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Exhibit 10.1

INDEMNITY
AGREEMENT

This Indemnity
Agreement (this “Agreement”)
dated as of ___________ _____, 20__, is made by and between
ChromaDex
Corporation, a Delaware corporation (the “Company”), and
_________________
(“Indemnitee”).

Recitals

A.           The
Company desires to attract and retain the services of highly
qualified individuals as directors, officers, employees and
agents.

B.           The
Company’s Amended and Restated Bylaws, as amended (the
“Bylaws”),
require that the Company indemnify its directors and officers, and
empowers the Company to indemnify its employees and other agents, as
authorized by the Delaware General Corporation Law, as amended (the
“Code”), under
which the Company is organized and such Bylaws expressly provide
that the indemnification provided therein is not exclusive and
contemplates that the Company may enter into separate agreements
with its directors, officers and other persons to set forth
specific indemnification provisions.

C.           Indemnitee
does not regard the protection currently provided by applicable
law, the Bylaws, the Company’s other governing documents, and
available insurance as adequate under the present circumstances,
and the Company has determined that Indemnitee and other directors,
officers, employees and agents of the Company may not be willing to
serve or continue to serve in such capacities without additional
protection.

D.           The
Company desires and has requested Indemnitee to serve or continue
to serve as a director, officer, employee or agent of the Company,
as the case may be, and has proffered this Agreement to Indemnitee
as an additional inducement to serve in such capacity.

E.           Indemnitee
is willing to serve, or to continue to serve, as a director,
officer, employee or agent of the Company, as the case may be, if
Indemnitee is furnished the indemnity provided for herein by the
Company.

Agreement

Now Therefore,
in consideration of the mutual covenants and agreements set forth
herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

1. Definitions.

(a) Agent.
For purposes of this Agreement, the term “Agent” of the
Company means any person who: (i) is or was a
director, officer, employee,
agent, or other fiduciary of the Company or a subsidiary of the
Company; or (ii) is or was serving at the request or for the
convenience of, or representing the interests of, the Company or a
subsidiary of the Company, as a director, officer, employee, agent,
or other fiduciary of a foreign or domestic corporation,
partnership, joint venture, trust or other enterprise.

 

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(b) Change
in Control. For purposes of this Agreement, a
“Change
in Control” shall be deemed to have occurred if (i)
any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing
20% or more of the total voting power represented by the
Company’s then outstanding Voting Securities, (ii)
individuals who on the date of this Agreement are members of the
Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the members of the Board (provided, however, that if the
appointment or election (or nomination for election) of any new
Board member was approved or recommended by a majority vote of the
members of the Incumbent Board then still in office, such new
member shall be considered as a member of the Incumbent Board), or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at
least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company
of (in one transaction or a series of transactions) all or
substantially all of the Company’s assets.

(c) Expenses.
For purposes of this Agreement, the term “Expenses”
shall be broadly construed and shall include, without limitation,
all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys’, witness, or
other professional fees and related disbursements, and other
out-of-pocket costs of whatever nature, actually and reasonably
incurred by Indemnitee in connection with the investigation,
defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement, the Code or
otherwise. The term “Expenses”
shall also include reasonable compensation for time spent by
Indemnitee for which he or she is not compensated by the Company or
any subsidiary or third party: (i) for any period during which
Indemnitee is not an Agent, in the employment of, or providing
services for compensation to, the Company or any subsidiary; and
(ii) if the rate of compensation and estimated time involved is
approved by the directors of the Company who are not parties to any
action with respect to which Expenses are incurred, for Indemnitee
while an Agent of, employed by, or providing services for
compensation to, the Company or any subsidiary.

(d) Independent
Counsel. For purposes of this Agreement, the term
“Independent
Counsel” means a law firm, or a partner (or, if
applicable, member) of such a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the
past five (5) years has
been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party, or (ii) any other party to
the proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term
“Independent
Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. The Company will pay the reasonable fees and
expenses of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

(e) Liabilities.
For purposes of this Agreement, the term “Liabilities”
shall be broadly construed and shall include, without limitation,
judgments, damages, deficiencies, liabilities, losses, penalties,
excise taxes, fines, assessments and amounts paid in settlement,
including any interest and any federal, state, local or foreign
taxes imposed as a result of the actual or deemed receipt of any
payment under this Agreement.

 

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(f) Proceedings.
For purposes of this Agreement, the term “proceeding”
shall be broadly construed and shall include, without limitation,
any threatened, pending, or completed action, suit, claim,
counterclaim, cross claim, arbitration, mediation, alternate
dispute resolution mechanism, investigation, inquiry,
administrative hearing, or any other actual, threatened or
completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or
investigative nature, and whether formal or informal in any case,
in which Indemnitee was, is or will be involved as a party,
potential party, non-party witness, or otherwise by reason of: (i)
the fact that Indemnitee is or was a director or officer of the
Company; (ii) the fact that any action was taken by Indemnitee (or
a failure to take action by Indemnitee) or of any action (or
failure to act) on Indemnitee’s part while acting as an
Agent; or (iii) the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, and in any such case described
above, whether or not serving in any such capacity at the time any
liability or Expense is incurred for which indemnification,
reimbursement, or advancement of Expenses may be provided under
this Agreement. If the Indemnitee believes in good faith that a
given situation may lead to or culminate in the institution of a
proceeding, this shall be considered a proceeding under this
paragraph.

(g) Subsidiary.
For purposes of this Agreement, the term “subsidiary”
means any corporation, limited liability company, or other entity,
of which more than 50% of the outstanding voting securities or
equity interests are owned, directly or indirectly, by the Company
and one or more of its subsidiaries, and any other corporation,
limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise of which Indemnitee is or
was serving at the request of the Company as an Agent.

(h) Voting
Securities. For purposes of this Agreement,
“Voting
Securities” shall mean any securities of the Company
that vote generally in the election of directors.

2. Agreement
to Serve. Indemnitee will serve, or continue to serve, as
the case may be, as an Agent, faithfully and to the best of his or
her ability, at the will of such entity designated by the Company
and at the request of the Company (or under separate agreement, if
such agreement exists), in the capacity Indemnitee currently serves
such entity, so long as Indemnitee is duly appointed or elected and
qualified in accordance with the applicable provisions of the
governance documents of such entity, or until such time as
Indemnitee tenders his or her resignation in writing; provided,
however, that nothing contained in this Agreement is intended as an
employment agreement between Indemnitee and the Company or any of
its subsidiaries or to create any right to continued employment of
Indemnitee with the Company or any of its subsidiaries in any
capacity.

The
Company acknowledges that it has entered into this Agreement and
assumes the obligations imposed on it hereby, in addition to and
separate from its obligations to Indemnitee under the Bylaws, to
induce Indemnitee to serve, or continue to serve, as an Agent, and
the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an Agent.

3. Indemnification.

(a) Indemnification
in Third Party Proceedings. Subject to Section 10
below, the Company shall indemnify Indemnitee to the fullest extent
permitted by the Code, as the same may be amended from time to time
(but, to the fullest extent of the law, only to the extent that
such amendment permits Indemnitee to broader indemnification rights
than the Code permitted prior to adoption of such amendment), if
Indemnitee is a party to or threatened to be made a party to or
otherwise involved in any proceeding, other than a proceeding by or
in the right of the Company to procure a judgment in its favor, for
any and all Expenses and Liabilities (including all interest,
assessments and other charges paid or payable in connection with or
in respect of such Expenses and Liabilities) incurred by Indemnitee
in connection with the investigation, defense, settlement or appeal
of such proceeding, if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company and, in the case of a criminal proceeding had no
reasonable cause to believe that Indemnitee's conduct was unlawful.
The parties hereto intend that this Agreement shall provide to the
fullest extent permitted by law for indemnification in excess of
that expressly permitted by statute, including, without limitation,
any indemnification provided by the Certificate of Incorporation of
the Company, the Bylaws, vote of its stockholders or disinterested
directors, or applicable law.

 

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(b) Indemnification
in Derivative Actions and Direct Actions by the Company.
Subject to Section 10 below, the Company shall indemnify Indemnitee
to the fullest extent permitted by the Code, as the same may be
amended from time to time (but, fullest extent permitted by
applicable law, only to the extent that such amendment permits
Indemnitee to broader indemnification rights than the Code
permitted prior to adoption of such amendment), if Indemnitee is a
party to or threatened to be made a party to or otherwise involved
in any proceeding by or in the right of the Company to procure a
judgment in its favor, against any and all Expenses actually and
reasonably incurred by Indemnitee in connection with the
investigation, defense, settlement, or appeal of such proceedings,
if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company. No indemnification for Expenses shall be made under
this Section 3(b) in respect of any claim, issue or matter as to
which Indemnitee shall have been finally adjudged by a court
competent jurisdiction to be liable to the Company, unless and only
to the extent that the Chancery Court of the State of Delaware or
any court in which the proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification.

4. Indemnification
of Expenses of Successful Party. Notwithstanding any other
provision of this Agreement, in circumstances where indemnification
is not available under Section 3(a) or 3(b), as the case may be, to
the fullest extent permitted by law and to the extent that
Indemnitee is a party to (or a participant in) any proceeding and
has been successful on the merits or otherwise in defense of any
proceeding or in defense of any claim, issue or matter therein, in
whole or part, including the dismissal of any action without
prejudice, the Company shall indemnify Indemnitee against all
Expenses and Liabilities in connection with the investigation,
defense or appeal of such proceeding. If Indemnitee is not wholly
successful in such proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or
matters in such proceeding, the Company shall indemnify Indemnitee
against all Expenses and Liabilities incurred by Indemnitee or on
Indemnitee’s behalf in connection with or related to each
successfully resolved claim, issue or matter to the fullest extent
permitted by law.

5. Partial
Indemnification; Witness Indemnification. If Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any Expenses and
Liabilities incurred by Indemnitee in the investigation, defense,
settlement or appeal of a proceeding, but is precluded by
applicable law or the specific terms of this Agreement to
indemnification for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Notwithstanding any other provision of this
Agreement, to the fullest extent permitted by applicable law and to
the extent that Indemnitee is, by reason of Indemnitee’s
acting as an Agent, a witness or otherwise asked to participate in
any proceeding to which Indemnitee is not a party, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.

6. Advancement
of Expenses. To the extent not prohibited by law, the
Company shall advance the Expenses incurred by Indemnitee in
connection with any proceeding, and such advancement shall be made
within twenty (20) days after the receipt by the Company of a
statement or statements requesting such advances (which shall
include invoices received by Indemnitee in connection with such
Expenses but, in the case of invoices in connection with legal
services, any references to legal work performed or to expenditures
made that would cause Indemnitee to waive any privilege accorded by
applicable law shall not be included with the invoice) and upon
request of the Company, an undertaking to repay the advancement of
Expenses if and to the extent that it is ultimately determined by a
court of competent jurisdiction in a final judgment, not subject to
appeal, that Indemnitee is not entitled to be indemnified by the
Company. Advances shall be unsecured, interest free and without
regard to Indemnitee’s ability to repay the Expenses.
Advances shall include any and all Expenses incurred by Indemnitee
pursuing an action to enforce Indemnitee’s right to
indemnification under this Agreement or otherwise and this right of
advancement, including expenses incurred preparing and forwarding
statements to the Company to support the advances claimed.
Indemnitee acknowledges that the execution and delivery of this
Agreement shall constitute an undertaking providing that Indemnitee
shall, to the fullest extent required by law, repay the advance
(without interest) if and to the extent that it is ultimately
determined by a court of competent jurisdiction in a final
judgment, not subject to appeal, that Indemnitee is not entitled to
be indemnified by the Company. The right to advances under this
Section shall continue until final disposition of any proceeding,
including any appeal therein. This Section 6 shall not apply to any
claim made by Indemnitee for which indemnity is excluded pursuant
to Section 10(b).

 

 

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7. Notice
and Other Indemnification Procedures.

(a) Notification
of Proceeding. Indemnitee will notify the Company in writing
promptly upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to
any proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The written notification
to the Company shall include a description of the nature of the
proceeding and the facts underlying the proceeding. The failure of
Indemnitee to so notify the Company shall not relieve the Company
of any obligation which it may have to Indemnitee under this
Agreement or otherwise and any delay in so notifying the Company
shall not constitute a waiver by Indemnitee of any rights under
this Agreement.

(b) Request
for Indemnification Payments. To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification under the terms of this
Agreement, and shall request payment thereof by the
Company.

(c) Determination
of Right to Indemnification Payments. Upon written request
by Indemnitee for indemnification pursuant to Section 7(b) hereof,
a determination with respect to Indemnitee’s entitlement
thereto shall be made in the specific case by one of the following
four methods, which shall be at the election of the Board of
Directors: (1) by a majority vote of the disinterested directors,
even though less than a quorum, (2) by a committee of disinterested
directors designated by a majority vote of the disinterested
directors, even though less than a quorum, (3) if there are no
disinterested directors or if the disinterested directors so
direct, by Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to the Indemnitee, or
(4) if so directed by the Board of Directors, by the stockholders
of the Company; provided,
however, that if there has been a Change in Control, then
such determination shall be made by Independent Counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). For purposes hereof, disinterested
directors are those members of the board of directors of the
Company who are not parties to the action, suit or proceeding in
respect of which indemnification is sought by Indemnitee.
Indemnification payments requested by Indemnitee under
Section 3 hereof shall be made by the Company no later than
sixty (60) days after receipt of the written request of Indemnitee.
Claims for advancement of Expenses shall be made under the
provisions of Section 6 herein.

(d) Application
for Enforcement. In the event the Company fails to make
timely payments as set forth in Sections 6 or 7(c) above,
Indemnitee shall have the right to apply to any court of competent
jurisdiction for the purpose of enforcing Indemnitee’s right
to indemnification or advancement of Expenses pursuant to this
Agreement. In such an enforcement hearing or proceeding, the burden
of proof shall be on the Company to prove that indemnification or
advancement of Expenses to Indemnitee is not required under this
Agreement or permitted by applicable law. Any determination by the
Company (including its Board of Directors, a committee thereof,
Independent Counsel) or stockholders of the Company, that
Indemnitee is not entitled to indemnification hereunder, shall not
be a defense by the Company to the action nor create any
presumption that Indemnitee is not entitled to indemnification or
advancement of Expenses hereunder.

(e) Indemnification
of Certain Expenses. The Company shall indemnify Indemnitee
against all Expenses incurred in connection with any hearing or
proceeding under this Section 7 unless the Company prevails in
such hearing or proceeding on the merits in all material
respects.

 

 

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8. Assumption
of Defense. In the event the Company shall be requested by
Indemnitee to pay the Expenses of any proceeding, the Company, if
appropriate, shall be entitled to assume the defense of such
proceeding, or to participate to the extent permissible in such
proceeding, with counsel reasonably acceptable to Indemnitee. Upon
assumption of the defense by the Company and the retention of such
counsel by the Company, the Company shall not be liable to
Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
proceeding, provided that Indemnitee shall have the right to employ
separate counsel in such proceeding at Indemnitee’s sole cost
and expense. Notwithstanding the foregoing, if Indemnitee’s
counsel delivers a written notice to the Company stating that such
counsel has reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any
such defense or the Company shall not, in fact, have employed
counsel or otherwise actively pursued the defense of such
proceeding within a reasonable time, then in any such event the
fees and Expenses of Indemnitee’s counsel to defend such
proceeding shall be subject to the indemnification and advancement
of Expenses provisions of this Agreement.

9. Insurance.
To the extent that the Company maintains an insurance policy or
policies providing liability insurance for Agents
(“D&O
Insurance”),
Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the
coverage available for any such Agent under such policy or
policies. If, at the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company has D&O
Insurance in effect or otherwise potentially available, the Company
shall give prompt notice of the commencement of such proceeding to
the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on
behalf of Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such
policies.

In the
event of a change of control of the Company or the Company
dissolving or liquidating (including being placed into receivership
or entering the federal bankruptcy process and the like), the
Company shall maintain in force any and all insurance policies then
maintained by the Company in providing insurance in respect of
Indemnitee (directors’ and officers’ liability,
fiduciary, employment practices or otherwise) for a period of at
least six years thereafter (a “Tail Policy”).
If such coverage is not placed with the incumbent insurance
carriers using the policies that were in place at the time of the
change of control or insolvency event, the Tail Policy shall be
substantially comparable in scope and amount as the expiring
policies, and the insurance carriers for the Tail Policy shall have
an AM Best rating that is the same or better than the AM Best
ratings of the expiring policies.

10. Exceptions.

(a) Certain
Matters. Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify Indemnitee on account of any
proceeding with respect to: (i) remuneration paid to
Indemnitee if it is determined by final judgment or other final
adjudication that such remuneration was in violation of law (and,
in this respect, both the Company and Indemnitee have been advised
that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication, as indicated in
Section 10(d) below); (ii) a final judgment rendered against
Indemnitee for an accounting, disgorgement or repayment of profits
made from the purchase or sale by Indemnitee of securities of the
Company against Indemnitee or in connection with a settlement by or
on behalf of Indemnitee to the extent it is acknowledged by
Indemnitee and the Company that such amount paid in settlement
resulted from Indemnitee's conduct from which Indemnitee received
monetary personal profit, pursuant to the provisions of
Section 16(b) of the Exchange Act or other provisions of any
federal, state or local statute or rules and regulations
thereunder; (iii) a final judgment or other final adjudication
that Indemnitee’s conduct was in bad faith, knowingly
fraudulent or deliberately dishonest or constituted willful
misconduct (but only to the extent of such specific determination);
or (iv) on account of conduct that is established by a final
judgment as constituting a breach of Indemnitee’s duty of
loyalty to the Company or resulting in any personal profit or
advantage to which Indemnitee is not legally entitled. For purposes
of the foregoing sentence, a final judgment or other adjudication
may be reached in either the underlying proceeding or action in
connection with which indemnification is sought or a separate
proceeding or action to establish rights and liabilities under this
Agreement.

 

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(b) Claims
Initiated by Indemnitee. Any provision herein to the
contrary notwithstanding, the Company shall not be obligated to
indemnify or advance Expenses to Indemnitee with respect to
proceedings or claims initiated or brought by Indemnitee against
the Company or its Agents and not by way of defense, except (i)
with respect to proceedings brought to establish or enforce a right
to indemnification or advancement under this Agreement or under any
other agreement, provision in the Bylaws or the Certificate of
Incorporation or applicable law, or (ii) with respect to any other
proceeding initiated by Indemnitee that is either approved by the
Board of Directors or Indemnitee’s participation is required
by applicable law. However, indemnification or advancement of
Expenses may be provided by the Company in specific cases if the
Board of Directors determines it to be appropriate.

(c) Unauthorized
Settlements. Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of a proceeding
effected without the Company’s written consent. Neither the
Company nor Indemnitee shall unreasonably withhold consent to any
proposed settlement; provided, however, that the Company may in any
event decline to consent to (or to otherwise admit or agree to any
liability for indemnification hereunder in respect of) any proposed
settlement if the Company is also a party in such proceeding and
determines in good faith that such settlement is not in the best
interests of the Company and its stockholders.

(d) Securities
Act Liabilities. Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify Indemnitee or otherwise act in
violation of any undertaking appearing in and required by the rules
and regulations promulgated under the Securities Act of 1933, as
amended (the “Securities
Act”), or in
any registration statement filed with the SEC under the Securities
Act. Indemnitee acknowledges that paragraph (h) of Item 512 of
Regulation S-K currently generally requires the Company to
undertake in connection with any registration statement filed under
the Securities Act to submit the issue of the enforceability of
Indemnitee’s rights under this Agreement in connection with
any liability under the Securities Act on public policy grounds to
a court of appropriate jurisdiction and to be governed by any final
adjudication of such issue. Indemnitee specifically agrees that any
such undertaking shall supersede the provisions of this Agreement
and to be bound by any such undertaking.

(e) Prior
Payments Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify or advance Expenses to
Indemnitee under this Agreement for which payment has actually been
made to or on behalf of Indemnitee under any insurance policy or
other indemnity provision, expect with respect to any excess beyond
the amount paid under any insurance policy or indemnity
policy.

11. Nonexclusivity
and Survival of Rights. The provisions for indemnification
and advancement of Expenses set forth in this Agreement shall not
be deemed exclusive of any other rights which Indemnitee may at any
time be entitled under any provision of applicable law, the
Company’s Certificate of Incorporation, the Bylaws or other
agreements, both as to action in Indemnitee’s official
capacity and Indemnitee’s action as an Agent, in any court in
which a proceeding is brought, and Indemnitee’s rights
hereunder shall continue after Indemnitee has ceased acting as an
Agent and shall inure to the benefit of the heirs, executors,
administrators and assigns of Indemnitee. The obligations and
duties of the Company to Indemnitee under this Agreement shall be
binding on the Company and its successors and assigns until
terminated in accordance with its terms. The Company shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession
had taken place.

 

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No
amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee
under this Agreement in respect of any action taken or omitted by
such Indemnitee in his or her corporate status prior to such
amendment, alteration or repeal. To the extent that a change in the
Code, whether by statute or judicial decision, permits greater
indemnification or advancement of Expenses than would be afforded
currently under the Company’s Certificate of Incorporation,
the Bylaws and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy,
and every other right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion
or employment of any right or remedy hereunder, or otherwise, by
Indemnitee shall not prevent the concurrent assertion or employment
of any other right or remedy by Indemnitee.

12. Term.
This Agreement shall continue until and terminate upon the later
of: (a) five (5) years after the date that Indemnitee shall have
ceased to serve as an Agent; or (b) one (1) year after the final
termination of any proceeding, including any appeal then pending,
in respect to which Indemnitee was granted rights of
indemnification or advancement of Expenses hereunder.

No
legal action shall be brought and no cause of action shall be
asserted by or in the right of the Company against an Indemnitee or
an Indemnitee's estate, spouse, heirs, executors or personal or
legal representatives after the expiration of five (5) years from
the date of accrual of such cause of action, and any claim or cause
of action of the Company shall be extinguished and deemed released
unless asserted by the timely filing of a legal action within such
five-year period; provided, however, that if any shorter period of
limitations is otherwise applicable to such cause of action, such
shorter period shall govern.

13. Subrogation.
In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who, at the request and expense of the
Company, shall execute all papers required and shall do everything
that may be reasonably necessary to secure such rights, including
the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.

14. Interpretation
of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to
provide indemnification and advancement of Expenses to Indemnitee
to the fullest extent now or hereafter permitted by
law.

15. Severability.
If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever, (a) the
validity, legality and enforceability of the remaining provisions
of the Agreement (including without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby; and (b) to the fullest extent possible,
the provisions of this Agreement (including, without limitation,
all portions of any paragraph of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that are
not themselves invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable and to give effect
to Section 14 hereof.

16. Amendment
and Waiver. No supplement, modification, amendment, or
cancellation of this Agreement shall be binding unless executed in
writing by the parties hereto. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver. The observance of any term
of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively),
only with the written consent of the waiving party.

 

-8-

 

 

17. Notice.
Except as otherwise provided herein, any notice or demand which, by
the provisions hereof, is required or which may be given to or
served upon the parties hereto shall be in writing and, if by
electronic transmission, shall be deemed to have been validly
served, given or delivered when sent, if by overnight delivery,
courier or personal delivery, shall be deemed to have been validly
served, given or delivered upon actual delivery and, if mailed,
shall be deemed to have been validly served, given or delivered
three (3) business days after deposit in the United States mail, as
registered or certified mail, with proper postage prepaid and
addressed to the party or parties to be notified at the addresses
set forth on the signature page of this Agreement (or such other
address(es) as a party may designate for itself by like notice). If
to the Company, notices and demands shall be delivered to the
attention of the Secretary of the Company.

18. Governing
Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as
applied to contracts between Delaware residents entered into and to
be performed entirely within Delaware.

19. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of
which together shall constitute but one and the same Agreement.
Only one such counterpart need be produced to evidence the
existence of this Agreement.

20. Headings.
The headings of the sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.

21. Entire
Agreement. Subject to Section 11 hereof, this Agreement
constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements,
including any previously executed written indemnification
agreement, understandings and negotiations, written and oral,
between the parties with respect to the subject matter of this
Agreement; provided, however, that this Agreement is a supplement
to and in furtherance of the Company’s Certificate of
Incorporation, the Bylaws, the Code and any other applicable law,
and shall not be deemed a substitute therefor, and does not
diminish or abrogate any
rights of Indemnitee thereunder.

22. Contribution.
To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under
this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such proceeding in order to
reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such proceeding; and/or (ii) the relative fault of the
Company and Indemnitee in connection with such event(s) and/or
transaction(s).

23. Consent
to Jurisdiction. The Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement
shall be brought only in the Chancery Court of the State of
Delaware (the “Delaware
Court”), and not in any other state or federal court
in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out
of or in connection with this Agreement, (iii) agree to appoint, to
the extent such party is not otherwise subject to service of
process in the State of Delaware, an agent in the State of Delaware
as such party's agent for acceptance of legal process in connection
with any such action or proceeding against such party with the same
legal force and validity as if served upon such party personally
within the State of Delaware, (iv) waive any objection to the
laying of venue of any such action or proceeding in the Delaware
Court, and (v) waive, and agree not to plead or to make, any claim
that any such action or proceeding brought in the Delaware Court
has been brought in an improper or inconvenient forum.

 

-9-

 

 

In Witness
Whereof, the parties hereto have entered into this Agreement
effective as of the date first above written.

	
 

	

CHROMADEX CORPORATION

 

By:  
___________________________________

        
Name: _____________________________

        
Title: ______________________________

 

	
 

	

INDEMNITEE

 

_______________________________________

Signature
of Indemnitee

 

_______________________________________

Print
or Type Name of Indemnitee

 

 

 

 

 

-10-exhibit101.htm

SECURITIES EXCHANGE AGREEMENT

 

This Securities Exchange Agreement (this “Agreement”) is dated as of December 16, 2016, between Microbot Medical Inc. (f/k/a Stemcells, Inc.), a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506 promulgated thereunder, the Company desires to issue to each Purchaser, and each Purchaser, severally and not jointly, desires to exchange with the Company, securities of the Company as more fully described in this Agreement.

 

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

 

 

ARTICLE I.

DEFINITIONS

 

1.1           Definitions.  In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Certificate of Designation (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:

 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.7.

 

 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

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

 

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

 

“Certificate of Designation” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Delaware, in the form of Exhibit A attached hereto.

 

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

 

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to exchange the Rights and (ii) the Company’s obligations to deliver the Shares of Preferred Stock have been satisfied or waived.

 

 

 

  

  

  

 

 

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

 

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

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

 

“Company Counsel” means Ruskin Moscou Faltischek, P.C., with offices located at 1425 RXR Plaza, East Tower, 15th Floor, Uniondale, New York 11556, or such other counsel retained by the Company from time to time.

 

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Effective Date” means the earliest of the date that (a) all of the Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (b) following the one year anniversary of the Closing Date provided that a holder of the Underlying Shares is not an Affiliate of the Company or (c) all of the Underlying Shares may be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Underlying Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

 

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

 

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

 

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

 

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

 

“Maximum Rate” shall have the meaning ascribed to such term in Section 5.17.

 

  

2

  

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

 

 “Preferred Stock” means the up to 9,736 shares of the Company’s newly-designated Series A Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Certificate of Designation, in the form of Exhibit A hereto.

 

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

 

“Public Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Public Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.10.

 

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

 

“Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Certificate of Designation, ignoring any conversion or exercise limits set forth therein.

 

“Right to Shares” shall mean those certain rights to receive shares of Common Stock issuable pursuant to the Right to Shares Agreement.

 

“Right to Shares Agreement” shall mean the Right to Shares Agreement, dated November 29, 2016 entered into between the Company and the Purchasers signatory hereto.

 

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

 

“Securities” means the shares of Preferred Stock and the Underlying Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

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

 

  

3

  

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

 

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

 

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

 

 “Transaction Documents” means this Agreement, Certificate of Designation and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means the current transfer agent of the Company and any successor transfer agent of the Company and any successor transfer agent of the Company.

 

“Underlying Shares” means the shares of Common Stock issued and issuable pursuant to the terms of the Certificate of Designation, without respect to any limitation or restriction on the conversion of the Certificate of Designation.

 

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

 

 

ARTICLE II.

PURCHASE AND SALE

 

2.1           Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to exchange with the Purchasers, severally and not jointly, all of its Right to Shares for shares of Preferred Stock on a one Underlying Share for one Underlying Share basis.   Each Purchaser shall deliver to the Company the Right to Shares and the Company shall deliver to each Purchaser its respective shares of Preferred Stock.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.  Each Purchaser, in its sole election, may, in lieu of the exchange into Preferred Stock hereunder, exercise its right to receive shares of Common Stock at Closing pursuant to its Right to Shares Agreement by indicating the number of Right to Shares exercised on such Purchaser’s signature page hereto.

 

 

  

4

  

 

 

2.2           Deliveries.

 

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

 

(i)           this Agreement duly executed by the Company;

 

(ii)           a certificate, in the form acceptable to such Purchaser, executed by the Secretary of the Company and each material Subsidiary and dated as of the Closing Date, as to the resolutions of the Board of Directors authorizing the transactions contemplated under this Agreement; and

 

(iii)           upon request by each Purchaser, a certificate evidencing a number of shares of Preferred Stock equal to the shares of Common Stock underlying the Rights to Share being surrendered, divided by 1,000, registered in the name of such Purchaser and evidence of the filing and acceptance of the Certificate of Designation from the Secretary of State of Delaware.

 

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

 

	
  

	
(i)

	
this Agreement duly executed by such Purchaser; and

 

(ii)           surrender of such Purchaser’s Right to Shares.

 

2.3           Closing Conditions.

 

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

 

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

 

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

 

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

 

(iv)           all notice or other waiting periods with respect to the Nasdaq Capital Market with respect to the issuance of the Preferred Stock in exchange for the Right to Shares have been met or waived.

 

  

5

  

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

 

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

 

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

 

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

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations and Warranties of the Company.  The Company hereby makes the following representations and warranties to each Purchaser:

 

(a)           Subsidiaries.  The Company owns, directly or indirectly, all of the capital stock or other equity interests of the Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of the Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

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

 

 

6

  

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

 

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

 

 

  

7

  

(e)           Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Underlying Shares for trading thereon in the time and manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)           Issuance of the Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof.

 

(g)           Private Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

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

 

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

 

 

  

8

  

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

 

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

 

(c)           Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it converts any shares of Preferred Stock it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

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

 

 

  

9

  

(e)           General Solicitation.  Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities 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.

 

(f)           Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

 

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

 

(h)           The Purchaser is the legal and beneficial owner of the Right to Shares, free and clear of any Liens whatsoever, and the Rights To Shares has not been assigned, transferred or otherwise hypothecated.

 

 

  

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The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.

 

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Transfer Restrictions.

 

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

 

(b)           The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

 

  

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

 

(c)           Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent if required by the Transfer Agent to effect the removal of the legend hereunder.  If all or any shares of Preferred Stock are converted at a time when there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued free of all legends.  The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.  Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend.

 

 

  

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

 

4.2           Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.  The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

 

4.3           Furnishing of Information; Public Information.

 

(a)           Until the earliest of the time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

 

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(b)           At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the number of Underlying Shares multiplied by the VWAP on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the Underlying Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

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

 

4.5           Conversion and Exercise Procedures.  Each of the form of Notice of Conversion included in the Certificate of Designation sets forth the totality of the procedures required of the Purchasers in order to convert the shares of Preferred Stock.  Without limiting the preceding sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required in order to convert the shares of Preferred Stock.  No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their shares of Preferred Stock.  The Company shall honor conversions of the shares of Preferred Stock and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

 

  

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4.6           Securities Laws Disclosure; Publicity.  The Company shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.  From and after the Effective Date, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon such public disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except: (a) as required by federal securities law in connection with the filing or disclosure of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

 

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

 

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

 

 

  

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4.9           Tacking of the Shares of Preferred Stock.  The Company covenants that it will accept an opinion of Purchaser’s legal counsel that the holding period of the shares of Preferred Stock tack back to November 28, 2016 for Rule 144 purposes.  The Company agrees not to take a position contrary to this paragraph.

 

4.10           Indemnification of Purchasers.   Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such  Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.10 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.  The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

 

  

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4.11           Reservation and Listing of Securities.

 

(a)           The Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.

 

(b)           If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.

 

(c)           The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

 

4.12           [RESERVED]

 

4.13           [RESERVED]

 

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

 

 

  

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ARTICLE V.

MISCELLANEOUS

 

5.1           Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before December 31, 2016; provided, however, that such termination will not affect the right of any party to sue for any breach by any other party (or parties).

 

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

 

5.3           Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.  Notwithstanding anything herein to the contrary, this Agreement does not supersede or terminate the rights of the Purchasers under the certain Securities Exchange Agreement dated November 29, 2016 (except as it relates solely to the cancellation of the Right to Shares hereunder).

 

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

 

 

  

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5.5           Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers holding at least 67% in interest of the Shares of Preferred Stock then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser, Any amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

 

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

 

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

 

5.8           No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.10.

 

5.9           Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action or Proceeding is improper or is an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If any party hereto shall commence an action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or Proceeding.

 

 

  

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5.10           Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

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

 

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

 

5.13           Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Shares of Preferred Stock, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded conversion.

 

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

 

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

 

 

  

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

 

5.17           Usury.  To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any action or Proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document.  Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate.  It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law.  If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election.

 

5.18           Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through EGS.  EGS does not represent any of the Purchasers and only represents Alpha.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.

 

 

  

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

 

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

 

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

 

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

 

 

 

(Signature Pages Follow)

 

 

  

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

 

	
MICROBOT MEDICAL INC.

 

 

	
Address for Notice:

	
By:__/s/ Harel Gadot________________________________________

     Name:  Harel Gadot

     Title:    Chairman, President and Chief Executive Officer

With a copy to (which shall not constitute notice):

	
Fax:

	
 

Ruskin Moscou Faltischek, P.C.

1425 RXR Plaza

East Tower, 15th Floor

Uniondale, NY 11556

Attention:  Stephen E. Fox, Esq.

 

 

	  

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

  

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[PURCHASER SIGNATURE PAGES TO SECURITIES EXCHANGE AGREEMENT]

 

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

 

Name of Purchaser:             Alpha Capital Anstalt                                                  

Signature of Authorized Signatory of Purchaser:  /s/ Konrad Ackermann                 

Name of Authorized Signatory:  Konrad Ackermann                                                

Title of Authorized Signatory:    Director                                                                

Email Address of Authorized Signatory:  info@alphacapital.li                                 

Facsimile Number of Authorized Signatory: _____________________________

Address for Notice to Purchaser:

 

 

 

 

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

 

 

 

 

 

Shares underlying surrendered Rights to Shares: 9,735,925

Shares of Preferred Stock (Rights/1000): 9,736

Exercise of Rights:

 

 

 

[SIGNATURE PAGES CONTINUE]

  

24

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