Exhibit 10.2

 
BACKSTOP AGREEMENT
 
This BACKSTOP AGREEMENT (this “Agreement”), dated as of November 9, 2017, is
entered into by and between CorMedix Inc., a Delaware corporation with offices
located at 400 Connell Drive, 5th Floor, Berkeley Heights, NJ
07922 (the ”Company”), and the backstop investors signatory hereto
(collectively, the “Backstop Investors”). Capitalized terms used but not defined
herein shall have the meanings assigned thereto in that certain Securities
Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”),
between the Company, the Backstop Investors and the other investors party
thereto from time to time.
 
RECITALS
 
WHEREAS, the Company desires to raise capital through the issuance and sale to
certain accredited investors of 5,000 shares of its newly issued Series F
Preferred Stock at a purchase price of $1,000 per share (the “Issue Price”) for
an aggregate purchase price of $5,000,000 pursuant to and in accordance with
that certain Purchase Agreement entered into as of the date hereof;
 
WHEREAS, pursuant to this Agreement, and upon the terms and subject to the
conditions and limitations set forth herein and in consideration of the payment
of the Commitment Payment (as defined below), the Company is willing to sell,
and the Backstop Investors are willing to purchase, their Pro Rata Share of
shares of Series F Preferred Stock at the Issue Price per share;
 
WHEREAS, the Company and the Backstop Investors are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(a)(2) of the Securities Act of 1933, as amended from time
to time, and the rules and regulations promulgated thereunder, or any successor
statute (the “1933 Act”).
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Backstop
Investors hereby agree as follows:
 
1.
BACKSTOP COMMITMENT.
 
(a)  Upon the terms and subject to the conditions contained herein, the Company
shall have the option to require each of the Backstop Investors, severally and
not jointly, to purchase from the Company on a Closing Date, and the Backstop
Investors, in reliance on the representations and warranties set forth in this
Agreement and in the Purchase Agreement which are expressly incorporated herein
by reference, hereby agree to purchase from the Company, the Preferred Shares
set forth in a Closing Notice, as applicable, subject in all respects to the
limitations set forth in Section 1(d) below. The Preferred Shares that each of
the Backstop Investors is required to purchase pursuant to this Section 1(a) are
referred to herein as such Backstop Investor’s “Backstop Shares.”
 
 

 
 
(b) To the extent that the Company does not require the Backstop Investors to
purchase their respective entire Pro Rata Share of the Purchase Maximum on a
Closing Date, the Company may require the Backstop Investors to purchase all or
a lesser remaining percentage (provided that such percentage is the same for
each Backstop Investor) of such Backstop Investor’s Pro Rata Share of the
Purchase Maximum on any subsequent date (each, a “Closing Date”) by giving to
the Backstop Investors, at least five Business Days prior to such Closing Date,
a written notification (a “Closing Notice”) setting forth the percentage
(provided that such percentage is the same for each Backstop Investor) of such
Backstop Investor’s Pro Rata Share of the Purchase Maximum that the Company
requires each Backstop Investor to purchase on such Closing Date.
 
(c) Each closing of the purchase and sale of Backstop Shares hereunder, whether
on a Closing Date (each, a “Closing Date”), shall be referred to as a “Closing”.
At each Closing, (i) payment for the Backstop Shares that each Backstop Investor
has agreed to purchase shall be effected by each such Backstop Investor wiring
an amount, to an account of the Company identified to each Backstop Investor at
least five days prior to such Closing, equal to the product of (1) the number of
Backstop Shares issuable to such Backstop Investor at such Closing (as set forth
in a Closing Date Notice) and (2) the Issue Price (such amount, a “Backstop
Drawdown Amount”) and (ii) the Company shall deliver to each Backstop Investor
the Backstop Shares and such certificates, documents or instruments required to
be delivered by it to such Backstop Investor pursuant to the Purchase Agreement.
 
(d) The Backstop Investors shall have no obligation to purchase Preferred Shares
pursuant to this Agreement prior to January 15, 2018. The obligation of the
Backstop Investors to purchase Preferred Shares hereunder shall terminate on
March 31, 2018 (the “Termination Date”). Notwithstanding anything to the
contrary contained herein, in no event shall (i) any Backstop Investor be
required to purchase hereunder an aggregate number of Preferred Shares in excess
of its Pro Rata Share of the initial Purchase Maximum, (ii) the Backstop
Investors be required to purchase hereunder an aggregate number of Preferred
Shares in excess of the initial Purchase Maximum or (iii) except in the case of
the last Closing Notice, shall the Backstop Investors be required to purchase
any Preferred Shares if the aggregate purchase price therefor is less than
$500,000. As used herein, the term “Purchase Maximum” means (A) at any date of
determination on or before the Termination Date, an amount equal to (1) $3
million minus (2) the aggregate purchase price of Backstop Shares purchased by
the Backstop Investors hereunder on or prior to such date minus (3) without
duplication, the aggregate cash proceeds actually received by the Company from
the sale of its equity or equity-linked securities, in a bona fide transaction,
after the date hereof but on or prior to such date and (B) after the Termination
Date, zero.
 
(e) Conditions to the Backstop Investors’ Obligation to Purchase the Backstop
Shares. Notwithstanding anything to the contrary, the obligation of the Backstop
Investors hereunder to purchase Backstop Shares on a Closing Date is subject to
the satisfaction, at or before such Closing Date, of each of the following
conditions, provided that these conditions are for the Backstop Investors’ sole
benefit and may be waived by the Backstop Investors at any time in its sole
discretion by providing the Company with prior written notice thereof:
 
 
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(i) The Company shall have duly executed and delivered to the Backstop Investors
each of the Transaction Documents to which it is a party and the Company shall
have duly executed and delivered to the Backstop Shares to be purchased by such
Backstop Investor at such Closing Date.
 
(ii) Each of the conditions precedent set forth in Section 7 of the Purchase
Agreement shall have been satisfied and the Warrant Closing shall have occurred.
 
(iii) The Backstop Investors shall have received the opinion of Wyrick Robbins
Yates & Ponton LLP, the Company’s counsel, dated as of such Closing Date, in the
form acceptable to the Backstop Investors, with respect to the Securities.
 
(iv) The Company shall have delivered to each Backstop Investor a copy of the
Irrevocable Transfer Agent Instructions, in the form acceptable to the Backstop
Investors, which instructions shall have been delivered to and acknowledged in
writing by the Company’s transfer agent.
 
(v) The Company shall have delivered to each Backstop Investor a certificate
evidencing the formation and good standing of the Company in the Company’s
jurisdiction of formation issued by the Secretary of State of such jurisdiction
of formation as of a date within three (3) days of such Closing Date.
 
(vi) The Company shall have delivered to each Backstop Investor a certificate,
in the form acceptable to the Backstop Investors, executed by the Secretary of
the Company and dated as of such Closing Date, attaching (i) the resolutions
adopted by the Company’s Board of Directors in a form reasonably acceptable to
each Backstop Investor, which resolutions shall approve each of the Transaction
Documents and the transactions contemplated thereby, (ii) the Certificate of
Incorporation of the Company and (iii) the Bylaws of the Company, each as in
effect as of such Closing Date.
 
(vii) All of the representations and warranties made by the Company in this
Agreement and the Purchase Agreement that are qualified by materiality or
material adverse effect shall be true and correct in all respects as of the date
hereof and as of such Closing Date as though made at and as of such Closing Date
(except to the extent such representations and warranties expressly speak as of
an earlier date, which shall be true and correct in all respects as of such
date) and all of the representations and warranties made by the Company in this
Agreement and in the Purchase Agreement that are not qualified by materiality or
material adverse effect shall be true and correct in all material respects as of
the date hereof and as of such Closing Date as though made at and as of such
Closing Date (except to the extent such representations and warranties expressly
speak as of an earlier date, which shall be true and correct in all material
respects as of such date);
 
(viii) The Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company in this Agreement and the Purchase
Agreement at or prior to such Closing Date.
 
 
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(ix) The Company shall have delivered to the Backstop Investors a certificate,
duly executed by the Chief Executive Officer of the Company, dated as of such
Closing Date, certifying that the conditions set forth in Section 1(e)(vii) and
Section 1(e)(viii) have been satisfied.
 
(x) The Common Stock (I) shall be designated for quotation or listed (as
applicable) on an Eligible Market (as defined below) and (II) shall not have
been suspended, as of such Closing Date, by the Securities and Exchange
Commission (the “SEC”) or the Eligible Market from trading on the Eligible
Market nor shall suspension by the SEC or the Principal Market (as defined
below) have been threatened, as of such Closing Date, either (A) in writing by
the SEC or the Principal Market or (B) by falling below the minimum maintenance
requirements of the Principal Market.
 
(xi) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities (as
defined below), including without limitation, those required by the Principal
Market, if any.
 
(xii) No stockholder approval of the Company shall be required in connection
with the issuance of the Backstop Shares, any other Preferred Shares issuable
pursuant to the Purchase Agreement or the issuance of the Backstop Conversion
Shares or the Backstop Warrant Shares as of such Closing Date. “Backstop
Conversion Shares” means any shares of Common Stock issuable upon conversion of
the Backstop Shares. “Backstop Warrant Shares” means any shares of Common Stock
issuable upon exercise of the Backstop Warrants. “Securities” means
collectively, the Backstop Warrants, Backstop Warrant Shares, the Backstop
Shares and the Backstop Conversion Shares.
 
(xiii) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
Governmental Entity (as defined below) of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Transaction
Documents.
 
(xiv) Since the date of execution of this Agreement, no event or series of
events shall have occurred that have or would reasonably be expected to result
in a Material Adverse Effect (as defined below).
 
(xv) From the date hereof to such Closing Date, (i) trading in the Common Stock
shall not have been suspended by the SEC or the Principal Market, and, (ii) at
any time prior to such 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 the Principal 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 the Backstop Investors, makes it impracticable or
inadvisable to purchase the Backstop Shares on such Closing Date.
 
 
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(xvi)   No action, suit or proceeding before any arbitrator or any Governmental
Entity shall have been commenced, and no investigation by any Governmental
Entity shall have been threatened, against the Company or any Subsidiary, or any
of the Company or any Subsidiary or any Backstop Investor, or any of the
Backstop Investors, officers, directors or affiliates, seeking to restrain,
prevent or change the transactions contemplated by this Agreement, and the
Purchase Agreement or seeking damages in connection with such transactions.
 
(xvii) The Company and its Subsidiaries shall have delivered to the Backstop
Investors such other documents relating to the transactions contemplated by this
Agreement and the Purchase Agreement as the Backstop Investors or its counsel
may reasonably request.
 
(xviii) Each Backstop Warrant shall have been issued. With respect to each
Closing Date, each Backstop Warrant shall be in full force and effect, unless
exercised in full by the owner thereof, and the Company shall not be in default,
or have committed any act or omission that, with the giving of notice or lapse
of time or both, would constitute a default, under such Backstop Warrant.
 
(xix) The offering of Preferred Shares pursuant to the Purchase Agreement shall
have been conducted in accordance with the terms and conditions of the
Transaction Documents.
 
(f) Conditions to the Obligation of the Company to Issue Backstop Shares. The
obligation of the Company hereunder to issue and sell the Backstop Shares to the
Backstop Investors on a Closing Date is subject to the satisfaction, at or
before the such Closing Date, of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Backstop Investors
with prior written notice thereof:
 
(i) The Backstop Investors shall have executed each of the Transaction Documents
(other than this Agreement) to which it is a party and delivered the same to the
Company.
 
(ii) Such Backstop Investor shall have delivered to the Company its respective
Backstop Drawdown Amount with respect to such Closing Date by wire transfer of
immediately available funds pursuant to the wire instructions provided by the
Company.
 
(iii) All of the representations and warranties made by such Backstop Investor
in this Agreement that are qualified by materiality or material adverse effect
shall be true and correct in all respects as of the date hereof and as of such
Closing Date as though made at and as of such Closing Date (except to the extent
such representations and warranties expressly speak as of an earlier date, which
shall be true and correct in all respects as of such date) and all of the
representations and warranties made by such Backstop Investor in this Agreement
that are not qualified by materiality or material adverse effect shall be true
and correct in all material respects as of the date hereof and as of such
Closing Date as though made at and as of such Closing Date (except to the extent
such representations and warranties expressly speak as of an earlier date, which
shall be true and correct in all material respects as of such date).
 
 
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(iv) Such Backstop Investor shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Backstop Investor
at or prior to such Closing Date.
 
2.
ISSUANCE OF WARRANTS
 
(a) Issuance of Warrants. As consideration for each Backstop Investor’s
commitment to purchase Backstop Shares, at the Warrant Closing, the Company
hereby agrees to issue to each Backstop Investor, a warrant in the form attached
hereto as Exhibit A (a “Backstop Warrant”), to purchase a number of shares of
the Company’s common stock, par value $0.001 per share (“Common Stock”), equal
to such Backstop Investor’s Pro Rata Share of an amount equal to (A) $500,000
divided by (b) $0.5278 minus (B) the product of (a) 50% of the amount in
sub-clause (A) and (b) (i) solely to the extent raised from Persons other than
the Backstop Investors and their respective affiliates, up to $3 million of any
cash proceeds described in clause (A)(3) of the definition of Purchase Maximum
actually received by the Company on or prior to December 24, 2017 divided by
(ii) $3 million. The warrant shall have an exercise price of $0.001 per share of
common stock. As used herein, the term “Pro Rata Share” means the percentage set
forth on the signature page hereto with respect to a Backstop Investor.
 
(b) Closing. The issuance of the Backstop Warrants shall take place at a closing
(the “Warrant Closing”) to be held at the offices of Wyrick Robbins Yates &
Ponton, LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, North Carolina 27607, at
10:00 a.m. (New York Time), on the date of the initial Closing (as defined in
the Purchase Agreement). The date on which the Warrant Closing occurs is
referred to herein as the “Warrant Closing Date”.
 
(c) Closing Transactions.
 
(i) At the Warrant Closing, the Company shall deliver to each Backstop Investor:
 
(1) Such Backstop Investor’s Backstop Warrant, duly executed by the Company.
 
(2) the registration rights agreement in the form attached hereto as Exhibit B,
dated as of the Warrant Closing Date (the “Registration Rights Agreement”), by
and between the Backstop Investors and the Company, duly executed by the
Company.
 
(3)  an opinion of Wyrick Robbins Yates & Ponton LLP, the Company’s counsel,
dated as of the Warrant Closing Date, in the form acceptable to the Backstop
Investors, with respect to the Backstop Warrants and Backstop Warrant Shares.
 
(4) a copy of the Irrevocable Transfer Agent Instructions, in the form
acceptable to the Backstop Investors, which instructions shall have been
delivered to and acknowledged in writing by the Company’s transfer agent.
 
(ii) At the Warrant Closing, the Backstop Investors shall deliver to the Company
the Registration Rights Agreement, duly executed by the Backstop Investors.
 
 
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3.
BACKSTOP INVESTORS’ REPRESENTATIONS AND WARRANTIES.
 
Each Backstop Investor, severally and not jointly, represents and warrants,
solely with respect to itself, to the Company that, as of the date hereof and as
of each Closing Date:
 
(a) Organization; Authority. Such Backstop Investor is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents to which
it is a party and otherwise to carry out its obligations hereunder and
thereunder.
 
(b) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of such Backstop Investor and constitutes a
legal, valid and binding obligation of such Backstop Investor enforceable
against such Backstop Investor in accordance with its terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
 
(c) No Conflicts . The execution, delivery and performance by such Backstop
Investor of this Agreement and the consummation by such Backstop Investor of the
transactions contemplated hereby will not (i) contravene the organizational
documents of such Backstop Investor, (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Backstop
Investor is a party, or (iii) contravene any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
such Backstop Investor, except in the case of clauses (ii) and (iii) above, for
such conflicts, defaults, rights or violations which would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the ability of such Backstop Investor to perform its obligations hereunder.
 
(d)           Backstop Investors Status. As of the date hereof, such Backstop
Investor is an “accredited investor” as defined in Rule 501 under the 1933 Act.
 
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
On the date hereof and on each Closing Date, the Company shall be deemed to have
made to each Backstop Investor each of the representations and warranties set
forth in Section 3 of the Purchase Agreement and, for the avoidance of doubt,
each of this Agreement and the Backstop Warrants shall be deemed to be a
Transaction Document. In addition, the Company represents and warrants to each
Backstop Investor that, as of the date hereof and each Closing Date and except
as set forth in the Disclosure Letter:
 
 
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(a) Organization and Qualification. Each of the Company and its Subsidiaries (as
defined below) are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authorization to own their properties and to conduct
their business as now being conducted and as presently proposed to be conducted.
Each of the Company and each of its Subsidiaries is duly qualified as a foreign
entity to do business and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company and its Subsidiaries taken as a whole, (ii) the transactions
contemplated hereby or in any of the other Transaction Documents or (iii) the
authority or ability of the Company to perform any of its obligations under any
of the Transaction Documents. Other than its Subsidiaries, there is no Person in
which the Company, directly or indirectly, (i) owns any of the capital stock or
holds an equity or similar interest or (ii) controls or operates all or any part
of the business, operations or administration of such Person. A “Subsidiary”
means any Person in which the Company, directly or indirectly, (i) owns any of
the outstanding capital stock or holds any equity or similar interest of such
Person or (ii) controls or operates all or any part of the business, operations
or administration of such Person, and all of the foregoing. As of the date of
this Agreement, the Company has no Subsidiaries other than CorMedix Europe GmbH.
 
(b) Authorization; Enforcement; Validity. The Company has the requisite power
and authority to enter into and perform its obligations under this Agreement and
the other Transaction Documents and to issue the Securities (as defined below)
in accordance with the terms hereof and thereof. The execution and delivery of
this Agreement and the other Transaction Documents by the Company, and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Backstop Shares, the
Backstop Conversion Shares, the Backstop Warrants and the reservation for
issuance and issuance of the Backstop Warrant Shares issuable upon exercise of
the Backstop Warrants) have been duly authorized by the Company’s board of
directors or other governing body and, no filing, consent or authorization is
required by the Company, its board of directors or its stockholders or other
governing body. This Agreement has been, and the other Transaction Documents to
be delivered on or prior to the Closing will be prior to Closing, duly executed
and delivered by the Company, and upon such execution will constitute a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies and except as rights to indemnification and to contribution may be
limited by federal or state securities law.
 
 
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(c) Issuance of Securities. The issuance of the Backstop Shares and the Backstop
Warrants are duly authorized and upon issuance in accordance with the terms of
the Transaction Documents shall be validly issued, fully paid and non-assessable
and free from all preemptive or similar rights, taxes, withholding, liens,
charges and other encumbrances with respect to the issuance thereof. The Company
shall have reserved from its duly authorized capital stock as of the Closing
Date, not less than 125% of the maximum number of Backstop Conversion Shares and
Backstop Warrant Shares (without taking into account any limitations on the
exercise of the Backstop Warrants set forth therein). Upon issuance or
conversion in accordance with the Backstop Shares or exercise in accordance with
the Backstop Warrants (as the case may be), the Backstop Conversion Shares and
the Backstop Warrant Shares, respectively, when issued, will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common
Stock.
 
(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company and its
Subsidiaries of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Securities and the reservation for
issuance of the Backstop Conversion Shares and the Backstop Warrant Shares as
contemplated under Section 4(c) above) will not (i) result in a violation of the
Certificate of Incorporation (as defined below) or other organizational
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or Bylaws (as defined below) of the Company
or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal and
state securities laws and regulations and the rules and regulations of the NYSE
American (the “Principal Market”) and including all applicable federal laws,
rules and regulations) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is
bound or affected except, in the case of clause (ii) or (iii) above, to the
extent such violations that could not reasonably be expected to have a Material
Adverse Effect.
 
(e) Consents. Neither the Company nor any Subsidiary is required to obtain any
consent from, authorization or order of, or make any filing or registration with
(other than the SEC and the Principal Market) any Governmental Entity or other
self-regulatory organization or body or any other Person in order for it to
execute, deliver or perform any of its respective obligations under or
contemplated by the Transaction Documents, in each case, in accordance with the
terms hereof or thereof. All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to obtain pursuant
to the preceding sentence have been obtained or effected on or prior to such
Closing Date, and neither the Company nor any of its Subsidiaries are aware of
any facts or circumstances which might prevent the Company or any of its
Subsidiaries from obtaining or effecting any of the registration, application or
filings contemplated by the Transaction Documents. The Company is not in
violation of the requirements of the Principal Market and has no knowledge of
any facts or circumstances which could reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future. As used herein,
“Governmental Entity” means any nation, state, county, city, town, village,
district, or other political jurisdiction of any nature, federal, state, local,
municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal), multi-national
organization or body; or body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature or instrumentality of any of the foregoing,
including any entity or enterprise owned or controlled by a government or a
public international organization or any of the foregoing.
 
 
 
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(f) Acknowledgment Regarding Backstop Investors’ Purchase of Securities. The
Company acknowledges and agrees that each Backstop Investor is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby and that no
Backstop Investor is (i) an officer or director of the Company or any of its
Subsidiaries, (ii) to its knowledge, an “affiliate” (as defined in Rule 144) of
the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial
owner” of more than 10% of the shares of Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934
Act”), taking account of any limitations on exercise or conversion (including
“blockers”) contained in securities and instruments beneficially owned by such
Person, without conceding that such Person is a 10% stockholder for purposes of
federal securities laws). The Company further acknowledges that no Backstop
Investor is acting as a financial advisor or fiduciary of the Company or any of
its Subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Backstop Investor or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Backstop Investors’ purchase of
the Securities. The Company further represents to the Backstop Investors that
the Company’s decision to enter into the Transaction Documents to which it is a
party has been based solely on the independent evaluation by the Company and its
representatives.
 
(g) No Placement Agent’s Fees. Neither the Company nor any of its Subsidiaries
has engaged any placement agent or other agent in connection with the offer or
sale of the Securities with respect to which a fee or commission due from any
Backstop Investor in connection with the transactions contemplated hereby.
 
(h) Dilutive Effect. The Company understands and acknowledges that the number of
Backstop Conversion Shares and Backstop Warrant Shares will increase in certain
circumstances. The Company further acknowledges that its obligation to issue the
Backstop Conversion Shares upon conversion of the Backstop Shares in accordance
with this Agreement and the Backstop Shares and the Backstop Warrant Shares upon
exercise of the Backstop Warrants in accordance with this Agreement and the
Backstop Warrants is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other
stockholders of the Company.
 
(i) Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, interested stockholder, business
combination, poison pill (including, without limitation, any distribution under
a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation, Bylaws or other organizational documents or the
laws of the jurisdiction of its incorporation or otherwise which is or could
become applicable to any Backstop Investor as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and such Backstop Investor’s ownership of the
Securities. The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of shares
of Common Stock or a change in control of the Company or any of its
Subsidiaries.
 
 
10

 
 
(j) SEC Documents; Financial Statements. During the two (2) years prior to the
date hereof and the applicable Closing Date, the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). The Company has delivered to each Backstop Investor or its
respective representatives true, correct and complete copies of each of the SEC
Documents not available on the EDGAR system requested by the Backstop Investors
or its respective representatives. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto as in effect as of the
time of filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will not be
material, either individually or in the aggregate). No other information
provided by or on behalf of the Company to the Backstop Investors which is not
included in the SEC Documents (including, without limitation, information
referred to in Section 5(g) of this Agreement) contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein not misleading, in the light of the circumstance under
which they are or were made. The Company is not currently contemplating to amend
or restate any of the financial statements (including without limitation, any
notes or any letter of the independent accountants of the Company with respect
thereto) included in the SEC Documents (the “Financial Statements”), nor is the
Company currently aware of facts or circumstances which would require the
Company to amend or restate any of the Financial Statements, in each case, in
order for any of the Financials Statements to be in compliance with GAAP and the
rules and regulations of the SEC. The Company has not been informed by its
independent accountants that they recommend that the Company amend or restate
any of the Financial Statements or that there is any need for the Company to
amend or restate any of the Financial Statements.
 
(k) Transactions With Affiliates. None of the officers, directors, employees or
affiliates of the Company or any of its Subsidiaries is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or 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, or otherwise
requiring payments to or from any such officer, director, employee or affiliate
or, to the knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other Person in which any such officer, director, or
employee has a substantial interest or is an employee, officer, director,
trustee, affiliate or partner.
 
 
11

 
 
(l) Equity Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i) 160,000,000 shares of Common Stock, of which,
67,025,419 were issued and outstanding on October 31, 2017, and
10,282,545 shares are reserved for issuance pursuant to securities (other than
the Warrants) exercisable or exchangeable for, or convertible into, shares of
Common Stock and (ii) 2,000,000 shares of preferred stock, of which 761,429
 shares of non-voting convertible Series A Preferred Stock are authorized and
none of which are issued and outstanding, 454,546 shares of non-voting
convertible Series B Preferred Stock are authorized and none of which are issued
and outstanding, 150,000 shares of non-voting convertible Series C-1 Preferred
Stock are authorized and none of which are issued and outstanding, 150,000
shares of non-voting convertible Series C-2 Preferred Stock are authorized and
none of which are issued and outstanding, 200,000 shares of non-voting
convertible Series C-3 Preferred Stock are authorized and 104,000 shares of
which are issued and outstanding, (viii) 73,962 shares of non-voting convertible
Series D Preferred Stock are authorized and 73,962 shares of which are issued
and outstanding, (ix) 89,623 shares of non-voting convertible Series E Preferred
Stock are authorized and 89,623 shares  of which are issued and outstanding, on
October 31, 2017, and (x) 5,000 shares of Series F Convertible Stock are
authorized and none of which are issued and outstanding.  No shares of Common
Stock or Preferred Stock are held in treasury.    All of such outstanding shares
are duly authorized and have been, or upon issuance will be, validly issued and
are fully paid and nonassessable.  An aggregate of 2,959,934 shares of the
Company’s issued and outstanding Common Stock on the date hereof are as of the
date hereof owned by Persons who are “affiliates” (as defined in Rule 405 of the
1933 Act and calculated based on the assumption that only officers, directors
and holders of at least 10% of the Company’s issued and outstanding Common Stock
are “affiliates” without conceding that any such Persons are “affiliates” for
purposes of federal securities laws) of the Company or any of its Subsidiaries. 
To the Company’s knowledge, as of the date hereof, no Person owns 10% or more of
the Company’s issued and outstanding shares of Common Stock (calculated based on
the assumption that all Convertible Securities, whether or not presently
exercisable or convertible, have been fully exercised or converted (as the case
may be) taking account of any limitations on exercise or conversion (including
“blockers”) contained therein without conceding that such identified Person is a
10% stockholder for purposes of federal securities laws). Except as disclosed in
the Disclosure Letter: (i) none of the Company’s or any Subsidiary’s capital
stock is subject to preemptive rights or any other similar rights or any liens
or encumbrances suffered or permitted by the Company or any Subsidiary; (ii)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries; (iii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound; (iv) there are no financing statements securing obligations in any
amounts filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act; (vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii)
neither the Company nor any Subsidiary has any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement; and (ix)
neither the Company nor any of its Subsidiaries have any liabilities or
obligations required to be disclosed in the SEC Documents which are not so
disclosed in the SEC Documents, other than those incurred in the ordinary course
of the Company’s or its Subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or could not have a Material Adverse
Effect.  The Company has furnished to each Backstop Investor true, correct and
complete copies of the Company’s Certificate of Incorporation, as amended and as
in effect on the date hereof (the “Certificate of Incorporation”), and the
Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and the terms of all securities convertible into, or exercisable or exchangeable
for, shares of Common Stock and the material rights of the holders thereof in
respect thereto that have not been disclosed in the SEC Documents.
 
 
12

 
 
(m) Acknowledgement Regarding Backstop Investors’ Trading Activity. It is
understood and acknowledged by the Company that (i) following the public
disclosure of the transactions contemplated by the Transaction Documents, in
accordance with the terms thereof, no Backstop Investor has been asked by the
Company or any of its Subsidiaries to agree, nor has any Backstop Investor
agreed with the Company or any of its Subsidiaries, to desist from effecting any
transactions in or with respect to (including, without limitation, purchasing or
selling, long and/or short) any securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) each Backstop Investor, and
counterparties in “derivative” transactions to which such Backstop Investor is a
party, directly or indirectly, presently may have a “short” position in the
Common Stock which was established prior to such Backstop Investor’s knowledge
of the transactions contemplated by the Transaction Documents, and (iii) no
Backstop Investor shall be deemed to have any affiliation with or control over
any arm’s length counterparty in any “derivative” transaction. The Company
further understands and acknowledges that following the public disclosure of the
transactions contemplated by the Transaction Documents pursuant to the 8-K
Filings (as defined below) each Backstop Investor may engage in hedging and/or
trading activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value
and/or number of the Backstop Conversion Shares, as applicable, deliverable with
respect to the Securities are being determined and (b) such hedging and/or
trading activities, if any, can reduce the value of the existing stockholders’
equity interest in the Company both at and after the time the hedging and/or
trading activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement or any other Transaction Document or any of the documents
executed in connection herewith or therewith.
 
(n) U.S. Real Property Holding Corporation. Neither the Company nor any of its
Subsidiaries is, or has ever been, and so long as any of the Securities are held
by the Backstop Investors, shall become, a U.S. real property holding
corporation within the meaning of Section 897 of the Code, and the Company and
each Subsidiary shall so certify upon the Backstop Investors’ request.
 
(o) Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the issuance, sale and transfer of the Securities to be sold or issued, now
or in the future, to the Backstop Investors hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such
taxes will be or will have been complied with.
 
(p) No Additional Agreements. The Company does not have any agreement or
understanding with any Backstop Investor with respect to the transactions
contemplated by the Transaction Documents other than as specified in the
Transaction Documents.
 
 
 
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(q) Disclosure. The Company confirms that neither it nor any other Person acting
on its behalf has provided any Backstop Investor or its agents or counsel with
any information that constitutes or could reasonably be expected to constitute
material, non-public information concerning the Company or any of its
Subsidiaries, other than the existence of the transactions contemplated by this
Agreement and the other Transaction Documents. The Company understands and
confirms that the Backstop Investors will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided
to the Backstop Investors regarding the Company and its Subsidiaries, their
businesses and the transactions contemplated hereby, including the schedules to
this Agreement, furnished by or on behalf of the Company or any of its
Subsidiaries is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each press release issued by the Company or any of its
Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release 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 are made, not misleading. No event or circumstance has occurred or
information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, liabilities, prospects, operations (including
results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof
or announcement by the Company but which has not been so publicly announced or
disclosed. The Company acknowledges and agrees that no Backstop Investor makes
or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.
 
(r)    Private Placement. No registration under the 1933 Act is required for the
offer and sale of the Backstop Warrants, the Backstop Shares, the Backstop
Conversion Shares or the Backstop Warrant Shares issuable upon exercise or
conversion thereof, as applicable, by the Company to any Backstop Investor as
contemplated hereby.
 
5.
COVENANTS.
 
(a) Best Efforts. The Company shall use its best efforts to timely satisfy each
of the conditions to be satisfied by it as provided in Section 1.
 
(b) Reporting Status. During the period (the “Reporting Period”) commencing on
the Closing Date and ending on the date on which the Backstop Investors shall
have sold all of the Securities or any capital stock of the Company issued or
issuable with respect to the Backstop Conversion Shares or the Backstop Warrant
Shares or any other capital stock of the Company owned by them, including,
without limitation, (1) as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise and (2) shares of
capital stock of the Company into which the shares of Common Stock are
converted, exercised or exchanged the Backstop Warrants or otherwise issuable
pursuant to the terms of the Backstop Warrants (collectively, the “Covered
Securities”), the Company shall timely file all reports required to be filed
with the SEC pursuant to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would no longer require or otherwise
permit such termination.
 
 
14

 
 
(c) Use of Proceeds. The Company will use the proceeds resulting from the
issuance of the Backstop Shares for general corporate purposes.
 
(d) Financial Information. The Company agrees to send the following to each
holder of the Securities (an “Investor”) during the Reporting Period (i) unless
the following are filed with the SEC through EDGAR and are available to the
public through the EDGAR system, within one (1) Business Day after the filing
thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, any interim reports or any consolidated balance sheets,
income statements, stockholders’ equity statements and/or cash flow statements
for any period other than annual, any Current Reports on Form 8-K and any
registration statements (other than on Form S-8) or amendments filed pursuant to
the 1933 Act, (ii) on the same day as the release thereof, facsimile copies of
all press releases issued by the Company or any of its Subsidiaries and (iii)
copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders.
 
(e) Listing. The Company shall promptly secure the listing or designation for
quotation (as the case may be) of all of the Covered Securities upon each
national securities exchange and automated quotation system, if any, upon which
the Common Stock is then listed or designated for quotation (as the case may be)
(subject to official notice of issuance) and shall maintain such listing or
designation for quotation (as the case may be) of all Covered Securities from
time to time issuable under the terms of the Transaction Documents on a national
securities exchange or automated quotation system. The Company shall maintain
the Common Stock’s listing or designation for quotation (as the case may be) on
one of the Principal Market, The New York Stock Exchange, the Nasdaq Capital
Market, the Nasdaq Global Market or the Nasdaq Global Select Market (each, an
“Eligible Market”). Neither the Company nor any of its Subsidiaries shall take
any action which could be reasonably expected to result in the delisting or
suspension of the Common Stock on an Eligible Market. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this
Section 5(e).
 
(f) Fees. The Company shall reimburse the Backstop Investors for all reasonable
costs and expenses incurred by it or its affiliates in connection with the
transactions contemplated by the Transaction Documents (including, without
limitation, as applicable, all reasonable legal fees and disbursements of
counsel to the Backstop Investors, any other reasonable fees and expenses in
connection with the structuring, documentation and implementation of the
transactions contemplated by the Transaction Documents and due diligence and
regulatory filings in connection therewith) (the “Expense Amount”) and the
Company shall pay such Expense Amount within 5 days following written notice by
the Backstop Investors.
 
 
15

 
 
(g) Disclosure of Transactions and Other Material Information. The Company
shall, on or before 8:30 a.m., New York time, on the first Trading Day after the
date of this Agreement, file a Current Report on Form 8-K describing all the
material terms of the transactions contemplated by the Transaction Documents in
the form required by the 1934 Act and attaching all the material Transaction
Documents (including, without limitation, this Agreement (and all schedules to
this Agreement), the form of the Backstop Warrants (including all attachments,
the “8-K Filing”). The Backstop Investors shall have reasonable opportunity to
review and comment on the 8-K Filing prior to the filing thereof. From and after
the filing of the 8-K Filing, the Company shall have disclosed all material,
non-public information (if any) provided to the Backstop Investors 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. The Company shall not, and the Company shall cause
the Subsidiary and each of its and their respective officers, directors,
employees and agents not to, provide any Backstop Investor with any material,
non-public information regarding the Company or the Subsidiary from and after
the 8-K Filing without the express prior written consent of the Backstop
Investors. The Company understands and confirms that each Backstop Investor
shall be relying on the foregoing covenant and agreement in effecting
transactions in securities of the Company, and based on such covenant and
agreement, unless otherwise expressly agreed in writing by such Backstop
Investor: (i) such Backstop Investor does not have any obligation of
confidentiality with respect to any information that the Company provides to
such Backstop Investor; and (ii) such Backstop Investor shall not be deemed to
be in breach of any duty to the Company and/or to have misappropriated any
non-public information of the Company, if such Backstop Investor engages in
transactions of securities of the Company, including, without limitation, any
hedging transactions, short sales and/or any derivative transactions based on
securities of the Company while in possession of such material non-public
information. In the event of a breach of any of the foregoing covenants or any
of the covenants or agreements contained in the Transaction Documents by the
Company, the Subsidiary, or any of its or their respective officers, directors,
employees and agents (as determined in the reasonable good faith judgment of
each Backstop Investor), in addition to any other remedy provided herein or in
the Transaction Documents, each Backstop Investor shall have the right to make a
public disclosure, in the form of a press release, public advertisement or
otherwise, of such breach or such material, non-public information, as
applicable, without the prior approval by the Company, the Subsidiary, or any of
its or their respective officers, directors, employees or agents. No Backstop
Investor shall have any liability to the Company, any of its Subsidiaries, or
any of its or their respective officers, directors, employees, stockholders or
agents, for any such disclosure. Subject to the foregoing, neither the Company,
its Subsidiaries nor any Backstop Investor shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, the Company shall be entitled, without the prior approval of
any Backstop Investor, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Backstop Investor
shall be consulted by the Company in connection with any such press release or
other public disclosure prior to its release). Without the prior written consent
of the applicable Backstop Investor, the Company shall not (and shall cause each
of its Subsidiaries and affiliates to not) disclose the name of such Backstop
Investor in any filing, announcement, release or otherwise.
 
 
16

 
 
(h) Reservation of Shares. During the period commencing on the Closing Date and
ending on the date no Backstop Shares or Backstop Warrants remain outstanding,
the Company shall take all actions reasonably necessary (including, without
limitation increasing any such reserve, as necessary, to at all times have
authorized, and reserved for the purpose of issuance, no less than (i) 125% of
the maximum number of Backstop Conversion Shares (determined without taking into
account any limitations on the conversion of the Backstop Shares set forth
therein), and (ii) the maximum number of Backstop Warrant Shares issuable upon
exercise of the Backstop Warrants (without taking into account any limitations
on the exercise of the Backstop Warrants set forth therein).
 
(i) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.
 
(j) Variable Securities. During the period commencing on the date hereof and
ending on the later of (x) the date the Backstop Shares are no longer
outstanding and (y) the date the Backstop Warrants are no longer outstanding,
the Company and each Subsidiary shall be prohibited from effecting or entering
into an agreement to effect any Subsequent Placement involving a Variable Rate
Transaction other than at-the-market offerings through a registered
broker-dealer or offerings of Preferred Shares. “Variable Rate Transaction”
means a transaction, on terms more favorable to an investor therein than the
terms of this Agreement and the Certificate of Designations, in which the
Company or any Subsidiary (i) issues or sells any Convertible Securities either
(A) at a conversion, exercise or exchange rate or other price that is based upon
and/or varies with the trading prices of or quotations for the shares of Common
Stock at any time after the initial issuance of such Convertible Securities, or
(B) with a conversion, exercise or exchange price that is subject to being reset
at some future date after the initial issuance of such Convertible Securities or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock, other
than pursuant to a customary “weighted average” anti-dilution provision or (ii)
enters into any agreement (other than an at-the-market offering through a
registered broker-dealer) whereby the Company or any Subsidiary may sell
securities at a future determined price (other than standard and customary
“preemptive” or “participation” rights). Each Backstop Investor shall be
entitled to obtain injunctive relief against the Company and its Subsidiaries to
preclude any such issuance, which remedy shall be in addition to any right to
collect damages.
 
 
17

 
 
(k) Stockholder Approval. (A) To the extent the exercise or conversion of the
Backstop Shares or the Backstop Warrants, as applicable, would require the
approval or consent of the stockholders of the Company  (in each case, without
giving effect to any limitations on exercise or “blockers”) pursuant to the
rules and regulations of the Principal Market, the Company shall provide each
stockholder entitled to vote at either (x) the next annual meeting of
stockholders of the Company or (y) a special meeting of stockholders of the
Company (the “Stockholder Meeting”), which shall be promptly called and held not
later than June 30, 2018 (the “Stockholder Meeting Deadline”), a proxy
statement, substantially in a form which shall have been previously reviewed by
counsel to the Backstop Investors, at the expense of the Company but in any
event such expense not to exceed $5,000 without the prior written approval of
the Company; soliciting each such stockholder’s affirmative vote at the
Stockholder Meeting for approval of resolutions (“Stockholder Resolutions”)
providing for the Company’s issuance of all of the Securities as described in
the Transaction Documents in accordance with applicable law and the rules and
regulations of the Principal Market (such affirmative approval being referred to
herein as the “Stockholder Approval”, and the date such Stockholder Approval is
obtained, the “Stockholder Approval Date”), and the Company shall use its
reasonable best efforts to solicit its stockholders’ approval of such
resolutions and to cause the Board of Directors of the Company to recommend to
the stockholders that they approve such resolutions. The Company shall be
obligated to seek to obtain the Stockholder Approval by the Stockholder Meeting
Deadline. If, despite the Company’s reasonable best efforts the Stockholder
Approval is not obtained on or prior to the Stockholder Meeting Deadline, the
Company shall cause an additional Stockholder Meeting to be held once in each of
the three subsequent calendar quarters thereafter until such Stockholder
Approval is obtained. If, despite the Company’s reasonable best efforts the
Stockholder Approval is not obtained after such subsequent stockholder meetings,
the Company shall cause an additional Stockholder Meeting to be held
semi-annually thereafter until such Stockholder Approval is obtained. (B) The
Company shall use its best efforts to obtain any waiver, consent or approval, in
each case, in a form acceptable to the Backstop Investor, of the holders of the
Company’s Junior Securities (as defined in the Certificate of Designations)
authorizing the issuance of the Series F Preferred Stock as a series of
preferred stock senior in rank to such class of Junior Securities.
 
(l) Passive Foreign Investment Company. The Company shall conduct its business,
and shall cause its Subsidiaries to conduct their respective businesses, in such
a manner as will ensure that the Company and its Subsidiaries will not be deemed
to constitute a passive foreign investment company within the meaning of Section
1297 of the Code.
 
(m) Corporate Existence. So long as any Backstop Investor beneficially owns any
Preferred Shares or Backstop Warrants, the Company shall not be party to any
Fundamental Transaction (as defined in the Certificate of Designations) unless
the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Certificate of Designations.
 
(n) Conversion and Exercise Procedures. Each of the form of Exercise Notice
included in the Backstop Warrants and the form of Conversion Notice included in
the Purchase Agreement set forth the totality of the procedures required of any
Backstop Investor in order to exercise the Backstop Warrants or convert the
Preferred Shares. No additional legal opinion, other information or instructions
shall be required of any Backstop Investor to exercise their Backstop Warrants
or convert their Preferred Shares. The Company shall honor exercises of the
Backstop Warrants and conversions of the Preferred Shares and shall deliver the
Backstop Conversion Shares and Backstop Warrant Shares in accordance with the
terms, conditions and time periods set forth in the Purchase Agreement,
Certificate of Incorporation, and Backstop Warrants.
 
 
18

 
 
6.
REGISTER; TRANSFER AGENT INSTRUCTIONS.
 
(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Backstop Warrants in which the Company
shall record the name and address of the Person in whose name the Backstop
Warrants have been issued (including the name and address of each transferee),
and the number of Backstop Warrant Shares issuable upon exercise of the Backstop
Warrants held by such Person. The Company shall keep the register open and
available at all times during business hours for inspection of the Backstop
Investors or their respective legal representatives.
 
(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to the Transfer Agent in the form previously provided to the
Company (the “Irrevocable Transfer Agent Instructions”) to issue certificates or
credit shares to the applicable balance accounts at DTC, registered in the name
of the applicable Backstop Investor or its respective nominee(s), for the
Backstop Conversion Shares and the Backstop Warrant Shares (in the case of
Backstop Warrant Shares, with respect to cashless exercise(s) or exercises when
there is an effective registration statement covering such Backstop Warrant
Shares and the Backstop Conversion Shares) in such amounts as specified from
time to time by the applicable Backstop Investor to the Company upon conversion
of the Backstop Shares or other issuance pursuant to the terms of the Backstop
Shares or the exercise of the Backstop Warrants (as the case may be). The
Company represents and warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 6(b) will be given by
the Company to the Transfer Agent with respect to the Backstop Conversion Shares
and the Backstop Warrants Shares, and shall otherwise be freely transferable on
the books and records of the Company. If a Backstop Investor effects a sale,
assignment or transfer of the Securities, the Company shall permit the transfer
and, with respect to the Backstop Conversion Shares and Backstop Warrant Shares
shall also promptly instruct the Transfer Agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Backstop Investor to effect
such sale, transfer or assignment. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the applicable
Backstop Investor. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 6(b) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 6(b), that the applicable Backstop Investor shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required. The Company shall cause its counsel to issue the legal
opinion referred to in the Irrevocable Transfer Agent Instructions to the
Transfer Agent to the extent required or requested by the Transfer Agent. Any
fees (with respect to the Transfer Agent, counsel to the Company or otherwise)
associated with the issuance of such opinion shall be borne by the Company.
 
 
 
19

 
 
7.
MISCELLANEOUS.
 
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State 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, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page 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 signature page
were an original thereof.
 
(c) Headings; Gender. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. Unless the context clearly indicates otherwise, each pronoun herein
shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like
import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import
refer to this entire Agreement instead of just the provision in which they are
found.
 
 
 
20

 
 
(d) Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s). Notwithstanding anything to the contrary contained
in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the
parties that in no event shall amounts and value paid by the Company and/or any
of its Subsidiaries (as the case may be), or payable to or received by any
Backstop Investor, under the Transaction Documents (including without
limitation, any amounts that would be characterized as “interest” under
applicable law) exceed amounts permitted under any applicable law. Accordingly,
if any obligation to pay, payment made to any Backstop Investor, or collection
by any Backstop Investor pursuant the Transaction Documents is finally
judicially determined to be contrary to any such applicable law, such obligation
to pay, payment or collection shall be deemed to have been made by mutual
mistake of such Backstop Investor, the Company and its Subsidiaries and such
amount shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be so
prohibited by the applicable law. Such adjustment shall be effected, to the
extent necessary, by reducing or refunding, at the option of the Backstop
Investors, the amount of interest or any other amounts which would constitute
unlawful amounts required to be paid or actually paid to the Backstop Investors
under the Transaction Documents. For greater certainty, to the extent that any
interest, charges, fees, expenses or other amounts required to be paid to or
received by any Backstop Investor under any of the Transaction Documents or
related thereto are held to be within the meaning of “interest” or another
applicable term to otherwise be violative of applicable law, such amounts shall
be pro-rated over the period of time to which they relate.
 
 
21

 
 
(e) Entire Agreement; Amendments. This Agreement, the other Transaction
Documents and the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all other prior oral or
written agreements between the Backstop Investors, the Company, its
Subsidiaries, their affiliates and Persons acting on their behalf solely with
respect to the matters contained herein and therein, and this Agreement, the
other Transaction Documents, the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein contain the entire
understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other
Transaction Document shall (or shall be deemed to) (i) have any effect on any
agreements any Backstop Investor has entered into with, or any instruments such
Backstop Investor has received from, the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by such
Backstop Investor in the Company or (ii) waive, alter, modify or amend in any
respect any obligations of the Company or any of its Subsidiaries, or any rights
of or benefits to such Backstop Investor or any other Person, in any agreement
entered into prior to the date hereof between or among the Company and/or any of
its Subsidiaries and such Backstop Investor, or any instruments such Backstop
Investor received from the Company and/or any of its Subsidiaries prior to the
date hereof, and all such agreements and instruments shall continue in full
force and effect. Except as specifically set forth herein or therein, neither
the Company nor any Backstop Investor makes any representation, warranty,
covenant or undertaking with respect to such matters. For clarification
purposes, the Recitals are part of this Agreement. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Backstop Investors. No waiver shall be effective unless it is in
writing and signed by an authorized representative of the waiving party. Other
than the Transaction Documents, the Company has not, directly or indirectly,
made any agreements with any Backstop Investor relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents. Without limiting the foregoing, the
Company confirms that, except as set forth in this Agreement or the other
Transaction Documents, no Backstop Investor has made any commitment or promise
or has any other obligation to provide any financing to the Company, any
Subsidiary or otherwise. As a material inducement for the Backstop Investors to
enter into this Agreement, the Company expressly acknowledges and agrees that
(i) no due diligence or other investigation or inquiry conducted by any Backstop
Investor, any of its advisors or any of its representatives shall affect such
Backstop Investor’s right to rely on, or shall modify or qualify in any manner
or be an exception to any of, the Company’s representations and warranties
contained in this Agreement or any other Transaction Document and (ii) unless a
provision of this Agreement or any other Transaction Document is expressly
preceded by the phrase “except as disclosed in the SEC Documents,” nothing
contained in any of the SEC Documents shall affect any Backstop Investor’s right
to rely on, or shall modify or qualify in any manner or be an exception to any
of, the Company’s representations and warranties contained in this Agreement or
any other Transaction Document.
 
(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day (as defined below) after deposit
with an overnight courier service with next day delivery specified, in each
case, properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be
 
 
 
22

 
 
If to the Company:
 
Cormedix Inc.
400 Connell Drive, 5th Floor
Suite 5000
Berkeley Heights, NJ 07922
Telephone: (908) 517-95000
Facsimile: (908) 429-4307
Attention: Chief Executive Officer
 
With a copy (for informational purposes only) to:
 
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail, Suite 300
Raleigh, NC 27607
 
Telephone: (919) 781-4000
Facsimile: (919) 781-4865
Attention: Alexander M. Donaldson, Esq.
 
 
If to the Transfer Agent:
 
VStock Transfer, LLC
18 Lafayette Place
Woodmere, NY 11598
 
Telephone: (212) 828-8436
Facsimile: (646) 536-3179
Attention: Yoel Goldfeder
 
If to any Backstop Investor, to:
 
c/o Elliott Management Corporation
40 West 57th Street
New York, NY 10019
 
Telephone: (212) 974-6000
Facsimile: (212) 478-2476
Attention: Elliot Greenberg
 
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.
“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to
remain closed.
 
 
23

 
 
(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns, including any assignee of any of the Securities. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of each Backstop Investor, including, without limitation, by way
of a Fundamental Transaction (as defined in the Backstop Warrants) (unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Backstop Warrants and the Certificate of
Designations). Provided a Backstop Investor provides the Company with written
notice thereof, such Backstop Investor may assign some or all of its rights
hereunder in connection with any transfer of any of its Securities without the
consent of the Company, in which event such assignee shall be deemed to be a
Backstop Investor hereunder with respect to such assigned rights, provided such
assignment is in compliance with applicable securities laws.
 
(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, other than the Indemnitees referred to in Section 7(k).
 
(i) Survival. The representations, warranties, agreements and covenants shall
survive the Closing. Each Backstop Investor shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.
 
(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
 
 
24

 
 
(k) Indemnification.
 
(i) In consideration of each Backstop Investor’s execution and delivery of the
Transaction Documents to which it is a party and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Backstop Investor and each holder of any Securities and all of
their stockholders, partners, members, officers, directors, employees and direct
or indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company or any Subsidiary in any of the Transaction Documents, (b) any breach of
any covenant, agreement or obligation of the Company or any Subsidiary contained
in any of the Transaction Documents, (c) any untrue statement or alleged untrue
statement of a material fact contained, or incorporated by reference, in a
registration statement or any amendment thereto or any omission or alleged
omission to state therein, or in any document incorporated by reference therein,
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (d) any untrue statement or alleged untrue
statement of a material fact contained, or incorporated by reference, in any
prospectus, any issuer free writing prospectus, or in any amendment thereof or
supplement thereto, or in any “issuer information” (as defined in Rule 433 under
the 1933 Act) of the Company, which “issuer information” is required to be, or
is, filed with the SEC or otherwise contained in any free writing prospectus, or
any amendment or supplement thereto, or any omission or alleged omission to
state therein, or in any document incorporated by reference therein, a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, (e)
any violation of United States federal or state securities laws or the rules and
regulations of the Principal Market or any Eligible Market in connection with
the transactions contemplated by this Agreement, the Backstop Warrants and the
Backstop Shares by the Company or any of its Subsidiaries, affiliates, officers,
directors or employees or (f) any cause of action, suit or claim brought or made
against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company or any Subsidiary) and
arising out of or resulting from (i) the execution, delivery, performance or
enforcement of any of the Transaction Documents, (ii) any transaction financed
or to be financed in whole or in part, directly or indirectly, with the proceeds
of the issuance of the Securities, (iii) any disclosure properly made by any
Backstop Investor pursuant to Section 5(g), or (iv) the status of any Backstop
Investor or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.
 
 
25

 
 
(ii) Promptly after receipt by an Indemnitee under this Section 7(k) of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall,
if a claim in respect thereof is to be made against the Company under this
Section 7(k), deliver to the Company a written notice of the commencement
thereof, and the Company shall have the right to participate in, and, to the
extent the Company so desires, to assume control of the defense thereof with
counsel mutually satisfactory to the Company and the Indemnitee; provided,
however, that an Indemnitee shall have the right to retain its own counsel with
the fees and expenses of such counsel to be paid by the Company if: (i) the
Company has agreed in writing to pay such fees and expenses; (ii) the Company
shall have failed promptly to assume the defense of such Indemnified Liability
and to employ counsel reasonably satisfactory to such Indemnitee in any such
Indemnified Liability; or (iii) the named parties to any such Indemnified
Liability (including any impleaded parties) include both such Indemnitee and the
Company, and such Indemnitee shall have been advised by counsel that a conflict
of interest is likely to exist if the same counsel were to represent such
Indemnitee and the Company (in which case, if such Indemnitee notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, then the Company shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Company), provided
further, that in the case of clause (iii) above the Company shall not be
responsible for the reasonable fees and expenses of more than one (1) separate
legal counsel for such Indemnitee. The Indemnitee shall reasonably cooperate
with the Company in connection with any negotiation or defense of any such
action or Indemnified Liability by the Company and shall furnish to the Company
all information reasonably available to the Indemnitee which relates to such
action or Indemnified Liability. The Company shall keep the Indemnitee
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. The Company shall not be liable
for any settlement of any action, claim or proceeding effected without its prior
written consent, provided, however, that the Company shall not unreasonably
withhold, delay or condition its consent. The Company shall not, without the
prior written consent of the Indemnitee, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such Indemnified
Liability or litigation, and such settlement shall not include any admission as
to fault on the part of the Indemnitee. Following indemnification as provided
for hereunder, the Company shall be subrogated to all rights of the Indemnitee
with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice
to the Company within a reasonable time of the commencement of any such action
shall not relieve the Company of any liability to the Indemnitee under this
Section 7(k), except to the extent that the Company is materially and adversely
prejudiced in its ability to defend such action.
 
(iii) The indemnification required by this Section 7(k) 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 Indemnified Liabilities are
incurred.
 
 
 
26

 
 
(iv) The indemnity agreement contained herein shall be in addition to (A) any
cause of action or similar right of the Indemnitee against the Company or
others, and (B) any liabilities the Company may be subject to pursuant to the
law.
 
(l) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty. Each and every reference to share prices,
shares of Common Stock and any other numbers in this Agreement that relate to
the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions
that occur with respect to the Common Stock after the date of this Agreement.
 
(m) Remedies. Each Backstop Investor and each holder of any Securities shall
have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which such holders have under
any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it or any Subsidiary fails to perform,
observe, or discharge any or all of its or such Subsidiary’s (as the case may
be) obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the applicable Backstop Investor. The Company therefore
agrees that each Backstop Investor shall be entitled to seek specific
performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case
without the necessity of proving actual damages and without posting a bond or
other security.
 
(n) Withdrawal Right. Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) the Transaction Documents, whenever
a Backstop Investor exercises a right, election, demand or option under a
Transaction Document and the Company or any Subsidiary does not timely perform
its related obligations within the periods therein provided, then such Backstop
Investor may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company or such Subsidiary (as the case may be), any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.
 
(o) Independent Nature of Backstop Investors’ Obligations and Rights. The
obligations of each Backstop Investor under any Transaction Document are several
and not joint with the obligations of any other Backstop Investor, and no
Backstop Investor shall be responsible in any way for the performance of the
obligations of any other Backstop Investor under any Transaction Document.
Nothing contained herein or in any other Transaction Document, and no action
taken by any Backstop Investor pursuant hereto or thereto, shall be deemed to
constitute the Backstop Investors as, and the Company acknowledges that the
Backstop Investors do not so constitute, a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Backstop
Investors are in any way acting in concert or as a group, and the Company shall
not assert any such claim with respect to such obligations or the transactions
contemplated by the Transaction Documents and the Company acknowledges that the
Backstop Investors are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Backstop Investor shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement
or out of any other Transaction Documents, and it shall not be necessary for any
other Backstop Investor to be joined as an additional party in any proceeding
for such purpose.
 
[signature pages follow]
 
 
27

 
 
IN WITNESS WHEREOF, each Backstop Investor and the Company have caused their
respective signature page to this Agreement to be duly executed as of the date
first written above.
 
 
 
COMPANY:
 
CORMEDIX INC.
 
 
 
By: /s/ Khoso Baluch                                 

Name: Khoso Baluch
Title: Chief Executive Officer
 
 
 
BACKSTOP INVESTORS:
 
 
ELLIOTT INTERNATIONAL, L.P.
By: Elliott International Capital Advisors Inc.,
       as attorney-in-fact
 
 
 
By: /s/ Elliot Greenberg                             
                                                   

Name: Elloit Greenberg

Title: Vice President

Pro Rata Share:

 
 
 

ELLIOTT ASSOCIATES, L.P.
By:  Elliott Capital Advisors, L.P., General Partner
By:  Braxton Associates, Inc., General Partner
 
 
 
By: /s/ Elliot Greenberg                                                     

Name:Elliot Greenberg

Title: Vice President

Pro Rata Share:

 

 
 
 
[Signature Page to Backstop Agreement]

 
 
EXHIBIT A
 
FORM OF WARRANT
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
EXHIBIT B
 
FORM OF REGISTRATION RIGHTS AGREEMENT