Blueprint





 







Exhibit 10.1

 



SECURITIES PURCHASE AGREEMENT

 


This
SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of November 17, 2017, is
by and among CorMedix Inc., a Delaware corporation with offices
located at 400 Connell Drive, 5th Floor, Berkeley Heights, NJ
07922 (the “Company”), and each of the investors
signatory hereto (individually, a “Buyer” and collectively, the “Buyers”).

 



RECITALS

 


A.           The
Company and each Buyer desire to enter into this transaction to
purchase the Common Shares (as defined below) in a transaction
pursuant to the Company’s currently effective shelf
registration statement on Form S-3 (Registration Number 333-203300)
(the “Registration
Statement”) which has been declared effective by the
Securities and Exchange Commission (the “SEC”) in accordance with the
Securities Act of 1933, as amended (the “1933 Act”).

 


B.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, such aggregate
number of shares of the Company’s common stock, $0.001 par
value per share (the “Common
Stock”), set forth on the signature page hereto
(collectively referred to herein as the “Common Shares”).

 


C.           The
Common Shares are also referred to herein as the “Securities”.

 



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 each Buyer hereby agree as
follows:

 




1.

PURCHASE
AND SALE OF COMMON SHARES.





 

(a) Purchase of Common
Shares. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not
jointly, agrees to purchase from the Company on the Closing Date
(as defined below) such aggregate number of Common Shares as is set
forth on the signature page hereto for such Buyer.

 

(b) Closing. The
closing of the purchase of the Common Shares by the Buyers (the
“Closing”) shall occur at the offices of
Wyrick Robbins Yates & Ponton, LLP, 4101 Lake Boone Trail,
Suite 300, Raleigh, North Carolina 27607 at a time and on a
Business Day (the “Closing Date”) mutually agreeable to the Company
and the Buyers. As used herein “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.

 

(c) Purchase Price.
The aggregate purchase price for the Common Shares to be purchased
by each Buyer (the “Purchase
Price”) shall be
the amount set forth on the signature page hereto for such Buyer.
The per share purchase price for each Common Share shall be
$0.48.

 


 







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(d) Form of Payment;
Deliveries. On the Closing Date each Buyer shall pay its
respective Purchase Price to the Company for the Common Shares to
be issued and sold to such Buyer at the Closing, by wire transfer
of immediately available funds in accordance with instructions
previously provided by the Company and the Company, within three
Business Days of the Closing Date, shall cause to be delivered to
each Buyer certificates representing such aggregate number of
Common Shares, as is set forth on the signature page hereto for
such Buyer, duly executed on behalf of the Company and registered
in the name of such Buyer.

 




2.

BUYER’S
REPRESENTATIONS AND WARRANTIES.





 


Each
Buyer, severally and not jointly, represents and warrants to the
Company with respect to only itself that, as of the date hereof and
as of the Closing Date:

 

(a) Organization;
Authority. Such Buyer, if an entity, is an entity duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, and such Buyer has the
requisite power and authority to enter into and to consummate the
transactions contemplated by this Agreement 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 Buyer and
constitutes the legal, valid and binding obligation of such Buyer
enforceable against such Buyer in accordance with its terms, except
as such enforceability may be limited by general principles of
equity or to 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 Buyer of this
Agreement and the consummation by such Buyer of the transactions
contemplated hereby will not (i) contravene the organizational
documents of such Buyer, (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 Buyer is a party
or (iii) contravene any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to
such Buyer, 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 Buyer to perform its
obligations hereunder.

 

(d) Receipt of Prospectus
Supplement. Such Buyer acknowledges receipt of the
Company’s Prospectus Supplement relating to the offering of
the Securities (the “Prospectus Supplement”), which
Prospectus Supplement is required to be delivered to such Buyer
pursuant to Section 4(c) below. Such Buyer acknowledges that it has
had an opportunity to review the Prospectus Supplement prior to
committing to purchase any of the Securities.

 

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

 



 

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3.

REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.





 


The
Company represents and warrants to each of the Buyers that, as of
the date hereof and as of the Closing Date (except for
representations and warranties that speak as of a specific date
which shall be true and correct as of such specified
date):

 

(a) Organization and
Qualification. Each of the Company and each of its
Subsidiaries 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 authority 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 or any of its Subsidiaries to
perform any of their respective obligations under any of the
Transaction Documents (as defined below). Other than CorMedix
Europe GmbH, the Company has no Subsidiaries. “Subsidiaries” means any Person in which the
Company, directly or indirectly, (A) owns any of the outstanding
capital stock or holds any equity or similar interest of such
Person or (B) controls or operates all or any part of the business,
operations or administration of such Person, and each of the
foregoing, is individually referred to herein as a “Subsidiary”.

 

(b) Authorization;
Enforcement; Validity. The Company has the requisite power
and authority to enter into and perform its obligations under this
Agreement and to issue the Securities in accordance with the terms
hereof. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by the
Company’s board of
directors and (other than the filing with the SEC and any other
filings as may be required by any state securities agencies) no
further filing, consent or authorization is required by the
Company, its board of directors or its stockholders or other
governing body. This Agreement has been duly executed and delivered
by the Company, and each constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its 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.

 

(c) Issuance of
Securities. The issuance of the Common Shares is duly
authorized and, upon issuance and payment in accordance with the
terms of this Agreement shall be validly issued, fully paid and
non-assessable and free from all preemptive or similar rights,
mortgages, defects, claims, liens, pledges, charges, taxes, rights
of first refusal, encumbrances, security interests and other
encumbrances (collectively “Liens”) with respect to the issuance
thereof.

 

(d) No Conflicts.
The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the
Certificate of Incorporation (as defined below), Bylaws (as defined
below), certificate of formation, memorandum of association,
articles of association, bylaws or other organizational documents
of the Company or any of its Subsidiaries, or any capital stock or
other securities 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) in any
respect 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, without
limitation, foreign, federal and state securities laws and
regulations and the rules and regulations of the NYSE American (the
“Principal
Market”), with a
reasonable prospect of delisting or suspension occurring after
giving effect to all applicable notice, appeal, compliance and
hearing periods, and including all applicable foreign, federal and
state 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 (ii) and (iii) for any such conflict, default or
violation that would 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 filing with the SEC, Principal
Market and any other filings as may be required by any state
securities agencies), any Governmental Entity (as defined below) or
any regulatory or self-regulatory agency or any other Person in
order for it to execute, deliver or perform any of its respective
obligations under or contemplated by this Agreement, 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 or will be obtained or effected on or prior to
the 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 this Agreement. Except as disclosed in the SEC
Documents (as defined below), 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.
“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 Buyer’s Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the
capacity of an arm’s
length purchaser with respect to this Agreement and the
transactions contemplated. The Company further acknowledges that no
Buyer is acting as a financial advisor or fiduciary of the Company
or any of its Subsidiaries (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby,
and any advice given by a Buyer or any of its representatives or
agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to such Buyer’s purchase of the Securities. The
Company further represents to each Buyer that the
Company’s decision to
enter into this Agreement has been based solely on the independent
evaluation by the Company and its representatives.

 

(g) Placement
Agent’s Fees. None of the Company or its Subsidiaries
has, and no manager, governor, director, officer or employee of any
of them has, employed any broker or finder, or incurred or will
incur any broker’s, finder’s or similar fees,
commissions or expenses, in each case in connection with the
transactions contemplated by this Agreement, for which any Buyer or
its designees will be liable.

 

(h) No Integrated
Offering. None of the Company, its Subsidiaries or any of
their affiliates, nor any Person acting on their behalf has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to require approval of
stockholders of the Company for purposes of the 1933 Act or under
any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the
Company are listed or designated for quotation. None of the
Company, its Subsidiaries, their affiliates nor any Person acting
on their behalf will take any action or steps that would cause the
offering of any of the Securities to be integrated with other
offerings of securities 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), stockholder rights plan 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 Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the Securities and any
Buyer’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.

 


 




 

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(j) SEC Documents;
Financial Statements. During the two years prior to the date
hereof, the Company has timely filed all reports, schedules, forms,
proxy statements, 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 and appendices 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 or has made available to the Buyers or their
respective representatives true, correct and complete copies of
each of the SEC Documents not available on the EDGAR system. 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
(including, without limitation, any notes or any letter of the
independent accountants of the Company with respect thereto) of the
Company included in the SEC Documents (the “Financial
Statements”)
complied 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 U.S.
generally accepted accounting principles (“GAAP”), consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such
Financial Statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the 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). The
reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonable based upon facts and
circumstances known by the Company on the date hereof and there are
no loss contingencies that are required to be accrued by the
Statement of Financial Accounting Standard No. 5 of the Financial
Accounting Standards Board which are not provided for by the
Company in its Financial Statements or otherwise. No other
information provided by or on behalf of the Company to any of the
Buyers which is not included in the SEC Documents (including,
without limitation, information in the disclosure schedules to 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
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.

 


 




 

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(k) Absence of Certain
Changes. Since the date of the Company’s most recent audited financial
statements contained in a Form 10-K and any subsequent unaudited
financial statements contained in Form 10-Q, except as disclosed in
the SEC Documents, there has been no material adverse change and no
material adverse development in the business, assets, liabilities,
properties, operations (including results thereof), condition
(financial or otherwise) or prospects of the Company or any of its
Subsidiaries. Since the date of the Company’s most recent audited financial
statements contained in a Form 10-K, neither the Company nor any of
its Subsidiaries has (i) declared or paid any dividends, (ii) sold
any assets, individually or in the aggregate, outside of the
ordinary course of business or (iii) made any material capital
expenditures, individually or in the aggregate. Neither the Company
nor any of its Subsidiaries has taken any steps to seek protection
pursuant to any law or statute relating to bankruptcy, insolvency,
reorganization, receivership, liquidation or winding up, nor does
the Company or any Subsidiary have any knowledge or reason to
believe that any of their respective creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any
fact which would reasonably lead a creditor to do so. The Company
and its Subsidiaries, individually and on a consolidated basis, are
not as of the date hereof, and after giving effect to the
transactions contemplated hereby to occur at the Closing, will not
be Insolvent (as defined below). For purposes of this Section 3(k),
“Insolvent” means, (i) with respect to the
Company and its Subsidiaries, on a consolidated basis, (A) the
present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount
required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined
below), (B) the Company and its Subsidiaries are unable to pay
their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (C)
the Company and its Subsidiaries intend to incur or believe that
they will incur debts that would be beyond their ability to pay as
such debts mature; and (ii) with respect to the Company and each
Subsidiary, individually, (A) the present fair saleable value of
the Company’s or such
Subsidiary’s (as the case
may be) assets is less than the amount required to pay its
respective total Indebtedness, (B) the Company or such Subsidiary
(as the case may be) is unable to pay its respective debts and
liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured or (C) the Company or
such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective
ability to pay as such debts mature. Neither the Company nor any of
its Subsidiaries has engaged in any business or in any transaction,
and is not about to engage in any business or in any transaction,
for which the Company’s
or such Subsidiary’s
remaining assets constitute unreasonably small
capital.

 

(l) No Undisclosed Events,
Liabilities, Developments or Circumstances. Other than the
transactions contemplated by this Agreement or as disclosed in the
SEC Documents, no event, liability, development or circumstance has
occurred or exists, or is reasonably expected to exist or occur
with respect to the Company, any of its Subsidiaries or any of
their respective businesses, properties, liabilities, prospects,
operations (including results thereof) or condition (financial or
otherwise), that (i) would be required to be disclosed by the
Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been
publicly announced, (ii) could have a material adverse effect on
any Buyer’s investment
hereunder or (iii) could have a Material Adverse
Effect.

 


 




 

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(m) Conduct of Business;
Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation, any certificate of designation,
preferences or rights of any other outstanding series of preferred
stock of the Company or any of its Subsidiaries or Bylaws (as
defined below) or their organizational charter, certificate of
formation, memorandum of association, articles of association,
Certificate of Incorporation or certificate of incorporation or
bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or
any statute, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries, and neither the Company nor any
of its Subsidiaries will conduct its business in violation of any
of the foregoing, except in all cases for possible violations which
could not, individually or in the aggregate, have a Material
Adverse Effect. Without limiting the generality of the foregoing,
the Company is not in violation of any of the rules, regulations or
requirements of the Principal Market and has no knowledge of any
facts or circumstances that could reasonably lead to delisting or
suspension of the Common Stock by the Principal Market in the
foreseeable future. During the two years prior to the date hereof,
(i) the Common Stock has been listed or designated for quotation on
the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) the Company
has received no communication, written or oral, from the SEC or the
Principal Market regarding the suspension or delisting of the
Common Stock from the Principal Market. The Company and each of its
Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate regulatory authorities necessary to
conduct their respective businesses, except where the failure to
possess such certificates, authorizations or permits would not
have, individually or in the aggregate, a Material Adverse Effect,
and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit. There is no
agreement, commitment, judgment, injunction, order or decree
binding upon the Company or any of its Subsidiaries or to which the
Company or any of its Subsidiaries is a party which has or would
reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of the Company or any of
its Subsidiaries, any acquisition of property by the Company or any
of its Subsidiaries or the conduct of business by the Company or
any of its Subsidiaries as currently conducted other than such
effects, individually or in the aggregate, which have not had and
would not reasonably be expected to have a Material Adverse Effect
on the Company or any of its Subsidiaries.

 

(n) Foreign Corrupt
Practices. None of the Company, its Subsidiaries or any
director, officer, agent, employee, nor any other Person acting for
or on behalf of the foregoing (individually and collectively, a
“Company
Affiliate”) have
violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable
anti-bribery or anti-corruption laws, nor has any Company Affiliate
offered, paid, promised to pay, or authorized the payment of any
money, or offered, given, promised to give, or authorized the
giving of anything of value, to any officer, employee or any other
Person acting in an official capacity for any Governmental Entity
to any political party or official thereof or to any candidate for
political office (individually and collectively, a “Government
Official”) or to
any Person under circumstances where such Company Affiliate knew or
was aware of a high probability that all or a portion of such money
or thing of value would be offered, given or promised, directly or
indirectly, to any Government Official, for the purpose
of:

 


 




 

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(i) (A) influencing any
act or decision of such Government Official in his/her official
capacity, (B) inducing such Government Official to do or omit to do
any act in violation of his/her lawful duty, (C) securing any
improper advantage, or (D) inducing such Government Official to
influence or affect any act or decision of any Governmental Entity,
or

 

(ii) assisting
the Company or its Subsidiaries in obtaining or retaining business
for or with, or directing business to, the Company or its
Subsidiaries.

 

(o) Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with
any and all applicable requirements of the Sarbanes-Oxley Act of
2002, as amended, and any and all applicable rules and regulations
promulgated by the SEC thereunder, except where the failure to
comply could not have, individually or in the aggregate, a Material
Adverse Effect.

 

(p) 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 that exceed the threshold set forth in Item
404 of Regulation S-K.

 


 




 

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(q) 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 November 17, 2017, and
24,566,813 shares are reserved for issuance pursuant to securities
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 2,000 shares of
which have been issued or are 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 has been
disclosed in the SEC Documents: (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. 

 


 




 

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(r) Indebtedness and Other
Contracts. Neither the Company nor any of its Subsidiaries,
(i) except as set forth in the SEC Documents, has any 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, (ii) is a party
to any contract, agreement or instrument, the violation of which,
or default under which, by the other party(ies) to such contract,
agreement or instrument could reasonably be expected to result in a
Material Adverse Effect, (iii) has any financing statements
securing obligations in any amounts filed in connection with the
Company or any of its Subsidiaries; (iv) is in violation of any
term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a
Material Adverse Effect, or (v) is a party to any contract,
agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is expected to
have a Material Adverse Effect. 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. For purposes of this
Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase
price of property or services (including, without limitation,
“capital
leases” in accordance
with GAAP) (other than trade payables entered into in the ordinary
course of business consistent with past practice), (C) all
reimbursement or payment obligations with respect to letters of
credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in
either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (F)
all monetary obligations under any leasing or similar arrangement
which, in connection with GAAP, consistently applied for the
periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured
by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or
in any property or assets (including accounts and contract rights)
owned by any Person, even though the Person which owns such assets
or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations (as defined
below) in respect of indebtedness or obligations of others of the
kinds referred to in clauses (A) through (G) above; and (y)
“Contingent
Obligation” means,
as to any Person, any direct or indirect liability, contingent or
otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary
purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of
such liability that such liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that
the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; and (z) “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and any
Governmental Entity or any department or agency
thereof.

 


 




 

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(s) Litigation.
There is no action, suit, arbitration, proceeding, inquiry or
investigation before or by the Principal Market, any court, public
board, other Governmental Entity, self-regulatory organization or
body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the
Common Stock or any of the Company’s or its Subsidiaries’ officers or directors, whether of a
civil or criminal nature or otherwise, in their capacities as such.
No director, officer or employee of the Company or any of its
subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in
reasonable anticipation of litigation. Without limitation of the
foregoing, there has not been, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the SEC
involving the Company, any of its Subsidiaries or any current or
former director or officer of the Company or any of its
Subsidiaries. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by
the Company under the 1933 Act or the 1934. After reasonable
inquiry of its employees, the Company is not aware of any fact
which might result in or form the basis for any such action, suit,
arbitration, investigation, inquiry or other proceeding. Neither
the Company nor any of its Subsidiaries is subject to any order,
writ, judgment, injunction, decree, determination or award of any
Governmental Entity.

 

(t) Insurance. The
Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such Subsidiary has any
reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain
substantially similar coverage from substantially similar insurers
as may be necessary to continue its business at a cost that would
not have a Material Adverse Effect.

 

(u) Employee
Relations. Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement or employs any
member of a union. No executive officer (as defined in Rule 501(f)
promulgated under the 1933 Act) or other key employee of the
Company or any of its Subsidiaries has notified the Company or any
such Subsidiary that such officer intends to leave the Company or
any such Subsidiary or otherwise terminate such officer’s employment with the Company or any
such Subsidiary. No executive officer or other key employee of the
Company or any of its Subsidiaries is, or is now expected to be, in
violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or
any restrictive covenant, and the continued employment of each such
executive officer or other key employee (as the case may be) does
not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all federal, state, local and
foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse
Effect.

 


 




 

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(v) Title.

 

(i) Real Property.
The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and have good and marketable title
to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case, free
and clear of all Liens except such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and any of its
Subsidiaries. Any real property and facilities held under lease by
the Company or any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company
or any of its Subsidiaries.

 

(ii) Fixtures
and Equipment. Each of the Company and its Subsidiaries (as
applicable) has good title to, or a valid leasehold interest in,
the tangible personal property, equipment, improvements, fixtures,
and other personal property and appurtenances that are used by the
Company or its Subsidiary in connection with the conduct of its
business (the “Fixtures and
Equipment”). The
Fixtures and Equipment are structurally sound, are in good
operating condition and repair, are adequate for the uses to which
they are being put, are not in need of maintenance or repairs
except for ordinary, routine maintenance and repairs and are
sufficient for the conduct of the Company’s and/or its
Subsidiaries’ businesses
(as applicable) in the manner as conducted prior to the Closing.
Except as described in the SEC Documents, each of the Company and
its Subsidiaries owns all of its Fixtures and Equipment free and
clear of all Liens except for (i) any Lien for taxes not yet due or
delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in
accordance with GAAP, (ii) any statutory Lien arising in the
ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent, (iii) any Lien created
by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens,
arising in the ordinary course of business with respect to a
liability that is not yet due or delinquent or that are being
contested in good faith by appropriate proceedings, (iv) Liens (A)
upon or in any equipment acquired or held by the Company or any of
its Subsidiaries to secure the purchase price of such equipment or
Indebtedness incurred solely for the purpose of financing the
acquisition or lease of such equipment, or (B) existing on such
equipment at the time of its acquisition, provided that the Lien is
confined solely to the property so acquired and improvements
thereon, and the proceeds of such equipment, (v) Liens in favor of
customs and revenue authorities arising as a matter of law to
secure payments of custom duties in connection with the importation
of goods, (vi) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
statutory obligations, indemnity, performance, surety and appeal
bonds, purchase agreements and other obligations of like nature
arising in the ordinary course of business, (vii) any interest,
Lien or title of a licensor, sublicensor, lessor or sublessor under
any license or lease agreement in the property being leased or
licensed as permitted hereunder, (viii) rights of setoff or
banker’s liens upon
deposits of cash in favor of banks or other depository
institutions, but not securing any Indebtedness for money borrower,
and (xi) zoning laws and other land use restrictions that do not
impair the present or anticipated use of the property subject
thereto.

 


 




 

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(w) Potential Products; FDA;
EMEA.

 

(i) Except as described
in the SEC Documents, the Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct its business
as currently conducted, including without limitation all such
certificates, authorizations and permits required by the United
States Food and Drug Administration (the “FDA”) or any other federal, state or
foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous materials, except where the failure
to so possess such certificates, authorizations and permits,
individually or in the aggregate, would not result in a Material
Adverse Effect. Except as described in the SEC Documents, the
Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization
or permit which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.

 

(ii) Except
to the extent disclosed in the SEC Documents, the Company has not
received any written notices or statements from the FDA, the
European Medicines Agency (the “EMEA”) or any other governmental agency,
and otherwise has no knowledge or reason to believe, that (i) any
drug candidate of the Company described in the SEC Documents (each
a “Potential
Product”) may or
will be rejected or determined to be non-approvable; (ii) a delay
in time for review and/or approval of a marketing authorization
application or marketing approval application in any jurisdiction
for any Potential Product is or may be required, requested or being
implemented; (iii) one or more clinical studies for any Potential
Product shall or may be requested or required in addition to the
clinical studies submitted to the FDA prior to the date hereof as a
precondition to or condition of issuance or maintenance of a
marketing approval for any Potential Product; (iv) any license,
approval, permit or authorization to conduct any clinical trial of
or market any product or Potential Product of the Company has been,
will be or may be suspended, revoked, modified or limited, except
in the cases of clauses (i), (ii), (iii) and (iv) where such
rejections, determinations, delays, requests, suspensions,
revocations, modifications or limitations might not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

(iii) Except
to the extent disclosed in the SEC Documents, to the
Company’s knowledge, the
preclinical and clinical testing, application for marketing
approval of, manufacture, distribution, promotion and sale of the
products and Potential Products of the Company is in compliance, in
all material respects, with all laws, rules and regulations
applicable to such activities, including without limitation
applicable good laboratory practices, good clinical practices and
good manufacturing practices, except for such non-compliance as
would not, individually or in the aggregate, have a Material
Adverse Effect. The descriptions of the results of such tests and
trials contained in the SEC Documents are complete and accurate in
all material respects such that there would be no untrue statement
of a material fact or omission of a material fact necessary to make
the statements in the SEC Documents, in light of the circumstances
under which they are made, not misleading. The Company is not aware
of any studies, tests or trials, the results of which reasonably
call into question the results of the tests and trials conducted by
or on behalf of the Company that are described or referred to in
the SEC Documents. Except to the extent disclosed in the SEC
Documents, the Company has not received notice of adverse finding,
warning letter or clinical hold notice from the FDA or any non-U.S.
counterpart of any of the foregoing, or any untitled letter or
other correspondence or notice from the FDA or any other
governmental authority or agency or any institutional or ethical
review board alleging or asserting noncompliance with any law, rule
or regulation applicable in any jurisdiction, except notices,
letters, and correspondences and non-U.S. counterparts thereof
alleging or asserting such noncompliance as would not, individually
or in the aggregate, have a Material Adverse Effect. Except to the
extent disclosed in the SEC Documents, the Company has not, either
voluntarily or involuntarily, initiated, conducted or issued, or
caused to be initiated, conducted or issued, any recall, field
correction, market withdrawal or replacement, safety alert,
warning, “dear
doctor” letter,
investigator notice, or other notice or action relating to an
alleged or potential lack of safety or efficacy of any product or
Potential Product of the Company, any alleged product defect of any
product or Potential Product of the Company, or any violation of
any material applicable law, rule, regulation or any clinical trial
or marketing license, approval, permit or authorization for any
product or potential product of the Company, and the Company is not
aware of any facts or information that would cause it to initiate
any such notice or action and has no knowledge or reason to believe
that the FDA, the EMEA or any other governmental agency or
authority or any institutional or ethical review board or other
non-governmental authority intends to impose, require, request or
suggest such notice or action.

 


 




 

13








 






 

(x) Intellectual Property
Rights. The Company and its Subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, original
works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property
Rights”) necessary
to conduct their respective businesses as now conducted and
presently proposed to be conducted. None of the Company’s Intellectual Property Rights have
expired or terminated or have been abandoned or are expected to
expire or terminate or are expected to be abandoned, within three
years from the date of this Agreement. The Company does not have
any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property Rights of others. There is no
claim, action or proceeding being made or brought, or to the
knowledge of the Company or any of its Subsidiaries, being
threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights. Neither the Company nor
any of its Subsidiaries is aware of any facts or circumstances
which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property
Rights.

 

(y) Environmental
Laws. The Company and its Subsidiaries (A) are in compliance
with any and all Environmental Laws (as defined below), (B) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions
of any such permit, license or approval where, in each of the
foregoing clauses (A), (B) and (C), the failure to so comply could
be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental
Laws” means all
federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata), including, without limitation, laws relating
to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous
substances or wastes (collectively, “Hazardous
Materials”) into
the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

(i) No Hazardous
Materials:

 

(A) have been disposed
of or otherwise released from any Real Property in violation of any
Environmental Laws, except where such violation would not
reasonably be expected to have a Material Adverse Effect;
or

 

(B) are present on,
over, beneath, in or upon any Real Property or any portion thereof
in quantities that would constitute a material violation of any
Environmental Laws. No prior use by the Company or any of its
Subsidiaries of any Real Property has occurred that violates any
Environmental Laws, which violation would have a Material Adverse
Effect on the business of the Company or any of its
Subsidiaries.

 


 




 

14








 






 

(ii) Neither
the Company nor any of its Subsidiaries knows of any other Person
who or entity which has stored, treated, recycled, disposed of or
otherwise located on any Real Property any Hazardous Materials,
including, without limitation, such substances as asbestos and
polychlorinated biphenyls.

 

(iii) None
of the Real Property are on any federal or state “Superfund” list or Liability Information
System (“CERCLIS”) list or any state environmental
agency list of sites under consideration for CERCLIS, nor subject
to any environmental related Liens.

 

(z) Subsidiary
Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all
capital securities of its Subsidiaries as owned by the Company or
such Subsidiary.

 

(aa) Tax
Status. The Company and each of its Subsidiaries (i) has
timely made or filed all material foreign, federal and state income
and all other material tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has
timely paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due
on such returns, reports and declarations, except those being
contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company and its Subsidiaries
know of no basis for any such claim. The Company is not operated in
such a manner as to qualify as a passive foreign investment
company, as defined in Section 1297 of the U.S. Internal Revenue
Code of 1986, as amended (the “Code”). The net operating loss
carryforwards (“NOLs”) for United States federal income
tax purposes of the consolidated group of which the Company is the
common parent, if any, shall not be adversely effected by the
transactions contemplated hereby. The transactions contemplated
hereby do not constitute an “ownership change” within the meaning of Section 382
of the Code, thereby preserving the Company’s ability to utilize such
NOLs.

 

(bb) Internal
Accounting and Disclosure Controls. The Company and each of
its Subsidiaries maintains internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the 1934
Act) that is effective to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles, including that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset and liability accountability, (iii) access to
assets or incurrence of liabilities is permitted only in accordance
with management’s general
or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and
liabilities at reasonable intervals and appropriate action is taken
with respect to any difference. The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e)
under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it
files or submits under the 1934 Act is recorded, processed,
summarized and reported, within the time periods specified in the
rules and forms of the SEC, including, without limitation, controls
and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the
Company’s management,
including its principal executive officer or officers and its
principal financial officer or officers, as appropriate, to allow
timely decisions regarding required disclosure. During the two
years prior to the date hereof, except as disclosed in the SEC
Documents, neither the Company nor any of its Subsidiaries has
received any notice or correspondence from any accountant,
Governmental Entity or other Person relating to any potential
material weakness or significant deficiency in any part of the
internal controls over financial reporting of the Company or any of
its Subsidiaries.

 


 




 

15








 






 

(cc) Off
Balance Sheet Arrangements. There is no transaction,
arrangement, or other relationship between the Company or any of
its Subsidiaries and an unconsolidated or other off balance sheet
entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be
reasonably likely to have a Material Adverse Effect.

 

(dd) Investment
Company Status. The Company is not, and upon consummation of
the sale of the Securities will not be, an “investment company,” an affiliate of an “investment company,” a company controlled by an
“investment
company” or an
“affiliated
person” of, or
“promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the
Investment Company Act of 1940, as amended.

 

(ee) Manipulation
of Price. Neither the Company nor any of its Subsidiaries
has, and, to the knowledge of the Company, no Person acting on
their behalf has, directly or indirectly, (i) taken any action
designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its
Subsidiaries to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, (iii) paid or
agreed to pay to any Person any compensation for soliciting another
to purchase any other securities of the Company or any of its
Subsidiaries or (iv) paid or agreed to pay any Person for research
services with respect to any securities of the Company or any of
its Subsidiaries.

 

(ff) 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 any of the Buyers, 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 any Buyer’s
request.

 

(gg) 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 to each Buyer 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.

 

(hh) Bank
Holding Company Act. Neither the Company nor any of its
Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal
Reserve”). Neither
the Company nor any of its Subsidiaries or affiliates owns or
controls, directly or indirectly, five percent (5%) or more of the
outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve. Neither the Company nor any of its Subsidiaries or
affiliates exercises a controlling influence over the management or
policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.

 

(ii) Shell
Company Status. The Company is not, and has never been, an
issuer identified in, or subject to, Rule 144(i).

 


 




 

16








 






 

 

(jj) Illegal
or Unauthorized Payments; Political Contributions. Neither
the Company nor any of its Subsidiaries nor, to the
Company’s knowledge
(after reasonable inquiry of its officers and directors), any of
the officers, directors, employees, agents or other representatives
of the Company or any of its Subsidiaries or any other business
entity or enterprise with which the Company or any Subsidiary is or
has been affiliated or associated, has, directly or indirectly,
made or authorized any payment, contribution or gift of money,
property, or services, whether or not in contravention of
applicable law, (i) as a kickback or bribe to any Person or (ii) to
any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political
contributions not involving the direct or indirect use of funds of
the Company or any of its Subsidiaries.

 

(kk) Money
Laundering. The Company and its Subsidiaries are in
compliance with, and have not previously violated, the USA Patriot
Act of 2001 and all other applicable U.S. and non-U.S. anti-money
laundering laws and regulations, including, without limitation, the
laws, regulations and Executive Orders and sanctions programs
administered by the U.S. Office of Foreign Assets Control,
including, but not limited, to (i) Executive Order 13224 of
September 23, 2001 entitled, “Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism” (66
Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31
CFR, Subtitle B, Chapter V.

 

(ll) Management.
During the past five year period, no current or former (but no
representation is made for any former director or officer after the
date he or she ceased to be a director or employee as the case may
be) officer or director or, to the knowledge of the Company, no
current ten percent (10%) or greater stockholder of the Company or
any of its Subsidiaries has been the subject of:

 

(i) a petition under
bankruptcy laws or any other insolvency or moratorium law or the
appointment by a court of a receiver, fiscal agent or similar
officer for such Person, or any partnership in which such Person
was a general partner at or within two years before the filing of
such petition or such appointment, or any corporation or business
association of which such Person was an executive officer at or
within two years before the time of the filing of such petition or
such appointment;

 

(ii) a
conviction in a criminal proceeding or a named subject of a pending
criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the
influence);

 

(iii) any
order, judgment or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such Person from, or otherwise limiting,
the following activities:

 

(A) Acting as a futures
commission merchant, introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the United States Commodity
Futures Trading Commission (the “CFTC”) or an associated person of any of
the foregoing, or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person, director or
employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;

 


 




 

17








 






 

(B) Engaging in any
particular type of business practice; or

 

(C) Engaging in any
activity in connection with the purchase or sale of any security or
commodity or in connection with any violation of securities laws or
commodities laws;

 

(iv) any
order, judgment or decree, not subsequently reversed, suspended or
vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such Person to
engage in any activity described in the preceding sub paragraph, or
to be associated with Persons engaged in any such
activity;

 

(v) a finding by a
court of competent jurisdiction in a civil action or by the SEC or
other authority to have violated any securities law, regulation or
decree and the judgment in such civil action or finding by the SEC
or any other authority has not been subsequently reversed,
suspended or vacated; or (vi) a finding by a court of competent
jurisdiction in a civil action or by the CFTC to have violated any
federal commodities law, and the judgment in such civil action or
finding has not been subsequently reversed, suspended or
vacated.

 

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

 

(nn) No
Disagreements with Accountants and Lawyers. There are no
material disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company
and the accountants and lawyers formerly or presently employed by
the Company and the Company is current with respect to any fees
owed to its accountants and lawyers which could affect the
Company’s ability to
perform any of its obligations under this Agreement. In addition,
on or prior to the date hereof, the Company had discussions with
its accountants about its Financial Statements previously filed
with the SEC. Based on those discussions, the Company has no reason
to believe that it will need to restate any such Financial
Statements or any part thereof.

 

(oo) No
Additional Agreements. The Company does not have any
agreement or understanding with any Buyer with respect to the
transactions contemplated by this Agreement other than as specified
in this Agreement.

 

(pp) Public
Utility Holding Act. None of the Company nor any of its
Subsidiaries is a “holding company,” or an “affiliate” of a “holding company,” as such terms are defined in the
Public Utility Holding Act of 2005.

 


 




 

18








 






 

(qq) Federal
Power Act. None of the Company nor any of its Subsidiaries
is subject to regulation as a “public utility” under the Federal Power Act, as
amended.

 

(rr) Disclosure.
The Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Buyers or their 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. The
Company understands and confirms that each of the Buyers will rely
on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Buyers
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. All of the written information furnished after the date
hereof by or on behalf of the Company or any of its Subsidiaries to
each Buyer pursuant to or in connection with this Agreement will be
true and correct in all material respects as of the date on which
such information is so provided and will 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 disclosed. All financial projections and forecasts that
have been prepared by or on behalf of the Company or any of its
Subsidiaries and made available to you have been prepared in good
faith based upon reasonable assumptions and represented, at the
time each such financial projection or forecast was delivered to
each Buyer, the Company’s
best estimate of future financial performance (it being recognized
that such financial projections or forecasts are not to be viewed
as facts and that the actual results during the period or periods
covered by any such financial projections or forecasts may differ
from the projected or forecasted results). The Company acknowledges
and agrees that no Buyer makes or has made any representations or
warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 2.

 




4.

COVENANTS.





 

(a) Best Efforts.
The Company shall use its best efforts to timely satisfy each of
the covenants hereunder and conditions to be satisfied by it as
provided in Section 7 of this Agreement.

 


 




 

19








 






 

(b) Blue Sky. The
Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to, qualify the Common Shares for sale
to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and
shall provide evidence of any such action so taken to the Buyers on
or prior to the Closing Date. Without limiting any other obligation
of the Company under this Agreement, the Company shall timely make
all filings and reports relating to the offer and sale of the
Common Shares required under all applicable securities laws
(including, without limitation, all applicable federal securities
laws and all applicable “Blue Sky” laws), and the Company shall comply
with all applicable foreign, federal, state and local laws,
statutes, rules, regulations and the like relating to the offering
and sale of the Common Shares to the Buyers.

 

(c) Reporting
Status. Until the earlier of (x) the date on which the
Common Shares may be resold by the Buyers without restriction under
Rule 144 under the 1933 Act, or (y) the date no Securities are held
by any Buyer (the “Reporting
Period”), 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.

 

(d) Use of
Proceeds. The Company will use the proceeds from the sale of
the Securities for general corporate purposes.

 

(e) Financial
Information. The Company agrees to send the following to
each holder of Common Shares (each, 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
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) unless the following are either filed with the SEC through
EDGAR or are otherwise widely disseminated via a recognized news
release service (such as PR Newswire), 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) unless the
following are filed with the SEC through EDGAR or made permanently
available on the Company’s website, 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.

 

(f) Listing. The
Company shall promptly secure the listing or designation for
quotation (as the case may be) of all of the Common Shares 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 Common Shares from time to
time issuable under the terms of this Agreement on such national
securities exchange or automated quotation system. The Company
shall maintain the Common Stock’s listing or authorization for
quotation (as the case may be) on the Principal Market, The New
York Stock Exchange, the NYSE American, 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 4(f).

 


 




 

20








 






 

(g) Fees. Except as
otherwise set forth in this Agreement, each party to this Agreement
shall bear its own expenses in connection with the sale of the
Securities to the Buyers. The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees,
transfer agent fees, Depository Trust Company (“DTC”) fees or broker’s commissions (other than for
Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses)
arising in connection with any claim relating to any such
payment.

 

(h) Pledge of
Securities. Notwithstanding anything to the contrary
contained in this Agreement, the Company acknowledges and agrees
that the Securities may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment
of the Securities hereunder, and no Investor effecting a pledge of
Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to
this Agreement. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably
request in connection with a pledge of the Securities to such
pledgee by a Buyer.

 

(i) Disclosure of Transactions and Other
Material Information.

 

(i) Disclosure of
Transaction. The Company shall, on or before 9:30 a.m., New
York time, on the first (1st)
Business Day after the date of this Agreement, issue a press
release (the “Press
Release”)
disclosing all the material terms of the transactions contemplated
by this Agreement. On or before 9:30 a.m., New York time, on the
first (1st)
Business Day after the date of this Agreement, the Company shall
file a Current Report on Form 8-K describing all the material terms
of the transactions contemplated by this Agreement in the form
required by the 1934 Act (including, without limitation, this
Agreement (including all attachments, the “8-K Filing”). From and after the filing of the
8-K Filing, the Company shall have disclosed all material,
non-public information (if any) provided to any of the Buyers by
the Company or any of its Subsidiaries or any of their respective
officers, directors, employees or agents prior to the date
hereof.


 


 




 

21








 






 

(j) 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 reasonably be expected to result, either individually or
in the aggregate, in a Material Adverse Effect.

 

(k) 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
each of its Subsidiaries will not be deemed to constitute a passive
foreign investment company within the meaning of Section 1297 of
the Code.

 

(l) Regulation M.
The Company will not take any action prohibited by Regulation M
under the 1934 Act, in connection with the distribution of the
Securities contemplated hereby.

 

(m) Prospectus Delivery.
Immediately prior to execution of this Agreement, the Company shall
have delivered to the Buyers, and as soon as practicable after
execution of this Agreement the Company shall file, a Prospectus
Supplement with respect to the Securities to be issued on the
Closing Date, as required under, and in conformity with, the 1933
Act, including Rule 424(b) thereunder. The Company shall deliver or
make available to the Buyers, without charge, an electronic copy of
the Prospectus Supplement on the Closing Date.

 




5.

TRANSFER
AGENT.





 


While
any Common Shares remain outstanding, the Company shall maintain a
transfer agent for the Common Stock that participates in the DTC
Fast Automated Securities Transfer Program.

 




6.

CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.





 

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

 

(i) Such Buyer shall
have executed this Agreement and delivered the same to the
Company.

 

(ii) Such
Buyer and each other Buyer shall have delivered to the Company the
Purchase Price for the Common Shares being purchased by such Buyer
at the Closing by wire transfer of immediately available funds in
accordance with instructions previously provided by the
Company.

 

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

 


 




 

22








 






 




7.

CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.





 

(a) The obligation of
each Buyer hereunder to purchase its Common Shares at the Closing
is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions
are for each Buyer’s sole
benefit and may be waived by such Buyer at any time in its sole
discretion by providing the Company with prior written notice
thereof:

 

(i) The Company shall
have duly executed and delivered to such Buyer this Agreement and
the Company shall have duly executed and delivered to such Buyer
such aggregate number of Common Shares set forth on the signature
page hereto for such Buyer being purchased by such Buyer at the
Closing pursuant to this Agreement.

 

(ii) All
of the representations and warranties made by the Company 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 the Company 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).

 

(iii) The
Common Stock (A) shall be designated for quotation or listed (as
applicable) on the Principal Market and (B) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal
Market from trading on the Principal Market nor, except as
disclosed in the SEC Documents, shall suspension by the SEC or the
Principal Market have been threatened (with a reasonable prospect
of delisting or suspension occurring after giving effect to all
applicable notice, appeal, compliance and hearing periods), as of
the Closing Date, either (I) in writing by the SEC or the Principal
Market or (II) by falling below the minimum maintenance
requirements of the Principal Market.

 

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

 

(v) No statute, rule,
regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or
Governmental Entity of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by this
Agreement.

 

(vi) Since
the date of execution of this Agreement, no event or series of
events shall have occurred that reasonably would have or result in
a Material Adverse Effect.

 


 




 

23








 






 

(vii) From
the date hereof to the Closing Date, (i) trading in the Common
Stock shall not have been suspended by the SEC or the Principal
Market (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated
prior to the Closing), and, (ii) at any time prior to the Closing
Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported
by such service, or on 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 each Buyer, makes it
impracticable or inadvisable to purchase the Securities at the
Closing.

 


(viii)                      The
Registration Statement shall be effective and available for the
issuance and sale of the Securities to be issued at the Closing
hereunder and the Company shall have delivered to each Buyer the
Prospectus Supplement as required thereunder.

 




8.

TERMINATION.





 

 A
Buyer
shall have the right to terminate its obligations under this
Agreement with respect to itself for a breach by the Company of the
terms and provisions of this Agreement without liability of such
Buyer to any other party; provided, however, (i) the right to
terminate this Agreement under this Section 8 shall not be
available to such Buyer if the failure of the transactions
contemplated by this Agreement to have been consummated by such
date is the result of such Buyer’s breach of this Agreement and (ii)
the abandonment of the sale and purchase of the Common Shares shall
be applicable only to such Buyer providing such written notice.
Nothing contained in this Section 8 shall be deemed to release any
party from any liability for any breach by such party of the terms
and provisions of this Agreement or to impair the right of any
party to compel specific performance by any other party of its
obligations under this Agreement.

 




9.

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. The Company
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 under any of the other Transaction Documents
or with any transaction contemplated hereby or thereby, 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.
Nothing contained herein shall be deemed or operate to preclude any
Buyer from bringing suit or taking other legal action against the
Company in any other jurisdiction to collect on the
Company’s obligations to
such Buyer or to enforce a judgment or other court ruling in favor
of such Buyer. 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 UNDER ANY OTHER TRANSACTION DOCUMENT OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR
THEREBY.

 


 




 

24








 






 

(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.

 

(d) Severability; Maximum
Payment Amounts. 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 (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 of the Buyers, under this Agreement
(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 Buyer, or collection by any
Buyer pursuant to this Agreement 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 Buyer, 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 such Buyer, the amount of interest
or any other amounts which would constitute unlawful amounts
required to be paid or actually paid to such Buyer under this
Agreement. For greater certainty, to the extent that any interest,
charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under this Agreement 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.

 


 




 

25








 






 

(e) Entire Agreement;
Amendments. This Agreement supersedes all other prior oral
or written agreements between the Buyers, the Company, its
Subsidiaries, their affiliates and Persons acting on their behalf,
including, without limitation, any transactions by any Buyer with
respect to Common Stock or the Securities, and the other matters
contained herein and therein, and this Agreement and the
instruments referenced herein contain the entire understanding of
the parties solely with respect to the matters covered herein and
therein; provided, however, nothing contained in this Agreement
shall (or shall be deemed to) (i) have any effect on any agreements
any Buyer has entered into with, or any instruments any Buyer has
received from, the Company or any of its Subsidiaries prior to the
date hereof with respect to any prior investment made by such Buyer
in the Company or (ii) waive, alter, modify or amend in any respect
any obligations of the Company or any of its Subsidiaries, or any
rights of or benefits to any Buyer or any other Person, in any
agreement entered into prior to the date hereof between or among
the Company and/or any of its Subsidiaries and any Buyer, or any
instruments any Buyer 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 Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. For clarification
purposes, the Recitals are part of this Agreement. No provision of
this Agreement may be amended other than by an instrument in
writing signed by the Company and the Holder against whom such
amendment is to be enforceable. No waiver shall be effective unless
it is in writing and signed by an authorized representative of the
waiving party. The Company has not, directly or indirectly, made
any agreements with any Buyers relating to the terms or conditions
of the transactions contemplated by this Agreement except as set
forth herein. Without limiting the foregoing, the Company confirms
that, except as set forth in this Agreement, no Buyer has made any
commitment or promise or has any other obligation to provide any
financing to the Company, any Subsidiary or otherwise. As a
material inducement for each Buyer to enter into this Agreement,
the Company expressly acknowledges and agrees that (x) no due
diligence or other investigation or inquiry conducted by a Buyer,
any of its advisors or any of its representatives shall affect such
Buyer’s right to rely on,
or shall modify or qualify in any manner or be an exception to any
of, the Company’s
representations and warranties contained in this Agreement and (y)
unless a provision of this Agreement is expressly preceded by the
phrase “except as
disclosed in the SEC Documents,” nothing contained in any of the SEC
Documents shall affect such Buyer’s right to rely on, or shall modify
or qualify in any manner or be an exception to any of, the
Company’s representations
and warranties contained in this Agreement.

 

(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 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:

 


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


 




 

26








 






 


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 a
Buyer, to its address and facsimile number set forth on the
signature page hereto for such Buyer. 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, with respect to each facsimile transmission, 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.

 

(g) Successors and
Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and
assigns, including any purchasers of any of the Common Shares. A
Buyer 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
Buyer hereunder with respect to such assigned rights, provided such
assignment is in compliance with applicable federal and state
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 9(k).

 

(i) Survival. The
representations, warranties, agreements and covenants shall survive
the Closing. Each Buyer 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.

 


 




 

27








 






 

(k) Indemnification.

 

(i) In consideration of
each Buyer’s execution
and delivery of this Agreement and acquiring the Securities
hereunder and in addition to all of the Company’s other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold
harmless each Buyer 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 (i) any misrepresentation or breach of any
representation or warranty made by the Company or any Subsidiary in
this Agreement, (ii) any breach of any covenant, agreement or
obligation of the Company or any Subsidiary contained in this
Agreement, (iii) 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, (iv)
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, (v) 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 by the Company or any of its Subsidiaries, affiliates,
officers, directors or employees or (vi) any cause of action, suit,
proceeding 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) or which
otherwise involves such Indemnitee that arises out of or results
from (A) the execution, delivery, performance or enforcement of
this Agreement, (B) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of the
issuance of the Securities, (C) any disclosure properly made by
such Buyer pursuant to Section 4(i), or (D) the status of such
Buyer or holder of the Securities either as an investor in the
Company pursuant to the transactions contemplated by this Agreement
or as a party to this Agreement (including, without limitation, as
a party in interest or otherwise in any action or proceeding for
injunctive or other equitable relief), in each case, other than as
a result of any misrepresentation or breach of any representation
or warranty made by such Buyer or holder of the Securities. 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.

 


 




 

28








 






 

(ii) Promptly
after receipt by an Indemnitee under this Section 9(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 9(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: (A) the Company has agreed in
writing to pay such fees and expenses; (B) 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 (C) 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 (C) above the Company shall not be responsible for
the reasonable fees and expenses of more than one (1) separate
legal counsel for the Indemnitees. 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 9(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 9(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.

 

(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.

 


 




 

29








 






 

(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. Notwithstanding anything in this Agreement
to the contrary, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty against, or a
prohibition of, any actions with respect to the borrowing of,
arrangement to borrow, identification of the availability of,
and/or securing of, securities of the Company in order for such
Buyer (or its broker or other financial representative) to effect
short sales or similar transactions in the future.

 

(m) Remedies. Each
Buyer and in the event of assignment by Buyer of its rights and
obligations hereunder, each holder of Securities, shall have all
rights and remedies set forth in this Agreement 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 this Agreement, any remedy at law would inadequate relief to
the Buyers. The Company therefore agrees that the Buyers shall be
entitled to 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. The remedies provided in this Agreement shall be
cumulative and in addition to all other remedies available under
this Agreement, at law or in equity (including a decree of specific
performance and/or other injunctive relief).

 

(n) Withdrawal
Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) this Agreement,
whenever any Buyer exercises a right, election, demand or option
under this Agreement and the Company or any Subsidiary does not
timely perform its related obligations within the periods herein
provided, then such Buyer 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) Payment Set Aside;
Currency. To the extent that the Company makes a payment or
payments to any Buyer hereunder or any of the Buyers enforce or
exercise their rights hereunder or thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, foreign, state
or federal law, common law or equitable cause of action), then to
the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred. Unless otherwise
expressly indicated, all dollar amounts referred to in this
Agreement are in United States Dollars (“U.S. Dollars”), and all amounts owing under this
Agreement shall be paid in U.S. Dollars. All amounts denominated in
other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date
of calculation. “Exchange
Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars
pursuant to this Agreement, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of
calculation.

 


 




 

30








 






 

(p) Judgment
Currency. If for the purpose of obtaining or enforcing
judgment against the Company in connection with this Agreement in
any court in any jurisdiction it becomes necessary to convert into
any other currency (such other currency being hereinafter in this
Section 9(p) referred to as the “Judgment
Currency”) an
amount due in U.S. Dollars under this Agreement, the conversion
shall be made at the Exchange Rate prevailing on the Business Day
immediately preceding:

 

(A) the date actual
payment of the amount due, in the case of any proceeding in the
courts of New York or in the courts of any other jurisdiction that
will give effect to such conversion being made on such date:
or

 

(B) the date on which
the foreign court determines, in the case of any proceeding in the
courts of any other jurisdiction (the date as of which such
conversion is made pursuant to this Section 9(p)(2) being
hereinafter referred to as the “Judgment Conversion
Date”).

 

(v) If in the case of
any proceeding in the court of any jurisdiction referred to in
Section 9(p)(1) above, there is a change in the Exchange Rate
prevailing between the Judgment Conversion Date and the date of
actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount
paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of U.S.
Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the
Exchange Rate prevailing on the Judgment Conversion
Date.

 

(vi) Any
amount due from the Company under this provision shall be due as a
separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this
Agreement.

 

(q) Independent Nature of
Buyers’ Obligations and Rights. The obligations of
each Buyer under this Agreement are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other
Buyer under this Agreement. Nothing contained herein, and no action
taken by any Buyer pursuant hereto, shall be deemed to constitute
the Buyers as, and the Company acknowledges that the Buyers do not
so constitute, a partnership, an association, a joint venture or
any other kind of group or entity, or create a presumption that the
Buyers are in any way acting in concert or as a group or entity,
and the Company shall not assert any such claim with respect to
such obligations or the transactions contemplated by this Agreement
or any matters, and the Company acknowledges that the Buyers are
not 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 this Agreement. Each Buyer
acknowledges that no other Buyer has acted as agent for such Buyer
in connection with such Buyer making its investment hereunder and
that no other Buyer will be acting as agent of such Buyer in
connection with monitoring such Buyer’s investment in the Securities or
enforcing its rights under this Agreement. The Company and each
Buyer confirms that each Buyer has independently participated with
the Company and its Subsidiaries in the negotiation of the
transaction contemplated hereby with the advice of its own counsel
and advisors. Each Buyer shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights
arising out of this Agreement, and it shall not be necessary for
any other Buyer to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement to
effectuate the purchase and sale of the Securities contemplated
hereby was solely in the control of the Company, not the action or
decision of any Buyer, and was done solely for the convenience of
the Company and its Subsidiaries and not because it was required or
requested to do so by any Buyer. It is expressly understood and
agreed that each provision contained in this Agreement is between
the Company, each Subsidiary and a Buyer, solely, and not between
the Company, its Subsidiaries and the Buyers collectively and not
between and among the Buyers.

 



[signature pages follow]

 




 

31








 






IN WITNESS WHEREOF, each
Buyer 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:                                                                            






Name:


Title:

 


 




 

32








 






 


BUYER:

 


If an entity (e.g. a corporation, LLC,
partnership, trust, IRA, etc.):

 


Entity
Name: 

 

 



By:                                                                                       





 



Name:                                                                                       





 



Title:                                                                                       





 


If an Individual:

 


Printed
Name:

 


Signature

 


Number
of Common Shares to be purchased by Buyer:

 


__________ shares x
$_______ (per share purchase price) = $__________ (total purchase
price)

 


Address:

 


____________________________________

 


____________________________________

 


____________________________________

 


Email:
______________________________

 


Telephone:
__________________________

 

 




 

33