Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of March 11,
2019, between Cocrystal Pharma, Inc., a Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, 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 Regulations S promulgated thereunder, the Company desires
to issue and sell to each Purchaser, and each Purchaser, severally and not
jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings set forth in this Section 1.1:

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“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.

 

“Allowable Grace Period” shall have the meaning ascribed to such term in Section
5.4(n).

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to
Section 2.1.

 

“Closing Date” means the date of Closing.

 

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

 

“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.

 

   

 

 

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

 

“Company Counsel” means Nason, Yeager, Gerson, Harris & Fumero, P.A., with
offices located at 3001 PGA Blvd., Suite 305, Palm Beach Gardens, Florida 33410.

 

“Cut Back Shares” shall have the meaning ascribed to such term in Section 5.2.

 

“Disclosure Schedules” means the disclosure schedules of the Company delivered
concurrently herewith.

 

“Effectiveness Date” means the date the Registration Statement pursuant to
Article V has been declared effective by the Commission.

 

“Effectiveness Deadline” shall have the meaning ascribed to such term in Section
5.1.

 

“Effectiveness Failure” shall have the meaning ascribed to such term in Section
5.3.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(s).

 

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

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA” shall have the meaning ascribed to such term in Section 3.1(kk).

 

“Filing Deadline” shall have the meaning ascribed to such term in Section 5.1.

 

“Filing Failure” shall have the meaning ascribed to such term in Section 5.3.

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Grace Period” shall have the meaning ascribed to such term in Section 5.4(n).

 

“Haynes and Boone” means Haynes and Boone, LLP, with offices located at 2323
Victory Park Avenue, 7th Floor, Dallas, Texas 75219.

 

“Indemnified Party” shall have the meaning ascribed to such term in Section
5.9(c).

 

 2 

 

 

“Indemnifying Party” shall have the meaning ascribed to such term in Section
5.9(c).

 

“Inspectors” shall have the meaning ascribed to such term in Section 5.4(g).

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(p).

 

“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).

 

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

 

“Lock-Up Agreement” means the Lock-Up Agreement, dated as of the date hereof, by
and among the Company and the directors and officers of the Company and certain
stockholders of the issued and outstanding shares of Common Stock on the date
hereof listed on Annex I hereto, in the form of Exhibit A attached hereto.

 

“Maintenance Failure” shall have the meaning ascribed to such term in Section
5.3.

 

“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(b).

 

“Material Permits” shall have the meaning ascribed to such term in Section
3.1(n).

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Placement Agent” means Cantor Fitzgerald & Co.

 

“Price Per Share” shall have the meaning ascribed to such term in Section 2.1.

 

“Pro Rata Interest” means the number of Shares purchased by each Purchaser,
relative to the total number of Shares being sold hereunder.

 

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

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Records” shall have the meaning ascribed to such term in Section 5.4(g).

 

 3 

 

 

“Registrable Securities” shall have the meaning ascribed to such term in Section
5.1.

 

“Registration Delay Payments” shall have the meaning ascribed to such term in
Section 5.3.

 

“Registration Statement” means a registration statement covering the resale of
the Shares by each Purchaser.

 

“Regulation S” means Regulation S promulgated by the Commission pursuant to the
Securities Act.

 

“Reporting Period” means the period commencing on the Closing Date and ending on
the earlier of: (i) the date as of which the Purchasers may sell all of the
Shares under Rule 144 without volume or manner-of-sale restrictions and without
the requirement for the Company to be in compliance with the current public
information requirements under Rule 144(c)(1) (or any successor thereto)
promulgated under the Securities Act and (ii) the date on which such Purchaser
shall have sold all of its Shares pursuant to a Registration Statement.

 

“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).

 

“Restriction Termination Date” shall have the meaning ascribed to such term in
Section 5.2.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“SEC Restrictions” shall have the meaning ascribed to such term in Section 5.2.

 

“Securities Act” shall have the meaning ascribed to such term in the recitals to
this Agreement.

 

“Shares” means the shares of Common Stock sold pursuant to this Agreement.

 

 4 

 

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include locating and/or
borrowing shares of Common Stock).

 

“Staff” shall have the meaning ascribed to such term in Section 4.1(c).

 

“Subscription Amount” shall mean, as to each Purchaser, the aggregate amount to
be paid for the Shares purchased hereunder as specified below such Purchaser’s
name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.

 

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a)
and shall, where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, or the New York Stock Exchange (or any successors to any of the
foregoing).

 

“Transaction Documents” means this Agreement, the Lock-Up Agreement, all
exhibits and schedules hereto and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Equity Stock Transfer, the current transfer agent of the
Company, with a mailing address of 237 West 37th Street, Suite 601, New York,
New York 10018 and a facsimile number of (347) 584-3644, and any successor
transfer agent of the Company.

 

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or
quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Purchasers of a majority
in interest of the Shares then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.

 

 5 

 

 

ARTICLE II.

PURCHASE AND SALE

 

2.1 Closing. On the Closing Date, upon the terms and subject to the conditions
set forth herein, substantially concurrent with the execution and delivery of
this Agreement by the parties hereto, the Company agrees to sell to each
Purchaser, and each Purchaser, severally and not jointly, agrees to purchase, a
number of Shares equal to such Purchaser’s Subscription Amount as set forth on
the signature page hereto executed by such Purchaser divided by the price per
Share of $2.61 (the “Price Per Share”). Each Purchaser shall deliver to the
Company, via wire transfer, immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares, and the Company and each Purchaser shall deliver the other
items set forth in Section 2.2 deliverable at Closing. Upon satisfaction or
waiver of the covenants and conditions set forth in Sections 2.2 and 2.3,
Closing shall occur at the offices of Haynes and Boone or such other location as
the parties shall mutually agree.

 

2.2 Deliveries.

 

(a) On or prior to the Closing Date (unless otherwise indicated below), the
Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i) this Agreement duly executed by the Company;

 

(ii) a certificate evidencing a number of Shares equal to such Purchaser’s
Subscription Amount divided by the Price Per Share, registered in the name of
such Purchaser, or a written confirmation from the Transfer Agent that a
book-entry notation reflecting such Purchaser’s ownership of such Shares has
been made;

 

(iii) the Company shall have provided each Purchaser with the Company’s wire
instructions, on Company letterhead and executed by the Company’s Chief
Executive Officer or Chief Financial Officer;

 

(iv) a legal opinion of Company Counsel, in the form reasonably deemed
acceptable by the Placement Agent;

 

(v) the Lock-Up Agreements; and

 

(vi) waivers of all preemptive rights and approvals under the Stockholder Rights
Agreement, dated November 24, 2014, by and among the Company and the
Shareholders party thereto.

 

(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company, the following:

 

 6 

 

 

(i) this Agreement duly executed by such Purchaser; and

 

(ii) such Purchaser’s Subscription Amount by wire transfer to the account
specified in writing by the Company.

 

2.3 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:

 

(i) the accuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect, in all
respects) on the Closing Date of the representations and warranties of the
Purchasers contained herein (unless as of a specific date therein in which case
they shall be accurate in all material respects as of such date);

 

(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of
this Agreement.

 

(b) The respective obligations of the Purchasers hereunder in connection with
Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations and
warranties of the Company contained herein (unless as of a specific date therein
in which case they shall be accurate as of such date);

 

(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

 

(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;

 

(iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

 

(v) from the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission or the Company’s principal Trading
Market and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Shares at the Closing.

 

 7 

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:

 

(a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are
set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all of
the capital stock or other equity interests of each Subsidiary free and clear of
any Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. If the
Company has no subsidiaries, all other references to the Subsidiaries or any of
them in the Transaction Documents shall be disregarded.

 

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

 

 8 

 

 

(c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and each of the other Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the
Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals. This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

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

 

(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii)
the notice and/or application(s) to each applicable Trading Market for the
issuance and sale of the Shares and the listing of the Shares for trading
thereon in the time and manner required thereby and (iii) such filings as are
required to be made under applicable state securities laws (collectively, the
“Required Approvals”), which in the case of clause (ii) have been made.

 

 9 

 

 

(f) Issuance of the Shares. The Shares are duly authorized and, when issued and
paid for pursuant to this Agreement, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in this Agreement.

 

(g) Capitalization. The capitalization of the Company is as set forth on
Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares
of Common Stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. Except as set forth on Schedule 3.1(g), the Company has
not issued any capital stock since its most recently filed periodic report under
the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company’s employee stock purchase plans and
pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act. Except as set forth on Schedule 3.1(g), no Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
purchase any securities sold by the Company. Each Person that has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents has
waived such rights. Except as set forth on Schedule 3.1(g), there are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock or the
capital stock of any Subsidiary, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents or capital
stock of any Subsidiary. The issuance and sale of the Shares will not obligate
the Company or any Subsidiary to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to redeem a security of the Company or such Subsidiary. The Company
does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement. All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors
or others is required for the issuance and sale of the Shares. Except as set
forth on Schedule 3.1(g), 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.

 

 10 

 

 

(h) SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the twelve (12) months preceding the date
hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”). As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Following January 2, 2014, the Company has not been an issuer
subject to Rule 144(i) under the Securities Act. The financial statements of the
Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

 

(i) Material Changes; Undisclosed Events, Liabilities or Developments. Except as
set forth on Schedule 3.1(i), since the date of the latest audited financial
statements included within the SEC Reports, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting (other
than in accordance with pronouncements under GAAP), (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending before the
Commission, or intend to file before March 18, 2019, any request for
confidential treatment of information. Except as disclosed on Schedule 3.1(i) or
for the issuance of the Shares contemplated by this Agreement, no material
event, liability, fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist with respect to the Company
or its Subsidiaries or their respective businesses, prospects, properties,
operations, assets or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least one (1) Trading Day prior to the date that this representation is made.

 

 11 

 

 

(j) Litigation. Except as set forth on Schedule 3.1(j), there is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Shares or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Except as set forth on Schedule 3.1(j), neither the Company nor
any Subsidiary, nor, to the Company’s knowledge, any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. Except as set forth on Schedule 3.1(j), there has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

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

 

 12 

 

 

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

 

(m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with all federal, state, local and foreign laws relating to pollution or
protection of human health or the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including laws relating
to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands, or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit,
license or approval where in each clause (i), (ii) and (iii), the failure to so
comply, or receive such approvals, could be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

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

 

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

 

 13 

 

 

(p) Intellectual Property. The Company and the Subsidiaries have, could
reasonably obtain or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and
similar rights necessary or required for use in connection with their respective
businesses as described in the SEC Reports, and which the failure to so have
could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received a notice (written
or otherwise) that any of the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the
Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a
claim or otherwise has any knowledge that the Intellectual Property Rights
violate or infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(q) Insurance. Except as set forth on Schedule 3.1(q), the Company and the
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance coverage at
least equal to the aggregate Subscription Amount. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.

 

(r) Transactions with Affiliates and Employees. Except as set forth on Schedule
3.1(r), none of the officers or directors of the Company or any Subsidiary and,
to the knowledge of the Company, none of the employees of the Company or any
Subsidiary are presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.

 

 14 

 

 

(s) Sarbanes-Oxley; Internal Accounting Controls. Except as set forth on
Schedule 3.1(s), the Company and the Subsidiaries are in compliance, in all
material respects, with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing Date. The Company
and the 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. The Company and the Subsidiaries have
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s then certifying
officers have evaluated the effectiveness of the disclosure controls and
procedures of the Company and the Subsidiaries as of the end of the period
covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of such certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company and its Subsidiaries that
have materially affected, or is reasonably likely to materially affect, the
internal control over financial reporting of the Company and its Subsidiaries.

 

(t) Certain Fees. Except for amounts payable by the Company to the Placement
Agent, no brokerage or finder’s fees or commissions are or will be payable by
the Company or any Subsidiary to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents. The Purchasers shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by the
Transaction Documents.

 

(u) Private Placement. Assuming the accuracy of each Purchaser’s representations
and warranties set forth in Section 3.2 and the assumptions contained in the
legal opinion of the Company’s counsel to be delivered to the Purchasers to the
extent that such assumptions relate to the offer and sale by the Placement Agent
to “qualified institutional buyers” as defined in Rule 144A(a) under the
Securities Act, or to persons that are not “U.S. persons” within the meaning of
Regulation S, no registration under the Securities Act is required for the offer
and sale of the Shares by the Company to the Purchasers as contemplated hereby.
The issuance and sale of the Shares hereunder does not contravene the rules and
regulations of the Trading Market.

 

 15 

 

 

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

 

(w) Registration Rights. Except as set forth on Schedule 3.1(w), other than each
of the Purchasers, no Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of any securities
of the Company or any Subsidiary. Other than each of the Purchasers, no Person
has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary on
the Registration Statement that has not been waived.

 

(x) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to 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 Commission is
contemplating terminating such registration. The Company has not, in the twelve
(12) months preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in material compliance with all
such listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust Company or another
established clearing corporation and the Company is current in payment of the
fees to the Depository Trust Company (or such other established clearing
corporation) in connection with such electronic transfer.

 

(y) Application of Takeover Protections. The Company and the Board of Directors
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to
the Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the Shares
and the Purchasers’ ownership of the Shares.

 

 16 

 

 

(z) Disclosure. All of the disclosure furnished by or on behalf of the Company
to the Purchasers regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, is true and correct, in all material respects, and
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The press
releases disseminated by the Company during the twelve (12) months preceding the
date of this Agreement taken as a whole do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made and when made, not misleading. The
Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.2 and Section 3.3
hereof.

 

(aa) No Integrated Offering. Assuming the accuracy of each Purchaser’s
representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this
offering of the Shares to be integrated with prior offerings by the Company for
purposes of (i) the Securities Act which would require the registration of any
such securities under the Securities Act, or (ii) any applicable stockholder
approval provisions of any Trading Market on which any of the securities of the
Company are listed or designated.

 

(bb) Reserved.

 

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

 

(dd) No General Solicitation. Neither the Company nor, to the Company’s
knowledge, any Person acting on behalf of the Company has offered or sold any of
the Shares by any form of general solicitation or general advertising. Assuming
the accuracy of the assumptions referred to in Section 3.1(u) and each
Purchaser’s representations and warranties set forth in Section 3.2 and Section
3.3 hereof, the Company has offered the Shares for sale only to the Purchasers,
“qualified institutional buyers” as defined in Rule 144A(a) under the Securities
Act or to persons that are not “U.S. persons” within the meaning of Regulation
S.

 

 17 

 

 

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

 

(ff) Accountants. The Company’s independent registered public accounting firm is
BDO USA, LLP. To the knowledge and belief of the Company, such accounting firm
(i) is a registered public accounting firm as required by the Exchange Act and
(ii) shall express its opinion with respect to the financial statements to be
included in the Company’s Annual Report for the fiscal year ending December 31,
2018.

 

(gg) No Disagreements with Accountants and Lawyers. There are no disagreements
of any kind presently existing, or reasonably anticipated by the Company to
arise, between the Company and the accountants and lawyers formerly or presently
employed by the Company, and the Company is current with respect to any fees
owed to its accountants and lawyers which could affect the Company’s ability to
perform any of its obligations under any of the Transaction Documents.

 

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

 

 18 

 

 

(ii) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(g) and 4.10 hereof), it is understood and acknowledged by the
Company that: (i) none of the Purchasers has been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Shares for any specified term, (ii) past or
future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities,
(iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, may presently have a
“short” position in the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in
any “derivative” transaction. The Company further understands and acknowledges
that (A) one or more Purchasers may engage in hedging activities at various
times during the period that the Shares are outstanding and (B) such hedging
activities (if any) could reduce the value of the existing stockholders’ equity
interests in the Company at and after the time that the hedging activities are
being conducted. The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction Documents.

 

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

 

(kk) Clinical Studies. To the extent required by applicable Laws of the United
States Food and Drug Administration (the “FDA”), the Company or the applicable
Subsidiary has submitted to the FDA an Investigational New Drug Application or
amendment or supplement thereto for each clinical trial it has conducted or
sponsored or is conducting or sponsoring; all such submissions were in material
compliance with applicable laws when submitted and no material deficiencies have
been asserted by the FDA with respect to any such submissions. The preclinical
studies and tests and clinical trials described in the SEC Reports were, and, if
still pending, are being conducted in all material respects in accordance with
the experimental protocols, procedures and controls pursuant to, where
applicable, accepted professional and scientific standards for products or
product candidates comparable to those being developed by the Company; the
descriptions of such studies, tests and trials, and the results thereof,
contained in the SEC Reports are accurate and complete in all material respects;
the Company is not aware of any tests, studies or trials not described in the
SEC Reports, the results of which reasonably call into question the results of
such tests, studies and trials; and the Company has not received any written
notice or correspondence from the FDA or any foreign, state or local
governmental authority exercising comparable authority or any institutional
review board or comparable authority requiring the termination, suspension,
clinical hold or material modification of any tests, studies or trials.

 

 19 

 

 

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

 

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

 

(nn) U.S. Real Property Holding Corporation. The Company is not and has never
been a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon Purchaser’s request.

 

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

 

3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself
and for no other Purchaser, hereby represents and warrants as of the date hereof
and as of the Closing Date to the Company as follows (unless as of a specific
date therein, in which case they shall be accurate as of such date):

 

(a) Organization; Authority. Such Purchaser is an entity duly incorporated or
formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of the Transaction Documents and performance by such Purchaser of
the transactions contemplated by the Transaction Documents have been duly
authorized by all necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

 20 

 

 

(b) Own Account. Such Purchaser understands that the Shares are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Shares as principal for its
own account and not with a view to or for distributing or reselling such Shares
or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Shares in
violation of the Securities Act or any applicable state securities law and has
no direct or indirect arrangement or understandings with any other Persons to
distribute, or regarding the distribution of, such Shares in violation of the
Securities Act or any applicable state securities law (this representation and
warranty not limiting such Purchaser’s right to sell the Shares in compliance
with applicable federal and state securities laws). Such Purchaser is acquiring
the Shares hereunder in the ordinary course of its business.

 

(c) Purchaser Status. Except for Purchasers that are Non-U.S. Purchasers (as
defined below), at the time such Purchaser was offered the Shares, it was, and
as of the date hereof it is, (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.

 

(d) Experience of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Shares and, at the present time, is able to afford
a complete loss of such investment.

 

(e) General Solicitation. Such Purchaser is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or, to such Purchaser’s
knowledge, any other general solicitation or general advertisement.

 

 21 

 

 

(f) Access to Information. Such Purchaser acknowledges that it has had the
opportunity to review the Transaction Documents (including all exhibits and
schedules thereto) and the SEC Reports, subject to the Company’s compliance with
Regulation FD, and has been afforded (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the offering of the Shares
and the merits and risks of investing in the Shares; (ii) access to information
about the Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Such Purchaser acknowledges and agrees that neither the Placement
Agent nor any Affiliate of the Placement Agent has provided such Purchaser with
any information or advice with respect to the Shares nor is such information or
advice necessary or desired. Neither the Placement Agent nor any Affiliate has
made or makes any representation as to the Company or the quality of the Shares,
and the Placement Agent and any Affiliate may have acquired non-public
information with respect to the Company which such Purchaser agrees need not be
provided to it. In connection with the issuance of the Shares to such Purchaser,
neither the Placement Agent nor any of its Affiliates has acted as a financial
advisor or fiduciary to such Purchaser.

 

(g) Certain Transactions and Confidentiality. Other than consummating the
transactions contemplated hereunder, such Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly, executed any purchases or sales, including Short Sales,
of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the
Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to
the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the representation
set forth above shall only apply with respect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the
Shares covered by this Agreement. Other than to other Persons party to this
Agreement or to such Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Notwithstanding the foregoing, for the
avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future,
provided, however, that the Purchasers shall not “cover” short positions
established prior to the Effectiveness Date by delivering the Shares.

 

 22 

 

 

3.3 Representations, Warranties and Covenants of Non-U.S. Purchasers. Each
Purchaser who is a Non-U.S. Purchaser (as defined below), hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:

 

(a) Certain Definitions. As used herein, the term “United States” means and
includes the United States of America, its territories and possessions, any
state of the United States and the District of Columbia, and the term “Non-U.S.
Purchaser” means any person who is not a U.S. person (as defined in Regulation
S) or is deemed not to be a U.S. person under Rule 902(k)(2) of the Securities
Act and is purchasing the Shares pursuant to Regulation S, as indicated below
such Purchaser’s name on the signature page of this Agreement by checking the
box labeled “Regulation S Purchaser.”

 

(b) Reliance on Representations and Warranties by the Company. This Agreement is
made by the Company with such Non-U.S. Purchaser in reliance upon such Non-U.S.
Purchaser’s representations and warranties made herein.

 

(c) Regulation S. Such Non-U.S. Purchaser has been advised and acknowledges
that:

 

(i) the Shares have not been registered under the Securities Act, the securities
laws of any state of the United States or the securities laws of any other
country;

 

(ii) in issuing and selling the Shares to such Non-U.S. Purchaser, the Company
is relying upon the “safe harbor” provided by Regulation S and/or on Section
4(a)(2) under the Securities Act;

 

(iii) it is a condition to the availability of the Regulation S “safe harbor”
that the Shares not be offered or sold in the United States or to a U.S. person
until the expiration of a period of six (6) months following the Closing Date
(the “Restricted Period”); notwithstanding the foregoing, prior to the
expiration of the Restricted Period, the Shares may be offered and sold by the
holder thereof only if such offer and sale is made in compliance with the terms
of this Agreement and either: (A) if the offer or sale is within the United
States or to or for the account of a U.S. person, the securities are offered and
sold pursuant to an effective registration statement of the Securities Act or
pursuant to an exemption from registration requirements of the Securities Act or
(B) the offer and sale is outside the United States and to a Person other than a
U.S. person.

 

(d) Certain Restrictions on Shares. Such Non-U.S. Purchaser agrees that, with
respect to the Shares, until the expiration of the Restricted Period:

 

(i) such Non-U.S. Purchaser, its agents or its representatives have not and will
not solicit offers to buy, offer for sale, sell or resell any of the Shares, or
any beneficial interest therein, in the United States or to or for the account
of a U.S. person during the Restricted Period; notwithstanding the foregoing,
prior to the expiration of the Restricted Period, the Shares may be offered and
sold by the holder thereof only if such offer and sale is made in compliance
with the terms of this Agreement and either: (A) if the offer or sale is within
the United States or to or for the account of a U.S. person, the securities are
offered and sold pursuant to an effective registration statement or pursuant to
an exemption from registration requirements of the Securities Act or (B) the
offer and sale is outside the United States and to a Person other than a U.S.
person; and

 

(ii) such Non-U.S. Purchaser shall not engage in hedging transactions with
regards to the Shares unless in compliance with the Securities Act.

 

 23 

 

 

The foregoing restrictions are binding upon subsequent transferees of the
Shares, except for transferees pursuant to an effective registration statement.
Such Non-U.S. Purchaser agrees that after the Restricted Period, the Shares may
be offered or sold within the United States or to or for the account of a U.S.
person only pursuant to applicable U.S. state and federal securities laws.

 

(e) Directed Selling. Such Non-U.S. Purchaser has not engaged, nor is it aware
that any party has engaged, and such Non-U.S. Purchaser will not engage or cause
any third party to engage, in any directed selling efforts (as such term is
defined in Regulation S) in the United States with respect to the Shares.

 

(f) Location of Non-U.S. Purchaser. Such Non-U.S. Purchaser: (i) is domiciled
and has its principal place of business or registered office outside the United
States; (ii) certifies that it is not a U.S. person and is not acquiring the
Shares for the account or benefit of any U.S. person; and (iii) at the time of
Closing, the Non-U.S. Purchaser or persons acting on the Non-U.S. Purchaser’s
behalf in connection therewith are located outside the United States.

 

(g) Distributor; Dealer. Such Non-U.S. Purchaser is not a “distributor” (as
defined in Regulation S) or a “dealer” (as defined in the Securities Act).

 

(h) Notation of Restrictions. Such Non-U.S. Purchaser acknowledges that the
Company shall make a notation in its stock books regarding the restrictions on
transfer set forth in this section and shall transfer such shares on the books
of the Company only to the extent consistent therewith.

 

(i) Compliance with Laws. Such Non-U.S. Purchaser is satisfied as to the full
observance of the laws of such Non-U.S. Purchaser’s jurisdiction in connection
with the transactions contemplated hereby, including (i) the legal requirements
within such Non-U.S. Purchaser’s jurisdiction for the transactions contemplated
hereby, (ii) any foreign exchange restrictions applicable to the transactions
contemplated hereby, (iii) any governmental or other consents that may need to
be obtained and (iv) the income tax and other tax consequences, if any, that may
be relevant to the exchange, holding, redemption, sale or transfer of the
Shares. Such Non-U.S. Purchaser’s participation in the transactions contemplated
hereby, and such Non-U.S. Purchaser’s continued beneficial ownership of the
Shares will not violate any applicable securities or other laws of such Non-U.S.
Purchaser’s jurisdiction.

 

The Company acknowledges and agrees that the representations contained in
Sections 3.2 and 3.3 shall not modify, amend or affect any such Purchaser’s
right to rely on the Company’s representations and warranties contained in this
Agreement or any representations and warranties contained in any other
Transaction Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of the
transactions contemplated hereby. Notwithstanding the foregoing, for the
avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future,
provided, however that the Purchasers shall not “cover” short positions
established prior to the Effectiveness Date by delivering the Shares.

 

 24 

 

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) The Shares may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement, Regulation S or Rule 144, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Shares under the Securities Act. As
a condition of transfer, any such transferee shall agree in writing to be bound
by the terms of the Transaction Documents and shall have the rights and
obligations of a Purchaser under the Transaction Documents.

 

(b) The Purchasers agree to the imprinting, so long as is required by this
Section 4.1, of the following legends, as applicable, on any of the Shares in
the following forms:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN
SECURED BY SUCH SECURITIES.”

 

Legend for Non-U.S. Purchasers only:

 

“THIS SECURITY IS BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT. TRANSFER OF THIS SECURITY IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT
TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

 25 

 

 

The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Shares to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Shares to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith. Further, no notice shall be
required of such pledge. At the appropriate Purchaser’s expense, the Company
will execute and deliver such reasonable documentation as a pledgee or secured
party of Shares may reasonably request in connection with a pledge or transfer
of the Shares, including, if the Shares are subject to registration pursuant to
a registration statement, the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling
stockholders thereunder.

 

(c) Certificates evidencing the Shares shall not contain any legend (including
the legend set forth in Section 4.1(b) hereof): (i) while a registration
statement covering the resale of such Shares is effective under the Securities
Act, (ii) following any sale of such Shares pursuant to Rule 144, (iii) if such
Shares are eligible for sale under Rule 144, or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission (the
“Staff”)). The Company shall cause its counsel to issue a legal opinion to the
Transfer Agent or the Purchaser if required by the Transfer Agent to effect the
removal of the legend hereunder, or if requested by a Purchaser, respectively.
The Company agrees that at such time as such legend is no longer required under
this Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined below) following the delivery by a Purchaser to the Company
or the Transfer Agent of a certificate representing Shares issued with a
restrictive legend (such date, the “Legend Removal Date”), deliver or cause to
be delivered to such Purchaser a certificate representing such Shares that is
free from all restrictive and other legends, provided that, upon written request
by the Company, the Purchaser delivers a certificate as to the factual basis for
removing the legend at the time of such request. The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 4. Certificates for
Shares subject to legend removal hereunder shall be transmitted by the Transfer
Agent to the Purchaser by crediting the account of the Purchaser’s prime broker
with the Depository Trust Company System as directed by such Purchaser. As used
herein, “Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s primary Trading Market
with respect to the Common Stock as in effect on the date of delivery of a
certificate representing Shares issued with a restrictive legend.

 

 26 

 

 

(d) In addition to such Purchaser’s other available remedies, the Company shall
pay to a Purchaser, in cash, (i) as partial liquidated damages and not as a
penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the
date such Shares are submitted to the Transfer Agent) delivered for removal of
the restrictive legend and subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after such damages have
begun to accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend and (ii) if the Company fails to (A)
issue and deliver (or cause to be delivered) to a Purchaser by the Legend
Removal Date a certificate representing the Shares so delivered to the Company
by such Purchaser that is free from all restrictive and other legends and (B) if
after the Legend Removal Date such Purchaser purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such Purchaser of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any
portion of the number of shares of Common Stock that such Purchaser anticipated
receiving from the Company without any restrictive legend, then, an amount equal
to the excess of such Purchaser’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common
Stock so purchased (including brokerage commissions and other out-of-pocket
expenses, if any) over the product of (x) such number of Shares that the Company
was required to deliver to such Purchaser by the Legend Removal Date multiplied
by (y) the lowest closing sale price of the Common Stock on any Trading Day
during the period commencing on the date of the delivery by such Purchaser to
the Company of the applicable Shares and ending on the date of such delivery and
payment under this clause (ii).

 

(e) Each Purchaser, severally and not jointly with the other Purchasers, agrees
with the Company that such Purchaser will sell any Shares pursuant to either the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and that if Shares
are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the
removal of the restrictive legend from certificates representing Shares as set
forth in this Section 4.1 is predicated upon the Company’s reliance upon this
understanding.

 

4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of
the Shares may result in dilution of the outstanding shares of Common Stock,
which dilution may be substantial under certain market conditions. The Company
further acknowledges that its obligations under the Transaction Documents are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

 

 27 

 

 

4.3 Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the
Shares in a manner that would require the registration under the Securities Act
of the sale of the Shares or that would be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

 

4.4 Securities Laws Disclosure; Publicity. The Company shall, by 9:30 a.m. (New
York City time) on the Trading Day immediately following the date hereof, (a)
issue a press release disclosing the material terms of the transactions
contemplated hereby, and (b) file with the Commission a Current Report on Form
8-K disclosing all material, non-public information delivered to any of the
Purchasers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents and including the Transaction
Documents as exhibits thereto. From and after the issuance of such press release
and the filing of such Form 8-K, the Company represents to the Purchasers that
it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of
their respective officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release and the filing of such Form 8-K, the
Company acknowledges and agrees that any and all confidentiality or similar
obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, agents,
employees or Affiliates on the one hand, and any of the Purchasers or any of
their Affiliates on the other hand, shall terminate. The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of the Purchasers holding
a majority in interest of the Shares, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if
such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or
communication. For the avoidance of doubt, each Purchaser acknowledges and
agrees that no written consent of the Purchasers shall be required for the
Company to refer to the offer and sale of the Shares pursuant to this Agreement
in the press releases to be disseminated by the Company in connection with the
filing of its periodic reports, including the Annual Report on Form 10-K for the
year ended December 31, 2018. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement registering the Shares for resale pursuant to this Agreement and (B)
the filing of final Transaction Documents with the Commission and (ii) to the
extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (ii). For the avoidance of doubt “federal
securities law” as used in this Section 4.4 shall include the comments issued by
the staff of the Division of Corporation Finance of the Commission.

 

 28 

 

 

4.5 Stockholder Rights Plan. No claim will be made or enforced by the Company
or, with the consent of the Company, any other Person, that any Purchaser is an
“acquiring person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Shares under the Transaction Documents or
under any other agreement between the Company and the Purchasers.

 

4.6 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, which
shall be disclosed pursuant to Section 4.4, the Company covenants and agrees
that neither it, nor any other Person acting on its behalf will provide any
Purchaser or its agents or counsel with any information that constitutes, or the
Company reasonably believes constitutes, material non-public information, unless
prior thereto such Purchaser shall have consented to the receipt of such
information and agreed with the Company to keep such information confidential.
To the extent that the Company delivers any material, non-public information to
a Purchaser without such Purchaser’s consent, the Company hereby covenants and
agrees that such Purchaser shall not have any duty of confidentiality to the
Company, any of its Subsidiaries, or any of their respective officers,
directors, agents, employees or Affiliates, or a duty to the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law.
To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenants in
effecting transactions in securities of the Company.

 

4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Shares hereunder for general corporate purposes and the continued development of
novel medicines for use in the treatment of human viral diseases and shall not
use such proceeds: (a) for the satisfaction of any portion of the Company’s debt
(other than payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any Common Stock or
Common Stock Equivalents, or (c) in violation of FCPA or OFAC regulations.

 

 29 

 

 

4.8 Indemnification of Purchasers. Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, stockholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based solely upon a material breach
of such Purchaser Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such Purchaser Party of
state or federal securities laws or any conduct by such Purchaser Party which is
finally judicially determined to constitute fraud, gross negligence or willful
misconduct). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
counsel selected by the Company to represent the Purchaser Party, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (A)
for any settlement by a Purchaser Party effected without the Company’s prior
written consent, which shall not be unreasonably withheld or delayed; or (B) to
the extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents, or attributable to Purchaser’s
fraud, gross negligence or willful misconduct. The indemnification required by
this Section 4.8 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
are incurred. The indemnity agreements contained herein shall be in addition to
any cause of action or similar right of any Purchaser Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.

 

4.9 Equal Treatment of Purchasers. No consideration (including any modification
of any Transaction Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser and is intended for the Company to treat
the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of securities or otherwise.

 

 30 

 

 

4.10 Certain Transactions and Confidentiality. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it, nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any
purchases or sales, including Short Sales, of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Transaction Documents and the Disclosure Schedules.
Notwithstanding the foregoing, and notwithstanding anything contained in this
Agreement to the contrary, the Company expressly acknowledges and agrees that,
except to the extent such purchases or sales involve “covering” of short
positions established prior to the Effectiveness Date by delivering the Shares,
(a) no Purchaser makes any representation, warranty or covenant hereby that it
will not engage in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.4, (b)
no Purchaser shall be restricted or prohibited from effecting any transactions
in any securities of the Company in accordance with applicable securities laws
from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.4 and (c) no Purchaser shall have any duty of confidentiality or duty
not to trade in the securities of the Company to the Company or its Subsidiaries
after the issuance of the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Shares covered by this
Agreement.

 

4.11 Capital Changes. Until the one (1) year anniversary of the Reporting
Period, the Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the
Purchasers holding a majority in interest of the Shares, provided, however, that
the Company shall not be prohibited from undertaking any such actions for the
purpose of either maintaining or up-listing such Common Stock on a Trading
Market.

 

 31 

 

 

ARTICLE V.

REGISTRATION RIGHTS

 

5.1 Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than April 25, 2019 (the “Filing Deadline”),
file with the Commission a Registration Statement under the Securities Act on an
appropriate form covering the resale of the full amount of the Shares (the
“Registrable Securities”). The Company shall use its commercially reasonable
efforts to have the Registration Statement declared effective by the Commission
as soon as practicable, but in no event later than the date (the “Effectiveness
Deadline”), which shall be either: (a) in the event that the Commission does not
review the Registration Statement, thirty (30) days after the Filing Deadline,
or (b) in the event that the Commission reviews the Registration Statement,
sixty (60) days after the Filing Deadline (but in any event, no later than three
(3) Business Days following the Commission indicating that it has no further
comments on the Registration Statement). Subject to any comments from the Staff,
such Registration Statement shall include the plan of distribution attached
hereto as Exhibit B; provided, however, that no Purchaser shall be named as an
“underwriter” in the Registration Statement without the Purchaser’s prior
written consent. Such Registration Statement shall not include any shares of
Common Stock or other securities for the account of any other holder without the
prior written consent of the Purchasers which purchased at least sixty-seven
(67) percent of the Shares based on the initial Subscription Amounts hereunder.

 

5.2 Rule 415; Cutback. If at any time the Staff takes the position that the
offering of some or all of the Registrable Securities in a Registration
Statement is not eligible to be made on a delayed or continuous basis under the
provisions of Rule 415 under the Securities Act or requires any Purchaser to be
named as an “underwriter,” the Company shall use its commercially reasonable
efforts to persuade the Commission that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415 and that none of the Purchasers
are “underwriters.” In the event that, despite the Company’s commercially
reasonable efforts and compliance with the terms of this Section 5.2, the Staff
refuses to alter its position, the Company shall (a) remove from the
Registration Statement such portion of the Registrable Securities (the “Cut Back
Shares”) and/or (b) agree to such restrictions and limitations on the
registration and resale of the Registrable Securities as the Staff may require
to assure the Company’s compliance with the requirements of Rule 415
(collectively, the “SEC Restrictions”); provided, however, that the Company
shall not agree to name any Purchaser as an “underwriter” in such Registration
Statement without the prior written consent of such Purchaser. Any cutback
imposed on the Purchasers pursuant to this Section 5.2 shall be allocated among
the Purchasers on their Pro Rata Interests, unless the SEC Restrictions
otherwise require or provide or the Purchasers otherwise agree. No liquidated
damages shall accrue as to any Cut Back Shares until such date as the Company is
able to effect the registration of such Cut Back Shares in accordance with any
SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back
Shares). From and after the Restriction Termination Date applicable to any Cut
Back Shares, all of the provisions of this Article V (including the liquidated
damages provisions) shall again be applicable to such Cut Back Shares; provided,
however, that (i) the Filing Deadline for the Registration Statement including
such Cut Back Shares shall be ten (10) Business Days after such Restriction
Termination Date, and (ii) the Effectiveness Deadline with respect to such Cut
Back Shares shall be the ninetieth (90th) day immediately after the Restriction
Termination Date or the one hundred twentieth (120th) day if the Staff reviews
such Registration Statement (but in any event no later than three (3) Business
Days from the Staff indicating it has no further comments on such Registration
Statement).

 

 32 

 

 

5.3 Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. Subject to Section 5.2, if either: (a) a Registration
Statement covering all of the Registrable Securities required to be covered
thereby and required to be filed by the Company pursuant to this Agreement is:
(i) not filed with the Commission on or before the Filing Deadline (a “Filing
Failure”), or (ii) not declared effective by the Commission on or before the
Effectiveness Deadline (an “Effectiveness Failure”), or (b) on any day during
the Reporting Period and after the Effectiveness Date, sales of all of the
Registrable Securities required to be included on such Registration Statement
cannot be made (other than (A) during an Allowable Grace Period or (B) if the
Registration Statement is on Form S-1 and the Company is ineligible to forward
incorporate by reference, for a period of fifteen (15) days following the date
the Company files a post-effective amendment to incorporate the Company’s Annual
Report on Form 10-K) pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
such Registration Statement or to register a sufficient number of shares of
Registrable Securities) (a “Maintenance Failure”), then, in satisfaction of the
damages to any holder of Registrable Securities by reason of any such delay in
or reduction of its ability to sell the Registrable Securities, the Company
shall pay to each holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to one percent (1.0%) of such holder’s Pro
Rata Interest on each of the following dates: (1) the initial day of a Filing
Failure and on every thirtieth (30th) day (prorated for periods totaling less
than thirty (30) days) thereafter until such Filing Failure is cured; (2) the
initial day of an Effectiveness Failure and on every thirtieth (30th) day
(prorated for periods totaling less than thirty (30) days) thereafter until such
Effectiveness Failure is cured; and (3) the initial day of a Maintenance Failure
and on every thirtieth (30th) day (prorated for periods totaling less than
thirty (30) days) thereafter until such Maintenance Failure is cured. The
payments to which a holder shall be entitled pursuant to this Section 5.3 are
referred to herein as “Registration Delay Payments”; provided that no
Registration Delay Payments shall be required following the termination of the
Reporting Period, and provided further that in no event shall the aggregate
Registration Delay Payments accruing under this Section 5.3 exceed six percent
(6%) of a holder’s Pro Rata Interest (i.e., corresponding to a total delay of
six (6) months); and provided further, that if the Commission is operating with
a limited number of Staff members as a result of any partial or full government
shutdown (either a “Shutdown”), the number of days that elapse during such
Shutdown shall not be included in the computation of any time periods set forth
in Section 5.2 or this Section 5.3 of this Agreement. The first such
Registration Delay Payment shall be paid within three (3) Business Days after
the event or failure giving rise to such Registration Delay Payment occurred and
all other Registration Delay Payments shall be paid on the earlier of the last
day of the calendar month during which such Registration Delay Payments are
incurred and the third (3rd) Business Day after the event or failure giving rise
to the Registration Delay Payments is cured.

 

5.4 Related Obligations. At such time as the Company is obligated to file a
Registration Statement with the Commission pursuant to Section 5.1 hereof, the
Company will use commercially reasonable efforts to effect the registration of
the Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:

 

(a) The Company shall submit to the Commission, within one (1) Business Day
after the Company learns that no review of a particular Registration Statement
will be made by the Staff or that the Staff has no further comments on a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than two (2) Business Days after the submission of such request. The
Company shall keep each Registration Statement effective pursuant to Rule 415 at
all times with respect to each Purchaser’s Registrable Securities until the
expiration of the Reporting Period. The Company shall ensure that each
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein (in the case of prospectuses, in the
light of the circumstances in which they were made) not misleading.

 

 33 

 

 

(b) The Company shall prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the Securities Act, as may be necessary to keep such Registration
Statement effective at all times during the Reporting Period, and, during such
period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement.

 

(c) Upon request of a Purchaser, the Company shall furnish to such Purchaser
without charge, (i) promptly after the Registration Statement including such
Purchaser’s Registrable Securities is prepared and filed with the Commission, at
least one (1) copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, and if requested by the Purchaser, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of any Registration
Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of
copies as the Purchaser may reasonably request) and (iii) such other documents,
including copies of any preliminary or final prospectus, as the Purchaser may
reasonably request from time to time in order to facilitate the disposition of
the Registrable Securities.

 

(d) The Company shall notify the Purchasers in writing of the happening of any
event, as promptly as practicable after becoming aware of such event, as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and upon
request deliver ten (10) copies of such supplement or amendment to the
Purchasers (or such other number of copies as the Purchasers may reasonably
request). Unless such information is publicly available, the Company shall also
promptly notify the Purchasers in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to the Purchasers by
facsimile or email within one (1) Business Day of such effectiveness), (ii) of
any request by the Commission for amendments or supplements to a Registration
Statement or related prospectus or related information, and (iii) of the
Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.

 

 34 

 

 

(e) The Company shall use commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify the Purchaser who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of notice of the initiation or threat of any proceeding for such
purpose.

 

(f) If a Purchaser is required under applicable securities law to be described
in the Registration Statement as an underwriter, at the reasonable request of
the Purchaser, the Company shall furnish to the Purchaser, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as the Purchaser may reasonably request, (i) a letter, dated such
date, from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Purchaser, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Purchaser.

 

(g) If a Purchaser is required under applicable securities law to be described
in the Registration Statement as an underwriter, upon the written request of the
Purchaser in connection with the Purchaser’s due diligence requirements, if any,
the Company shall make available for inspection by (i) the Purchaser and its
legal counsel and (ii) one firm of accountants or other agents retained by the
Purchaser (collectively, the “Inspectors”), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector solely for the purpose of establishing a due diligence defense from
underwriter liability under the Securities Act, and cause the Company’s
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree to
hold in strict confidence and shall not make any disclosure (except to the
Purchaser) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (A) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the Securities Act, (B) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (C) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this Agreement or any other agreement.
The Purchaser agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order preventing disclosure of, the
Records deemed confidential. Nothing herein (or in any other confidentiality
agreement between the Company and the Purchaser) shall be deemed to limit the
Purchaser’s ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws.

 

 35 

 

 

(h) The Company shall hold in confidence and not make any disclosure of
information concerning the Purchasers provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, including as provided in Section 4.4 of this Agreement, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent jurisdiction
or (iv) such information has been made generally available to the public other
than by disclosure in violation of this Agreement or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning the Purchasers is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to the
Purchasers and allow the Purchasers, at each Purchaser’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
preventing disclosure of, such information.

 

(i) The Company shall cooperate with the Purchasers and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the Purchasers may
reasonably request and registered in such names as the Purchasers may request.

 

(j) If requested by a Purchaser, the Company shall, as soon as practicable, (i)
incorporate in a prospectus supplement or post-effective amendment such
information as the Purchaser reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make
amendments to any Registration Statement if reasonably requested by the
Purchaser.

 

(k) The Company shall use commercially reasonable efforts to cause the
Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

 

(l) The Company shall otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission in connection with
any registration hereunder.

 

(m) Within two (2) Business Days after a Registration Statement that covers
Registrable Securities is declared effective by the Commission, the Company
shall deliver to the Transfer Agent (with copies to the Purchasers) confirmation
that such Registration Statement has been declared effective by the Commission.

 

 36 

 

 

(n) Notwithstanding anything to the contrary herein, at any time after the
Effectiveness Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors and its counsel, in the best
interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a “Grace Period”); provided, that the Company shall promptly (i)
notify the Purchasers in writing of the existence of material, non-public
information giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material, non-public information
to the Purchasers) and the date on which the Grace Period will begin, and (ii)
notify the Purchasers in writing of the date on which the Grace Period ends;
and, provided further, that the Grace Periods shall not exceed an aggregate of
thirty (30) Trading Days during any three hundred sixty-five (365)-day period
and the first (1st) day of any Grace Period must be at least fifteen (15) days
after the last day of any prior Grace Period (each, an “Allowable Grace
Period”). For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the Purchasers receive the
notice referred to in clause (i) and shall end on and include the later of the
date the Purchasers receive the notice referred to in clause (ii) and the date
referred to in such notice. The provisions of Section 5.4(d) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of
the Grace Period, the Company shall again be bound by the first sentence of
Section 5.4(d) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding
anything to the contrary, the Company shall cause the Transfer Agent to deliver
unlegended shares of Common Stock to a transferee of any Purchaser in accordance
with the terms of this Agreement in connection with any sale of Registrable
Securities with respect to which a Purchaser has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the applicable
Registration Statement (unless an exemption from such prospectus delivery
requirement exists), prior to the Purchaser’s receipt of the notice of a Grace
Period and for which the Purchaser has not yet settled.

 

(o) Neither the Company nor any Subsidiary or Affiliate shall identify any
Purchaser as an underwriter in any public disclosure or filing with the
Commission or any applicable Trading Market without the prior written consent of
such Purchaser, and any Purchaser being deemed an underwriter by the Commission
shall not relieve the Company of any obligations it has under this Agreement.

 

5.5 Obligations of the Purchasers.

 

(a) Each Purchaser agrees to furnish to the Company or its counsel, not more
than ten (10) Business Days following the Closing Date, a completed selling
stockholder questionnaire in such form as may reasonably be adopted by the
Company. At least five (5) Business Days prior to the first anticipated filing
date of a Registration Statement, the Company shall notify each Purchaser in
writing of any information, other than the information included in the selling
stockholder questionnaire (if any), the Company requires from such Purchaser in
order to have that Purchaser’s Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Purchaser that the Purchaser shall
furnish to the Company promptly but in any event not more than three (3)
Business Days prior to the initial anticipated filing date, such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the effectiveness of the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.

 

 37 

 

 

(b) Each Purchaser, by its acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
the Purchaser has notified the Company in writing of the Purchaser’s election to
exclude all of the Purchaser’s Registrable Securities from such Registration
Statement.

 

(c) Each Purchaser agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5.4(d) or the first
sentence of Section 5.4(n), the Purchaser will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until the Purchaser’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 5.4(d) or the
first sentence of Section 5.4(n) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary, the Company
shall cause the Transfer Agent to deliver unlegended shares of Common Stock to a
transferee of the Purchaser in accordance with the terms of this Agreement in
connection with any sale of Registrable Securities with respect to which the
Purchaser has entered into a contract for sale prior to the Purchaser’s receipt
of a notice from the Company of the happening of any event of the kind described
in Section 5.4(d) or the first sentence of Section 5.4(n) and for which the
Purchaser has not yet settled.

 

(d) Each Purchaser covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the
Registration Statement and shall sell Registrable Securities only in accordance
with the method of distribution described in the Registration Statement.

 

5.6 Expenses of Registration. All reasonable expenses incurred in connection
with registrations, filings or qualifications pursuant to this Article V,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company, shall be paid by the Company. Notwithstanding the foregoing, in no
event shall the Company be responsible for underwriting discounts, commissions,
placement agent fees or other similar expenses, including fees of any Purchaser,
payable with respect to Registrable Securities being sold or offered for sale by
the Purchasers.

 

5.7 Reports under the Exchange Act. With a view to making available to the
Purchasers the benefits of Rule 144 or any other similar rule or regulation of
the Commission that may at any time permit the Purchasers to sell securities of
the Company to the public without registration, the Company agrees to:

 

(a) make and keep public information available, as those terms are understood
and defined in Rule 144, during the Reporting Period;

 

 38 

 

 

(b) file with the Commission in a timely manner all reports and other documents
required of the Company under the Exchange Act; and

 

(c) furnish to the Purchasers, so long as any Purchaser owns Registrable
Securities, promptly upon request during the Reporting Period: (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Purchasers to sell such securities
pursuant to Rule 144 without registration.

 

5.8 Assignment of Registration Rights. The rights under this Article V shall be
automatically assignable by a Purchaser to any transferee of all or any portion
of the Purchaser’s Registrable Securities if: (a) the Purchaser agrees in
writing with the transferee or assignee to assign such rights and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment; (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name, address and phone
number of such transferee or assignee,(ii) the securities with respect to which
such registration rights are being transferred or assigned, and (iii) such other
information as may reasonably be requested by the Company; (c) immediately
following such transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act or
applicable state securities laws; (d) at or before the time the Company receives
the written notice contemplated by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein; and (e) such transfer shall have been made in accordance with
the applicable requirements of this Agreement. Following any such transfer in
accordance with this Section 5.8, the Company shall thereafter use commercially
reasonable efforts to amend or supplement the selling stockholder table
contained in the Registration Statement to reflect such change in beneficial
ownership of the affected Registrable Securities.

 

5.9 Registration Indemnification.

 

(a) Company Indemnification. The Company will indemnify each Purchaser who holds
Registrable Securities (if Registrable Securities held by such Purchaser are
included in the securities as to which such registration is being effected),
each of its officers and directors, partners, members and each person
controlling such Purchaser within the meaning of Section 15 of the Securities
Act, to the extent permitted by applicable law, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on (i) any untrue statement (or alleged untrue
statement) of a material fact contained in any Registration Statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such Registration Statement, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or (ii) any violation by
the Company of the Securities Act, the Exchange Act, state securities laws or
any rule or regulation promulgated under such laws applicable to the Company in
connection with any such registration; and in each case, the Company will
reimburse each such Purchaser, each of its officers and directors, partners,
members and each person controlling such Purchaser, for any legal and any other
expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on (A) any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Purchaser or
controlling person, and stated to be specifically for use therein, (B) the use
by a Purchaser of an outdated or defective prospectus after the Company has
notified such Purchaser in writing that the prospectus is outdated or defective,
(C) a Purchaser’s (or any other indemnified person’s) failure to send or give a
copy of the prospectus or supplement (as then amended or supplemented), if
required, pursuant to Rule 172 under the Securities Act (or any successor rule)
to the Persons asserting an untrue statement or alleged untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such person if
such statement or omission was corrected in such prospectus or supplement, or
(D) any violation by such Purchaser of the Securities Act, the Exchange Act,
state securities laws or any rule or regulation promulgated under such laws
applicable to such Purchaser.

 

 39 

 

 

(b) Purchaser Indemnification. Each Purchaser holding Registrable Securities
will, if Registrable Securities held by such Purchaser are included in the
securities as to which such registration is being effected, severally and not
jointly, indemnify the Company, each of its directors and officers, other
holders of the Company’s securities covered by such Registration Statement, each
person who controls the Company within the meaning of Section 15 of the
Securities Act, and each such holder, each of its officers and directors and
each person controlling such holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on: (i) any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, to the extent, and
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such Registration Statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Purchaser and stated to be specifically for use therein,
or (ii) any violation by such Purchaser of the Securities Act, the Exchange Act,
state securities laws or any rule or regulation promulgated under such laws
applicable to such Purchaser, and in each case, such Purchaser will reimburse
the Company, each other holder, and directors, officers, persons, underwriters
or control persons of the Company and the other holders for any legal or any
other expenses reasonably incurred, as such expenses are incurred, in connection
with investigating or defending any such claim, loss, damage, liability or
action; provided, that the indemnity agreement contained in this Section 5.9(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
indemnifying Purchaser (which consent shall not be unreasonably withheld or
delayed). The liability of any Purchaser for indemnification under this Section
5.9(b) in its capacity as a seller of Registrable Securities shall not exceed
the greater of (i) the amount of net proceeds to such Purchaser of the
securities sold in any such registration and (ii) the purchase price of the
Shares paid by such Purchaser.

 

(c) Notice and Procedure. Each party entitled to indemnification under this
Section 5.9 (each, an “Indemnified Party”) shall give written notice to the
party required to provide indemnification (the “Indemnifying Party”) promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party’s expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party’s ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense of any action, in which there is, in the reasonable opinion
of counsel selected by the Indemnifying Party to represent the Indemnified
Party, a material conflict or any material issue between the position of the
Indemnifying Party and the position of the Indemnified Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party (whose consent shall not be unreasonably
withheld), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.

 

(d) Contribution. If the indemnification provided for in this Section 5.9 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any losses, claims, damages or liabilities referred to
herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the untrue statement or omission that
resulted in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Indemnifying Party or by the Indemnified Party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, that in no event shall any contribution by
a Purchaser hereunder exceed the proceeds from the offering received by such
Purchaser. The amount paid or payable by a party as a result of any loss, claim,
damage or liability shall be deemed to include, subject to the limitations set
forth in this Agreement, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 5.9 was available to such party in
accordance with its terms.

 

 40 

 

 

(e) Survival. The obligations of the Company and the Purchasers under this
Section 5.9 shall survive completion of any offering of Registrable Securities
in a Registration Statement and the termination of this Agreement. The indemnity
and contribution agreements contained in this Section 5.9 are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties and
are not in diminution or limitation of other remedies or causes of action that
the parties may have under this Agreement.

 

ARTICLE VI

MISCELLANEOUS

 

6.1 Termination. This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or before the
fifth (5th) Trading Day following the date hereof; provided, however, that no
such termination will affect the right of any party to sue for any breach by any
other party (or parties).

 

6.2 Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company), stamp taxes and
other taxes and duties levied in connection with the delivery of any Shares to
the Purchasers.

 

6.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

 

6.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or
email attachment at the e-mail address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the facsimile
number or e-mail address as set forth on the signature pages attached hereto on
a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as set forth on the
signature pages attached hereto. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K.

 

 41 

 

 

6.5 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except pursuant to a written instrument signed, in the
case of an amendment, by the Company and Purchasers which purchased at least
sixty-seven (67) percent of the Shares based on the initial Subscription Amounts
hereunder or, in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought, provided that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser (or
group of Purchasers), the consent of such disproportionately impacted Purchaser
(or group of Purchasers) shall also be required. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right. Any proposed amendment or waiver
that disproportionately, materially and adversely affects the rights and
obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such
adversely affected Purchaser. Any amendment effected in accordance with this
Section 6.5 shall be binding upon each Purchaser and holder of Shares and the
Company.

 

6.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

 

6.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Shares, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Shares, by the provisions of the Transaction Documents that apply to the
“Purchasers.”

 

6.8 No Third-Party Beneficiaries. The Placement Agent shall be a third-party
beneficiary of the representations and warranties of the Company in Section 3.1
hereof and with respect to the representations and warranties of the Purchasers
and Non-U.S. Purchasers in Section 3.2 and Section 3.3, respectively. This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.8, Section 5.9 and this Section 6.8.

 

 42 

 

 

6.9 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, stockholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If any party shall commence an
Action or Proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company under Section 4.8, the
prevailing party in such Action or Proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Action or Proceeding.

 

6.10 Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares.

 

6.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to each other party, it being understood that the parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

 

6.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

 43 

 

 

6.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.

 

6.14 Replacement of Shares. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause
to be issued in exchange and substitution for and upon cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The applicant
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with the
issuance of such replacement Shares.

 

6.15 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to
assert in any Action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

 

6.16 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

 

6.17 Reserved.

 

6.18 Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto
or thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser 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 Purchaser to be joined as an additional party in any
Proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in its review and negotiation of the Transaction
Documents. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by any of the Purchasers. It is expressly
understood and agreed that each provision contained in this Agreement and in
each other Transaction Document is between the Company and a Purchaser, solely,
and not between the Company and the Purchasers collectively and not between and
among the Purchasers.

 

 44 

 

 

6.19 Liquidated Damages. The Company’s obligations to pay any partial liquidated
damages or other amounts owing under the Transaction Documents is a continuing
obligation of the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts have been paid notwithstanding the fact
that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.

 

6.20 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

6.21 Construction. The parties agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments thereto. In
addition, each and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

 

6.22 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

 

(Signature Pages Follow)

 

 45 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

Cocrystal pharma, inc. Address for Notice:

 

By:__________________________________________ Email: Name: Fax: Title:      
With a copy to (which shall not constitute notice):          

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

Signature Page to Securities Purchase Agreement

 

 

 

 

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser: ____________________________________________________

 

Signature of Authorized Signatory of Purchaser: __________________________

 

Name of Authorized Signatory: ____________________________________

 

Title of Authorized Signatory: _____________________________________

 

Non-U.S. Purchaser: [  ]

 

Email Address of Authorized Signatory:
___________________________________________

 

Facsimile Number of Authorized Signatory:
_________________________________________

 

Address for Notice to Purchaser:

 

Address for Delivery of Securities to Purchaser (if not same as address for
notice):

 

Subscription Amount: $____________

 

Shares: ____________

 

EIN Number: _______________________

 

[SIGNATURE PAGES CONTINUE]

 

Signature Page to Securities Purchase Agreement

 

 

 

 

Annex I

 

Parties to Lock-Up Agreements

 

Todd Brady

Phillip Frost

Jane Hsiao

Sam Lee

James Martin

Steve Rubin

Raymond F. Schinazi

Gary Wilcox

Frost Gamma Investments Trust

OPKO Health, Inc.

 

Annex I to Securities Purchase Agreement

 

 

 

 

Exhibit A

Lock-Up Agreement

 

March __, 2019

 

Cocrystal Pharma, Inc.

 

Re: Securities Purchase Agreement, dated as of March 11, 2019 (the “Purchase
Agreement”), between Cocrystal Pharma, Inc., a Delaware corporation (the
“Company”), and the purchasers signatory thereto (each, a “Purchaser” and,
collectively, the “Purchasers”)

 

 

Ladies and Gentlemen:

 

Defined terms not otherwise defined in this letter agreement (this “Letter
Agreement”) shall have the meanings set forth in the Purchase Agreement.
Pursuant to Section 2.2(a)(vi) of the Purchase Agreement and in satisfaction of
a condition of the Company’s obligations under the Purchase Agreement, the
undersigned irrevocably agrees with the Company that, from the date hereof until
ninety (90) days after the Closing Date (such period, the “Restriction Period”),
the undersigned will not offer, sell, contract to sell, hypothecate, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any Affiliate of the undersigned or any person
in privity with the undersigned or any Affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act with respect to,
any shares of Common Stock or Common Stock Equivalents beneficially owned, held
or hereafter acquired by the undersigned (the “Securities”), other than
transfers: (A) as a bona fide gift or gifts; (B) to any trust for the direct or
indirect benefit of the undersigned or the immediate family of the undersigned;
(C) pursuant to a qualified domestic order or in connection with a divorce
settlement; or (D) by will or intestate succession to the legal representative,
heir, beneficiary or immediate family of the undersigned upon the death of the
undersigned; provided that, in the case of any transfer or distribution pursuant
to clauses (A) through (D), it shall be a condition precedent to any such
transfer or distribution that (1) prior to any such transfer, each donee,
trustee, distributee or transferee, as the case may be, delivers to the Company
a signed lock-up agreement, substantially in the form of this Letter Agreement,
for the balance of the Restriction Period, (2) any such transfer shall not
involve a disposition for value, (3) in the case of clauses (A) through (C),
such transfers are not required to be reported with the Commission under the
Exchange Act, and (4) the undersigned does not otherwise voluntarily effect any
public filing or report regarding such transfers. As used herein, “immediate
family” shall mean the spouse, domestic partner, lineal descendant, father,
mother, brother, sister, or any other person with whom the undersigned has a
relationship by blood, marriage or adoption not more remote than first cousin.

 

 

 

 

Beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act. In order to enforce this covenant, the Company shall impose
irrevocable stop-transfer instructions preventing the Transfer Agent from
effecting any actions in violation of this Letter Agreement.

 

The undersigned acknowledges that the execution, delivery and performance of
this Letter Agreement is a material inducement to each Purchaser to complete the
transactions contemplated by the Purchase Agreement and that each Purchaser
(which shall be a third-party beneficiary of this Letter Agreement) and the
Company shall be entitled to specific performance of the undersigned’s
obligations hereunder. The undersigned hereby represents that the undersigned
has the power and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration therefor and
that the undersigned will indirectly benefit from the closing of the
transactions contemplated by the Purchase Agreement.

 

This Letter Agreement may not be amended or otherwise modified in any respect
without the written consent of the Company and the undersigned. This Letter
Agreement shall be construed and enforced in accordance with the laws of the
State of New York without regard to the principles of conflict of laws. The
undersigned hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court sitting in the Southern District of New York and
the courts of the State of New York located in Manhattan, for the purposes of
any suit, action or proceeding arising out of or relating to this Letter
Agreement, and hereby waives, and agrees not to assert in any such suit, action
or proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court, (ii) the suit, action or proceeding is brought in an
inconvenient forum, or (iii) the venue of the suit, action or proceeding is
improper. The undersigned hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
receiving a copy thereof sent to the Company at the address in effect for
notices to it under the Purchase Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. The
undersigned hereby waives any right to a trial by jury. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The undersigned agrees and understands that this Letter
Agreement does not intend to create any relationship between the undersigned and
any Purchaser, that no Purchaser is entitled to cast any votes on any matters
contemplated herein or in the Purchase Agreement and that no issuance or sale of
the Securities is created or intended by virtue of this Letter Agreement.

 

This Letter Agreement shall be binding on successors and assigns of the
undersigned with respect to the Securities and any such successor or assign
shall enter into a similar agreement for the benefit of the Purchasers.

 

This Letter Agreement shall automatically terminate, and the undersigned shall
be released from its obligations hereunder, upon the termination of the Purchase
Agreement prior to payment for and delivery of the securities of the Company
sold thereunder.

 

[Signature Page Follows]

 

 

 

 

  Very truly yours,   ___________________________________   Name of
Securityholder/Director/Officer (Print exact name)       By:
_________________________________   Signature       If not signing in an
individual capacity:   ___________________________________   Name of Authorized
Signatory (Print)       ___________________________________   Title of
Authorized Signatory (Print)   (indicate capacity of person signing if signing
as custodian, trustee or on behalf of an entity)

 

Exhibit A to Securities Purchase Agreement

 

 

 

 

Exhibit B

Plan of Distribution

 

We are registering the shares of common stock, which we refer to as the shares,
of the selling stockholders to permit the resale of such shares by such
stockholders from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the
shares. We will bear all fees and expenses incident to our obligation to
register the shares, except that, if the shares are sold through underwriters or
broker-dealers, the selling stockholders will be responsible for any
underwriting discounts or commissions or agent’s commissions.

 

The selling stockholders, which may include donees, pledgees, transferees or
other successors in interest selling shares or interests in shares received
after the date of this prospectus from a selling stockholder as a gift, pledge,
partnership, distribution or other transfer, may sell all or a portion of the
shares beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. The shares may be
sold in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions, on any national securities exchange or
quotation service on which the securities may be listed or quoted at the time of
sale. The selling stockholders may use any one or more of the following methods
when disposing of the shares:

 

  ● through the writing of options, whether such options are listed on an
options exchange or otherwise;         ● ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers;         ● block
trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;         ● purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;         ● an exchange distribution in
accordance with the rules of the applicable exchange;         ● privately
negotiated transactions;         ● short sales;         ● broker-dealers may
agree with the selling stockholders to sell a specified number of such
securities at a stipulated price per security;         ● a combination of any
such methods of sale; or         ● any other method permitted pursuant to
applicable law.

 

Exhibit B to Securities Purchase Agreement

 

 

 

 

If the selling stockholders effect such transactions by selling shares to or
through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares for whom they may act as agent or to whom they may sell
as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved).

 

In connection with sales of the shares or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares in the course of hedging in positions they
assume. The selling stockholders may also sell the shares short and deliver the
shares covered by this prospectus to close out short positions and to return
borrowed shares in connection with such short sales. The selling stockholders
may also loan or pledge the shares to broker-dealers that in turn may sell such
shares.

 

The selling stockholders may pledge or grant a security interest in some or all
of the shares owned by them, and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the
shares from time to time pursuant to this prospectus or other applicable
provisions of the Securities Act of 1933, as amended, or the Securities Act,
amending, if necessary, the list of selling stockholders to include such
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and donate the
shares in other circumstances in which case the transferees, donees, pledgees or
other successors in interest will be the selling beneficial owners for purposes
of this prospectus.

 

The selling stockholders also may resell all or a portion of the shares in open
market transactions, rather than under this prospectus, in reliance upon Rule
144 under the Securities Act, provided that they meet the criteria and conform
to the requirements of that rule.

 

The selling stockholders and any broker-dealer participating in the distribution
of the shares may be deemed to be “underwriters” within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions allowed
to, any such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act. At the time a particular offering of the
shares is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of shares being offered and the terms of the
offering, including the name or names of any broker-dealers or agents, any
discounts, commissions and other terms constituting compensation from the
selling stockholders and any discounts, commissions or concessions allowed or
reallowed or paid to broker-dealers.

 

Under the securities laws of some states, the shares may be sold in such states
only through registered or licensed brokers or dealers. In addition, in some
states, the shares may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.

 

There can be no assurance that the selling stockholders will sell any or all of
the shares registered pursuant to the registration statement of which this
prospectus forms a part.

 

Exhibit B to Securities Purchase Agreement

 

 

 

 

The selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, or the Exchange Act, and the rules and regulations thereunder,
including, without limitation, Regulation M of the Exchange Act, which may limit
the timing of purchases and sales of any of the shares of by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares to engage in
market-making activities with respect to the shares. All of the foregoing may
affect the marketability of the shares and the ability of any person or entity
to engage in market-making activities with respect to the shares.

 

We will pay all expenses of the registration of the shares pursuant to the
registration statement of which this prospectus forms a part, including, without
limitation, filing fees payable to the Securities Exchange Commission and
expenses of compliance with state securities or “blue sky” laws; provided,
however, that the selling stockholders will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling stockholders against
liabilities, including some liabilities under the Securities Act, or the selling
stockholders will be entitled to contribution. We may be indemnified by the
selling stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by
the selling stockholders specifically for use in this prospectus or we may be
entitled to contribution.

 

Once sold under the registration statement of which this prospectus forms a
part, the shares will be freely tradable in the hands of persons other than our
affiliates.

 

Exhibit B to Securities Purchase Agreement