Document:

SEPARATION AND GENERAL RELEASE AGREEMENT

	
This Separation and General Release Agreement must be executed and returned to

Employer on or after September 30, 2011 but before October 21, 2011.

THIS SEPARATION AND GENERAL RELEASE AGREEMENT (this “Separation Agreement”) is entered into between John C. Houghton, with an address at 18 Perry Road, Annandale, NJ 08801 (“Houghton”) and Cormedix, Inc., with an address at 745 Route 202-206, Suite 303, Bridgewater, NJ  08807 (the “Employer”).  Employer, together with its past, present and future direct and indirect subsidiaries, affiliated entities, related companies and divisions and each of their respective past, present and future officers, directors, employees, investors, shareholders, trustees, members, partners, attorneys and agents (in each case, individually and their official capacities), and each of their respective employee benefit plans (and such plans' fiduciaries, agents, administrators and insurers, in their individual and their official capacities), as well as any predecessors, future successors or assigns or estates of any of the foregoing, is collectively referred to in this Separation Agreement as the “Released Parties.”

1.           Separation of Employment.  Houghton acknowledges and understands that his last day of employment with Employer was September 30, 2011 (the "Separation Date").  Houghton further acknowledges that Houghton has received all compensation and benefits to which Houghton is entitled as a result of Houghton’s employment, except as otherwise provided in this Separation Agreement.  Houghton understands that, except as otherwise provided in this Separation Agreement, Houghton is entitled to nothing further from the Released Parties, including reinstatement by Employer.  Employer shall not contest or dispute Houghton’s application for unemployment benefits, except in the event of a material misstatement or omission in such application.

2.           Houghton General Release of the Released Parties.  In consideration of the consideration set forth in Section 4 below, Houghton hereby unconditionally and irrevocably releases, waives, discharges and gives up, to the full extent permitted by law, any and all Claims (as defined below) that Houghton may have against any of the Released Parties, arising on or prior to the date of Houghton’s execution and delivery of this Separation Agreement to Employer.  “Claims” means any and all actions, charges, controversies, demands, causes of action, suits, rights, and/or claims whatsoever for debts, sums of money, wages, salary, severance pay, commissions, fees, bonuses, unvested stock options, vacation pay, sick pay, fees and costs, attorneys fees, losses, penalties, damages, including damages for pain and suffering and emotional harm, arising, directly or indirectly, out of any promise, agreement, offer letter, contract (including but not limited to that certain amended and restated employment agreement dated as of November 25, 2009, as amended on January 14, 2011 and September 26, 2011 (the "Employment Agreement"), understanding, common law, tort, the laws, statutes, and/or regulations of the State of New Jersey, or any other state and the United States, including, but not limited to, federal and state wage and hour laws (to the extent waivable), federal and state whistleblower laws, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Lilly Ledbetter Fair Pay Act of 2009, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act (excluding COBRA), the Vietnam Era Veterans Readjustment Assistance Act, the Fair Credit Reporting Act, the Occupational Safety and Health Act, the Age Discrimination in Employment Act (“ADEA”), the Older Workers’ Benefit Protection Act, the Sarbanes-Oxley Act of 2002, the New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the New Jersey Civil Rights Act, the New Jersey Conscientious Employee Protection Act, the New York State Human Rights Laws, and the New York City Human Rights Laws, as each may be amended from time to time, whether arising directly or indirectly from any act or omission, whether intentional or unintentional.  This Section 2 releases all Claims including those of which Houghton is not aware and those not mentioned in this Separation Agreement.  Houghton specifically releases any and all Claims arising out of Houghton’s employment with Employer or separation therefrom.  Houghton expressly acknowledges and agrees that, by entering into this Separation Agreement, Houghton is releasing and waiving any and all Claims, including, without limitation, Claims that Houghton may have arising under ADEA, which have arisen on or before the date of Houghton’s execution and delivery of this Separation Agreement to Employer.

   

  

  

  

   

3.           Representations; Covenant Not to Sue.  Houghton hereby represents and warrants that (A) Houghton has not filed, caused or permitted to be filed any pending proceeding (nor has Houghton lodged a complaint with any governmental or quasi-governmental authority) against any of the Released Parties, nor has Houghton agreed to do any of the foregoing, (B) Houghton has not assigned, transferred, sold, encumbered, pledged, hypothecated, mortgaged, distributed, or otherwise disposed of or conveyed to any third party any right or Claim against any of the Released Parties which has been released in this Separation Agreement, and (C) Houghton has not directly or indirectly assisted any third party in filing, causing or assisting to be filed, any Claim against any of the Released Parties.  Except as set forth in Section 11 below, Houghton covenants and agrees that Houghton shall not encourage or solicit or voluntarily assist or participate in any way in the filing, reporting or prosecution by himself or any third party of a proceeding or Claim against any of the Released Parties based upon or relating to any Claim released by Houghton in this Separation Agreement.

4.           Consideration.  As good consideration for Houghton’s execution, delivery and non-revocation of this Separation Agreement, Employer shall provide Houghton with:

(a) continuation of Houghton's Base Salary (as defined in the Employment Agreement), commencing on the next regularly scheduled paydate following the eighth day after Houghton's execution, delivery, and non-revocation of this Separation Agreement and continuing in regular installments on regularly scheduled paydates for one hundred and twenty (120) days thereafter;

(b) provided Houghton elects COBRA, continuation of Houghton's health insurance benefits on the same terms and conditions in effect prior to the Separation Date through March 30, 2012;

(c) an extension of the period of time in which Houghton may exercise the 1,915 options granted to Houghton on August 1, 2008 with an exercise price per share of $8.23, pursuant to the Amended and Restated 2006 Stock Incentive Plan (the “Plan”), that are currently fully vested as of the date hereof, from ninety (90) days of the Separation Date to two and one-half (2.5) years of the Separation Date; and

    

  

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(d) an extension of the period of time in which Houghton may exercise 272,715 options (which represents the portion of the 818,146 options granted to Houghton on March 30, 2010 with an exercise price per share of $3.125, pursuant to the Plan, that are currently vested as of the date hereof), from ninety (90) days of the Separation Date to two and one-half (2.5) years of the Separation Date.

Houghton acknowledges that (i) Houghton is not otherwise entitled to receive certain of the payments and extensions of benefits set forth above and acknowledges that nothing in this Separation Agreement shall be deemed to be an admission of liability on the part of any of the Released Parties, and (ii) Houghton is foregoing his right under the Employment Agreement to the accelerated vesting of the second tranche of 272,715 options that were granted on March 30, 2010.  Houghton agrees that Houghton will not seek anything further from any of the Released Parties.

5.           Who is Bound.  Employer and Houghton are bound by this Separation Agreement.  Anyone who succeeds to Houghton’s rights and responsibilities, such as the executors of Houghton’s estate, is bound and anyone who succeeds to Employer’s rights and responsibilities, such as its successors and assigns, is also bound.

6.           Cooperation With Investigations/Litigation.  Houghton agrees, upon Employer’s request, to make himself reasonably accessible and available to respond by e-mail and/or telephone to inquiries by Employer regarding matters that Houghton handled or had knowledge of during his employment.  Houghton further agrees to reasonably cooperate in any Employer investigation, litigation, arbitration, or regulatory proceeding regarding events that occurred during Houghton’s tenure with Employer.  Houghton will make himself reasonably available to consult with Employer and/or its counsel, to provide information, and to appear to give testimony.  Employer will reimburse Houghton for reasonable out-of-pocket expenses Houghton incurs in extending such cooperation, so long as Houghton provides advance written notice of Houghton’s request for reimbursement and provides satisfactory documentation of the expenses.

7.           Confidentiality and Non Disparagement.  Houghton agrees not to make any defamatory or derogatory statements concerning any of the Released Parties.  Provided inquiries are directed to Employer’s Chief Executive Officer, Employer shall disclose to prospective employers information limited to Houghton’s dates of employment and last position held by Houghton.  Houghton confirms and agrees that Houghton shall not, directly or indirectly, disclose to any individual, entity, business enterprise or media or use for Houghton’s own benefit, any confidential information concerning the business, projects, finances or operations of Employer, its affiliates or any of its or their respective clients or customers, provided, however, that Houghton’s obligations under this Section 7 shall not apply to information generally known in Employer’s industry through no fault of Houghton or the disclosure of which is required by law after reasonable notice has been provided to Employer sufficient to enable Employer to contest the disclosure.  Confidential information shall include, without limitation, trade secrets, customer, client, prospect lists, details of contracts, pricing policies, operational materials, marketing plans or strategies, security and safety plans and strategies, project development, and any other non-public or confidential information of, or relating to, Employer or its affiliates.  Houghton shall not reveal the amounts paid to Houghton or the other terms of this Separation Agreement to anyone, except to Houghton’s spouse, legal and financial advisors and then only after securing the agreement of such individual to maintain the confidentiality of this Separation Agreement, or in response to a subpoena or other legal process, after reasonable written notice has been provided to Employer sufficient to enable Employer to contest the disclosure.

    

  

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8.           Remedies.  If Houghton breaches any term or condition of this Separation Agreement or any representation made by Houghton in this Separation Agreement was false when made, it shall constitute a material breach of this Separation Agreement and, in addition to and not instead of the Released Parties’ other remedies hereunder or otherwise at law or in equity, Houghton shall be required to immediately, upon written notice from Employer, return all of the payments and benefits paid by Employer under Section 4 of this Separation Agreement, less $5,000.  Houghton agrees that if Houghton is required to return the payments and other benefits, this Separation Agreement shall continue to be binding on Houghton and the Released Parties shall be entitled to enforce the provisions of this Separation Agreement as if these payments had not been repaid to Employer and Employer shall have no further payment obligations to Houghton under Section 4 of this Separation Agreement.  Further, in the event of a breach by Houghton of his obligations under this Separation Agreement, Houghton agrees to pay all of the Released Parties’ attorneys’ fees and other costs associated with enforcing the terms of this Separation Agreement.  Notwithstanding the foregoing, it is understood and agreed that Houghton shall have no automatic repayment obligations or obligation to pay the Released Parties’ attorneys’ fees and other costs associated with enforcing the terms of this Separation Agreement if Houghton were to challenge the ADEA waiver only.

9.           Company Property.  Other than certain property which Houghton is entitled to retain for a period of time pursuant to Section 12 hereof, Houghton represents that he has returned to Employer all of Employer’s and its affiliates’ property in Houghton’s possession, custody and/or control, including, but not limited to, all equipment, vehicles, computers, personal digital assistants, pass codes, keys, swipe cards, credit cards, documents or other materials, in whatever form or format, that Houghton received, prepared, or helped prepare.  Houghton represents that Houghton has not retained any copies, duplicates, reproductions, computer disks, or excerpts thereof of Employer’s or its affiliates’ documents.

10.         Construction of Agreement.

(a)           Sections 6, 7, 12, and 13(b) of the Employment Agreement shall remain in full force and effect.

(b)           In the event that one or more of the provisions contained in this Separation Agreement shall for any reason be held unenforceable in any respect under the law of any state of the United States or the United States, such unenforceability shall not affect any other provision of this Separation Agreement, but this Separation Agreement shall then be construed as if such unenforceable provision or provisions had never been contained herein provided, however, that if any court were to find that the waiver and release of Claims set forth in Section 2 of this Separation Agreement is unlawful or unenforceable, or was not entered into knowingly or voluntarily, Houghton agrees, at Employer’s option, either to return the payment and benefits set forth in Section 4 of this Separation Agreement or to execute a waiver and release of claims in a form satisfactory to Employer that is lawful and enforceable.  If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by applicable law.  

    

  

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11.          Acknowledgments.  Employer and Houghton acknowledge and agree that:

(A)  By entering in this Separation Agreement, Houghton does not waive any rights or Claims that may arise after the date that Houghton executes and delivers this Separation Agreement to Employer;

(B)  This Separation Agreement shall not affect the rights and responsibilities of the Equal Employment Opportunity Commission (the “EEOC”) or similar federal or state agency to enforce ADEA or other laws, and further acknowledge and agree that this Separation Agreement shall not be used to justify interfering with Houghton’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC or similar federal or state agency.  Accordingly, nothing in this Separation Agreement shall preclude Houghton from filing a charge with, or participating in any manner in an investigation, hearing or proceeding conducted by, the EEOC or similar federal or state agency, but Houghton hereby waives any and all rights to recover under, or by virtue of, any such investigation, hearing or proceeding;

(C)  Notwithstanding anything set forth in this Separation Agreement to the contrary, nothing in this Separation Agreement shall affect or be used to interfere with Houghton’s protected right to test in any court, under the Older Workers’ Benefit Protection Act, or like statute or regulation, the validity of the waiver of rights under ADEA set forth in this Separation Agreement;

(D)  Nothing in this Separation Agreement shall preclude Houghton from exercising Houghton’s rights, if any (i) under Section 601-608 of the Employee Retirement Income Security Act of 1974, as amended, popularly known as COBRA, or (ii) Employer’s 401(k) plan;

(E)  On or before October 30, 2011, the Company shall pay the reasonable fees and expenses of Lowenstein Sandler LLP, the counsel for Houghton, in an amount not to exceed, in the aggregate, Two Thousand Dollars ($2,000); and

(F)  Effective as of September 30, 2011, Houghton resigns as a member of the Board of Directors of Employer.

12.          Transition Services.  For one hundred and twenty (120) days following the Separation Date, the parties agree that Houghton (for no additional consideration other than as set forth in Section 4 hereof) shall be available, on a reasonable, as needed basis to members of the Company’s Board of Directors and management, to assist the Company in its transition.  The Company shall provide Houghton with the use of an office, secretarial support, computer, Blackberry and Company email address until December 31, 2011, to assist the Company in such transition, provided Houghton complies with Company policies applicable to the use thereof.

  

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13.          Opportunity For Review.

(A)           Houghton is hereby advised and encouraged by Employer to consult with his/her own independent counsel before signing this Agreement.  Houghton represents and warrants that Houghton (i) has had sufficient opportunity to consider this Separation Agreement, (ii) has read this Separation Agreement, (iii) understands all the terms and conditions hereof, (iv) is not incompetent or had a guardian, conservator or trustee appointed for Houghton, (v) has entered into this Separation Agreement of Houghton’s own free will and volition, (vi) has duly executed and delivered this Separation Agreement, (vii) understands that Houghton is responsible for Houghton’s own attorneys’ fees and costs in excess of the amount set forth in Section 11(E), if any, (viii) has been advised and encouraged by Employer to consult with Houghton's own independent counsel before signing this Separation Agreement (ix) has had the opportunity to review this Separation Agreement with counsel of his/her choice or has chosen voluntarily not to do so, (x) understands that Houghton has been given twenty-one (21) days to review this Separation Agreement before signing this Separation Agreement and understands that he is free to use as much or as little of the 21-day period as he wishes or considers necessary before deciding to sign this Separation Agreement, (xi) understands that if Houghton does not sign and return this Separation Agreement to Employer on or before October 21, 2011, Employer shall have no obligation to enter into this Separation Agreement, Houghton shall not be entitled to receive the payment and extension of benefits provided for under Section 4 of this Separation Agreement, and the Separation Date shall be unaltered, and (xii) understands that this Separation Agreement is valid, binding, and enforceable against the parties hereto in accordance with its terms.

(B)           This Separation Agreement shall be effective and enforceable on the eighth (8th) day after execution and delivery to Employer by Houghton.  The parties hereto understand and agree that Houghton may revoke this Separation Agreement after having executed and delivered it to Employer, in writing, provided such writing is received by Employer at the address listed in this Separation Agreement above no later than 11:59 p.m. on the seventh (7th) day after Houghton’s execution and delivery of this Separation Agreement to Employer.  If Houghton revokes this Separation Agreement, it shall not be effective or enforceable, Houghton shall not be entitled to receive the payment and extension of benefits provided for under Section 4 of this Separation Agreement, and the Separation Date shall be unaltered.

14.           Indemnification; Director and Officer Insurance.  Employer shall indemnify and hold harmless Houghton for matters relating to Houghton’s capacity as an officer and director of Employer to the maximum extent permitted by the Employer’s certificate of incorporation, bylaws and applicable law.  Employer covenants that while Houghton was employed by the Employer, directors’ and officers’ liability insurance coverage for each of the members of the Board of Directors of the Employer and each of the officers of the Company was in effect.

Agreed to and accepted on this 30th day of September, 2011

	
Witness:

	  	
HOUGHTON:

	 
	  	  	  	 
	
Brian Lenz

	  	
/s/ John C. Houghton

	 
	  	
  

	
John C. Houghton

	 

Agreed to and accepted on this 30th day of September, 2011

   

  

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EMPLOYER:

	  	  
	  	
CORMEDIX, INC.

	  	  	  
	  	
BY:

	
/s/Brian Lenz

	  	  	
Name: Brian Lenz

	  	  	
Title:  Chief Financial Officer

  

  

- 7 -Unassociated Document

Execution Copy

Confidential Treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as “***”.  A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

AMENDMENT NO. 3 TO CONTRIBUTION AGREEMENT

This AMENDMENT NO. 3 TO CONTRIBUTION AGREEMENT (this “Amendment”), is executed as of August 31, 2011, by and between Shiva Biomedical, LLC, a New Jersey limited liability company having a business address of 10810 Executive Drive, Danville Building, Suite 100, Little Rock, Arkansas 22211 (“Shiva”), and CorMedix, Inc., formerly Picton Holding Company, Inc. (“Holdings”) and successor in interest to Picton Pharmaceuticals, Inc. (“Picton”), a Delaware corporation having a business address of 745 Route 202-206, Suite 303, Bridgewater, NJ 08807 (the “Company”).

INTRODUCTORY STATEMENT

WHEREAS, on July 28, 2006, Shiva, Picton, Holdings and the stockholders of Picton entered into that certain Contribution Agreement (the “Contribution Agreement”) relating to the development of License Product (as defined in the Contribution Agreement);

WHEREAS, on October 6, 2009, Shiva and the Company, formerly known as Holdings and successor in interest to Picton, entered into that certain Amendment to Contribution Agreement (“Amendment No. 1”);

WHEREAS, on February 22, 2010, Shiva and the Company entered into that certain Amendment to Contribution Agreement (“Amendment No. 2,” together with the Contribution Agreement and Amendment No. 1, the “Agreement”); and

WHEREAS, Shiva and the Company have since agreed that certain changes are required under the Agreement, including changes with respect to the development of Licensed Product, as well as, changes to allow the Company, in certain circumstances, to return either Shiva 101 or Shiva 102, as applicable, to Shiva without terminating the Agreement.

NOW THEREFORE, Shiva and the Company have agreed to amend the Agreement on the terms and subject to the conditions hereinafter set forth:

 

Section 1.          Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meaning given them in the Agreement.

 

Section 2.          Development.  Article 5 of the Agreement is hereby amended to include a new Article 5.1.2 as follows:

 

  

1

 

 

	
  

	
5.1.2

	
Notwithstanding anything to the contrary contained in Article 5 of this Agreement, if after use of all reasonable commercial efforts to bring Licensed Products to market through a thorough, vigorous and diligent program for exploitation, including, but not limited to, all commercially reasonable efforts to carry out those activities under the Development Plan attached to the Agreement as Exhibit 5.1, the Company determines, in its sole and reasonable discretion, that it is commercially reasonable for the Company to discontinue development of a Licensed Product incorporating either Shiva 101 or Shiva 102, then, upon prior written notice by the Company to Shiva of such facts, the parties agree that the Company shall be free to cease and shall cease all development activities relating to such Licensed Product incorporating either Shiva 101 or Shiva 102, as applicable, and that, as applicable, Shiva 101 (which shall include, without limitation, any diagnostic test covered in any way by the Patent Rights or the Know-how) or Shiva 102 (which shall include, without limitation, deferiprone or any other compound whose composition or method of use or manufacture is covered in any way by the Patent Rights or the Know How) shall cease to be a Licensed Product for all purposes under this Agreement, including but not limited to with respect to Articles 6, 8 and 10 of this Agreement.  The Company hereby grants to Shiva, effective as of the date of any such notice, an irrevocable, fully paid-up, non-exclusive, unblocking license (with the right to sublicense) under any Company intellectual property necessary or useful in connection with the manufacture, use, sale or importation of Shiva 101 or Shiva 102, as the case may be, existing at the time of such notice to make, have made, use, have used, sell, have sold, import and have imported such Shiva 101 or Shiva 102, as the case may be. The parties further agree that promptly following such notice, the Company shall:

 

	 	
(a)

	
Reassign to Shiva all Know-how and other intellectual property that Shiva assigned to the Company pursuant to Article 3.1 relating to Shiva 101 or Shiva 102, as applicable, including any Improvements.

 

	 	
(b)

	
Unless otherwise prohibited by law, the Company shall, with respect to Shiva 101 or Shiva 102, as applicable, transfer and assign to Shiva all patent rights, know-how and other intellectual property controlled by the Company that specifically and directly relates to the composition of, or any method of using or method of making, Shiva 101 or Shiva 102 (the “Company IP Rights”), as the case may be, including as applicable:  (i) copies of all regulatory submissions; (ii) all data and reports from pre-clinical and clinical studies; (iii) any prototypes, designs or models; (iii) any communications with the FDA and the minutes of any meetings with the FDA relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable; (iv) trial master files relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, including copies of all case report forms; (v) copies of all listings and tables of results from the clinical trials relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable; (vi) copies of all treatment-related serious adverse event reports from the clinical trials relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable; (vii) any retained samples of materials used in clinical trials relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable; (viii) rights of access to CROs involved in the clinical trials relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable; (ix) the data, files and results of any CMC related activities regarding any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable; and (x) all other information that Shiva may reasonably request regarding the manufacturing of any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, clinical trials with respect to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, and the commercial sale of any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable.

 

  

2

 

 

	 	
(c)

	
The Company shall use commercially reasonable efforts to arrange (i) for the assignment to Shiva of any manufacturing, supply, or similar commercial contract related to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, or ingredient thereof and necessary or desirable for the manufacture, development, and commercialization of any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, subject to the assumption of such contract by Shiva or (ii) for any Third Party who is (as of that time) a party with the Company to any such contract to enter into a similar contract with Shiva, on a basis acceptable to Shiva, provided that the Company shall not be required to make any payment or provide any other consideration in order to arrange for any such assignment or similar contract.

 

	 	
(d)

	
The Company shall grant to Shiva a free-of-charge right to reference and use and have full access to all Governmental Approvals and all other regulatory documents relating to any Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, including any IND, any NDA and any DMF (whether as an independent document or as part of any NDA, and all chemistry, manufacturing and controls information), and any supplements, amendments or updates to the foregoing, where such regulatory documents are owned or sufficiently Controlled by the Company, directly or indirectly, to permit such grant (for the purposes of this Article, the “Right of Reference”). Shiva may sublicense the Right of Reference to Affiliates and to Third Parties, in Shiva’s sole discretion.

 

	 	
(e)

	
Upon Shiva’s request, the Company shall transfer to Shiva any Governmental Approvals or other applicable regulatory filings related to Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, which are owned and held by the Company as of that time.

 

  

3

 

 

	 	
(f)

	
The Company shall transfer to Shiva at Shiva’s request all or any part of the Company’s inventory of (i) Licensed Product incorporating Shiva 101 or Shiva 102, as applicable, and (ii) GMP and non-GMP Compound relating to Licensed Product incorporating Shiva 101 or Shiva 102, as applicable.

 

	 	
(g)

	
Notwithstanding the foregoing, nothing in this Article 5.1.2 shall relieve the Company of its obligations under Article 6.3.2(a) of this Agreement.

 

Section 3.          Development.  Article 5 of the Agreement is hereby amended to include new Article 5.2 as follows:

 

5.2  Development Committee

 

5.2.1    The Company and Shiva will appoint representatives to the Development Committee (the “DC”) in accordance with the terms of this Article 5.2.1 and convene the first DC meeting. The DC will coordinate and oversee the development of the Licensed Product in accordance with the Development Plan. The purposes of the DC will be, with respect to the License Product only, (a) to coordinate the management and implementation of the parties’ development activities hereunder, including arrangement of clinical trials, (b) to update the Development Plan in a manner consistent with the Development Plan by providing additional detail regarding the activities described therein and to amend the Development Plan from time to time in order to facilitate and clarify the parties’ development activities thereunder, and (c) to recruit internationally-recognized investigators to assist with the Development Plan. The DC will have the membership and will operate by the procedures set forth in Article 5.2.2 below.

 

5.2.2    The DC shall have up to three (3) members.  Two members of the DC shall be representatives designated by the Company and one member of the DC shall be designated by Shiva.  The initial representatives of the Company shall be John Houghton and Mark Klausner.  The initial representative of Shiva shall be Dr. Sudhir V. Shah.  Each of the Company and Shiva may replace its representatives on the DC at any time upon written notice to the other party.  Notwithstanding the foregoing, upon prior notice, a reasonable number of employees, consultants, representatives or advisors of the Company who are not the Company’s DC representatives may attend DC meetings as observers.

5.2.3    The DC will have only such powers as are specifically delegated to it hereunder and will not be a substitute for the rights of the parties. Without limiting the generality of the foregoing, the DC will not have any power to amend this Agreement (except amendments to the Development Plan). Any amendment to the terms and conditions of this Agreement may only be implemented pursuant to Article 17.5 of the Agreement (Entire Agreement; Amendment).

5.2.4    The DC will take action by unanimous vote with each party having a single vote, irrespective of the number of representatives actually in attendance at a meeting, or by a written resolution signed by the members of the DC.  In the event there is not unanimity among the DC members, the Company shall have sole and final decision making authority.

  

4

 

 

Section 4.          Royalties and Other Payments.  The heading of Article 6.3 is hereby amended to read “Royalties and Other Payments” and Article 6.3.2(a) is hereby amended and restated in its entirety to read as follows:

(a)           Up to One Million Dollars ($1,000,000), payable as follows:

 

	 	
(i)

	
One Hundred Thousand Dollars ($100,000), payable no later than September 8, 2011;

 

	 	
(ii)

	
Four Hundred Fifty Thousand Dollars ($450,000), payable on or before December 31, 2011; provided, the Company continues development of Shiva 102 in accordance with Article 5 of this Agreement from the date of this Amendment through December 31, 2011.  If the Company, in accordance with Article 5.1.2 of this Agreement, ceases development of Shiva 102 on or prior to December 31, 2011, then the payment obligation under this Article 6.3.2(a)(ii) shall be null, void and of no further force and effect; and

 

	 	
(iii)

	
Four Hundred Fifty Thousand Dollars ($450,000), payable on or before March 31, 2012; provided the Company continues development of Shiva 102 and Shiva 101 in accordance with Article 5 of this Agreement from the date of this Agreement through March 31, 2012.  If the Company, in accordance with Article 5.1.2 of this Agreement, ceases development of Shiva 101 and 102 on or prior to March 31, 2012, then the payment obligation under this Article 6.3.2(a)(iii) shall be null, void and of no further force and effect.  Notwithstanding the foregoing, in the event the Company ceases development of Shiva 102 on or prior to March 31, 2012 and the Company Out-licenses (as defined below) Shiva 101 on or prior to March 31, 2012; then the payment obligation under this Article 6.3.2(a)(iii) shall be null, void and of no further force and effect.

 

Section 5.          Shiva 101 Amendments.  In the event the Company sublicenses certain of its rights to Shiva 101 under the Agreement to an independent non-affiliated, third-party sub-licensee on or before *** (an “Out-license”), then the parties agree to make the following amendments to the Agreement:

 

(a)        If the Out-license is “exclusive” and the Company is prohibited from further sublicense its rights under the Agreement to Shiva 101, then the parties agree to amend and restate Article 6.3.2(i) in its entirety as follows:

 

	
  

	
6.3.2(i)

	
***, payable by the Company to Shiva in pro-rated installments in accordance with development and sales milestone payments received by the Company pursuant to the Out-license, as more fully described on Exhibit A attached hereto.

 

  

5

 

 

(b)       If the Out-license is “non-exclusive” and the Company is permitted to further sublicensing its rights to Shiva 101 under the Agreement, then the parties agree to amend and restate Articles 6.3.1 and 6.3.2(i) in their entirety as follows:

 

6.3.1        Unless this Agreement shall be terminated as hereinafter provided, during the applicable Royalty Term for each Licensed Product, except for License Product incorporating Shiva 101, the Company shall pay Shiva royalties on such Licensed Product on a country-by-country basis equal to *** percent (***%) of Net Sales. With respect to Licensed Product incorporating Shiva 101, unless this Agreement shall be terminated as hereinafter provided, during the Royalty Term the Company shall pay Shiva royalties on a country-by-country basis equal to *** percent (***%) of the royalties received by the Company pursuant to the Out-license, up to an aggregate of *** percent (***%) of the aggregate Net Sales of the Licensed Product incorporating Shiva 101 under the Out-license.

 

	 	
6.3.2(i)

	
***Dollars ($***) payable by the Company to Shiva in pro-rated installments in accordance with development and sales milestone payments received by the Company pursuant to the Out-license, as more fully described on Exhibit A attached hereto; and

 

	
  

	
(ii)

	
*** Dollars ($***) each time the Company successfully Out-licenses, on a non-exclusive basis, its rights under the Agreement to Shiva 101 following the initial Out-License, up to an aggregate payment to Shiva under this Article 6.3.2(i)(ii) of *** Dollars ($***).

 

Section 6.          Termination for Cause.  Article 10.4.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

 

	
  

	
10.4.2

	
Shiva shall have the right to terminate this Agreement within *** (***) days after giving written notice of termination to the Company if the Company has not initiated patient dosing in a “Pivotal Trial” for a Licensed Product on or before March 31, 2012, where “Pivotal Trial” means (i) a Phase III clinical study (as such term is defined in 21 C.F.R.§ 312.21(c) or its successor regulation or the equivalent regulation in any other country), or (ii) if it has been determined at the time of first dosing that the data generated in such study, if successful, will be sufficient, without data from further studies, to support the filing of an NDA, a Phase II clinical study (as described above) or a combination Phase II clinical study and Phase III clinical study.

 

Section 7.         Development Plan.  Exhibit 5.1 of the Agreement is hereby amended and restated in its entirety to reach as provided in Exhibit 5.1 attached hereto.

 

  

6

 

 

Section 8.          Security Agreement.  As security for the Company’s payment obligations under Article 6.3.2(a), the Company hereby grants to Shiva a first security interest in the Company’s interest in the Company IP Rights as defined in Article 5.1.2(b) above  (subject to any Out-license). The parties hereby agree to negotiate and enter into a commercially reasonable Security Agreement on or before October 1, 2011, providing for such first priority security interest in the Company IP Rights (the “Security Agreement”), which Security Agreement shall expire by its terms immediately upon payment of the obligations described in Article 6.3.2(a) in accordance with the terms and conditions contained therein.

 

Section 9.          Full Force and Effect.  This Amendment shall be in full force and effect from and after the date hereof.  Except as amended hereby, the Agreement shall remain in full force and effect.

 

Section 10.        Shiva Expenses.  The Company shall pay to Shiva up to $*** as reimbursement for all reasonable and documented expenses directly incurred by Shiva in connection with this Amendment, payable by the Company within *** (***) days of receipt of related invoices.

 

Section 11.        Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Amendment may be signed and delivered to the other parties by facsimile signature; such transmission will be deemed a valid signature.

 

* * * * *

 

  

7

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment, in triplicate by proper persons thereunto duly authorized.

 

	
CORMEDIX, INC.

	  	
SHIVA BIOMEDICAL, LLC

	  	  	  
	
By:

	
/s/ John C. Houghton

	  	
By:

	
/s/Sudhir V. Shah

	
Name:

	
John C. Houghton

	  	
Name:

	
Sudhir V. Shah

	
Title:

	
President and CEO

	  	
Title:

	
President

	
Date:

	
August 31 ,2011

	  	
Date:

	
August 29 ,2011

Signature Page to

Amendment No. 3 to Contribution Agreement

 

  

8

 

 

EXHIBIT 5.1

DEVELOPMENT PLAN

This Development Plan replaces all previous Development Plans.

The Development Plan consists of the attached Clinical Development Timeline for Shiva Products (Exhibit 5.1 A) and the attached Global Development Plan for Deferiprone (Exhibit 5.1 B).

 

  

9

 

 

EXHIBIT A

EXCLUSIVE/NON-EXCLUSIVE OUT-LICENSE: MILESTONE PAYMENTS

  

  

10

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