Ex 10-2





 






 



Exhibit 10.2


 


 


 


 


 


UNIT
PURCHASE AGREEMENT


 


 


BY AND
AMONG


 


 


MEDOVEX
CORPORATION


 


AND


 


THE
PURCHASERS PARTY HERETO


 


 


 


 




 








 






 


 



EXHIBITS


TO


UNIT PURCHASE
AGREEMENT


 


 




Exhibit
A

Schedule of
Purchasers








Exhibit
B

Form of
Warrant








Exhibit
C

Form of
Subscription Agreement








Exhibit
D

Funding
Instructions








Exhibit
E

Form of Legal
Opinion








Exhibit
F

Form of
Registration Rights Agreement








Exhibit
G

Form of Certificate
of Designation for Series A Convertible Preferred
Stock






 




 

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MEDOVEX
CORPORATION



UNIT PURCHASE AGREEMENT


THIS
UNIT PURCHASE AGREEMENT (the “Agreement”) is
entered into as of the date set forth on the signature page hereto
by and among Medovex Corporation, a Nevada corporation (the
“Company”), and
the purchasers identified on Exhibit A on the date hereof
(which purchasers are hereinafter collectively referred to as the
“Purchasers”
and each individually as, a “Purchaser”).



BACKGROUND


A.
Unless otherwise defined in this Agreement, capitalized terms used
in this Agreement shall have the respective meanings ascribed to
such terms in Section 9.


B. The
Company is offering Units (as defined below) to a limited number of
persons who qualify as “accredited investors” as
defined in Rule 501 of Regulation D promulgated under the
Securities Act (the “Offering”).


 


C. Each
Unit shall consist of (a) one share of common stock, par value
$0.001 per share, of the Company (“Common Stock”)
and (b) one-half of a warrant to purchase a share of Common Stock
(the “Warrant”), at
an exercise price per share equal to $1.50 per share, which Warrant
will be exercisable at any time on or after the date of issuance
for a period of five (5) years following the final closing (the
“Final
Closing Date”) of the Offering (collectively, the
“Units”) at a
price per Unit equal to the lower of (i) the closing bid price for
the Common Stock on the day immediately prior to the Closing, or
(ii) $1.20.   


 


D. To
the extent that the purchase of Units would result in a purchaser
acquiring beneficial ownership of 4.99% or more of the
Company’s then outstanding Common Stock, such purchaser may
elect to purchase, in lieu of the Common Stock included as part of
the Units, shares of our Series A Convertible Preferred Stock (the
“Preferred
Stock”), par value $0.001 per share, which are
convertible into shares of Common Stock (the “Conversion
Shares”), with such rights and designations as set
forth in the form of Certificate of Designation of Preferences,
Rights and Limitations of Series A Convertible Preferred Stock
attached hereto as Exhibit G, (the “Series A Certificate of
Designation”).


 


E.
The Units are being offered on a
“reasonable
efforts” basis in a
minimum amount of $3,000,000 (the “Minimum
Offering Amount”), and a
maximum amount of $5,000,000 (the “Maximum
Offering Amount”). The
Placement Agent agrees to use reasonable efforts to complete the
Offering on or before April 30, 2017.


 


F.  Officers, directors or employees of the Company
may offer Units, which shall be included in, and counted towards,
the Minimum and Maximum Offering.


 


G. The
Company desires to issue and sell the Units to each Purchaser in
one or more closings (each a “Closing” and
collectively the “Closings”) as
set forth herein.


NOW,
THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:


 




 

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1. SALE
AND PURCHASE OF UNITS.


1.1
Authorization of
Units. The board of directors of the Company (the
“Board of
Directors”) has authorized (i) the sale of up to
5,000,000 Units, each Unit consisting of (a) a share of common
stock, par value $0.001 per share, of the Company
(“Common
Stock”) (or Preferred Stock for any Purchasers that
elect to purchase shares of our Preferred Stock in lieu of Common
Stock)(which is determined by dividing the price per Unit by the
lower of (i) the closing bid price for the Common Stock on the day
immediately prior to the Closing, or (ii) $1.20), and (b) one-half
of a warrant to purchase a share of Common Stock, at an exercise
price per share equal to $1.50 per share, which warrant will be
exercisable at any time on or after the date of issuance for a
period of five (5) years following the final Closing. From and
after the applicable Closing, the Company shall issue and reserve
for issuance the shares of its Common Stock issuable in such
Closing; (i) the shares of Common Stock that may be issued upon
full exercise of the Warrants (the “Warrant
Shares”) issued at such Closing, plus such additional
number of Warrant Shares as shall be required to be issued pursuant
to the terms thereof; and (ii) the Conversion Shares to any
Purchasers that elect to purchase preferred stock in lieu of Common
Stock, as set forth herein.


1.2 Initial Sale and Purchase of
Units. Subject to the terms and conditions hereof, and in
reliance upon the representations, warranties and covenants
contained herein, at the Initial Closing, the Company shall issue
and sell to each Purchaser, and each Purchaser shall purchase from
the Company, the number of Units set forth opposite such
Purchaser’s name on Exhibit A under the
“Initial Units” column, at a purchase price per Unit
equal to the lower of (i) the closing bid price for the Common
Stock on the day immediately prior to the Closing, or (ii) $1.20
(subject to appropriate and proportionate adjustment for stock
dividends payable in shares of, forward or reverse stock splits and
other subdivisions and combinations of, and recapitalizations and
like occurrences with respect to, the Common Stock, the
“Per Unit
Purchase Price”). The minimum investment required from
each Purchaser is one hundred thousand dollars ($100,000), unless
the Company and the Placement Agent agree, in their mutual
discretion, to allow a Purchaser to invest less than one hundred
thousand dollars ($100,000).  Notwithstanding
anything herein to the contrary, in the event that a
Purchaser’s subscription to Units would cause such
Purchaser’s beneficial ownership to exceed 4.99% of the
issued and outstanding shares of the Company’s Common Stock,
such Purchaser may elect to purchase shares of the Company
Preferred Stock in lieu of the shares of Common Stock to be part of
the Units, which preferred stock shall have such rights and
designations as set forth in Exhibit G hereof.


1.3
Subsequent Sales and
Purchases of Units. Subject to the terms and
conditions hereof, and in reliance upon the representations,
warranties and covenants contained herein, at each subsequent
Closing, the Company shall issue and sell to each Purchaser who is
identified as a “Subsequent Closing Purchaser” on
Exhibit A, which
shall be deemed amended at each such subsequent Closing to add each
such additional Purchaser (each, a “Subsequent Closing
Purchaser”), and each Subsequent Closing Purchaser
shall purchase from the Company, the number of Units set forth
opposite such Purchaser’s name on Exhibit A at the Per Unit
Purchase Price.


1.4 
Issuance of
Warrants. The Warrants shall be in form and substance
substantially the same as the form of Warrant in Exhibit B.


1.5
Placement Agent.
Laidlaw & Company (UK) Ltd. (the “Placement
Agent”),
a New York, New York-based, registered broker-dealer
member FINRA/SIPC, is acting as the placement agent for the
Offering. The Offering will be made on a “reasonable
efforts” basis. The Placement Agent’s principal
business address is 546 Fifth Avenue, New York, New York 10036. The
Placement Agent will receive a cash commission in the amount of ten percent (10%) of the gross
proceeds of the Offering received from investors introduced by the
Placement Agent to the Company (“Laidlaw
Investors”), and a
cash commission in the amount of five
percent (5%) of the gross proceeds of the Offering received from
investors introduced by the Company, its officers, directors or
employees (“Company
Investors”). In addition,
the Placement Agent shall be entitled to a non-allocable expense
reimbursement in the amount of two percent (2%) of the gross
proceeds of the Offering. At each closing, the Company will also
issue to the Placement Agent (a) warrants to purchase shares of
Common Stock equal to ten percent (10%) of the securities issued
and issuable in the Offering to Laidlaw Investors, and (b) warrants
to purchase shares of Common Stock equal to five percent (5%) of
the securities issued and issuable in the Offering to Company
Investors. The Warrants issued to the Placement Agent will have an
exercise price equal to lowest price per share of the shares or
warrants issued or issuable to investors in the Offering. The
Company has also paid the Placement Agent an activation fee of
$12,500 in connection with its engagement for this offering, and
the Company has agreed to reimburse the Placement Agent for its
legal fees up to an amount not to exceed
$50,000.


 




 

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1.6
Conversion of
Notes. Certain holders of promissory notes
(“Notes”) previously issued by the Company in the
aggregate amount of One Million One Hundred Fifty Thousand Dollars
($1,150,000) have agreed to convert, simultaneous with the Initial
Closing, as defined below, the Notes under the same terms and
conditions set forth in this Agreement (the “Conversion”). The amount
of Notes converted shall not be deemed to be a part of this
Offering and shall not be counted towards the Minimum Offering
Amount or the Maximum Offering Amount, and the Placement Agent
shall not be entitled to receive the fees set forth under Section
1.5 above with respect to the Conversion.


2.
CLOSINGS, DELIVERY AND PAYMENT.


2.1 Initial Closing. Subject to the
conditions set forth in Section 5 herein, the initial closing of
the sale and purchase of the Units (the “Initial Closing”),
shall take place electronically on such date and at such time as is
agreed between the Company and the Placement Agent (such date the
“Initial
Closing Date”); upon the earliest of (1) the sale of
the Maximum Offering Amount or (2) April 30, 2017 (the “Termination
Date”).  Subject to the foregoing, at the
Initial Closing, the Company must sell a minimum of $3,000,000 of
Units (the “Initial
Units”), and the Company may thereafter sell up to a
maximum of $5,000,000 of Units.


2.2
Subsequent
Closings. If the Minimum Offering Amount has been raised
prior to the Termination Date, subject to the conditions set forth
in Section 5, each Subsequent Closing shall take place
electronically on such date and at such time as is agreed between
the Company and the Placement Agent (such date the
“Subsequent Closing
Date”), in no event later than the Termination
Date. Subject to the foregoing,
at Subsequent Closings, the Company may sell up to a maximum of 0
Units less the number of Units sold in all prior Closings. The
Units sold at the Subsequent Closings are sometimes referred to
herein as “Subsequent
Units.”


2.3
Delivery; Payment.
At each Closing, subject to the terms and conditions hereof, the
Purchasers will deliver the full amount of the Purchase Price in
cash by wire transfer of immediately available funds in accordance
with instructions attached hereto as Exhibit D, or as the Company
shall otherwise direct and the Company will deliver (1) one (1)
certificate registered in such Purchaser’s name, to purchase
such number of shares of Common Stock (or Preferred Stock for any
Purchasers that elect to purchase shares of our Preferred Stock in
lieu of Common Stock) included in the Units purchased by such
Purchaser or Subsequent Closing Purchaser, as the case may be, at
such Closing and (2) one Warrant, registered in such
Purchaser’s name to purchase such number of Warrant Shares
included in the Units purchased by such Purchaser or Subsequent
Closing Purchaser, as the case may be, at such Closing. The Company
and the Placement Agent, in their mutual discretion, may allow a
Purchaser to purchase a partial Unit, in which case the Purchaser
shall receive a certificate representing the appropriate number of
shares of Common Stock (or Preferred Stock for any Purchasers that
elect to purchase shares of our Preferred Stock in lieu of Common
Stock) included in such partial Unit and a Warrant for the
appropriate number of corresponding Warrant Shares.


3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.


The
Company represents and warrants to the Placement Agent and each of
the Purchasers that the statements made in this Section 3, except
as qualified in the disclosure schedules referenced herein and
attached hereto (the “Schedules”),
are true and correct on the date hereof, as of the Initial Closing
and shall be true and correct as of each Subsequent Closing, except
as qualified by any updated Schedules delivered at the Subsequent
Closing in accordance with Section 5.1.1 herein, all of which qualifications in
the Schedules attached hereto and updated Schedules delivered at
the Subsequent Closing shall be deemed to be representations and
warranties as if made hereunder. The Schedules shall be arranged to
correspond to the numbered paragraphs contained in this Section 3,
and the disclosure in any paragraph of the Schedules shall qualify
other subsections in Section 3 only to the extent that it is
readily apparent from a reading of the disclosure that such
disclosure is applicable to such other subsections. For purposes of
this Section 3, “knowledge” shall mean the personal
knowledge of any of the Company’s officers or directors or
what they would have known upon having made reasonable
inquiry.





 




 

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3.1
Organization, Good
Standing and Qualification. The Company is a corporation
duly incorporated, validly existing and in good standing under the
corporate and general laws of the State of Nevada. Each of the
Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its Subsidiaries has all
requisite corporate power and authority to own and operate its
properties and assets. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and its
Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation in each jurisdiction set forth on
Schedule 3.1, except where failure to be
so qualified or in good standing, as the case may be, could not
reasonably be expected to result in: (i) a material adverse effect
on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material
Adverse Effect”) and no Proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification.


3.2 Subsidiaries. The SEC Reports
include a true and complete list of each of the Subsidiaries and
their respective jurisdictions of organization. Except as set forth
on Schedule
3.2, neither the Company
nor any Subsidiary owns or controls any ownership interest or
profits interest in any other corporation, limited liability
company, limited partnership or other entity. The Company owns,
directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all
of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or
purchase securities.. Except as set forth on Schedule 3.2, neither the
Company nor any Subsidiary is a participant in any joint venture,
partnership or similar arrangement.


3.3
Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.


3.4
No Conflicts. The
execution, delivery and performance by the Company of this
Agreement and the other Transaction Documents to which it is a
party, the issuance and sale of the Securities and the consummation
by it of the transactions contemplated hereby and thereby do not
and will not: (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.


 


 




 

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3.5
Filings, Consents and
Approvals. Except for NASDAQ approval, the Company is not
required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental
authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction
Documents.


 


3.6
Issuance of the
Securities. The Units, the shares of Common Stock and the
Warrants are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Warrant
Shares and the Conversion Shares, when issued in accordance with
the terms of the Warrants and the Series A Certificate of
Designation, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents.
The Company has reserved from its duly authorized capital stock a
number of shares of Common Stock for issuance of the Warrant Shares
and the Conversion Shares on the date hereof.


 


3.7
Capitalization. The
capitalization of the Company is as set forth on Schedule 3.7
hereto. Schedule 3.7 includes the number of shares of Common Stock
and Preferred Stock owned beneficially, and of record, by
affiliates of the Company as of the date hereof. Except as
disclosed on the Schedule 3.7 and the SEC Reports, there are no
outstanding securities of the Company or any Subsidiary which
contain any right of first refusal, preemptive right, right of
participation, or any similar right. No Person has any right of
first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by
the Transaction Documents. Except as a result of the purchase and
sale of the Securities, and except as set forth in the SEC Reports,
there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into
or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or common stock equivalents. The
issuance and sale of the Securities will not obligate the Company
to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. There are no
proxies, stockholder agreements, or any other agreements between
the Company or any Subsidiary and any securityholder of such entity
or, to the knowledge of the Company, among any securityholders of
the Company or any Subsidiary, including agreements relating to the
voting, transfer, redemption or repurchase of any securities of
such entity. Neither the Company nor any Subsidiary has any
outstanding shareholder purchase rights or “poison
pill” or any similar arrangement in effect giving any person
the right to purchase any equity interest in such entity upon the
occurrence of certain events. All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or
others is required for the issuance and sale of the Securities.
There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.
Except as required by law, including any federal securities rules
and regulations, there are no restrictions upon the voting or
transfer of any of the shares of capital stock of the Company or
any Subsidiary pursuant to its Organizational Documents or other
governing documents or any agreement or other instruments to which
the Company or any Subsidiary is a party or by which it is
bound.


 





 




 

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3.8
Shell Company Status; SEC
Reports; Financial Statements. The Company was never a
“shell” company as described in Rule 144(i)(1) under
the Securities Act. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it
under the Securities Exchange Act , including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof
(or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials and any
amendments filed through the date hereof, including the exhibits
thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC
Reports”) on
a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.
The financial statements (the “Financial
Statements”) of the Company included in its Form 10-K
dated April 14, 2016 for the year ended December 31, 2015 and Form
10-Q dated November 17, 2016 for the quarter ending September 30,
2016 have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except
as may be otherwise specified in such financial statements or the
footnotes thereto except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its
Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject to
normal, immaterial, year-end audit adjustments. There is no
transaction, arrangement, or other relationship between the Company
or any Subsidiary and an unconsolidated or other off balance sheet
entity that is not disclosed in its financial statements that
should be disclosed in accordance with GAAP and that would be
reasonably likely to have a Material Adverse Effect.


3.9
Absence of
Liabilities. Except as set forth in the SEC Reports or on
Schedule 3.9
hereto, since the Balance Sheet Date (hereinafter defined): (i)
there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or
disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company
stock option plans. Except for the issuance of the Securities
contemplated by this Agreement or as set forth in the SEC Reports
no event, liability, fact, circumstance, occurrence or development
has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective
businesses, properties, operations, assets or financial condition,
that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made
or deemed made. Except as set
forth in the SEC Reports or on Schedule 3.9, neither the
Company nor any Subsidiary is a guarantor or indemnitor of any
liability of any other Person.


For
purposes of this Section 3.9, is September 30, 2016 is referred to
as the “Balance
Sheet Date”.


3.10
Agreements;
Action.


3.10.1. Disclosure. Except as set forth
on Schedule 3.10.1
, the SEC Reports include exhibits consisting of all of the
following Contracts to which the Company and its Subsidiaries or
any of their respective properties or assets are a party or
otherwise bound (each a “Material Contract”):


(a)
Contracts not made in the ordinary course of business;


 




 

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(b)
each Contract pursuant to which (x) the Company or any Subsidiary
is granted rights to, or ownership in, any Intellectual Property
(as defined below) by any other Person (excluding “shrink
wrap” licenses for generally available, commercial,
off-the-shelf Software that has not been modified), (y) the Company
or any Subsidiary purchases components, raw materials, equipment,
instruments, and other supplies and machinery that are material to
the Company’s or any Subsidiary’s businesses, or
supplies any other Person with any components, raw materials,
equipment, instruments, and other supplies and machinery, or (z)
the Company or any Subsidiary grants another person rights to, or
ownership in, any Intellectual Property;


(c)
Contracts relating to the manufacture or production of any of the
Products;


(d)
Contracts among one or more stockholders of the Company or any
Subsidiary which by their respective terms require performance
after the date hereof;


(e)
Contracts or commitments involving future expenditures, actual or
potential, in excess of $150,000 after the date
hereof;


(f)
Contracts or commitments for the performance of services for the
Company or any Subsidiary by a third party which has a term of one
(1) year or more and involves expenditures by the Company or any
Subsidiary of $150,000 or more;


(g)
Contracts or commitments relating to commission arrangements with
any other Person;


(h)
Contracts (A) to employ, engage or terminate executive officers and
other Contracts with present or former executive officers or
directors of the Company which by their respective terms require
performance after the date hereof, or (B) that will result in the
payment of, or the creation of any Liability on the part of the
Company or any Subsidiary to pay, any severance, termination,
“golden parachute,” or other similar payments to any
present or former executive officers or directors of the Company or
any Subsidiary following termination of employment or engagement or
otherwise;


(i) any
lease under which any Subsidiary is either lessor or lessee of
personal property requiring annual lease payments (including rent
and any other charges) in excess of $150,000, and any lease under
which any Subsidiary is either lessor or lessee of any real
property, including any Real Property Lease;


(j)
promissory notes, loans, agreements, indentures, evidences of
indebtedness, letters of credit, guarantees, or other instruments
relating to an obligation to pay in excess of $150,000, whether the
Company or any Subsidiary shall be the borrower, lender or
guarantor thereunder (excluding credit provided by the Company or
any Subsidiary in the ordinary course of business to purchasers of
its products or services and obligations to pay vendors in the
ordinary course of business and consistent with past
practice);


(k)
Contracts containing covenants limiting the freedom of the Company
or any Subsidiary to engage in any activity anywhere in the
world;


(l)
Contracts between the Company or any Subsidiary and any United
States federal, state or local government or any foreign
government, or any Governmental or Regulatory Authority, or any
agency or department thereof, or with any educational institution
or part thereof;


(m) any
power of attorney granted by the Company or any Subsidiary in favor
of any Person;


 




 

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(n)
Contracts pertaining to any material joint ventures, partnerships
or similar arrangements;


(o) any
Contract or other arrangement with an Affiliate; and


(p) any
Contract not otherwise required to be listed pursuant to
Subsections (a) – (s) above and with respect to which the
consequences of a default, non-renewal or termination could
reasonably be expected to have a Material Adverse Effect in the
absence of a replacement Contract or arrangement
therefor.


3.10.2.
The Company has provided or made available, either through access
to the SEC Reports or otherwise upon request, true and complete
copies, of all of the Material Contracts to the Purchasers. Each of
the Material Contracts is (a) in full force and effect, (b) a valid
and binding obligation of, and is enforceable in accordance with
its terms against the Company or the applicable Subsidiary that is
party thereto and, to the knowledge of the Company, each of the
other parties thereto, except as such enforceability may be limited
by bankruptcy, insolvency, moratorium or other law affecting the
enforcement of creditors’ rights generally or by general
equitable principles, (c) except for those Material Contracts
disclosed pursuant to Section 3.10.1(a) and identified as such, was
made in the ordinary course of business, and (d) contains no
provision or covenant prohibiting or limiting the ability of the
Company or any Subsidiary to operate its business in the manner in
which it is currently operated.


3.10.3.
To the best of the Company’s knowledge, each of the Company
and its Subsidiaries has in all material respects performed the
obligations required to be performed by it to date under each
Material Contract to which it is a party and is not in default or
breach thereof, and no event or condition has occurred, whether
with or without the passage of time or the giving of notice, or
both, that would constitute such a breach or default. Neither the
Company nor any Subsidiary or any other party to any Material
Contract has provided any notice to the other party or to the
Company or any Subsidiary, as applicable, of its intent to
terminate, withdraw its participation in, or not renew any such
Material Contract. Neither the Company nor its Subsidiaries has,
and to the knowledge of the Company, no other party to any Material
Contract has, threatened to terminate, withdraw from participation
in, or not renew any such Material Contract. To the knowledge of
the Company, no other party to any Material Contract is in breach
or default under any provision thereof, and no event or condition
has occurred, whether with or without the passage of time or the
giving of notice, or both, that would constitute such a breach or
default.


3.10.4.
No Consent of any party to any Material Contract is required in
connection with the transactions contemplated by this Agreement and
the other Transaction Documents.


3.10.5.
The execution, delivery and performance of this Agreement and the
other Transaction Documents do not and will not (a) result in or
give to any Person any right of termination, non-renewal,
cancellation, withdrawal, acceleration or modification in or with
respect to any Material Contract, (b) result in or give to any
Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under any such
Material Contract or (c) result in the creation or imposition of
any Liability or any Encumbrances upon the Intellectual Property or
any assets of the Company or any Subsidiary under the terms of any
such Material Contract.


3.10.6.
Except as disclosed in the SEC Reports, neither the Company nor any
Subsidiary or any representative thereof is a party to any binding
Contract or has engaged in the past twelve (12) months in any
discussions regarding, and is not a party to or otherwise bound by
any Contract in respect of, (a) any purchase, lease, license or
other acquisition of any other Person, whether by equity purchase,
merger, consolidation, reorganization or otherwise, or all or
substantially all of the assets of any other Person, or the
entering into by the Company or any Subsidiary of any share
exchange with any other Person, (b) any change of control
transaction with respect to the Company or its Subsidiaries, or (c)
liquidation with respect to the Company or any
Subsidiary.


3.11
Changes. Except as
set forth on Schedule
3.11, or as disclosed in the SEC Reports, or where the
occurrence of any of the following events would not have a Material
Adverse Effect, since September 30, 2016 there has not
been:





 




 

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3.11.1.
any effect, event, condition or circumstance (including, without
limitation, the initiation of any litigation or other legal,
regulatory or investigative proceeding) against the Company that
individually or in the aggregate, with or without the passage of
time, the giving of notice, or both, has had or could reasonably be
expected to have a Material Adverse Effect;


3.11.2.
any resignation or termination of any director, officer or key
employee of the Company or any Subsidiary, and neither the Company
nor any Subsidiary has received notification of any impending
resignation from any such Person;


3.11.3.
any material change in the contingent obligations of the Company or
any Subsidiary by way of guaranty, endorsement, indemnity, warranty
or otherwise;


3.11.4.
any material damage, destruction or loss adversely affecting the
assets, properties, business, financial condition or prospects of
the Company and its Subsidiaries taken as a whole, whether or not
covered by insurance;


 


3.11.5.
any waiver by the Company or any Subsidiary of a valuable right or
of any debt;


 


3.11.6.
any development, event, change, condition or circumstance that
constitutes, whether with or without the passage o time or the
giving of notice or both, a default under any outstanding debt
obligation of the Company or any Subsidiary;


3.11.7.
any change in any compensation arrangement or agreement with any
employee, consultant, officer, director or stockholder of the
Company or any Subsidiary that would increase the cost of any such
agreement or arrangement to the Company or any Subsidiary by more
than $10,000 in each instance;


3.11.8.
any labor organization activity of the employees of the Company or
any Subsidiary;


3.11.9.
any declaration or payment of any dividend or other distribution of
the assets of the Company or any Subsidiary;


3.11.10. any change
in the accounting methods or practices followed by the Company or
any Subsidiary; or


3.11.11. any
Contract or commitment made by the Company or any Subsidiary to do
any of the foregoing.


3.12
Title to Properties and
Assets; Liens, etc. Except where a violation of this Section
3.12 could reasonably be expected to have a Material Adverse
Effect, the Company and each Subsidiary has good and marketable
title to the properties and assets it owns, and the Company and
each Subsidiary has a valid license in all properties and assets
licensed by it, including the properties and assets reflected as
owned in the most recent balance sheet included in the Financial
Statements all as described in the SEC Reports, and has a valid
leasehold interest in its leasehold estates, in each case subject
to no Encumbrance, other than those resulting from Taxes which have
not yet become delinquent or those of the lessors of leased
property or assets. All facilities, machinery, equipment, fixtures,
vehicles and other properties owned, leased or used by the Company
or any Subsidiary are in good operating condition and repair,
ordinary wear and tear excepted and are fit and usable for the
purposes for which they are being used. Each of the Company and its
Subsidiaries is in compliance with all terms of each lease to which
it is a party or is otherwise bound.





 




 

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3.13
Intellectual
Property.


3.13.1.
The Company or the applicable Subsidiary is the owner or licensee
of all Owned Intellectual Property and all Licensed Intellectual
Property as described in its SEC Reports (collectively, the
“Intellectual
Property”). Except as set
forth on Schedule 3.13.1
and identified as such,
neither the Company nor any
Subsidiary has licensed any Intellectual Property to any
Person. All of the registrations and applications for registration
of the Intellectual Property are valid, subsisting and in full
force and effect, and all actions and payments necessary for the
maintenance and continuation of such Intellectual Property have
been taken or paid on a timely basis. The Company and its
Subsidiaries owns or possesses sufficient legal rights to use all
of the Intellectual Property and the
exclusive right to use all Owned Intellectual Property and all
Licensed Intellectual Property as being licensed to
the Company and its
Subsidiaries.


3.13.2.
To the knowledge of the Company, the business as currently
conducted and as proposed to be conducted by the Company and its
Subsidiaries has not and will not constitute any infringement of
the Intellectual Property rights of any other Person which could
reasonably be expected to have a Material Adverse Effect. To the
knowledge of the Company, the development of Product candidates and
the use, manufacture or sale of the Company’s Products based
on the Intellectual Property does not, and will not, infringe the
Intellectual Property rights of any third Person. To the knowledge
of the Company, no employee or agents of the Company or any
Subsidiary have misappropriated the Intellectual Property rights of
any Person.


3.13.3. Except as set forth on
Schedule 3.13.3 or in the SEC
Reports, there are no outstanding options or other rights to
acquire any Intellectual Property. To the knowledge of the Company,
each licensor of the Licensed Intellectual Property is the sole and
exclusive owner of such Licensed Intellectual Property and has the
sole and exclusive right and authority to grant licenses to such
Licensed Intellectual Property.


3.13.4. Except as set forth on
Schedule 3.13.4 or in the SEC
Reports, neither the Company nor any Subsidiary has received any
written communications alleging or suggesting that it has violated
or, by conducting its business as currently conducted or proposed
to be conducted, would infringe or misappropriate any of the
Intellectual Property rights of any other Person.


3.13.5.
It is not necessary to the business of the Company or any
Subsidiary, as currently conducted or as proposed to be conducted,
to utilize any inventions, trade secrets or proprietary information
of any of its employees, agents, developers, consultants or
contractors made prior to their employment by or service to such
entity, except for inventions, trade secrets or proprietary
information that have been assigned or licensed to the Company or
any Subsidiary.


 


3.13.6.
Except as disclosed in the SEC Reports, since the date of the Company’s
incorporation, there has not been any sale, assignment or transfer
of any material Intellectual Property or other material intangible
assets of the Company by the Company or any
Subsidiary.


3.13.7.
To the knowledge of the Company, no Intellectual Property is
subject to any interference, reissue, reexamination, opposition or
cancellation proceeding or any other Legal Proceeding or subject to
or otherwise bound by any outstanding Order or Contract (other than
in the case of any Licensed Intellectual Property, the Contract
pursuant to which the Company licenses the rights to such Licensed
Intellectual Property) that restricts in any manner the use,
transfer or licensing thereof by the Company or any Subsidiary or
may affect the validity, use or enforceability of such Intellectual
Property. Neither the Company nor any Subsidiary has any knowledge
of any fact or circumstance that would render any portion of the
Intellectual Property invalid or unenforceable.


 


 




 

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3.13.8.
Except where the failure to comply
with this Section 3.13.8 could not be reasonably expected to have a
Material Adverse Effect, each current and former officer, employee,
agent, developer, consultant and contractor who (a) has had or has
access to any confidentiality of the trade secrets of the
Intellectual Property; and (b) contributed to or participated in
the creation and/or development of the Intellectual Property
either: (i) is a party to a “work made for hire”
agreement under which the Company or any Subsidiary
is deemed to be the original
owner/author of all right, title and interest in the Intellectual
Property created or developed by such Person; or (ii) has executed
an assignment or an agreement to assign in favor of the
Company or any Subsidiary of all such
Person’s right, title and interest in the Intellectual
Property.


 


3.13.9.
The execution and delivery of this Agreement and the other
Transaction Documents and consummation of the transactions
contemplated hereby and thereby will not result in the breach of,
or create on behalf of any third party the right to terminate or
modify, any license, sublicense, agreement or permission: (a)
relating to or affecting any Intellectual Property; or (b) pursuant
to which the Company or any Subsidiary is granted a license or
otherwise authorized to use any third party Intellectual
Property.


 


3.13.10. Except as
set forth in the SEC Reports or on Schedule 3.13.10, to the
knowledge of the Company, no Person is infringing, violating,
misappropriating or making unauthorized use of any of the
Intellectual Property. Neither the Company nor any Subsidiary have
enforced and taken such commercially reasonable steps as are
necessary to protect and preserve all rights in the Intellectual
Property against the infringement, violation, misappropriation and
unauthorized use thereof by any Person. Each of the Company or the
Subsidiary has the right to: (a) bring actions for past, present
and future infringement, dilution, misappropriation or unauthorized
use of any Intellectual Property owned or licensed by such entity,
injury to goodwill associated with the use of any such Intellectual
Property, unfair competition or trade practices violations of and
other violation of such Intellectual Property; and (b) with respect
to the Intellectual Property owned exclusively by the Company or
any Subsidiary, receive all proceeds from the foregoing set forth
in subsection (a) hereof, including, without limitation, licenses,
royalties income, payments, claims, damages and proceeds of
suit.


3.14
Compliance with Other
Instruments. Except as set forth in the SEC Reports or on
Schedule 3.14,
neither the Company nor any Subsidiary (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material
Adverse Effect.


3.15 Litigation. Except as set forth
in the SEC Reports or on Schedule 3.15, there is no Legal
Proceeding pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary or any investigation of the
Company or any Subsidiary, nor is the Company aware of any fact
that would make any of the foregoing reasonably likely to arise.
Neither the Company nor any Subsidiary is a party or subject to the
provisions of any Order. Except as set forth in the SEC Reports or
on Schedule
3.15, there is no Legal
Proceeding by the Company or any Subsidiary currently pending or
that the Company or any Subsidiary intends to initiate. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Order involving a claim of violation
of or liability under federal or state securities laws or a claim
of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any
current or former director or officer of the Company.





 




 

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3.16
Tax Returns and
Payments.


3.16.1.
Except as set forth in the SEC Reports or on Schedule 3.16.1, the Company
and each Subsidiary has filed all Tax Returns required to be filed
by it, and each such entity has timely paid all Taxes owed (whether
or not shown on any Tax Return). All such Tax Returns were complete
and correct, and such Tax Returns correctly reflected the facts
regarding the income, business, assets, operations, activities,
status and other matters of such entity and any other information
required to be shown thereon. The Company and each Subsidiary has
withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any Employee, creditor,
independent contractor, shareholder, member or other third party.
The Company and each Subsidiary has established adequate reserves
for all Taxes accrued but not yet payable. No deficiency assessment
with respect to or proposed adjustment of the Company and/or any
Subsidiaries Taxes is pending or, to the knowledge of the Company,
threatened. There is no tax lien (other than for current Taxes not
yet due and payable), imposed by any taxing authority, outstanding
against the assets, properties or the business of the Company or
any Subsidiary.


3.16.2.
Neither the Company nor any Subsidiary has agreed to make any
adjustment under Section 481(a) of the Internal Revenue Code of
1986, as amended (the “Code”) (or any
corresponding provision of state, local or foreign tax law) by
reason of a change in accounting method or otherwise, and neither
the Company nor any Subsidiary will be required to make any such
adjustment as a result of the transactions contemplated by this
Agreement. Neither the Company nor any Subsidiary has been or is a
party to any tax sharing or similar agreement. Neither the Company
nor any Subsidiary is or has ever been a party to any joint
venture, partnership, limited liability company, or other
arrangement or Contract which could be treated as a partnership for
federal income tax purposes. Neither the Company nor any Subidiary
is or has ever been a “United States real property holding
corporation” as that term is defined in Section 897 of the
Code.


3.17
Employees.


3.17.1. (a) Neither the Company
nor any Subsidiary has, or has ever had any, collective bargaining
agreements with any of its employees; (b) there is no labor union
organizing activity pending or, to the knowledge of the Company,
threatened with respect to the Company or any Subsidiary; (c) no
employee has or is subject to any agreement or Contract to which
the Company or any Subsidiary is a party (including, without
limitation, licenses, covenants or commitments of any nature)
regarding his or her employment or engagement; (d) to the best of
the Company’s knowledge, no employee is subject to any Order
that would interfere with his or her duties to the Company or any
Subsidiary or that would conflict with the businesses the Company
or any Subsidiary as currently conducted and as proposed to be
conducted; (e) no employee is in violation of any term of any
employment contract, proprietary information agreement or any other
agreement relating to the right of any such Person to be employed
by, or to contract with, the Company or any Subsidiary; (f) to the
best of the Company’s knowledge, the continued employment by
the Company or any Subsidiary of its present employees, and the
performance of their respective duties to such entity, will not
result in any violation of any term of any employment contract,
proprietary information agreement or any other agreement relating
to the right of any such individual to be employed by, or to
contract with, the Company or any Subsidiary, and neither the
Company nor any Subsidiary has received any written notice alleging
that such violation has occurred; (g) no Employee or consultant has
been granted the right to continued employment by or service to the
Company or any Subsidiary or to any compensation following
termination of employment with or service to the Company or any
Subsidiary; and (h) neither the Company nor any Subsidiary has any
present intention to terminate the employment or engagement or
service of any officer or any significant employee or
consultant


3.17.2.
Except as set forth in the SEC Reports or on Schedule 3.17.1, there are no
outstanding or, to the knowledge of the Company, threatened claims
against the Company or any Subsidiary or any Affiliate (whether
under federal or state law, under any employment agreement, or
otherwise) asserted by any present or former employee or consultant
of the Company or any Subsidiary. Neither the Company nor any
Subsidiary is in violation of any law or Requirement of Law
concerning immigration or the employment of persons other than U.S.
citizens.





 




 

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3.18
Pension and Other Employee
Benefit Plans.


3.18.1. There are set forth or
identified in the SEC Reports or in Schedule 3.18.1 all of the plans,
funds, policies, programs and arrangements sponsored or maintained
by the Company or any Subsidiary on behalf of any employee or
former employee of the Company or any Subsidiary (or any dependent
or beneficiary of any such Employee or former employee) with
respect to (a) deferred compensation or retirement benefits; (b)
severance or separation from service benefits (other than those
required by law); (c) incentive, performance, stock, share
appreciation or bonus awards; (d) health care benefits; (e)
disability income or wage continuation benefits; (f) supplemental
unemployment benefits; (g) life insurance, death or
survivor’s benefits; (h) accrued sick pay or vacation pay; or
(i) any other material benefit offered under any arrangement
constituting an “employee benefit plan” within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) and
not excepted by Section 4 of ERISA (the foregoing being
collectively called “Employee Benefit
Plans”). Schedule 3.18.1 sets forth all such
Employee Benefit Plans subject to the provisions of Section 412 of
the Code as well as any “multi-employer plans” within
the meaning of Section 3(37) of ERISA or Section 4001(a)(3) of
ERISA. Except as set forth on Schedule 3.18.1, the transactions
contemplated by this Agreement will not result in any payment or
series of payments by the Purchasers, the Company or any Subsidiary
of an “excess parachute payment” within the meaning of
Section 280G of the Code or any other severance, bonus or other
payment on account of such transactions. Except as set forth on
Schedule 3.18.1, none of the
Employee Benefit Plans is under investigation or audit by the
United States Department of Labor, the Internal Revenue Service or
any other Governmental or Regulatory Authority.


3.18.2. Except as set forth in
the SEC Reports or on Schedule 3.18.2, (a) the Company and
each Subsidiary has complied with its obligations under all
applicable Requirements of Law including, without limitation, of
ERISA and the Code with respect to such Employee Benefit Plans and
all other arrangements that provide compensation or benefits to any
Employee and the terms thereof, whether or not such person is
directly employed by the Company or any Subsidiary and (b) there
are no pending or, to the knowledge of the Company, threatened
actions or claims for benefits by any Employee, other than routine
claims for benefits in the ordinary course of business. No Employee
Benefit Plan provides any benefits to any former
employees.


3.18.3.
All Employee Benefit Plans that are intended to meet the
requirements of Section 401(a) of the Code have been determined by
the Internal Revenue Service to meet such requirements and have at
all times operated in compliance with such
requirements.


3.18.4.
All employment Taxes, premiums for employee benefits provided
through insurance, contributions to Employee Benefit Plans, and all
other compensation and benefits to which employees are entitled,
have been timely paid or provided as applicable, and there is no
liability for any such payments, contributions or
premiums.


 


3.19
Real Property.
Neither the Company nor any Subsidiary has any interest in any real
estate, except that the Company and its Subsidiaries lease the
properties described in the SEC Reports or on Schedule 3.19 (the
“Leased
Real Property”). The Leased Real Property is adequate
for the operations of each of the Company and its
Subsidiaries’ businesses as currently conducted and as
contemplated to be conducted. True and complete copies of the lease
agreements (the “Real Property
Leases”) pertaining to the Leased Real Property have
been delivered or made available to the Placement Agent. Except as
set forth in the SEC Reports or Schedule 3.19, the Company and
each Subsidiary has paid all amounts due from it, and is not in
default under any of the Real Property Leases and there exists no
condition or event, which, with the passage of time, giving of
notice or both, would reasonably be expected to give rise to a
default under or breach of the Real Property Leases.


 


 




 

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3.20
Permits;
Regulatory.


3.20.1
No Regulatory Approval or Consent of, or any designation,
declaration or filing with, any Governmental or Regulatory
Authority or any other Person is required in connection with the
valid execution, delivery and performance of this Agreement and the
other Transaction Documents (including, without limitation, the
issuance of the Units), except such Regulatory Approvals, Consents,
designations, declarations or filings that have been duly and
validly obtained or filed, or with respect to any filings that must
be made after the Initial Closing or the Subsequent Closing as will
be filed in a timely manner. The Company and each Subsidiary has
all franchises, Permits, licenses and any similar authority
necessary for the conduct of its business as now being
conducted, including, without
limitation, the Food and Drug Administration (“FDA”) of the
U.S. Department of Health and Human Services all as described in
the SEC Reports. 


3.20.2
To the best of the Company’s knowledge, all manufacturing and
production operations conducted by the Company or (or by third
parties on behalf of the Company and its Subsidiaries including,
without limitation, any manufacturing or production being done by
any third party in connection with any feasibility, preclinical,
clinical or other study, test or trial for or on behalf of the
Company or any Subsidiary or any such study, test or trial that is
being sponsored by the Company or any Subsidiary or in which the
Company or any Subsidiary or any of the Company and its
Subsidiaries’ Products is participating), if any, relating to
the manufacture or production of the Products are being conducted
in compliance with all applicable Requirements of Law including to
the extent mandated by relevant regulatory agencies, without
limitation, current Good Manufacturing Practices or similar foreign
requirements.


3.20.3
Neither the Company nor any Subsidiary or, to the knowledge of the
Company, any other Person has received (a) any reports of
inspection observations, (b) any establishment inspection reports
or (c) any warning letters or any other documents from the FDA or
any other Governmental or Regulatory Authority relating to the
Products and/or arising out of the conduct of any Subsidiary or any
Person which has conducted or is conducting any feasibility,
preclinical, clinical or other study, test or trial for or on
behalf of the Company or any Subsidiary or any such study, test or
trial that is being sponsored by the Company or any Subsidiary or
in which any of the Company’s or any Subsidiary’s
Products is participating that assert a material violation or
material non-compliance with any applicable Requirements of Law
(including, without limitation, those of the FDA).


3.21
Environmental and Safety
Laws. Neither the Company nor any Subsidiary has caused or
allowed, or contracted with any party for, the generation, use,
transportation, treatment, storage or disposal of any Hazardous
Substances in connection with the operation of its business or
otherwise, except in compliance with all applicable Environmental
Laws. To the best of the Company’s knowledge, the Company and
each Subsidiary and the operation of their respective businesses
are in compliance with all applicable Environmental Laws. To the
best of the Company’s knowledge, all of the Leased Real
Property and all other real property which the Company or any
Subsidiary occupy (the “Premises”) is
in compliance with all applicable Environmental Laws and Orders or
directives of any Governmental or Regulatory Authority having
jurisdiction under such Environmental Laws, including, without
limitation, any Environmental Laws or Orders or directives with
respect to any cleanup or remediation of any release or threat of
release of Hazardous Substances. Each of the Company and its
Subsidiaries and the operation of their respective businesses are
and have been in compliance with all applicable Environmental Laws.
To the knowledge of the Company, there have occurred no and there
are no events, conditions, circumstances, activities, practices,
incidents, or actions that may give rise to any common law or
statutory liability, or otherwise form the basis of any Legal
Proceeding, any Order, any remedial or responsive action, or any
investigation or study involving or relating to the Company or any
Subsidiary, based upon or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release
into the environment, of any pollutants, contaminants, chemicals,
or industrial, toxic or Hazardous Substance. To the knowledge of
the Company, (a) there is no asbestos contained in or forming a
part of any building, structure or improvement comprising a part of
any of the Leased Real Property, (b) there are no polychlorinated
byphenyls (PCBs) present, in use or stored on any of the Leased
Real Property, and (c) no radon gas or the presence of radioactive
decay products of radon are present on, or underground at any of
the Leased Real Property at levels beyond the minimum safe levels
for such gas or products prescribed by applicable Environmental
Laws. Each of the Company and its Subsidiaries has obtained and is
maintaining in full force and effect all necessary Permits,
licenses and approvals required by all Environmental Laws
applicable to the Premises and the business operations conducted
thereon, and is in compliance with all such Permits, licenses and
approvals. Neither the Company nor any Subsidiary has caused or
allowed a release, or a threat of release, of any Hazardous
Substance onto, at or near the Premises, and, to the knowledge of
the Company, neither the Premises nor any property at or near the
Premises has ever been subject to a release, or a threat of
release, of any Hazardous Substance.





 




 

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3.22
Regulatory Permits.
The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct
their respective businesses, except where the failure to possess
such permits could not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither
the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
Material Permit all as described in the SEC Reports.


3.23
Offering Valid.
Assuming the accuracy of the representations and warranties of the
Purchasers contained in the subscription agreements entered into by
each Purchaser in connection with this Agreement, the offer, sale
and issuance of the Units will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the
“Securities
Act”), and will be exempt from registration and
qualification under applicable state securities laws.


3.24
Disclosure. Except
with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf
has provided any of the Purchasers or their agents or counsel with
any information that it believes constitutes or might constitute
material, non-public information. The Company understands and
confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Company. All of the disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company and its
Subsidiaries, their respective businesses and the transactions
contemplated hereby, is, as of each Closing Date, true and correct
and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which
they were made, not misleading. The press releases disseminated by
the Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made
and when made, not misleading. The Company acknowledges and agrees
that no Purchaser makes or has made any representations or
warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2
hereof.


3.25
Minute Books. A
copy of all minutes of all meetings of directors and stockholders
and all actions by written consent without a meeting by the
directors and stockholders sinceJanuary 1, 2015, has been made
available to the Placement Agent in a virtual data room and
accurately reflect all actions taken by the directors (and any
committee of the directors) and stockholders with respect to all
transactions referred to in such minutes.


3.26
Insurance.
Schedule 3.28 sets
forth a list of all policies or binders of fire, casualty,
liability, product liability, worker’s compensation,
vehicular or other insurance held by the Company and its
Subsidiaries concerning its assets and/or its businesses
(specifying for each such insurance policy the insurer, the policy
number or covering note number with respect to binders, and each
pending claim thereunder of more than $5,000). Such policies and
binders are valid and in full force and effect. Neither the Company
nor any Subsidiary is in default with respect to any provision
contained in any such policy or binder or has failed to give any
notice or present any claim of which it has notice under any such
policy or binder in a timely fashion. Neither the Company nor any
Subsidiary has received or given a notice of cancellation or
non-renewal with respect to any such policy or binder. None of the
applications for such policies or binders contain any material
inaccuracy, and all premiums for such policies and binders have
been paid when due. Neither the Company nor any Subsidiary has
knowledge of any state of facts or the occurrence of any event that
could reasonably be expected to form the basis for any claim
against it not fully covered by the policies referred to on
Schedule 3.28. No
Subsidiary has received written notice from any of their respective
insurance carriers that any insurance premiums will be materially
increased after the applicable Closing Date or that any insurance
coverage listed on Schedule 3.28 will not be
available after such Closing Date on substantially the same terms
as now in effect.


3.27
Investment Company
Act. Neither the Company nor any Subsidiary is an
“investment company”, or a company
“controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as
amended.


 




 

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3.28
Foreign Payments;
Undisclosed Contract Terms.


3.28.1.
To the knowledge of the Company, neither the Company nor any
Subsidiary has made any offer, payment, promise to pay or
authorization for the payment of money or an offer, gift, promise
to give, or authorization for the giving of anything of value to
any Person in violation of the Foreign Corrupt Practices Act of
1977, as amended and the rules and regulations promulgated
thereunder.


3.28.2.
To the knowledge of the Company, there are no understandings,
arrangements, agreements, provisions, conditions or terms relating
to, and there have been no payments made to any Person in
connection with any agreement, Contract, commitment, lease or other
contractual undertaking of the Company or any Subsidiary which are
not expressly set forth in such contractual
undertaking.


3.29
No Broker. Other
than commissions (including fees, expenses and warrants) payable to
the Placement Agent as described herein, neither the Company nor
any Subsidiary has employed any broker or finder, or incurred any
liability for any brokerage or finder’s fees in connection
with the sale of the Units, or the Common Stock and Warrants
underlying the Units pursuant to this Agreement or the other
Transaction Documents.


3.30
Compliance with
Laws. Neither the Company nor any Subsidiary is in violation
of, or in default under, any Requirement of Law applicable to such
Subsidiary, or any Order issued or pending against such Subsidiary
or by which the Company’s or such Subsidiary’s
properties are bound, except for such violations or defaults that
have not had, and could not reasonably be expected to have, a
Material Adverse Effect.


3.31
No Integrated
Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 4, neither the
Company, nor any of its affiliates, nor any Person acting on its or
their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of any of the shares
of Common Stock, Warrants, Warrant Shares, Preferred Stock and
Conversion Shares (collectively, the “Securities”)
to be integrated with prior offerings by the Company for purposes
of (i) the Securities Act which would require the registration of
any such securities under the Securities Act, or (ii) any
applicable shareholder approval provisions of any Trading Market on
which any of the securities of the Company are listed or
designated.


3.32
Application of Takeover
Protections. The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights
under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.


3.33
No General
Solicitation. Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Securities by
any form of general solicitation or general advertising. The
Company has offered the Securities for sale only to the Purchasers
and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act.


3.34
Foreign Corrupt
Practices. Neither the Company nor any Subsidiary, nor to
the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has: (i)
directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign
or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law
or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.


 




 

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3.35
Stock Option Plans.
Except as set forth in the SEC Reports or on Schedule 3.37, each stock
option or stock issuance granted by the Company under the
Company’s stock incentive plan was granted (i) in accordance
with the terms of the Company’s stock incentive plan and (ii)
such options had an exercise price at least equal to the fair
market value of the Common Stock on the date such stock option
would be considered granted under GAAP and applicable law. No stock
option granted under the Company’s stock option plan has been
backdated. The Company has not knowingly granted, and there is no
and has been no Company policy or practice to knowingly grant,
stock options prior to, or otherwise knowingly coordinate the grant
of stock options with, the release or other public announcement of
material information regarding the Company or its Subsidiaries or
their financial results or prospects.


3.36
Office of Foreign Assets
Control. Neither the Company nor any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or
affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).


3.37
U.S. Real Property Holding
Corporation. The Company is not and has never been a U.S.
real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon Purchaser’s request.


3.38
Money Laundering.
The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.


3.39
Bad Actor
Disqualification


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


(b) Other Covered Persons. The
Company is not aware of any person that (i) has been or will be
paid (directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of the Securities and (ii)
who is subject to a Disqualification Event.


(c)
Notice of Disqualification
Events. The Company will notify the Placement Agent in
writing of (i) any Disqualification Event relating to any Issuer
Covered Person and (ii) any event that would, with the passage of
time, become a Disqualification Event relating to any Issuer
Covered Person, prior to any Closing of this Offering.


3.40
[RESERVED].


 




 

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3.41
Transactions with
Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to
the knowledge of the Company, none of the employees of the Company
is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for: (i) payment of salary or
consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee
benefits, including stock option agreements under any stock option
plan of the Company.


3.42
Sarbanes-Oxley; Internal
Accounting Controls. The Company is in material compliance
with all provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it as of the Closing Date. Except as disclosed in the
SEC Reports, the Company and the
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the SEC
Reports, the Company has established
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures as of the end of the period
covered by the Company’s most recently filed periodic report
under the Exchange Act (such date, the “Evaluation
Date”). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the Company’s internal
control over financial reporting (as such term is defined in the
Exchange Act) that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over
financial reporting.


3.43
Listing and Maintenance
Requirements. The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any
notification that the SEC is contemplating terminating such
registration. Except as set forth in Schedule 3.43, the Company has
not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been
listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such
Trading Market. The Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.


3.44
Regulation M
Compliance.  The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold,
bid for, purchased, or paid any compensation for soliciting
purchases of, any of the securities of the Company, or (iii) paid
or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other
than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s placement agent in connection with the
placement of the Securities.


3.45 DTC
Status. The
Company’s transfer agent, Interwest Transfer Company, Inc.,
(the “Transfer Agent”) is a member participant of the
Depository Trust Company Automated Securities Transfer Program. The
Company's Common Stock is currently eligible for transfer pursuant
to the Depository Trust Company Automated Securities Transfer
Program. As of the date of the
Agreement, the Company’s securities are currently trading on
NASDAQ under the symbols “MDVX” and
“MDVXW”.


 




 

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3.46
OFAC. Neither the
Company nor any Subsidiary or, to the Company’s knowledge,
any director, officer, agent, employee, Affiliate or person acting
on behalf of any Subsidiary, is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the
sale of the Units, or lend, contribute or otherwise make available
such proceeds to any joint venture partner or other person or
entity, towards any sales or operations in Cuba, Iran, Syria,
Sudan, Myanmar or any other country sanctioned by OFAC or for the
purpose of financing the activities of any person currently subject
to any U.S. sanctions.


3.47
Registration
Rights. Except as set forth on Schedule 3.47 and in the SEC
Reports and as required pursuant to the Registration Rights
Agreement, neither the Company nor any Subsidiary is under any
obligation, or has granted any rights that have not been
terminated, to register any of such Subsidiary’s currently
outstanding securities or any of its securities that may hereafter
be issued.


3.48
Material Non-Public
Information. Except with respect to the transactions
contemplated hereby that will be publicly disclosed, neither the
Company nor any Subsidiary has provided any Purchaser with any
information that such Subsidiary believes constitutes material
non-public information.


3.49
Right to Receive
Additional Shares. Except as set forth on Schedule 3.49 and
in the SEC Reports or in connection with the Units issued in this
Offering, no existing shareholder of the Company has any right to
cause the Company to issue additional shares of Common Stock (the
“Existing
Right Issuances”) to such shareholder.


4.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.


Each of
the Purchasers hereby severally, and not jointly, represents and
warrants to the Company that each such Purchaser’s
representations and warranties in such Purchaser’s
subscription agreement (each a “Subscription
Agreement” and collectively, the “Subscription
Agreements”) entered into in connection with this
Agreement, in form and substance substantially the same as the form
of Subscription Agreement in Exhibit C are true and correct
as of their respective Closing, and such representations and
warranties are deemed repeated as if contained herein.


5.
CONDITIONS TO THE CLOSING.


5.1 Conditions to Purchasers’
Obligations at the Closings. The obligations of the
Purchasers to consummate the transactions contemplated herein to be
consummated at the Initial Closing and of each Subsequent Closing,
as the case may be, are subject to the satisfaction, on or prior to
the date of such Closing, of the conditions set forth below and
applicable thereto, which satisfaction shall be determined, or may
be waived in writing, the Purchasers or Subsequent Closing
Purchasers, as the case may be, who have subscribed for at least a
majority of the Units to be purchased at such Closing.


5.1.1. Representations and Warranties;
Performance of Obligations. Each of the representations and
warranties of the Company contained herein shall be true and
correct on and as of the Initial Closing Date. As of the Initial
Closing, the Company shall have performed and complied with the
covenants and provisions of this Agreement required to be performed
or complied with by it at or prior to the Initial Closing Date. As
to the Subsequent Closings, each of the representations and
warranties of the Company contained herein shall be true and
correct on and as of the Subsequent Closing Date, as qualified by
any updated Schedules delivered at least five (5) days in advance
of the Subsequent Closing to the Subsequent Closing Purchasers
participating in the Subsequent Closing. As to the Subsequent
Closings, the Company shall have performed and complied with the
covenants and provisions of this Agreement and the other
Transaction Documents required to be performed or complied with by
it at or prior to the Subsequent Closing Date. At each Closing, the
Purchasers participating in such Closing shall have received
certificates of the Company dated as of the date of such Closing,
signed by the president or chief executive officer of the Company,
certifying as to the fulfillment of the conditions set forth in
this Section 5.1 and the truth and
accuracy of the representations and warranties of the Company
contained herein (as qualified by the most recently delivered
Schedules) as of the Initial Closing Date and, as to each
Subsequent Closing, the Subsequent Closing Date.


 




 

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5.1.2.
Issuance in Compliance
with Laws. The sale and issuance of the Units shall be
legally permitted by all laws and regulations to which any of the
Purchasers and the Company are subject.


5.1.3.
Filings, Consents,
Permits, and Waivers. The Company and the Purchasers shall
have made all filings and obtained any and all Consents, Permits,
waivers, and Regulatory Approvals necessary for consummation of the
transactions contemplated by the Agreement and the other
Transaction Documents, except for such filings as are not due to be
made until after the applicable Closing.


5.1.4.
Reservation of the Common
Stock, Warrant
Shares and Conversion Shares. From and after the Initial
Closing and any Subsequent Closing, the Common Stock, Warrant
Shares and Conversion Shares, which were the subject of such
Closing shall have been duly authorized and reserved for issuance
by the Board of Directors.


5.1.5.
Conversion Procedures. Each of the form of Notice of Conversion
included in the Series A Certificate of Designation set forth the
totality of the procedures required of the Subscribers in order to
convert the Preferred Stock. No legal opinion, other information or
instructions shall be required of the Subscribers to convert their
Preferred Stock (other than customary 144 representation letters if
such Preferred Stock are to be sold in reliance upon the exemption
provided by to Rule 144). The Company shall honor conversions of
the Preferred Stock and shall deliver the Conversion Shares in
accordance with the terms, conditions and time periods set forth in
the Series A Certificate of Designation.


5.1.6.
Registration Rights
Agreement. Concurrently with the issuance of the Units
occurring at the Initial Closing, the Registration Rights
Agreement, substantially in the form
attached hereto as Exhibit F
(the “Registration
Rights Agreement”), shall
have been executed and delivered by the Company and each
Purchaser.


5.1.7.
Lock-Up Agreements.
Each of (a) the officers and directors of the Company, (b) any
stockholder of the Company owning 7.5% or more (giving effect to
the conversion or exercise of all convertible securities held by
each such stockholder) of the issued and outstanding Common Stock
as of the date of such Closing (but not including any Purchaser of
Units), (c) any other controlling persons, (d) the Placement Agent,
and (e) each Purchaser of Units in the Offering, shall have
executed a form of lock-up agreement reasonably satisfactory to the
Placement Agent and the Company whereby each such Person agrees not
sell or otherwise transfer any shares of the Company owned by such
Person until the date that is ninety (90) days following the
effective date of the Registration Statement (as defined in the
Registration Rights Agreement).


5.1.8.
Legal Opinion. At
each Closing, the Placement Agent and the Purchasers or the
Subsequent Closing Purchasers, as the case may be, shall have
received a legal opinion addressed to each of them, dated as of
such Closing Date, substantially in the form attached hereto as
Exhibit E from
Sichenzia Ross Ference Kesner LLP.


5.1.9.
Proceedings and
Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closings and all
documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers or
the Subsequent Closing Purchasers, as the case may be, and their
counsel, and the Purchasers or the Subsequent Closing Purchasers,
as the case may be, and their counsel shall have received all such
counterpart originals or certified or other copies of such
documents as they may reasonably request.


5.1.10.
Proceedings and
Litigation. No action, suit or proceeding shall have been
commenced by any Person against any party hereto seeking to
restrain or delay the purchase and sale of the Units or the other
transactions contemplated by this Agreement or any of the other
Transaction Documents.





 




 

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5.1.11.
No Material Adverse
Effect. Since the date hereof, there shall not have occurred
any effect, event, condition or circumstance (including, without
limitation, the initiation of any litigation or other legal,
regulatory or investigative proceeding) that individually or in the
aggregate, with or without the passage of time, the giving of
notice, or both, that has had, or could reasonably be expected to
have, a Material Adverse Effect or which could adversely affect the
Company’s ability to perform its respective obligations under
this Agreement or any of the other Transaction
Documents.


5.1.12.
Updated
Disclosures. As to the Subsequent Closings, the Company must
have delivered to the Purchasers an updated set of schedules in
accordance with Section 5.1.1 and such
updated schedules do not reveal any information or the occurrence,
since the Initial Closing Date, of any effect, event, condition or
circumstance, which individually, or in the aggregate, has had or
could reasonably be expected to have, a Material Adverse Effect and
do not include any state of facts that occur as a result of the
breach by the Company of any of its obligations under this
Agreement or any of the other Transaction Documents.


5.1.13.
Payment of Purchase
Price. As to the Initial Closing, each Purchaser shall have
delivered to the Company the total purchase price to be paid for
such Purchaser’s Initial Units, in the amount set forth
opposite such Purchaser’s name on Exhibit A, which shall be no
less than $100,000 in aggregate gross proceeds. As to each
Subsequent Closing, each Subsequent Closing Purchaser shall have
delivered to the Company the total purchase price to be paid for
such Subsequent Closing Purchaser’s Subsequent
Units.


5.1.14.
Delivery of Documents at
the Initial Closing. The Company shall have executed and
delivered the following documents, on or prior to the Initial
Closing Date:


(a)
Certificates.
Certificates representing the Common Stock or Preferred Stock to be
purchased and sold on the Initial Closing Date;


(b)
Warrants: An
executed Warrant, in substantially the form of Exhibit B for the Warrants to
be issued on the Initial Closing Date;


(c)
Legal Opinion. The
legal opinion required by Section 5.1.6 hereof;


(d)
Secretary’s
Certificate. A certificate of the Secretary of the Company
(i)attaching and certifying as to the Company’s Certificate
of Incorporation (the “Certificate”),
(ii) attaching and certifying as to the Bylaws of the Company in
effect at the Initial Closing, (iii) attaching and certifying as to
copies of resolutions by the Board of Directors of the Company
authorizing and approving this Agreement and the other Transaction
Documents and the transactions contemplated hereby (collectively,
the “Minutes”); and (iv) certifying as to the
incumbency of the officers of the Company executing this Agreement
and the other Transaction Documents.


5.1.15.
Delivery of Documents at
the Subsequent Closing. At any Subsequent Closing, the
Company shall deliver, or shall cause to be delivered to the
Subsequent Closing Purchasers the following documents, to be held
in escrow pending the completion of such Subsequent
Closing:


(a)
Certificates.
Certificates representing the Common Stock to be purchased and sold
on the Subsequent Closing Date bearing the legends required to be
placed on such certificates pursuant to the Transaction
Documents;


(b)
Warrants: An
executed Warrant, in substantially the form of Exhibit B for the Warrants to
be issued on the Subsequent Closing Date;


(c)
Compliance
Certificate. The certificate required by
Section 5.1.15(e) hereof
certifying that all representations and warranties made by the
Company as of the Subsequent Closing Date are true, complete and
correct as of the Subsequent Closing Date, as qualified by the
updated Schedules delivered pursuant to Section 5.1.1 and that all covenants in this Agreement
and the other Transaction Documents required to be performed by the
Company prior to the Subsequent Closing Date have been so
performed;


 




 

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(d)
Legal Opinion. A
bringdown of the legal opinion required by Section 5.1.6 hereof;
and


(e)
Secretary’s
Certificate. A Certificate of the Secretary of the Company
(i) certifying that the resolutions by the Board of Directors of
the Company authorizing and approving this Agreement and the other
Transaction Documents delivered at the Initial Closing have not
been modified in any way or rescinded and are otherwise in effect
as of the Subsequent Closing, (ii) certifying as to the incumbency
of the officers of the Company executing any documents contemplated
by this Agreement to be executed and delivered by the Company at
the Subsequent Closing, and (iii) attaching and certifying as to
(iii) the Certificate as in effect at the Subsequent Closing, and
(iv) the Bylaws of the Company in effect at the Subsequent
Closing.


5.2
Conditions to Obligations
of the Company at the Closings. The obligation of the
Company to consummate the transactions contemplated herein to be
consummated at the Initial Closing or the Subsequent Closing, as
the case may be, is subject to the satisfaction, on or prior to the
date of such Closing of the conditions set forth below and
applicable thereto, any of which may be waived in writing by the
Company:


5.2.1.
Representations and
Warranties; Performance of Obligations. Each of the
representations and warranties of the Purchasers contained herein
shall be true and correct on and as of the Initial Closing Date. As
of the Initial Closing Date, the Purchasers shall have performed
and complied with the covenants and provisions of this Agreement
required to be performed or complied with by them at or prior to
the Initial Closing Date. As to the Subsequent Closing, each of the
representations and warranties of the Purchaser(s) contained herein
shall be true and correct on and as of the Subsequent Closing Date.
As to the Subsequent Closing, the Subsequent Closing Purchaser(s)
shall have performed and complied with the covenants and provisions
of this Agreement required to be performed and complied with by
them at or prior to the Subsequent Closing Date.


5.2.2.
Proceedings and
Litigation. No action, suit or proceeding shall have been
commenced by any Governmental Authority against any party hereto
seeking to restrain or delay the purchase and sale of the Units or
the other transactions contemplated by this Agreement.


5.2.3.
Qualifications. All
Permits, if any, that are required in connection with the lawful
issuance and sale of the Units pursuant to this Agreement shall be
obtained and effective as of the Initial Closing or Subsequent
Closing, as applicable.


6.
COVENANTS OF THE PARTIES.


6.1
Commercially Reasonable
Efforts. Upon the terms and subject to the conditions set
forth in this Agreement, the parties to this Agreement shall use
their respective good faith commercially reasonable efforts to
take, or cause to be taken, without any party being obligated to
incur any material internal costs or make any payment or payments
to any third party or parties which, individually or in the
aggregate, are material and are not otherwise legally required to
be made, all actions, and to do or cause to be done, and to assist
and cooperate with the other parties in doing, all things
necessary, proper or advisable for such party to consummate and
make effective, in the most expeditious manner practicable, each
Closing and the other transactions contemplated
hereunder.


6.2
Post-Closing
Filings. In connection with each Closing, the Company and
the Purchasers, if applicable, agree to file all required forms or
filings under applicable securities laws.


6.3
Transfer
Restrictions.


6.3.1 The Securities may only be disposed of in
compliance with state and federal securities laws. In connection
with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144 promulgated under the Securities
Act, to the Company or to an Affiliate of a Purchaser, the Company
may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of
transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of a
Purchaser under this Agreement.


 




 

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6.3.2
The Purchaser agrees to the imprinting, so long as is required by
this Section 6.1, of a legend on any of the Securities, including
the Warrant Shares and the Conversion Shares, substantially in the
following form:


[NEITHER] THIS
SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.


6.3.3 Certificates evidencing the shares of Common
Stock and the Warrant Shares and Conversion Shares shall be
eligible for removal of the restrictive legend set forth in Section
6.1.2 hereof, (a) following any sale of such shares of Common
Stock, Warrant Shares, or Conversion Shares pursuant to Rule 144,
or (b) if such shares of Common Stock, Warrant Shares, or
Conversion Shares are eligible for sale under Rule 144, without the
requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such shares of
Common Stock, Warrant Shares and Conversion Shares and without
volume or manner-of-sale restrictions, (c) following any sale of
such shares of Common Stock, Warrant Shares, or Conversion Shares,
pursuant to the plan of distribution in an effective registration
statement (in compliance with any prospectus delivery
requirements), or (d) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission) (the “Removal
Date”).  The Company shall cause its counsel
to issue a legal opinion to the Transfer Agent promptly after the
Removal Date if required by the Transfer Agent to effect the
removal of the legend hereunder as permitted by applicable law then
in effect. The Company agrees that following the Removal Date, it
will, no later than five (5) trading days following the delivery by
a Purchaser to the Company or the Transfer Agent of a certificate
representing shares of Common Stock, Warrant Shares, or
Conversion Shares, as the case
may be, issued with a restrictive legend, together with any
reasonable certifications requested by the Company, the
Company’s counsel or the Transfer Agent (such fifth (5th)
trading day, the “Legend Removal
Date”), deliver or cause to be delivered to such
Purchaser a certificate representing such shares that is free from
all restrictive and other legends. The
Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on
transfer set forth in this Section 6. Certificates for shares of
Common Stock, Warrant Shares, and Conversion Shares subject to
legend removal hereunder shall be transmitted by the Transfer Agent
to the Purchaser by crediting the account of the
Purchaser’s prime broker with the Depository Trust Company
System as directed by such Purchaser if the Transfer Agent is then
a participant in such system and the Company is eligible to use
such system and as directed by such
Purchaser if either (i) there is an effective registration
statement permitting the resale of such shares of Common Stock,
Warrant Shares or Conversion Shares by the Purchaser (and the
Purchaser provides the Company or the Company’s counsel with
any requested certifications with respect to future sales of such
shares) or (ii) the shares are eligible for resale by the Purchaser
under Rule 144, without the requirement for the Company to be in
compliance with the current public information required under Rule
144 as to such shares of Common Stock, Warrant Shares and
Conversion Shares and without volume or manner-of-sale
restrictions.


6.3.4 In addition to any other rights available to
a Purchaser, if the Company fails to deliver to a Purchaser
unlegended Warrant Shares or Conversion Shares as required pursuant
to this Agreement and after the Legend Removal Date such Purchaser,
or a broker on such Purchaser’s behalf, purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by such Purchaser of the Warrant Shares
or Conversion Shares that such Purchaser was entitled to receive
from the Company (a “Buy-In”),
then the Company shall promptly pay in cash to such Purchaser (in
addition to any remedies available to or elected by such Purchaser)
the amount by which (a) such Purchaser’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (b) the aggregate purchase price
of


 




 

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the
Warrant Shares or Conversion Shares delivered to the Company for
reissuance as unlegended shares (which amount shall be paid as
liquidated damages and not as a penalty). For example, if a
Purchaser purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to Common Stock or
Warrant Shares or Conversion Shares delivered to the Company for
reissuance as unlegended shares having an aggregate purchase price
of $10,000, the Company shall be required to pay the Purchaser
$1,000, plus interest. The Purchaser shall provide the Company
written notice indicating the amounts payable to the Purchaser in
respect of the Buy-In. For purposes of this Agreement, the
“purchase price” of a (a) share of Common Stock shall
be $___ per share, and (b) Warrant Share shall be the Exercise
Price (as defined in the Warrants).


6.3.5 In addition to such Purchaser’s other
available remedies, the Company shall pay to such Purchaser, in
cash, as partial liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares or Conversion Shares (based on the
Exercise Price of such Warrant Shares or Conversion Shares, as the
case may be) delivered for removal of the restrictive legend, $10
per trading day (increasing to $20 per trading day five (5) trading
days after such damages have begun to accrue)) for each trading day
after the fifth (5th) trading day following the Legend Removal Date
until such certificate is delivered without a legend. Nothing
herein shall limit such Purchaser’s right to pursue actual
damages for the Company’s failure to deliver certificates
representing any Securities as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all
remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief.


6.4 Furnishing of
Information; Public Information. For so long as any Purchaser holds any
Securities, or if earlier, for a period of twenty-four (24) months
following the Termination Date the Company covenants to file all
annual and quarterly periodic reports with the SEC pursuant to
Section 15(d) of the Exchange Act or alternatively, if registered
under Section 12(b) or 12(g) of the Exchange Act, maintain the
registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all
such annual and quarterly reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.
Unless the Securities owned by such Purchaser shall have been
registered for resale, if at any time during the period commencing
from the date that is 6 months after the date hereof and ending 24
months following the Termination Date the Company shall fail for
any reason to satisfy the current public information requirement
under Rule 144(c) (a “Public Information
Failure”) then, in addition to such Purchaser’s
other available remedies, the Company shall pay to a Purchaser, in
cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the
Securities, an amount in cash equal to two percent (2.0%) of the
pro-rata portion of such Purchaser’s Purchase Price
attributable to the unsold Warrant Shares or Conversion Shares on the day of a Public
Information Failure and on every thirtieth (30th) day (prorated for
periods totaling less than thirty (30) days) thereafter until the
earlier of (A) the date such Public Information Failure is cured
and (B) such time that such public information is no longer
required for the Purchasers to transfer their shares of Common
Stock, Warrant Shares and Conversion
Shares pursuant to Rule 144. The payments to which a
Purchaser shall be entitled pursuant to this Section 6.2 are
referred to herein as “Public Information Failure
Payments”. Public Information Failure Payments shall be paid
on the earlier of (Y) the last day of the calendar month during
which such Public Information Failure Payments are incurred, and
(Z) the third (3rd) business day after the event or failure giving
rise to the Public Information Failure Payments is cured. Nothing
herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser
shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. Notwithstanding anything
herein to the contrary, the maximum payment hereunder shall not
exceed twelve (12%) percent of such Purchaser’s Purchase
Price. As long as any Purchaser owns
Securities, if the Company is not required to file reports pursuant
to such laws, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the
Securities under Rule 144. The Company further covenants that it
will take such further action as any holder of Securities may
reasonably request, to the extent required from time to time to
enable such person to sell such Securities without registration
under the Securities Act within the requirements of the exemption
provided by Rule 144.


 




 

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6.2
Listing of
Securities. The Company agrees,
(i) if the Company applies to have the Common Stock traded on any
other trading market, it will include in such application the
Warrant Shares and Conversion Shares of each Purchaser, and will
take such other action as is necessary or desirable to cause such
Common Stock and any Warrant Shares and Conversion Shares to be
listed on such other trading market as promptly as possible, and
(ii) it will take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market (as
defined in the Warrant) and will comply in all material respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of any such Trading
Market (as defined in the Warrant).


6.3
Reservation of
Shares. From and after
the Initial Closing and any Subsequent Closing, the Company shall at all times thereafter while
the Common Stock and Warrants which were purchased and sold at such
Closing are outstanding maintain a reserve from its duly authorized
shares of Common Stock of a number of shares of Common Stock
sufficient to allow for the issuance of Common Stock, Warrant
Shares and Conversion Shares, which were the subject of such
Closing.


6.4
Replacement of
Securities. If any certificate
or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument,
but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay
any reasonable third-party costs associated with the issuance of
such replacement securities. If a replacement certificate or
instrument evidencing any securities is requested due to a
mutilation thereof, the Company may require delivery of such
mutilated certificate or instrument as a condition precedent to any
issuance of a replacement.


6.5
Securities
Laws; Publicity. The Company
shall by 8:30 a.m. (New York City time) on the trading day
immediately, following a Closing hereunder, file a Current Report
on Form 8-K disclosing the material terms of the transactions
contemplated hereby and including the Transaction Documents as
exhibits thereto to the extent required by law. The Company shall
not publicly disclose the name of Purchaser, or include the name of
any Purchaser in any filing with the SEC or any regulatory agency
or trading market, without the prior written consent of Purchaser,
except: (a) as required by federal securities law in connection
with the filing of final Transaction Documents (including signature
pages thereto) with the SEC and (b) to the extent such disclosure
is required by law, in which case the Company shall provide the
Purchaser with prior notice of such disclosure permitted under this
clause (b).


6.6
Form D;
Blue Sky Filings. The Company
agrees to timely file a Form D with respect to the Securities as
required under Regulation D promulgated under the Securities Act
and to provide a copy thereof, promptly upon request of the
Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchaser at the
Closing under applicable securities or “Blue Sky” laws
of the states of the United States, and shall provide evidence of
such actions promptly upon request of any
Purchaser.


6.7
Equal
Treatment of Purchasers. No
consideration (including any modification of any Transaction
Document) shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered
to all of the parties to the Transaction
Documents.


6.8
Non-Public
Information. Except with
respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company covenants
and agrees that neither it, nor any other person acting on its
behalf, will provide Purchaser or its agents or counsel with any
information that the Company believes constitutes material
non-public information, unless prior thereto Purchaser shall have
executed a written agreement regarding the confidentiality and use
of such information. The Company understands and confirms that
Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.


 




 

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6.9
Use of
Proceeds. The Company shall use
the net proceeds from the sale of the Securities hereunder for
working capital purposes and shall not use the proceeds for (a) the
satisfaction of any portion of the Company’s debt (other than
payment of trade payables in the ordinary course of the
Company’s business and prior practices), (b) the redemption
of any Common Stock or Common Stock Equivalents or (c) the
settlement of any outstanding litigation.


6.10
Commercially Reasonable
Efforts. Upon the terms and subject to the conditions set
forth in this Agreement, the parties to this Agreement shall use
their respective good faith commercially reasonable efforts to
take, or cause to be taken, without any party being obligated to
incur any material internal costs or make any payment or payments
to any third party or parties which, individually or in the
aggregate, are material and are not otherwise legally required to
be made, all actions, and to do or cause to be done, and to assist
and cooperate with the other parties in doing, all things
necessary, proper or advisable for such party to consummate and
make effective, in the most expeditious manner practicable, each
Closing and the other transactions contemplated
hereunder.


7. INDEMNIFICATION AND
EXPENSES.


 


7.1 The Company Indemnification.
The Company shall indemnify and hold harmless each Purchaser and
any of such Purchaser’s affiliates and any Person which
controls, is controlled by, or under common control with (within
the meaning of the Securities Act) such Purchaser or any such
Affiliate, and each of their respective directors and officers, and
the successors and assigns and executors and estates of any of the
foregoing (each, an “Indemnified
Party”, and collectively, the “Indemnified
Parties”) from and against all Indemnified Losses
imposed upon, incurred by, or asserted against any of the
Indemnified Parties resulting from, relating to or arising out
of:


 


7.1.1. any representation or
warranty made in this Agreement or any of the other Transaction
Documents or in any certificate or other instrument delivered by or
on behalf of the Company not being true and correct in any material
respect when made;


7.1.2. any breach or
non-fulfillment of any covenant or agreement to be performed by the
Company under this Agreement or the other Transaction
Documents;


7.1.3.
any third party action or claim against any Indemnified Party
arising out of any misrepresentation or breach described in Section
7.1.1 or Section 7.1.2; or


7.1.4. any third party action
or claim relating in any way to the Indemnified Party’s
status as a security holder of the Company, as a Person which
controls, is controlled by or under common control with (within the
meaning of the Securities Act) any such Indemnified Party or as a
director or officer of any of the foregoing (including, without
limitation, any and all Indemnifiable Losses arising under the
Securities Act, the Securities Exchange Act of 1934, as amended, or
similar securities law, or any other Requirements of Law or
otherwise, which relate directly or indirectly to the registration,
purchase, sale or ownership of any securities of the Company or to
any fiduciary obligation owed with respect thereto), including,
without limitation, in connection with any action or claim relating
to any action taken or omitted to be taken or alleged to have been
taken or omitted to have been taken by such Indemnified Party as a
security holder; provided that the Company shall not be obligated
to indemnify or hold harmless any Indemnified Party under this
Section 7.1.4 against any Indemnified
Losses resulting from or arising out of any such action or claim if
it has been adjudicated by a final and non-appealable determination
of a court or other trier of fact of competent jurisdiction that
such Indemnified Losses were the result of (a) a breach of such
Indemnified Party’s fiduciary duty, (b) any action or
omission made by the Indemnified Party in bad faith, (c) such
Indemnified Party’s willful misconduct, or (d) any criminal
action on the part of such Indemnified Party.


7.2
Attorneys’ Fees and
Expenses.  If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this
Agreement or any Transaction Document, the prevailing party shall
be entitled to reasonable attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which
such party may be entitled as determined by such court, equity or
arbitration proceeding.


 




 

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8.
MISCELLANEOUS.


8.1
Governing Law; Submission
to Jurisdiction; Waiver of Trial by Jury. This Agreement
shall be governed in all respects by the laws of the State of New
York without regard to
the conflict of laws principles of the State of New York or any
other jurisdiction. No suit, action or proceeding with respect to
this Agreement or any of the Transaction Documents may be brought
in any court or before any similar authority other than in a court
of competent jurisdiction in the State of New York and the parties
hereby submit to the exclusive jurisdiction of such courts for the
purpose of such suit, proceeding or judgment. Each of the parties
hereto hereby irrevocably waives any right which it may have had to
bring such an action in any other court, domestic or foreign, or
before any similar domestic or foreign authority and agrees not to
claim or plead the same. Each of the parties hereto hereby
irrevocably and unconditionally waives trial by jury in any legal
action or proceeding in relation to this Agreement or any of the
Transaction Documents and for any counterclaim
therein.


8.2
Survival of
Representations and Warranties. The representations and
warranties made by the Company and the Purchasers herein at each
Closing shall survive such Closing for a period of twelve (12)
months. All statements contained in any certificate or other
instrument delivered by or on behalf of any party to this
Agreement, pursuant to or in connection with the transactions
contemplated by this Agreement or any of the other Transaction
Documents shall be deemed to be representations and warranties made
by such party as of the date of such certificate or other
instrument.


8.3 Successors and Assigns. The
provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns; provided that no
party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of each
other party. Notwithstanding the foregoing (a) any Purchaser may
assign or transfer, in whole or, from time to time, in part, the
right to purchase all or any portion of the Units to one or more of
its Affiliates (subject to Affiliate qualification as an Accredited
Investor) and (b) from and after the Initial Closing Date, any
Purchaser or other holder of Common Stock may assign, pledge or
otherwise transfer, in whole or from time to time in part, its
rights hereunder to any Person who acquires any interest in any
Common Stock and (c) any Purchaser may assign or transfer any of
its rights or obligations under this Agreement, in whole or from
time to time in part, to the Company or any other Purchaser or any
Affiliate of any other Purchaser. As a condition of any transfer
pursuant to this Section 8.3, the
transferee must agree in writing for the benefit of all parties to
this Agreement (which writing shall be in form and substance
reasonably acceptable to all parties to this Agreement) to be bound
by the terms and conditions of this Agreement and all other
Transaction Documents with respect to any Common Stock being
transferred hereunder.


8.4
Entire Agreement.
This Agreement, the Exhibits and Schedules hereto, the other
Transaction Documents and each of the Exhibits delivered pursuant
thereto constitute the full and entire understanding and agreement
between the parties hereto with regard to the subject matter hereof
and thereof and no party hereto shall be liable or bound to any
other party hereto in any manner by any representations,
warranties, covenants and agreements except as specifically set
forth herein and therein.


8.5
Severability. If
any provision of the Agreement is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be
affected or impaired thereby.


8.6
Amendment and
Waiver. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and
is signed by the Company and the Purchasers (and, to the extent of
any assignment under Section 8.3
hereof, their respective permitted assigns and any permitted
assigns thereof) holding a majority of the voting power of the then
outstanding Common Stock, Warrant Shares and Conversion Shares purchased under this
Agreement held by such holders.




 

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8.7
Delays or
Omissions. No delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement, the other
Transaction Documents, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or
of or in any similar breach, default or noncompliance thereafter
occurring. Any waiver or approval of any kind or character on any
Purchaser’s part of any breach, default or noncompliance
under this Agreement, the other Transaction Documents or any waiver
on such party’s part of any provisions or conditions of the
Agreement, the other Transaction Documents, must be in writing and
shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement, the other
Transaction Documents, or otherwise afforded to any party, shall be
cumulative and not alternative.


8.8
Notices. All
notices, requests, demands and other communications given or made
in accordance with the provisions of this Agreement shall be
addressed (i) if to a Purchaser, at such Purchaser’s address,
fax number or email address, as furnished to the Company on the
signature page below or as otherwise furnished to the Company by
the Purchaser in writing, or (ii) if to the Company, to the
attention of the President at such address, fax number or email
address furnished to the Purchasers on the signature page below or
as otherwise furnished by the Company in writing, and shall be made
or sent by a personal delivery or overnight courier, by registered,
certified or first class mail, postage prepaid, or by facsimile or
electronic mail with confirmation of receipt, and shall be deemed
to be given on the date of delivery when made by personal delivery
or overnight courier, 48 hours after being deposited in the U.S.
mail, or upon confirmation of receipt when sent by facsimile or
electronic mail. Any party may, by written notice to the other,
alter its address, number or respondent, and such notice shall be
considered to have been given three (3) days after the overnight
delivery, airmailing, faxing or sending via e-mail
thereof.


8.9
Expenses. The
Company shall pay all
costs and expenses that it incurs with respect to the preparation,
negotiation, execution, delivery and performance of this Agreement,
including, without limitation, any costs and expenses of its
counsel. The Company shall pay the reasonable fees and expenses of
independent counsel for the Placement Agent with respect to the
negotiation and execution of this Agreement and the other
Transaction Documents in accordance with the terms of the
Company’s agreement with the Placement Agent.


8.10
Titles and
Subtitles. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.


8.11
Counterparts; Execution by
Facsimile Signature. This Agreement may be executed in any
number of counterparts (including execution by facsimile), each of
which shall be an original, but all of which together shall
constitute one instrument. This Agreement may be executed by
facsimile signature(s) which shall be binding on the party
delivering same, to be followed by delivery of originally executed
signature pages.


8.12
Acknowledgment. Any
investigation or other examination that may have been made at any
time by or on behalf of a party to whom representations and
warranties are made in this Agreement or in any other Transaction
Documents shall not limit, diminish, supersede, act as a waiver of,
or in any other way affect the representations, warranties and
indemnities contained in this Agreement and the other Transaction
Documents, and the respective parties may rely on the
representations, warranties and indemnities made to them in this
Agreement and the other Transaction Documents irrespective of and
notwithstanding any information obtained by them in the course of
any investigation, examination or otherwise, whether before or
after any Closing.


8.13
Publicity. Except
as otherwise required by law or applicable stock exchange rules, no
announcement or other disclosure, public or otherwise, concerning
the transactions contemplated by this Agreement shall be made,
either directly or indirectly, by any party hereto which mentions
another party (or parties) hereto without the prior written consent
of such other party (or parties), which consent shall not be
unreasonably withheld, delayed or conditioned.


8.14
No Third Party
Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights,
remedies, obligations or Liabilities under or by reason of this
Agreement.


 




 

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8.15
Pronouns. All
pronouns contained herein, and any variations thereof, shall be
deemed to refer to the masculine, feminine or neutral, singular or
plural, as to the identity of the parties hereto may
require.


9. DEFINITIONS.


As used
in this Agreement, the following terms shall have the meanings
herein specified:


9.1
“Affiliate”
shall mean, with respect to any Person specified: (i) any Person
that directly or indirectly through one or more intermediaries
controls, is controlled by or under common control with the Person
specified; (ii) any director, officer, or Subsidiary of the Person
specified; and (iii) the spouse, parents, children, siblings,
mothers-in-law, fathers-in law, sons-in-law, daughters-in-law,
brothers-in-law, and sisters-in-law of the Person specified,
whether arising by blood, marriage or adoption, and any Person who
resides in the specified Person’s home. For any director,
officer, or Subsidiary of the Person specified. For purposes of
this definition and without limitation to the previous sentence,
(x) “control” (including, with correlative
meanings, the terms “controlled by” and “under
common control with”) of a Person means the power, direct or
indirect, to direct or cause the direction of management and
policies of such Person, whether through ownership of voting
securities, by contract or otherwise, and (y) any Person
beneficially owning, directly or indirectly, more than ten percent
(10%) or more of any class of voting securities or similar
interests of another Person shall be deemed to be an Affiliate of
that Person.


9.2
“Agreement”
shall have the meaning set forth in the preamble to this
Agreement.


 


9.3
“Balance
Sheet Date” shall have the meaning set forth in
Section 3.9.


9.4
“Budget” shall
have the meaning set forth in Section 3.21.


9.5
“Certificate”
shall have the meaning set forth in Section 5.1.13.


9.6
“Closing” shall
mean the Initial Closing or the Subsequent Closing, as
applicable.


9.7
“Code” shall
have the meaning set forth in Section 3.16.2.


9.8
“Closing
Date” shall mean the Initial Closing Date or the
Subsequent Closing Date, as applicable.


9.9
“Common
Stock” shall have the meaning set forth in the
preamble to this Agreement.


9.10
“Common
Stock Equivalents” shall means any securities of the
Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation,
any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to
receive Common Stock.


9.11
“Company” shall
have the meaning set forth in the preamble to this
Agreement.


9.12
“Consents”
shall mean any consents, waivers, approvals, authorizations, or
certifications from any Person or under any Contract,
Organizational Document or Requirement of Law, as
applicable.


9.13
“Contracts”
shall mean any indentures, indebtedness, contracts, leases,
agreements, instruments, licenses, undertakings and other
commitments, whether written or oral.


9.14
“Conversion
Shares” shall have the meaning set forth in the
preamble to this Agreement.


 




 

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9.15
“Copyrights”
shall mean all copyrights, copyrightable works, mask works and
databases, including, without limitation, any computer software
(object code and source code), Internet web-sites and the content
thereof, and any other works of authorship, whether statutory or
common law, registered or unregistered, and registrations for and
pending applications to register the same including all reissues,
extensions and renewals thereto, and all moral rights thereto under
the laws of any jurisdiction.


 


9.16
“Employee” shall
have the meaning set forth in Section 3.17.1.


9.17
“Employee
Benefit Plans” shall have the meaning set forth in
Section 3.18.1.


9.18
“Encumbrances”
shall mean any security interests, liens, encumbrances, pledges,
mortgages, conditional or installment sales Contracts, title
retention Contracts, transferability restrictions and other claims
or burdens of any nature whatsoever.


9.19
“Environmental
Laws” shall mean any Federal, state or local law or
ordinance or Requirement of Law or regulation pertaining to the
protection of human health or the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Sections 9601, et seq., the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001,
et seq., and the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901, et seq.


9.20
“ERISA” shall
have the meaning set forth in Section 3.18.1.


9.21
“FDA” shall
have the meaning set forth in Section 3.22.1.


9.22
“Financial
Statements” shall have the meaning set forth in
Section 3.8.


9.23
“Governmental or Regulatory
Authority” shall mean any court, tribunal, arbitrator,
authority, agency, commission, official or other instrumentality of
the government of the United States or of any foreign country, any
state or any political subdivision of any such government (whether
state, provincial, county, city, municipal or
otherwise).


9.24
“Hazardous
Substances” shall mean oil and petroleum products,
asbestos, polychlorinated biphenyls, urea formaldehyde and any
other materials classified as hazardous or toxic under any
Environmental Laws.


9.25
“Indemnified
Losses” shall mean all losses, Liabilities,
obligations, claims, demands, damages, penalties, settlements,
causes of action, costs and expenses arising out of any third party
claim or action against an Indemnified Party, including, without
limitation, the actual costs paid in connection with an Indemnified
Party’s investigation and evaluation of any claim or right
asserted against such Indemnified Party and all reasonable
attorneys’, experts’ and accountants’ fees,
expenses and disbursements and court costs including, without
limitation, those incurred in connection with the Indemnified
Party’s enforcement of the indemnification provisions of
Section 7 of this
Agreement.


9.26
“Indemnified
Party” shall have the meaning set forth in Section
7.1.


9.27
“Initial
Closing” shall have the meaning set forth in Section
2.1.


9.28
“Initial
Closing Date” shall have the meaning set forth in
Section 2.1.


9.29
“Initial
Units” shall have the meaning set forth in Section
1.2.


9.30
“Leased
Real Property” shall have the meaning set forth in
Section 3.19.





 




 

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9.31
“Legal
Proceeding” shall mean any action, suit, arbitration,
claim or investigation by or before any Governmental or Regulatory
Authority, any arbitration or alternative dispute resolution panel,
or any other legal, administrative or other
proceeding.


9.32
“Liabilities”
shall mean all obligations and liabilities including, without
limitation, direct or indirect indebtedness, guaranties,
endorsements, claims, losses, damages, deficiencies, costs,
expenses, or responsibilities, in any of the foregoing cases,
whether fixed or unfixed, known or unknown, asserted or unasserted,
choate or inchoate, liquidated or unliquidated, or secured or
unsecured.


9.33
“Licensed
Intellectual Property” shall mean all Copyrights,
Patents, Trademarks, technology rights and licenses, trade secrets,
know-how, inventions, methods, techniques and other intellectual
property any one or more Entities have or has the right to use in
connection with its business or their respective businesses, as
applicable, pursuant to license, sublicense, agreement or
permission.


9.34
“Material
Adverse Effect” shall have the meaning set forth in
Section 3.1.


9.35
“Material
Contract” shall have the meaning set forth in Section
3.10.1.


9.36
“Order” shall
mean any judgment, order, writ, decree, stipulation, injunction or
other determination whatsoever of any Governmental or Regulatory
Authority, arbitrator or any other Person whose finding, ruling or
holding is legally binding or is enforceable as a matter of right
(in any case, whether preliminary or final and whether voluntarily
imposed or consented to).


9.37
“Organizational
Documents” shall mean, with respect to any Person,
such Person’s articles or certificate of incorporation,
by-laws or other governing or constitutive documents, if
any.


9.38
“Owned
Intellectual Property” shall mean all Copyrights,
Patents, Trademarks, technology, trade secrets, know-how,
inventions, methods, techniques and other intellectual property
owned by the Company or any of its Subsidiaries.


9.39
“Patents” shall
mean patents and patent applications (including, without
limitation, provisional applications, utility applications and
design applications), including, without limitation, reissues,
patents of addition, continuations, continuations-in-part,
substitutions, additions, divisionals, renewals, registrations,
confirmations, re-examinations, certificates of inventorship,
extensions and the like, any foreign or international equivalent of
any of the foregoing, and any domestic or foreign patents or patent
applications claiming priority to any of the above.


9.40
“Permits” shall
mean all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises, rights,
Orders, qualifications and similar rights or approvals granted or
issued by any Governmental or Regulatory Authority relating to the
Business.


9.41
“Per Unit
Purchase Price” shall have the meaning set forth in
Section 1.2.


9.42
“Person” shall
mean any individual, corporation, partnership, firm, joint venture,
association, limited liability company, limited liability
partnership, joint-stock company, trust, unincorporated
organization or Governmental or Regulatory Authority.


9.43
“Placement
Agent” shall mean Laidlaw & Company (UK)
Ltd.


9.44           “Preferred
Stock” shall have the meaning set forth in the
preamble to this Agreement.


9.45
“Premises”
shall have the meaning set forth in Section 3.23.


9.46
“Products”
shall have the meaning set forth in Section 3.10.1(c)


 




 

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9.47
“Purchase
Price” shall mean the “Total Purchase Price
Amount” set forth in Exhibit A for each respective
Purchaser.


9.48
“Purchasers”
and “Purchaser”
shall have the meaning set forth in the preamble to this
Agreement.


9.49
“Real
Property Leases” shall have the meaning set forth in
Section 3.19.


9.50
"Registration
Rights Agreement” shall have the meaning set forth in
Section 5.1.5.


9.51
“Regulatory
Approvals” shall mean all Consents from all
Governmental or Regulatory Authorities.


9.52
“Requirement of
Law” shall mean any provision of law, statute, treaty,
rule, regulation, ordinance or pronouncement having the effect of
law, and any Order.


9.53
“Schedules”
shall have the meaning set forth in the preamble to Section
3.


9.54
“SEC” shall
mean Securities and Exchange Commission.


9.55
“SEC
Reports” shall
have the meaning set forth in Section 3.8.


9.56
“Securities” shall
have the meaning set forth in Section 3.33.


9.57
“Securities
Act” shall have the meaning set forth in Section
3.25.


9.58
“Subsequent
Closing” shall mean the funding which occurs on the
Subsequent Closing Date.


9.59
“Subsequent Closing
Date” shall have the meaning set forth in Section
2.2.


9.60
“Subsequent Closing
Purchaser” shall have the meaning set forth in Section
1.3.


9.61
“Subsidiaries”
and “Subsidiary”
shall mean, with respect to any Person (including the Company), any
corporation, partnership, association or other business entity of
which more than 50% of the issued and outstanding stock or
equivalent thereof having ordinary voting power is owned or
controlled by such Person, by one or more Subsidiaries or by such
Person and one or more Subsidiaries of such Person.


9.62
“Suppliers”
shall have the meaning set forth in Section 3.20.2.


9.63
“Tax
Returns” shall mean any declaration, return, report,
estimate, information return, schedule, statements or other
document filed or required to be filed in connection with the
calculation, assessment or collection of any Taxes or, when none is
required to be filed with a taxing authority, the statement or
other document issued by, a taxing authority.


9.64
“Taxes” shall
mean (i) any tax, charge, fee, levy or other assessment including,
without limitation, any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise,
profits, payroll, employment, social security, unemployment,
excise, estimated, stamp, occupancy, occupation, property or other
similar taxes, including any interest or penalties thereon, and
additions to tax or additional amounts imposed by any federal,
state, local or foreign Governmental or Regulatory Authority,
domestic or foreign or (ii) any Liability for the payment of
any taxes, interest, penalty, addition to tax or like additional
amount resulting from the application of Treasury Regulation
§1.1502-6 or comparable Requirement of Law.


 


 




 

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9.65
“Trademarks”
shall mean trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade
styles, uniform resource locators (URLs), domain names, trade
dress, any other names and locators associated with the Internet,
other source of business identifiers, whether registered or
unregistered and whether or not currently in use, and
registrations, applications to register and all of the goodwill of
the business related to the foregoing.


9.66
“Transaction
Documents” shall mean this Agreement, the Subscription
Agreements, the Warrant, the Registration Rights Agreement and all
other documents, certificates and instruments executed and
delivered at any Closing.


9.67
“Units” shall
have the meaning set forth in the preamble to this
Agreement.


9.68
“Warrant
Shares” shall have the meaning set forth in Section
1.1.


 



[SIGNATURES ON FOLLOWING PAGES]


 




 

-35-








 






 


 


IN
WITNESS WHEREOF, the parties hereto have executed this Unit
Purchase Agreement as of January ___, 2017.


 


	


COMPANY:


 



MEDOVEX CORPORATION


 

	
 


	

By:
_____________________________


Name:


Title:


 


Address:


 


Tel:


Fax:
 


email:

	
 


	
 

	
 


	
 

	
 


	


PURCHASERS:


 


	

The Purchasers set forth on Exhibit A to the Agreement have
executed a Subscription Agreement with the Company which provides,
among other things, that by executing the Subscription Agreement
each Purchaser is deemed to have executed the UNIT PURCHASE
AGREEMENT in all respects and is bound to purchase the Units set
forth in such Subscription Agreement and Exhibit A to the
Agreement.







  





 

-36-








 










 



Company Disclosure Schedules


 




3.1

The Company is
incorporated in the State of Nevada. The Company is qualified to do
business in the State of Georgia, Minnesota and
Florida.





 




3.2

Not
applicable





 




3.7

Capitalization
Table





 


	
 

	


Description


 

	
 

	


Amount


 


	
 

	

Common
Stock Issued and Outstanding


 

	
 

	


14,855,238


 


	
 

	

Preferred Stock
Issued and Outstanding


 

	
 

	


0


 


	
 

	

Stock
Options (issued)


 

	
 

	


1,456,811


 


	
 

	

Stock
Options (unissued)


 

	
 

	


193,189


 


	
 

	

Warrants


 

	
 

	


3,506,281


 







 




3.9

Not
applicable





 




3.10.1

Not
applicable





 




3.11

Not
applicable





 




3.13.1

Not
applicable





 




3.13.3


Not
applicable






 




3.13.4


Not
applicable






 




3.13.10


Not
applicable






 




3.14

Not
applicable





 




3.15

Not
applicable





 




3.16.1

Not
applicable





 




3.17.1

Not
applicable





 




3.18.1

Not
applicable





 




3.18.2


Not
applicable






 




3.19

Not
applicable






 




 

-37-








 






 




3.28


The
Company maintains D&O and blanket insurance coverage (general
liability, property, auto, umbrella, workers comp) through
Travelers Insurance Co.






 




3.37

Not
applicable





 




3.43

On August 30, 2016,
the Company received a NASDAQ deficiency letter that the Company
was not in compliance with the stockholder’s equity
requirement for continued listing on NASDAQ. 





 




3.47


Not
applicable






 




3.48


Not
applicable






 


 


 




 

-38-








 






 



EXHIBIT A


 


SCHEDULE
OF PURCHASERS


 



Initial Closing


 


	


Name of Purchaser

	


Initial Units

	


Common



 Stock

	


Preferred Stock (in lieu of Common Stock)

	


Warrant Shares

	


Total Purchase



Price Amount


	
 

	
 

	
 

	
 

	
 

	

$


	
 

	
 

	
 

	
 

	
 

	


TOTAL: $







 



Subsequent Closing


	


Name of Subsequent Closing Purchaser

	


Subsequent Units

	


Common



 Stock

	


Preferred Stock (in lieu of Common Stock)

	


Warrant Shares

	


Total Purchase



Price Amount


	
 

	
 

	
 

	
 

	
 

	


TOTAL: $







 




 

-39-








 











EXHIBIT B


FORM OF
WARRANT


 


 




 

-40-








 






 



EXHIBIT C


FORM OF
SUBSCRIPTION AGREEMENT


 


 




 

-41-








 











EXHIBIT D


FUNDING
INSTRUCTIONS


 


 




 

-42-








 











EXHIBIT E


FORM OF
LEGAL OPINION


 


 


 




 

-43-








 






 



EXHIBIT F


FORM OF
REGISTRATION RIGHTS AGREEMENT


 


 


 




 

-44-