Blueprint





  Exhibit 10.2











 



BACKSTOP AGREEMENT

 


This
BACKSTOP AGREEMENT (this
“Agreement”),
dated as of November 9, 2017, is entered into by and between
CorMedix Inc., a Delaware corporation with offices located at 400
Connell Drive, 5th Floor, Berkeley Heights, NJ 07922 (the ”Company”), and the backstop
investors signatory hereto (collectively, the “Backstop Investors”). Capitalized
terms used but not defined herein shall have the meanings assigned
thereto in that certain Securities Purchase Agreement, dated as of
the date hereof (the “Purchase Agreement”), between the
Company, the Backstop Investors and the other investors party
thereto from time to time.

 



RECITALS

 


WHEREAS, the
Company desires to raise capital through the issuance and sale to
certain accredited investors of 5,000 shares of its newly issued
Series F Preferred Stock at a purchase price of $1,000 per share
(the “Issue
Price”) for an aggregate purchase price of $5,000,000
pursuant to and in accordance with that certain Purchase Agreement
entered into as of the date hereof;

 


WHEREAS, pursuant
to this Agreement, and upon the terms and subject to the conditions
and limitations set forth herein and in consideration of the
payment of the Commitment Payment (as defined below), the Company
is willing to sell, and the Backstop Investors are willing to
purchase, their Pro Rata Share of shares of Series F Preferred
Stock at the Issue Price per share;

 


WHEREAS, the
Company and the Backstop Investors are executing and delivering
this Agreement in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act of
1933, as amended from time to time, and the rules and regulations
promulgated thereunder, or any successor statute (the
“1933
Act”).

 



AGREEMENT

 


NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Backstop Investors hereby agree
as follows:

 




1.

BACKSTOP
COMMITMENT.





 

(a)  Upon the
terms and subject to the conditions contained herein, the Company
shall have the option to require each of the Backstop Investors,
severally and not jointly, to purchase from the Company on a
Closing Date, and the Backstop Investors, in reliance on the
representations and warranties set forth in this Agreement and in
the Purchase Agreement which are expressly incorporated herein by
reference, hereby agree to purchase from the Company, the Preferred
Shares set forth in a Closing Notice, as applicable, subject in all
respects to the limitations set forth in Section 1(d) below. The
Preferred Shares that each of the Backstop Investors is required to
purchase pursuant to this Section 1(a) are referred to herein as
such Backstop Investor’s “Backstop Shares.”

 




 








 






 

(b) To the extent that
the Company does not require the Backstop Investors to purchase
their respective entire Pro Rata Share of the Purchase Maximum on a
Closing Date, the Company may require the Backstop Investors to
purchase all or a lesser remaining percentage (provided that such
percentage is the same for each Backstop Investor) of such Backstop
Investor’s Pro Rata Share of the Purchase Maximum on any
subsequent date (each, a “Closing Date”) by giving to the
Backstop Investors, at least five Business Days prior to such
Closing Date, a written notification (a “Closing Notice”) setting forth the
percentage (provided that such percentage is the same for each
Backstop Investor) of such Backstop Investor’s Pro Rata Share
of the Purchase Maximum that the Company requires each Backstop
Investor to purchase on such Closing Date.

 

(c) Each closing of the
purchase and sale of Backstop Shares hereunder, whether on a
Closing Date (each, a “Closing Date”), shall be referred
to as a “Closing”. At each Closing, (i)
payment for the Backstop Shares that each Backstop Investor has
agreed to purchase shall be effected by each such Backstop Investor
wiring an amount, to an account of the Company identified to each
Backstop Investor at least five days prior to such Closing, equal
to the product of (1) the number of Backstop Shares issuable to
such Backstop Investor at such Closing (as set forth in a Closing
Date Notice) and (2) the Issue Price (such amount, a
“Backstop Drawdown
Amount”) and (ii) the Company shall deliver to each
Backstop Investor the Backstop Shares and such certificates,
documents or instruments required to be delivered by it to such
Backstop Investor pursuant to the Purchase Agreement.

 

(d) The Backstop
Investors shall have no obligation to purchase Preferred Shares
pursuant to this Agreement prior to January 15, 2018. The
obligation of the Backstop Investors to purchase Preferred Shares
hereunder shall terminate on March 31, 2018 (the
“Termination
Date”). Notwithstanding anything to the contrary
contained herein, in no event shall (i) any Backstop Investor be
required to purchase hereunder an aggregate number of Preferred
Shares in excess of its Pro Rata Share of the initial Purchase
Maximum, (ii) the Backstop Investors be required to purchase
hereunder an aggregate number of Preferred Shares in excess of the
initial Purchase Maximum or (iii) except in the case of the last
Closing Notice, shall the Backstop Investors be required to
purchase any Preferred Shares if the aggregate purchase price
therefor is less than $500,000. As used herein, the term
“Purchase
Maximum” means (A) at any date of determination on or
before the Termination Date, an amount equal to (1) $3 million
minus (2)
the aggregate purchase price of Backstop Shares purchased by the
Backstop Investors hereunder on or prior to such date minus (3)
without duplication, the aggregate cash proceeds actually received
by the Company from the sale of its equity or equity-linked
securities, in a bona fide transaction, after the date hereof but
on or prior to such date and (B) after the Termination Date,
zero.

 

(e) Conditions to the Backstop Investors’
Obligation to Purchase the Backstop Shares. Notwithstanding
anything to the contrary, the obligation of the Backstop Investors
hereunder to purchase Backstop Shares on a Closing Date is subject
to the satisfaction, at or before such Closing Date, of each of the
following conditions, provided that these conditions are for the
Backstop Investors’ sole benefit and may be waived by the
Backstop Investors at any time in its sole discretion by providing
the Company with prior written notice thereof:

 




 

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(i) The Company shall
have duly executed and delivered to the Backstop Investors each of
the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to the Backstop Shares to be
purchased by such Backstop Investor at such Closing
Date.

 

(ii) Each
of the conditions precedent set forth in Section 7 of the Purchase
Agreement shall have been satisfied and the Warrant Closing shall
have occurred.

 

(iii) The
Backstop Investors shall have received the opinion of Wyrick
Robbins Yates & Ponton LLP, the Company’s counsel, dated
as of such Closing Date, in the form acceptable to the Backstop
Investors, with respect to the Securities.

 

(iv) The
Company shall have delivered to each Backstop Investor a copy of
the Irrevocable Transfer Agent Instructions, in the form acceptable
to the Backstop Investors, which instructions shall have been
delivered to and acknowledged in writing by the Company’s
transfer agent.

 

(v) The Company shall
have delivered to each Backstop Investor a certificate evidencing
the formation and good standing of the Company in the
Company’s jurisdiction of formation issued by the Secretary
of State of such jurisdiction of formation as of a date within
three (3) days of such Closing Date.

 

(vi) The
Company shall have delivered to each Backstop Investor a
certificate, in the form acceptable to the Backstop Investors,
executed by the Secretary of the Company and dated as of such
Closing Date, attaching (i) the resolutions adopted by the
Company’s Board of Directors in a form reasonably acceptable
to each Backstop Investor, which resolutions shall approve each of
the Transaction Documents and the transactions contemplated
thereby, (ii) the Certificate of Incorporation of the Company and
(iii) the Bylaws of the Company, each as in effect as of such
Closing Date.

 

(vii) All of the representations and
warranties made by the Company in this Agreement and the Purchase
Agreement that are qualified by materiality or material adverse
effect shall be true and correct in all respects as of the date
hereof and as of such Closing Date as though made at and as of such
Closing Date (except to the extent such representations and
warranties expressly speak as of an earlier date, which shall be
true and correct in all respects as of such date) and all of the
representations and warranties made by the Company in this
Agreement and in the Purchase Agreement that are not qualified by
materiality or material adverse effect shall be true and correct in
all material respects as of the date hereof and as of such Closing
Date as though made at and as of such Closing Date (except to the
extent such representations and warranties expressly speak as of an
earlier date, which shall be true and correct in all material
respects as of such date);

 

(viii) The Company shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company in this Agreement and the
Purchase Agreement at or prior to such Closing Date.

 




 

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(ix) The
Company shall have delivered to the Backstop Investors a
certificate, duly executed by the Chief Executive Officer of the
Company, dated as of such Closing Date, certifying that the
conditions set forth in Section 1(e)(vii) and Section 1(e)(viii)
have been satisfied.

 

(x) The Common Stock
(I) shall be designated for quotation or listed (as applicable) on
an Eligible Market (as defined below) and (II) shall not have been
suspended, as of such Closing Date, by the Securities and Exchange
Commission (the “SEC”) or the Eligible Market from
trading on the Eligible Market nor shall suspension by the SEC or
the Principal Market (as defined below) have been threatened, as of
such Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum maintenance
requirements of the Principal Market.

 

(xi) The
Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the sale of the
Securities (as defined below), including without limitation, those
required by the Principal Market, if any.

 

(xii) No
stockholder approval of the Company shall be required in connection
with the issuance of the Backstop Shares, any other Preferred
Shares issuable pursuant to the Purchase Agreement or the issuance
of the Backstop Conversion Shares or the Backstop Warrant Shares as
of such Closing Date. “Backstop Conversion Shares” means
any shares of Common Stock issuable upon conversion of the Backstop
Shares. “Backstop Warrant
Shares” means any shares of Common Stock issuable upon
exercise of the Backstop Warrants. “Securities” means collectively,
the Backstop Warrants, Backstop Warrant Shares, the Backstop Shares
and the Backstop Conversion Shares.

 

(xiii) No
statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or
endorsed by any Governmental Entity (as defined below) of competent
jurisdiction that prohibits the consummation of any of the
transactions contemplated by the Transaction
Documents.

 

(xiv) Since
the date of execution of this Agreement, no event or series of
events shall have occurred that have or would reasonably be
expected to result in a Material Adverse Effect (as defined
below).

 

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

 




 

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(xvi)   No
action, suit or proceeding before any arbitrator or any
Governmental Entity shall have been commenced, and no investigation
by any Governmental Entity shall have been threatened, against the
Company or any Subsidiary, or any of the Company or any Subsidiary
or any Backstop Investor, or any of the Backstop Investors,
officers, directors or affiliates, seeking to restrain, prevent or
change the transactions contemplated by this Agreement, and the
Purchase Agreement or seeking damages in connection with such
transactions.

 

(xvii) The
Company and its Subsidiaries shall have delivered to the Backstop
Investors such other documents relating to the transactions
contemplated by this Agreement and the Purchase Agreement as the
Backstop Investors or its counsel may reasonably
request.

 

(xviii) Each
Backstop Warrant shall have been issued. With respect to each
Closing Date, each Backstop Warrant shall be in full force and
effect, unless exercised in full by the owner thereof, and the
Company shall not be in default, or have committed any act or
omission that, with the giving of notice or lapse of time or both,
would constitute a default, under such Backstop
Warrant.

 

(xix) The
offering of Preferred Shares pursuant to the Purchase Agreement
shall have been conducted in accordance with the terms and
conditions of the Transaction Documents.

 

(f) Conditions to the Obligation of the Company to
Issue Backstop Shares. The obligation of the Company
hereunder to issue and sell the Backstop Shares to the Backstop
Investors on a Closing Date is subject to the satisfaction, at or
before the such Closing Date, of each of the following conditions,
provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole
discretion by providing the Backstop Investors with prior written
notice thereof:

 

(i) The Backstop
Investors shall have executed each of the Transaction Documents
(other than this Agreement) to which it is a party and delivered
the same to the Company.

 

(ii) Such
Backstop Investor shall have delivered to the Company its
respective Backstop Drawdown Amount with respect to such Closing
Date by wire transfer of immediately available funds pursuant to
the wire instructions provided by the Company.

 

(iii) All
of the representations and warranties made by such Backstop
Investor in this Agreement that are qualified by materiality or
material adverse effect shall be true and correct in all respects
as of the date hereof and as of such Closing Date as though made at
and as of such Closing Date (except to the extent such
representations and warranties expressly speak as of an earlier
date, which shall be true and correct in all respects as of such
date) and all of the representations and warranties made by such
Backstop Investor in this Agreement that are not qualified by
materiality or material adverse effect shall be true and correct in
all material respects as of the date hereof and as of such Closing
Date as though made at and as of such Closing Date (except to the
extent such representations and warranties expressly speak as of an
earlier date, which shall be true and correct in all material
respects as of such date).

 




 

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(iv) Such
Backstop Investor shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by such Backstop Investor at or prior to such Closing
Date.

 




2.

ISSUANCE
OF WARRANTS





 

(a) Issuance of Warrants. As
consideration for each Backstop Investor’s commitment to
purchase Backstop Shares, at the Warrant Closing, the Company
hereby agrees to issue to each Backstop Investor, a warrant in the
form attached hereto as Exhibit A (a “Backstop Warrant”), to purchase a
number of shares of the Company’s common stock, par value
$0.001 per share (“Common
Stock”), equal to such Backstop Investor’s Pro
Rata Share of an amount equal to (A) $500,000 divided by (b) $0.5278
minus (B) the
product of (a) 50%
of the amount in sub-clause (A) and (b) (i) solely to the extent
raised from Persons other than the Backstop Investors and their
respective affiliates, up to $3 million of any cash proceeds
described in clause (A)(3) of the definition of Purchase Maximum
actually received by the Company on or prior to December 24, 2017
divided by (ii) $3
million. The warrant shall have an exercise price of $0.001 per
share of common stock. As used herein, the term “Pro Rata Share” means the
percentage set forth on the signature page hereto with respect to a
Backstop Investor.

 

(b) Closing. The issuance of the
Backstop Warrants shall take place at a closing (the
“Warrant
Closing”) to be held at the offices of Wyrick Robbins
Yates & Ponton, LLP, 4101 Lake Boone Trail, Suite 300, Raleigh,
North Carolina 27607, at 10:00 a.m. (New York Time), on the date of
the initial Closing (as defined in the Purchase Agreement). The
date on which the Warrant Closing occurs is referred to herein as
the “Warrant
Closing
Date”.

 

(c) Closing
Transactions.

 

(i) At the Warrant
Closing, the Company shall deliver to each Backstop
Investor:

 

(1) Such Backstop
Investor’s Backstop Warrant, duly executed by the
Company.

 

(2) the registration
rights agreement in the form attached hereto as Exhibit B, dated as
of the Warrant Closing Date (the “Registration Rights Agreement”),
by and between the Backstop Investors and the Company, duly
executed by the Company.

 

(3)  an opinion of
Wyrick Robbins Yates & Ponton LLP, the Company’s counsel,
dated as of the Warrant Closing Date, in the form acceptable to the
Backstop Investors, with respect to the Backstop Warrants and
Backstop Warrant Shares.

 

(4) a copy of the
Irrevocable Transfer Agent Instructions, in the form acceptable to
the Backstop Investors, which instructions shall have been
delivered to and acknowledged in writing by the Company’s
transfer agent.

 

(ii) At
the Warrant Closing, the Backstop Investors shall deliver to the
Company the Registration Rights Agreement, duly executed by the
Backstop Investors.

 




 

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3.

BACKSTOP
INVESTORS’ REPRESENTATIONS AND WARRANTIES.





 


Each
Backstop Investor, severally and not jointly, represents and
warrants, solely with respect to itself, to the Company that, as of
the date hereof and as of each Closing Date:

 

(a) Organization;
Authority. Such Backstop
Investor is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization
with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction
Documents to which it is a party and otherwise to carry out its
obligations hereunder and thereunder.

 

(b) Validity;
Enforcement. This Agreement
has been duly and validly authorized, executed and delivered on
behalf of such Backstop Investor and constitutes a legal, valid and
binding obligation of such Backstop Investor enforceable against
such Backstop Investor in accordance with its terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights
and remedies.

 

(c) No
Conflicts . The execution,
delivery and performance by such Backstop Investor of this
Agreement and the consummation by such Backstop Investor of the
transactions contemplated hereby will not (i) contravene the
organizational documents of such Backstop Investor, (ii) conflict
with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which
such Backstop Investor is a party, or (iii) contravene any law,
rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Backstop Investor, except
in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse
effect on the ability of such Backstop Investor to perform its
obligations hereunder.

 


(d)           Backstop
Investors Status. As of the date hereof, such Backstop
Investor is an “accredited investor” as defined in Rule
501 under the 1933 Act.

 




4.

REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.





 


On the
date hereof and on each Closing Date, the Company shall be deemed
to have made to each Backstop Investor each of the representations
and warranties set forth in Section 3 of the Purchase Agreement
and, for the avoidance of doubt, each of this Agreement and the
Backstop Warrants shall be deemed to be a Transaction Document. In
addition, the Company represents and warrants to each Backstop
Investor that, as of the date hereof and each Closing Date and
except as set forth in the Disclosure Letter:

 




 

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(a) Organization
and Qualification. Each of the
Company and its Subsidiaries (as defined below) are entities duly
organized and validly existing and in good standing under the laws
of the jurisdiction in which they are formed, and have the
requisite power and authorization to own their properties and to
conduct their business as now being conducted and as presently
proposed to be conducted. Each of the Company and each of its
Subsidiaries is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the
failure to be so qualified or be in good standing would not have a
Material Adverse Effect. As used in this Agreement,
“Material Adverse
Effect” means any material adverse effect on (i) the
business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction
Documents or (iii) the authority or ability of the Company to
perform any of its obligations under any of the Transaction
Documents. Other than its Subsidiaries, there is no Person in which
the Company, directly or indirectly, (i) owns any of the capital
stock or holds an equity or similar interest or (ii) controls or
operates all or any part of the business, operations or
administration of such Person. A “Subsidiary” means any Person in
which the Company, directly or indirectly, (i) owns any of the
outstanding capital stock or holds any equity or similar interest
of such Person or (ii) controls or operates all or any part of the
business, operations or administration of such Person, and all of
the foregoing. As of the date of this Agreement, the Company has no
Subsidiaries other than CorMedix Europe GmbH.

 

(b) Authorization;
Enforcement; Validity. The Company has
the requisite power and authority to enter into and perform its
obligations under this Agreement and the other Transaction
Documents and to issue the Securities (as defined below) in
accordance with the terms hereof and thereof. The execution and
delivery of this Agreement and the other Transaction Documents by
the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Backstop Shares, the Backstop
Conversion Shares, the Backstop Warrants and the reservation for
issuance and issuance of the Backstop Warrant Shares issuable upon
exercise of the Backstop Warrants) have been duly authorized by the
Company’s board of directors or other governing body and, no
filing, consent or authorization is required by the Company, its
board of directors or its stockholders or other governing body.
This Agreement has been, and the other Transaction Documents to be
delivered on or prior to the Closing will be prior to Closing, duly
executed and delivered by the Company, and upon such execution will
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or
state securities law.

 




 

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(c) Issuance
of Securities. The issuance of
the Backstop Shares and the Backstop Warrants are duly authorized
and upon issuance in accordance with the terms of the Transaction
Documents shall be validly issued, fully paid and non-assessable
and free from all preemptive or similar rights, taxes, withholding,
liens, charges and other encumbrances with respect to the issuance
thereof. The Company shall have reserved from its duly authorized
capital stock as of the Closing Date, not less than 125% of the
maximum number of Backstop Conversion Shares and Backstop Warrant
Shares (without taking into account any limitations on the exercise
of the Backstop Warrants set forth therein). Upon issuance or
conversion in accordance with the Backstop Shares or exercise in
accordance with the Backstop Warrants (as the case may be), the
Backstop Conversion Shares and the Backstop Warrant Shares,
respectively, when issued, will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the
issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock.

 

(d) No
Conflicts. The execution,
delivery and performance of the Transaction Documents by the
Company and the consummation by the Company and its Subsidiaries of
the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Securities and the
reservation for issuance of the Backstop Conversion Shares and the
Backstop Warrant Shares as contemplated under Section 4(c) above)
will not (i) result in a violation of the Certificate of
Incorporation (as defined below) or other organizational documents
of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or Bylaws (as defined below) of
the Company or any of its Subsidiaries, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including
foreign, federal and state securities laws and regulations and the
rules and regulations of the NYSE American (the “Principal Market”) and
including all applicable federal laws, rules and regulations)
applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is
bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that could not reasonably be
expected to have a Material Adverse Effect.

 

(e) Consents. Neither the
Company nor any Subsidiary is required to obtain any consent from,
authorization or order of, or make any filing or registration with
(other than the SEC and the Principal Market) any Governmental
Entity or other self-regulatory organization or body or any other
Person in order for it to execute, deliver or perform any of its
respective obligations under or contemplated by the Transaction
Documents, in each case, in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to
obtain pursuant to the preceding sentence have been obtained or
effected on or prior to such Closing Date, and neither the Company
nor any of its Subsidiaries are aware of any facts or circumstances
which might prevent the Company or any of its Subsidiaries from
obtaining or effecting any of the registration, application or
filings contemplated by the Transaction Documents. The Company is
not in violation of the requirements of the Principal Market and
has no knowledge of any facts or circumstances which could
reasonably lead to delisting or suspension of the Common Stock in
the foreseeable future. As used herein, “Governmental Entity” means any
nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local,
municipal, foreign, or other government, governmental or
quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and
any court or other tribunal), multi-national organization or body;
or body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature or instrumentality of any of the
foregoing, including any entity or enterprise owned or controlled
by a government or a public international organization or any of
the foregoing.

 


 




 

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(f) Acknowledgment
Regarding Backstop Investors’ Purchase of
Securities. The Company
acknowledges and agrees that each Backstop Investor is acting
solely in the capacity of an arm’s length purchaser with
respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that no Backstop Investor is
(i) an officer or director of the Company or any of its
Subsidiaries, (ii) to its knowledge, an “affiliate” (as
defined in Rule 144) of the Company or any of its Subsidiaries or
(iii) to its knowledge, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of
Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”), taking account of any limitations on
exercise or conversion (including “blockers”) contained
in securities and instruments beneficially owned by such Person,
without conceding that such Person is a 10% stockholder for
purposes of federal securities laws). The Company further
acknowledges that no Backstop Investor is acting as a financial
advisor or fiduciary of the Company or any of its Subsidiaries (or
in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any
advice given by a Backstop Investor or any of its representatives
or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental
to the Backstop Investors’ purchase of the Securities. The
Company further represents to the Backstop Investors that the
Company’s decision to enter into the Transaction Documents to
which it is a party has been based solely on the independent
evaluation by the Company and its representatives.

 

(g) No
Placement Agent’s Fees. Neither the
Company nor any of its Subsidiaries has engaged any placement agent
or other agent in connection with the offer or sale of the
Securities with respect to which a fee or commission due from any
Backstop Investor in connection with the transactions contemplated
hereby.

 

(h) Dilutive
Effect. The Company
understands and acknowledges that the number of Backstop Conversion
Shares and Backstop Warrant Shares will increase in certain
circumstances. The Company further acknowledges that its obligation
to issue the Backstop Conversion Shares upon conversion of the
Backstop Shares in accordance with this Agreement and the Backstop
Shares and the Backstop Warrant Shares upon exercise of the
Backstop Warrants in accordance with this Agreement and the
Backstop Warrants is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.

 

(i) Application
of Takeover Protections; Rights Agreement. The Company and
its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition,
interested stockholder, business combination, poison pill
(including, without limitation, any distribution under a rights
agreement) or other similar anti-takeover provision under the
Certificate of Incorporation, Bylaws or other organizational
documents or the laws of the jurisdiction of its incorporation or
otherwise which is or could become applicable to any Backstop
Investor as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s
issuance of the Securities and such Backstop Investor’s
ownership of the Securities. The Company and its board of directors
have taken all necessary action, if any, in order to render
inapplicable any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of shares of
Common Stock or a change in control of the Company or any of its
Subsidiaries.


 




 

10








 






 

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

 

(k) Transactions
With Affiliates. None of the
officers, directors, employees or affiliates of the Company or any
of its Subsidiaries is presently a party to any transaction with
the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or
from any such officer, director, employee or affiliate or, to the
knowledge of the Company or any of its Subsidiaries, any
corporation, partnership, trust or other Person in which any such
officer, director, or employee has a substantial interest or is an
employee, officer, director, trustee, affiliate or
partner.

 




 

11








 






 

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

 




 

12








 






 

(m) Acknowledgement
Regarding Backstop Investors’ Trading
Activity. It is understood
and acknowledged by the Company that (i) following the public
disclosure of the transactions contemplated by the Transaction
Documents, in accordance with the terms thereof, no Backstop
Investor has been asked by the Company or any of its Subsidiaries
to agree, nor has any Backstop Investor agreed with the Company or
any of its Subsidiaries, to desist from effecting any transactions
in or with respect to (including, without limitation, purchasing or
selling, long and/or short) any securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold any of the Securities for any specified
term; (ii) each Backstop Investor, and counterparties in
“derivative” transactions to which such Backstop
Investor is a party, directly or indirectly, presently may have a
“short” position in the Common Stock which was
established prior to such Backstop Investor’s knowledge of
the transactions contemplated by the Transaction Documents, and
(iii) no Backstop Investor shall be deemed to have any affiliation
with or control over any arm’s length counterparty in any
“derivative” transaction. The Company further
understands and acknowledges that following the public disclosure
of the transactions contemplated by the Transaction Documents
pursuant to the 8-K Filings (as defined below) each Backstop
Investor may engage in hedging and/or trading activities at various
times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value
and/or number of the Backstop Conversion Shares, as applicable,
deliverable with respect to the Securities are being determined and
(b) such hedging and/or trading activities, if any, can reduce the
value of the existing stockholders’ equity interest in the
Company both at and after the time the hedging and/or trading
activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute
a breach of this Agreement or any other Transaction Document or any
of the documents executed in connection herewith or
therewith.

 

(n) U.S.
Real Property Holding Corporation. Neither the
Company nor any of its Subsidiaries is, or has ever been, and so
long as any of the Securities are held by the Backstop Investors,
shall become, a U.S. real property holding corporation within the
meaning of Section 897 of the Code, and the Company and each
Subsidiary shall so certify upon the Backstop Investors’
request.

 

(o) Transfer Taxes. On the Closing
Date, all stock transfer or other taxes (other than income or
similar taxes) which are required to be paid in connection with the
issuance, sale and transfer of the Securities to be sold or issued,
now or in the future, to the Backstop Investors hereunder will be,
or will have been, fully paid or provided for by the Company, and
all laws imposing such taxes will be or will have been complied
with.

 

(p) No Additional Agreements. The
Company does not have any agreement or understanding with any
Backstop Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the
Transaction Documents.

 


 




 

13








 






 

(q) Disclosure.
The Company confirms that neither it nor any other Person acting on
its behalf has provided any Backstop Investor or its agents or
counsel with any information that constitutes or could reasonably
be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the
existence of the transactions contemplated by this Agreement and
the other Transaction Documents. The Company understands and
confirms that the Backstop Investors will rely on the foregoing
representations in effecting transactions in securities of the
Company. All disclosure provided to the Backstop Investors
regarding the Company and its Subsidiaries, their businesses and
the transactions contemplated hereby, including the schedules to
this Agreement, furnished by or on behalf of the Company or any of
its Subsidiaries is true and correct and does not contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading. Each press release issued by the Company or any of its
Subsidiaries during the twelve (12) months preceding the date of
this Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they are made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or any
of its Subsidiaries or its or their business, properties,
liabilities, prospects, operations (including results thereof) or
conditions (financial or otherwise), which, under applicable law,
rule or regulation, requires public disclosure at or before the
date hereof or announcement by the Company but which has not been
so publicly announced or disclosed. The Company acknowledges and
agrees that no Backstop Investor makes or has made any
representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in
Section 3.

 


(r)   
Private Placement.
No registration under the 1933 Act is required for the offer and
sale of the Backstop Warrants, the Backstop Shares, the Backstop
Conversion Shares or the Backstop Warrant Shares issuable upon
exercise or conversion thereof, as applicable, by the Company to
any Backstop Investor as contemplated hereby.

 




5.

COVENANTS.





 

(a) Best
Efforts. The Company shall
use its best efforts to timely satisfy each of the conditions to be
satisfied by it as provided in Section 1.

 

(b) Reporting
Status. During the period
(the “Reporting
Period”) commencing on the Closing Date and ending on
the date on which the Backstop Investors shall have sold all of the
Securities or any capital stock of the Company issued or issuable
with respect to the Backstop Conversion Shares or the Backstop
Warrant Shares or any other capital stock of the Company owned by
them, including, without limitation, (1) as a result of any stock
split, stock dividend, recapitalization, exchange or similar event
or otherwise and (2) shares of capital stock of the Company into
which the shares of Common Stock are converted, exercised or
exchanged the Backstop Warrants or otherwise issuable pursuant to
the terms of the Backstop Warrants (collectively, the
“Covered
Securities”), the Company shall timely file all
reports required to be filed with the SEC pursuant to the 1934 Act,
and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would no longer require or
otherwise permit such termination.


 




 

14








 






 

(c) Use
of Proceeds. The Company will
use the proceeds resulting from the issuance of the Backstop Shares
for general corporate purposes.

 

(d) Financial
Information. The Company
agrees to send the following to each holder of the Securities (an
“Investor”)
during the Reporting Period (i) unless the following are filed with
the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof
with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, any interim reports or any
consolidated balance sheets, income statements, stockholders’
equity statements and/or cash flow statements for any period other
than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to
the 1933 Act, (ii) on the same day as the release thereof,
facsimile copies of all press releases issued by the Company or any
of its Subsidiaries and (iii) copies of any notices and other
information made available or given to the stockholders of the
Company generally, contemporaneously with the making available or
giving thereof to the stockholders.

 

(e) Listing.
The Company shall promptly secure the listing or designation for
quotation (as the case may be) of all of the Covered Securities
upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed or
designated for quotation (as the case may be) (subject to official
notice of issuance) and shall maintain such listing or designation
for quotation (as the case may be) of all Covered Securities from
time to time issuable under the terms of the Transaction Documents
on a national securities exchange or automated quotation system.
The Company shall maintain the Common Stock’s listing or
designation for quotation (as the case may be) on one of the
Principal Market, The New York Stock Exchange, the Nasdaq Capital
Market, the Nasdaq Global Market or the Nasdaq Global Select Market
(each, an “Eligible
Market”). Neither the Company nor any of its
Subsidiaries shall take any action which could be reasonably
expected to result in the delisting or suspension of the Common
Stock on an Eligible Market. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this
Section 5(e).

 

(f) Fees.
The Company shall reimburse the Backstop Investors for all
reasonable costs and expenses incurred by it or its affiliates in
connection with the transactions contemplated by the Transaction
Documents (including, without limitation, as applicable, all
reasonable legal fees and disbursements of counsel to the Backstop
Investors, any other reasonable fees and expenses in connection
with the structuring, documentation and implementation of the
transactions contemplated by the Transaction Documents and due
diligence and regulatory filings in connection therewith) (the
“Expense
Amount”) and the Company shall pay such Expense Amount
within 5 days following written notice by the Backstop
Investors.

 




 

15








 






 

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

 




 

16








 






 

(h) Reservation
of Shares. During the period
commencing on the Closing Date and ending on the date no Backstop
Shares or Backstop Warrants remain outstanding, the Company shall
take all actions reasonably necessary (including, without
limitation increasing any such reserve, as necessary, to at all
times have authorized, and reserved for the purpose of issuance, no
less than (i) 125% of the maximum number of Backstop Conversion
Shares (determined without taking into account any limitations on
the conversion of the Backstop Shares set forth therein), and (ii)
the maximum number of Backstop Warrant Shares issuable upon
exercise of the Backstop Warrants (without taking into account any
limitations on the exercise of the Backstop Warrants set forth
therein).

 

(i) Conduct
of Business. The business of
the Company and its Subsidiaries shall not be conducted in
violation of any law, ordinance or regulation of any Governmental
Entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse
Effect.

 

(j) Variable Securities. During the
period commencing on the date hereof and ending on the later of (x)
the date the Backstop Shares are no longer outstanding and (y) the
date the Backstop Warrants are no longer outstanding, the Company
and each Subsidiary shall be prohibited from effecting or entering
into an agreement to effect any Subsequent Placement involving a
Variable Rate Transaction other than at-the-market offerings
through a registered broker-dealer or offerings of Preferred
Shares. “Variable Rate
Transaction” means a transaction, on terms more
favorable to an investor therein than the terms of this Agreement
and the Certificate of Designations, in which the Company or any
Subsidiary (i) issues or sells any Convertible Securities either
(A) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such Convertible Securities, or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such
Convertible Securities or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock, other than pursuant
to a customary “weighted average” anti-dilution
provision or (ii) enters into any agreement (other than an
at-the-market offering through a registered broker-dealer) whereby
the Company or any Subsidiary may sell securities at a future
determined price (other than standard and customary
“preemptive” or “participation” rights).
Each Backstop Investor shall be entitled to obtain injunctive
relief against the Company and its Subsidiaries to preclude any
such issuance, which remedy shall be in addition to any right to
collect damages.

 




 

17








 






 

(k) Stockholder
Approval. (A) To the extent
the exercise or conversion of the Backstop Shares or the Backstop
Warrants, as applicable, would require the approval or consent of
the stockholders of the Company  (in each case, without giving effect
to any limitations on exercise or
“blockers”) pursuant to the
rules and regulations of the Principal Market, the Company shall
provide each stockholder entitled to vote at either (x) the next
annual meeting of stockholders of the Company or (y) a special
meeting of stockholders of the Company (the “Stockholder Meeting”), which shall
be promptly called and held not later than June 30, 2018 (the “Stockholder Meeting Deadline”), a
proxy statement, substantially in a form which shall have been
previously reviewed by counsel to the Backstop Investors, at the
expense of the Company but in any event such expense not to exceed
$5,000 without the prior written approval of the Company;
soliciting each such stockholder’s affirmative vote at the
Stockholder Meeting for approval of resolutions
(“Stockholder
Resolutions”) providing for the Company’s
issuance of all of the Securities as described in the Transaction
Documents in accordance with applicable law and the rules and
regulations of the Principal Market (such affirmative approval
being referred to herein as the “Stockholder Approval”, and the
date such Stockholder Approval is obtained, the “Stockholder Approval Date”), and
the Company shall use its reasonable best efforts to solicit its
stockholders’ approval of such resolutions and to cause the
Board of Directors of the Company to recommend to the stockholders
that they approve such resolutions. The Company shall be obligated
to seek to obtain the Stockholder Approval by the Stockholder
Meeting Deadline. If, despite the Company’s reasonable best
efforts the Stockholder Approval is not obtained on or prior to the
Stockholder Meeting Deadline, the Company shall cause an additional
Stockholder Meeting to be held once in each of the three subsequent
calendar quarters thereafter until such Stockholder Approval is
obtained. If, despite the Company’s reasonable best efforts
the Stockholder Approval is not obtained after such subsequent
stockholder meetings, the Company shall cause an additional
Stockholder Meeting to be held semi-annually thereafter until such
Stockholder Approval is obtained. (B) The Company shall use its
best efforts to obtain any waiver, consent or approval, in each
case, in a form acceptable to the Backstop Investor, of the holders
of the Company’s Junior Securities (as defined in the
Certificate of Designations) authorizing the issuance of the Series
F Preferred Stock as a series of preferred stock senior in rank to
such class of Junior Securities.

 

(l) Passive Foreign Investment
Company. The Company shall conduct its business, and shall
cause its Subsidiaries to conduct their respective businesses, in
such a manner as will ensure that the Company and its Subsidiaries
will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the
Code.

 

(m) Corporate Existence. So long as
any Backstop Investor beneficially owns any Preferred Shares or
Backstop Warrants, the Company shall not be party to any
Fundamental Transaction (as defined in the Certificate of
Designations) unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth
in the Certificate of Designations.

 

(n) Conversion and Exercise
Procedures. Each of the form of Exercise Notice included in
the Backstop Warrants and the form of Conversion Notice included in
the Purchase Agreement set forth the totality of the procedures
required of any Backstop Investor in order to exercise the Backstop
Warrants or convert the Preferred Shares. No additional legal
opinion, other information or instructions shall be required of any
Backstop Investor to exercise their Backstop Warrants or convert
their Preferred Shares. The Company shall honor exercises of the
Backstop Warrants and conversions of the Preferred Shares and shall
deliver the Backstop Conversion Shares and Backstop Warrant Shares
in accordance with the terms, conditions and time periods set forth
in the Purchase Agreement, Certificate of Incorporation, and
Backstop Warrants.

 




 

18








 






 




6.

REGISTER;
TRANSFER AGENT INSTRUCTIONS.





 

(a) Register.
The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by
notice to each holder of Securities), a register for the Backstop
Warrants in which the Company shall record the name and address of
the Person in whose name the Backstop Warrants have been issued
(including the name and address of each transferee), and the number
of Backstop Warrant Shares issuable upon exercise of the Backstop
Warrants held by such Person. The Company shall keep the register
open and available at all times during business hours for
inspection of the Backstop Investors or their respective legal
representatives.

 

(b) Transfer Agent
Instructions. The Company shall
issue irrevocable instructions to the Transfer Agent in the form
previously provided to the Company (the “Irrevocable Transfer Agent
Instructions”) to issue certificates or credit shares
to the applicable balance accounts at DTC, registered in the name
of the applicable Backstop Investor or its respective nominee(s),
for the Backstop Conversion Shares and the Backstop Warrant Shares
(in the case of Backstop Warrant Shares, with respect to cashless
exercise(s) or exercises when there is an effective registration
statement covering such Backstop Warrant Shares and the Backstop
Conversion Shares) in such amounts as specified from time to time
by the applicable Backstop Investor to the Company upon conversion
of the Backstop Shares or other issuance pursuant to the terms of
the Backstop Shares or the exercise of the Backstop Warrants (as
the case may be). The Company represents and warrants that no
instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 6(b) will be given by the Company to
the Transfer Agent with respect to the Backstop Conversion Shares
and the Backstop Warrants Shares, and shall otherwise be freely
transferable on the books and records of the Company. If a Backstop
Investor effects a sale, assignment or transfer of the Securities,
the Company shall permit the transfer and, with respect to the
Backstop Conversion Shares and Backstop Warrant Shares shall also
promptly instruct the Transfer Agent to issue one or more
certificates or credit shares to the applicable balance accounts at
DTC in such name and in such denominations as specified by such
Backstop Investor to effect such sale, transfer or assignment. The
Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the applicable Backstop
Investor. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Section 6(b) will be
inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section 6(b), that
the applicable Backstop Investor shall be entitled, in addition to
all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and
without any bond or other security being required. The Company
shall cause its counsel to issue the legal opinion referred to in
the Irrevocable Transfer Agent Instructions to the Transfer Agent
to the extent required or requested by the Transfer Agent. Any fees
(with respect to the Transfer Agent, counsel to the Company or
otherwise) associated with the issuance of such opinion shall be
borne by the Company.

 


 




 

19








 






 




7.

MISCELLANEOUS.





 

(a) Governing
Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

 

(b) Counterparts.
This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an
e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid
and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if
such signature page were an original thereof.

 

(c) Headings;
Gender. The headings of
this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement. Unless
the context clearly indicates otherwise, each pronoun herein shall
be deemed to include the masculine, feminine, neuter, singular and
plural forms thereof. The terms “including,”
“includes,” “include” and words of like
import shall be construed broadly as if followed by the words
“without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like
import refer to this entire Agreement instead of just the provision
in which they are found.

 


 




 

20








 






 

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

 




 

21








 






 

(e) Entire
Agreement; Amendments. This Agreement,
the other Transaction Documents and the schedules and exhibits
attached hereto and thereto and the instruments referenced herein
and therein supersede all other prior oral or written agreements
between the Backstop Investors, the Company, its Subsidiaries,
their affiliates and Persons acting on their behalf solely with
respect to the matters contained herein and therein, and this
Agreement, the other Transaction Documents, the schedules and
exhibits attached hereto and thereto and the instruments referenced
herein and therein contain the entire understanding of the parties
solely with respect to the matters covered herein and therein;
provided, however, nothing contained in this Agreement or any other
Transaction Document shall (or shall be deemed to) (i) have any
effect on any agreements any Backstop Investor has entered into
with, or any instruments such Backstop Investor has received from,
the Company or any of its Subsidiaries prior to the date hereof
with respect to any prior investment made by such Backstop Investor
in the Company or (ii) waive, alter, modify or amend in any respect
any obligations of the Company or any of its Subsidiaries, or any
rights of or benefits to such Backstop Investor or any other
Person, in any agreement entered into prior to the date hereof
between or among the Company and/or any of its Subsidiaries and
such Backstop Investor, or any instruments such Backstop Investor
received from the Company and/or any of its Subsidiaries prior to
the date hereof, and all such agreements and instruments shall
continue in full force and effect. Except as specifically set forth
herein or therein, neither the Company nor any Backstop Investor
makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals
are part of this Agreement. No provision of this Agreement may be
amended other than by an instrument in writing signed by the
Company and the Backstop Investors. No waiver shall be effective
unless it is in writing and signed by an authorized representative
of the waiving party. Other than the Transaction Documents, the
Company has not, directly or indirectly, made any agreements with
any Backstop Investor relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as
set forth in the Transaction Documents. Without limiting the
foregoing, the Company confirms that, except as set forth in this
Agreement or the other Transaction Documents, no Backstop Investor
has made any commitment or promise or has any other obligation to
provide any financing to the Company, any Subsidiary or otherwise.
As a material inducement for the Backstop Investors to enter into
this Agreement, the Company expressly acknowledges and agrees that
(i) no due diligence or other investigation or inquiry conducted by
any Backstop Investor, any of its advisors or any of its
representatives shall affect such Backstop Investor’s right
to rely on, or shall modify or qualify in any manner or be an
exception to any of, the Company’s representations and
warranties contained in this Agreement or any other Transaction
Document and (ii) unless a provision of this Agreement or any other
Transaction Document is expressly preceded by the phrase
“except as disclosed in the SEC Documents,” nothing
contained in any of the SEC Documents shall affect any Backstop
Investor’s right to rely on, or shall modify or qualify in
any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any
other Transaction Document.

 

(f) Notices.
Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day (as defined below) after deposit with an
overnight courier service with next day delivery specified, in each
case, properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall
be

 


 




 

22








 






 


If to
the Company:

 


Cormedix
Inc.


400
Connell Drive, 5th Floor


Suite
5000


Berkeley Heights,
NJ 07922


Telephone: (908)
517-95000


Facsimile: (908)
429-4307


Attention: Chief
Executive Officer


 


With a
copy (for informational purposes only) to:

 


Wyrick
Robbins Yates & Ponton LLP


4101
Lake Boone Trail, Suite 300


Raleigh,
NC 27607


 


Telephone:
(919) 781-4000


Facsimile:
(919) 781-4865


Attention:
Alexander M. Donaldson, Esq.


 

 


If to
the Transfer Agent:

 


VStock
Transfer, LLC


18
Lafayette Place


Woodmere,
NY 11598


 


Telephone:
(212) 828-8436


Facsimile:
(646) 536-3179


Attention:
Yoel Goldfeder


 


If to
any Backstop Investor, to:

 


c/o
Elliott Management Corporation


40 West
57th Street


New
York, NY 10019

 


Telephone: (212)
974-6000


Facsimile: (212)
478-2476


Attention: Elliot
Greenberg

 


or to
such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the
sender’s facsimile machine containing the time, date,
recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or
receipt from an overnight courier service in accordance with clause
(i), (ii) or (iii) above, respectively. “Business Day” means any day other
than a Saturday, Sunday or other day on which commercial banks in
New York, New York are authorized or required by law to remain
closed.

 




 

23








 






 

(g) Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns, including any
assignee of any of the Securities. The Company shall not assign
this Agreement or any rights or obligations hereunder without the
prior written consent of each Backstop Investor, including, without
limitation, by way of a Fundamental Transaction (as defined in the
Backstop Warrants) (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth
in the Backstop Warrants and the Certificate of Designations).
Provided a Backstop Investor provides the Company with written
notice thereof, such Backstop Investor may assign some or all of
its rights hereunder in connection with any transfer of any of its
Securities without the consent of the Company, in which event such
assignee shall be deemed to be a Backstop Investor hereunder with
respect to such assigned rights, provided such assignment is in
compliance with applicable securities laws.

 

(h) No
Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person,
other than the Indemnitees referred to in Section
7(k).

 

(i) Survival.
The representations, warranties, agreements and covenants shall
survive the Closing. Each Backstop Investor shall be responsible
only for its own representations, warranties, agreements and
covenants hereunder.

 

(j) Further
Assurances. Each party shall
do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.


 




 

24








 






 

(k) Indemnification.

 

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


 




 

25








 






 

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

 

(iii) The
indemnification required by this Section 7(k) shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or
Indemnified Liabilities are incurred.

 


 




 

26








 






 

(iv) The
indemnity agreement contained herein shall be in addition to (A)
any cause of action or similar right of the Indemnitee against the
Company or others, and (B) any liabilities the Company may be
subject to pursuant to the law.

 

(l) Construction.
The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party.
No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each
and every reference to share prices, shares of Common Stock and any
other numbers in this Agreement that relate to the Common Stock
shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar
transactions that occur with respect to the Common Stock after the
date of this Agreement.

 

(m) Remedies.
Each Backstop Investor and each holder of any Securities shall have
all rights and remedies set forth in the Transaction Documents and
all rights and remedies which such holders have been granted at any
time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights
under any provision of this Agreement shall be entitled to enforce
such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights
granted by law. Furthermore, the Company recognizes that in the
event that it or any Subsidiary fails to perform, observe, or
discharge any or all of its or such Subsidiary’s (as the case
may be) obligations under the Transaction Documents, any remedy at
law may prove to be inadequate relief to the applicable Backstop
Investor. The Company therefore agrees that each Backstop Investor
shall be entitled to seek specific performance and/or temporary,
preliminary and permanent injunctive or other equitable relief from
any court of competent jurisdiction in any such case without the
necessity of proving actual damages and without posting a bond or
other security.

 

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

 

(o) Independent Nature of Backstop
Investors’ Obligations and Rights. The obligations of
each Backstop Investor under any Transaction Document are several
and not joint with the obligations of any other Backstop Investor,
and no Backstop Investor shall be responsible in any way for the
performance of the obligations of any other Backstop Investor under
any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Backstop Investor
pursuant hereto or thereto, shall be deemed to constitute the
Backstop Investors as, and the Company acknowledges that the
Backstop Investors do not so constitute, a partnership, an
association, a joint venture or any other kind of entity, or create
a presumption that the Backstop Investors are in any way acting in
concert or as a group, and the Company shall not assert any such
claim with respect to such obligations or the transactions
contemplated by the Transaction Documents and the Company
acknowledges that the Backstop Investors are not acting in concert
or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Backstop Investor
shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this
Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Backstop Investor to be joined as an
additional party in any proceeding for such purpose.

 


[signature
pages follow]

 




 

27








 






 


IN WITNESS WHEREOF, each Backstop
Investor and the Company have caused their respective signature
page to this Agreement to be duly executed as of the date first
written above.

 


 


	
 

	

COMPANY:


 





CORMEDIX
INC.


 


 


 


By:
/s/ Khoso Baluch  
                 
          
 



Name:
Khoso Baluch


Title:
Chief Executive Officer

 


 


	
 

	


BACKSTOP INVESTORS:


 


	
 

	


ELLIOTT INTERNATIONAL, L.P.


By:
Elliott International Capital Advisors Inc.,


       as
attorney-in-fact


 


 


 


By:
/s/ Elliot Greenberg
                 
          
                                                   




Name:
Elloit Greenberg



Title:
Vice President



Pro
Rata Share:



	
 

	


 

 






ELLIOTT
ASSOCIATES, L.P.


By:  Elliott
Capital Advisors, L.P., General Partner


By:  Braxton
Associates, Inc., General Partner


 


 


 


By:
/s/ Elliot Greenberg
                  
  
                              




Name:Elliot
Greenberg



Title:
Vice President


Pro
Rata Share:



 







 


 



 


[Signature
Page to Backstop Agreement]








 






 


EXHIBIT
A

 


FORM
OF WARRANT

 


 


 


 


 


 


 


 


 


 


 


 

 




 








 






 


EXHIBIT
B

 


FORM
OF REGISTRATION RIGHTS AGREEMENT