Document:

Exhibit

Exhibit 10.6

AMENDMENT NO. 5 TO CREDIT AGREEMENT

AMENDMENT NO. 5 TO CREDIT AGREEMENT, dated as of May 24, 2018 (this “Amendment”), to the Amended and Restated Credit Agreement dated as of February 14, 2017 (as amended by Amendment No. 1 to Credit Agreement dated as of March 31, 2017, Amendment No. 2 to Credit Agreement dated June 2, 2017, Amendment No. 3 to Credit Agreement dated as of February 5, 2018, Amendment No. 4 to Credit Agreement dated as of March 6, 2018, and as otherwise amended, supplemented and modified from time to time, the “Credit Agreement”) among NGL ENERGY PARTNERS LP, a Delaware limited partnership (“Parent”), NGL ENERGY OPERATING LLC, a Delaware limited liability company (“Borrowers’ Agent”), each subsidiary of the Parent identified as a “Borrower” under the Credit Agreement (together with the Borrowers’ Agent, each, a “Borrower” and collectively, the “Borrowers”), each subsidiary of Parent identified as a “Guarantor” under the Credit Agreement (together with the Parent, each, a “Guarantor” and collectively, the “Guarantors”) DEUTSCHE BANK AG, NEW YORK BRANCH, as technical agent (in such capacity, together with its successors in such capacity, the “Technical Agent”) and DEUTSCHE BANK TRUST COMPANY AMERICAS (“DBTCA”), as administrative agent for the Secured Parties (in such capacity, together with its successors in such capacity, the “Administrative Agent”) and as collateral agent for the Secured Parties (as defined below) (in such capacity, together with its successors in such capacity, the “Collateral Agent”) and each financial institution identified as a “Lender” or an “Issuing Bank” under the Credit Agreement (each, a “Lender” and together with the Technical Agent, the Administrative Agent and the Collateral Agent, the “Secured Parties”).
RECITALS
WHEREAS, the Borrowers have requested certain amendments to the Credit Agreement; and
WHEREAS, the Lenders have agreed to amend the Credit Agreement solely upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:
1.Defined Terms.  Unless otherwise noted herein, terms defined in the Credit Agreement and used herein shall have the respective meanings given to them in the Credit Agreement.
2.Amendment to Section 1.1 (Certain Defined Terms) of the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended by adding the following new defined terms in their respective alphabetical order therein: 
““Total Leverage Indebtedness” means, at any date, Total Indebtedness as of such date plus the outstanding amount of Working Capital Revolving Loans and Swingline Loans owed to Working Capital Revolving Lenders.”
““Total Leverage Indebtedness Ratio” means, as of any date of determination, the ratio of (a) Total Leverage Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.”
3.Amendment to Section 2.4 (Termination and Reductions of Revolving Commitments; Increase in Total Commitments) of the Credit Agreement.  Section 2.4 of the Credit Agreement is hereby amended by adding the below as new Section 2.4(d) to Section 2.4:

“(d)    With respect to the fiscal quarter ending September 30, 2018, if the Leverage Ratio is greater than 4.00 to 1.0 as of the last day of such fiscal quarter (determined as the Borrowing Base Reference Time), then the Total Acquisition Revolving Commitments shall be immediately and permanently reduced by an amount equal to $100,000,000, which reduction shall be applied ratably to the Acquisition Revolving Commitment of each Acquisition Revolving Lender; provided that if, as of such day, the Total Acquisition Revolving Commitment is less than $100,000,000 (as a result of a Reallocation Request or otherwise), then the Total Acquisition Revolving Commitment shall be reduced to zero and the Total Working Capital Revolving Commitment shall be immediately and permanently reduced by an amount equal to the difference between $100,000,000 and the Total Acquisition Revolving Commitment as of such date, which reduction shall be applied ratably to Working Capital Revolving Commitment of each Working Capital Revolving Lender.  For the avoidance of doubt, (i) any reduction of the Total Working Capital Revolving Commitment shall occur pursuant to this Section 2.4(d) only if the Total Acquisition Revolving Commitment is less than $100,000,000 as of the applicable day, without consideration of whether such

Acquisition Revolving Commitment is then drawn or undrawn, although the parties acknowledge that the reduction in the Total Acquisition Revolving Commitments contemplated by this Section 2.4(d) could trigger a mandatory prepayment under Section 2.5(c), (ii) any reduction pursuant to this Section 2.4(d) shall be effective on the first to occur of (x) the date of the delivery of the Compliance Certificate for the fiscal quarter ending September 30, 2018 and (y) the date such Compliance Certificate is to be delivered pursuant to Section 6.3(c) of the this Agreement to the extent the Compliance Certificate has not been delivered by such date, and (iii) any reduction of the Total Working Capital Revolving Commitment pursuant to this Section 2.4(d) shall be applied first against any Reallocated Amount of the Acquisition Revolving Commitment that then comprises Working Capital Revolving Commitments, and second against the Total Working Capital Revolving Commitment, so that at the expiration of the relevant Reallocation Period, the portion of the Acquisition Revolving Commitments that reverts to the Acquisition Facility shall be reduced by the amounts applied against such Reallocated Amount pursuant to this clause (iii).”
4.Amendment to Section 7.11 (Financial Covenants) of the Credit Agreement.  Section 7.11(c) of the Credit Agreement is hereby amended by deleting the table that appears at the end of such section and inserting in lieu thereof the following: 
	
		
	Fiscal Quarter Ending
	Minimum Interest Coverage Ratio

	6/30/2017
	2.25 to 1.0

	9/30/2017
	2.25 to 1.0

	12/31/2017
	2.25 to 1.0

	3/31/2018
	2.50 to 1.0

	6/30/2018
	2.50 to 1.0

	9/30/2018
	2.50 to 1.0

	12/31/2018 and the last day of each fiscal quarter thereafter
	2.75 to 1.0

5.Amendment to Section 7.11 (Financial Covenants) of the Credit Agreement.  Section 7.11 of the Credit Agreement is hereby amended by adding the below as new Section 7.11(d) to Section 7.11: 
“(d)    Commencing with the fiscal quarter ending March 31, 2019, permit the Total Leverage Indebtedness Ratio of the Credit Parties as of the last day of any fiscal quarter (determined at the Borrowing Base Reference Time of such day) to be greater than 6.50 to 1.0.”
6.Amendment to Exhibit D (Compliance Certificate) to the Credit Agreement.  Exhibit D (Compliance Certificate) is hereby deleted and replaced with the form of Compliance Certificate attached hereto as Exhibit A, which has been amended solely to provide for evidence of compliance with the Total Leverage Indebtedness Ratio provided in Section 7.11(d) of the Credit Agreement, which is being added to the Credit Agreement pursuant to this Amendment.  
7.Representations and Warranties; No Default.  To induce the Lenders to enter into this Amendment, each Credit Party that is a party hereto (by delivery of its respective counterpart to this Amendment) hereby (i) represents and warrants to the Administrative Agent and the Lenders that after giving effect to this Amendment, its representations and warranties contained in the Credit Agreement and other Loan Documents are true and correct in all material respects on and as of the date hereof with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties were true and correct in all material respects as of such earlier date); (ii) represents and warrants to the Administrative Agent and the Lenders that it (x) has the requisite power and authority to make, deliver and perform this Amendment; (y) has taken all necessary corporate, limited liability company, limited partnership or other action to authorize its execution, delivery and performance of this Amendment, and (z) has duly executed and delivered this Amendment and (iii) certifies that no Default or Event of Default has occurred and is continuing under the Credit Agreement (after giving effect to this Amendment) or will result from the making of this Amendment.
8.Effectiveness of Amendments.  This Amendment shall become effective upon the first date on which each of the following conditions has been satisfied:
(a)Amendment Documents.  The Administrative Agent shall have received this Amendment, duly executed and delivered by each of the Credit Parties, and by Lenders constituting the Required Lenders.  

2

(b)Proceedings and Documents.  All corporate and other proceedings pertaining directly to this Amendment and all documents, instruments directly incident to this Amendment shall be satisfactory to the required Lenders and their respective counsel and the Technical Agent shall have received all such counterpart originals or certified or other copies of such documents as the Technical Agent may reasonably request.
9.Limited Effect.  Except as expressly provided hereby, all of the terms and provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force and effect.  The amendments contained herein shall not be construed as a waiver or amendment of any other provision of the Credit Agreement or the other Loan Documents or for any purpose, except as expressly set forth herein, or a consent to any further or future action on the part of any Credit Party that would require the waiver or consent of the Lenders.  This Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.
10.GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF NEW YORK.
11.Counterparts.  This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart.  Delivery of an executed counterpart hereof by facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.
12.Headings.  Section or other headings contained in this Amendment are for reference purposes only and shall not in any way affect the meaning or interpretation of this Amendment.
13.Guarantor Acknowledgement.  Each Guarantor party hereto hereby (i) consents to the modifications to the Credit Agreement contemplated by this Amendment and (ii) acknowledges and agrees that its guaranty pursuant to Section 10.18 of the Credit Agreement is, and shall remain, in full force and effect after giving effect to the Amendment.
[Signature Pages Follow]

3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BORROWERS’ AGENT AND BORROWER:

NGL ENERGY OPERATING LLC,
a Delaware limited liability company

		
	By:
	/s/ Robert W. Karlovich III

		
	Name:
	Robert W. Karlovich III

		
	Title:
	Chief Financial Officer and Executive Vice President

PARENT:

NGL ENERGY PARTNERS LP,
a Delaware limited partnership

		
	By:
	/s/ Robert W. Karlovich III

		
	Name:
	Robert W. Karlovich III

		
	Title:
	Chief Financial Officer and Executive Vice President

Signature Page to Amendment No. 5 to Credit Agreement

GUARANTORS:
ANTICLINE DISPOSAL, LLC
CENTENNIAL ENERGY, LLC
CENTENNIAL GAS LIQUIDS ULC
CHOYA OPERATING, LLC
GRAND MESA PIPELINE, LLC
NGL CRUDE CUSHING, LLC
NGL CRUDE LOGISTICS, LLC
NGL CRUDE TERMINALS, LLC
NGL CRUDE TRANSPORTATION, LLC
NGL ENERGY EQUIPMENT, LLC
NGL ENERGY FINANCE CORP.
NGL ENERGY HOLDINGS II, LLC
NGL ENERGY LOGISTICS, LLC
NGL ENERGY OPERATING LLC
NGL ENERGY PARTNERS LP
NGL LIQUIDS, LLC
NGL-MA, LLC
NGL-MA REAL ESTATE, LLC
NGL MARINE, LLC
NGL MILAN INVESTMENTS, LLC
NGL-NE REAL ESTATE, LLC
NGL PROPANE, LLC
NGL SUPPLY TERMINAL COMPANY, LLC
NGL SUPPLY WHOLESALE, LLC 
NGL WATER SOLUTIONS, LLC
NGL WATER SOLUTIONS BAKKEN, LLC
NGL WATER SOLUTIONS DJ, LLC
NGL WATER SOLUTIONS EAGLE FORD, LLC
NGL WATER SOLUTIONS PERMIAN, LLC
OPR, LLC
OSTERMAN PROPANE, LLC
TRANSMONTAIGNE LLC
TRANSMONTAIGNE PRODUCT SERVICES LLC
TRANSMONTAIGNE SERVICES LLC

		
	By:
	/s/ Robert W. Karlovich III

		
	Name:
	Robert W. Karlovich III

		
	Title:
	Chief Financial Officer and Executive Vice President

Signature Page to Amendment No. 5 to Credit Agreement

SECURED PARTIES:

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent and as Collateral Agent

		
	By:
	/s/ Shai Bandner

		
	Name:
	Shai Bandner

		
	Title:
	Director

		
	By:
	/s/ Kai Fang

		
	Name:
	Kai Fang

		
	Title:
	Associate

DEUTSCHE BANK AG, NEW YORK BRANCH, 
as a Lender, as Swingline Lender, as an Issuing Bank and as Technical Agent

		
	By:
	/s/ Shai Bandner

		
	Name:
	Shai Bandner

		
	Title:
	Director

		
	By:
	/s/ Kai Fang

		
	Name:
	Kai Fang

		
	Title:
	Associate

Signature Page to Amendment No. 5 to Credit Agreement

ROYAL BANK OF CANADA,
as a Lender

		
	By:
	/s/ Jason S. York

		
	Name:
	Jason S. York

		
	Title:
	Authorized Signatory

BNP PARIBAS,
as a Lender and Issuing Bank

By:                
Name:    
Title:    

By:                
Name:    
Title:    

PNC BANK, NATIONAL ASSOCIATION
as a Lender

		
	By:
	/s/ Stephen Monto

		
	Name:
	Stephen Monto

		
	Title:
	SVP

BARCLAYS BANK PLC,
as a Lender

		
	By:
	/s/ Sydney G. Dennis

		
	Name:
	Sydney G. Dennis

		
	Title:
	Director

Signature Page to Amendment No. 5 to Credit Agreement

ABN AMRO CAPITAL USA LLC,
as a Lender

		
	By:
	/s/ Darrell Holley

		
	Name:
	Darrell Holley

		
	Title:
	Managing Director

		
	By:
	/s/ Anna C. Ferreira

		
	Name:
	Anna C. Ferreira

		
	Title:
	Vice President

TORONTO DOMINION BANK, NEW YORK BRANCH,
as a Lender

		
	By:
	/s/ Annie Dorval

		
	Name:
	Annie Dorval

		
	Title:
	Authorized Signatory

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender

		
	By:
	/s/ Jacob L. Osterman

		
	Name:
	Jacob L. Osterman

		
	Title:
	Director

MIZUHO BANK, LTD.,
as a Lender

		
	By:
	/s/ Raymond Ventura Jr.

		
	Name:
	Raymond Ventura Jr.

		
	Title:
	Managing Director

Signature Page to Amendment No. 5 to Credit Agreement

UBS AG, STAMFORD BRANCH,
as a Lender

		
	By:
	/s/ Darlene Arias

		
	Name:
	Darlene Arias

		
	Title:
	Director

		
	By:
	/s/ Craig Pearson

		
	Name:
	Craig Pearson

		
	Title:
	Associate Director

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as a Lender

		
	By:
	/s/ Nupur Kumar

		
	Name:
	Nupur Kumar

		
	Title:
	Authorized Signatory

		
	By:
	/s/ Christopher Zybrick

		
	Name:
	Christopher Zybrick

		
	Title:
	Authorized Signatory

GOLDMAN SACHS BANK USA,
as a Lender

		
	By:
	/s/ Meghan Sullivan

		
	Name:
	Meghan Sullivan

		
	Title:
	Authorized Signatory

MACQUARIE BANK LIMITED,
as a Lender

		
	By:
	/s/ Robert Trevona

		
	Name:
	Robert Trevona

		
	Title:
	Division Director

    

		
	By:
	/s/ Fiona Smith

		
	Name:
	Fiona Smith

		
	Title:
	Division Director

Signature Page to Amendment No. 5 to Credit Agreement

RAYMOND JAMES BANK, N.A.,
as a Lender

		
	By:
	/s/ Scott G. Axelrod

		
	Name:
	Scott G. Axelrod

		
	Title:
	Senior Vice President

CITIZENS BANK, N.A.,
as a Lender

		
	By:
	/s/ David Slye

		
	Name:
	David Slye

		
	Title:
	Managing Director

Signature Page to Amendment No. 5 to Credit Agreement

EXHIBIT A TO
AMENDMENT NO. 5 TO CREDIT AGREEMENT

EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of Company]
[DATE]
Deutsche Bank Trust Company Americas, as Administrative Agent
60 Wall Street
New York, New York 10005
Attention: Project Finance Manager-NGL Energy
Telecopy No.: [______________]

Ladies and Gentlemen:
I hereby certify to you as follows:
(a)     I am the duly elected [Title] of NGL ENERGY OPERATING LLC, a Delaware limited liability company (the “Company”) acting as Borrowers’ Agent. All capitalized terms used but not defined herein shall have the meanings specified in the Amended and Restated Credit Agreement dated as of February 14, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, each other borrower from time to time party thereto (together with Company, each a “Borrower” and collectively, the “Borrowers”), the Guarantors from time to time party thereto, each of the financial institutions which may from time to time become a party thereto (individually, a “Lender” and collectively, the “Lenders”), Deutsche Bank AG, New York Branch, as technical agent and Deutsche Bank Trust Company Americas, as administrative agent and collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”).
(b)     I have reviewed the terms of the Credit Agreement, and have made, or have caused to be made under my supervision, a detailed review of the transactions and the condition of the Credit Parties during the immediately preceding [applicable time period].
(c)     Except as disclosed on Annex A attached hereto, the review described in paragraph (b) above did not disclose the existence during or at the end of such period, and I have no knowledge of the existence as of the date hereof, of any condition or event which constitutes a Default or an Event of Default.
(d)     Provided in Annex B to this Certificate are the financial statements and information required to be furnished to the Administrative Agent pursuant to Section 6.3 of the Credit Agreement. Such financial statements fairly present in all material respects the financial condition and results of operations of the Parent and its Subsidiaries on a consolidated basis and in accordance with GAAP consistently applied.
(e)     Provided in Annex C to this Certificate are the financial data and computations evidencing compliance with Section 7.11(a) (Leverage Ratio), all of which data and computations are true, correct and complete.
(f)     Provided in Annex D to this Certificate are the financial data and computations evidencing compliance with Section 7.11(b) (Senior Secured Leverage Ratio), all of which data and computations are true, correct and complete.
(g)    Provided in Annex E to this Certificate are the financial data and computations evidencing compliance with Section 7.11(c) (Interest Coverage Ratio), all of which data and computations are true, correct and complete.
(h)    Provided in Annex F to this Certificate are the financial data and computations evidencing compliance with Section 7.11(d) (Total Leverage Indebtedness Ratio), all of which data and computations are true, correct and complete.
I further certify that, based on the review described in paragraph (b) above, no Credit Party has at any time during or at the end of such period, except as (i) specifically described in paragraph (m) below or (ii) permitted by the Credit Agreement, done any of the following:

EXHIBIT A TO
AMENDMENT NO. 5 TO CREDIT AGREEMENT

(i)     Changed its respective address, name, identity, type of organization, corporate structure (e.g., by merger, consolidation, change in corporate form or otherwise), jurisdiction of organization, location of its chief executive office or principal place of business or the place it keeps its material books and records, or established any trade names;
(j)     Permitted any of its Subsidiaries to issue any equity or securities or otherwise change its capital structure;
(k)     Failed to notify the Administrative Agent in accordance with Section 6.11 of the Credit Agreement after any Responsible Officer of any Credit Party or any of its Subsidiaries have become aware of, obtained knowledge of, or received notification of:
		
	(i) 
	the institution of any lawsuit, administrative proceeding or investigation affecting any Credit Party or any of their Subsidiaries (other than the litigation described in Schedule 5.4 of the Credit Agreement), including without limitation any examination or audit by the IRS the adverse determination under which could reasonably be expected to cause, a Material Adverse Effect;

		
	(ii) 
	any development or change in the business or affairs of any Credit Party or any of their Subsidiaries which has had or which is likely to have, in the reasonable judgment of any Responsible Officer of the applicable Credit Parties, a Material Adverse Effect;

		
	(iii) 
	any Default or Event of Default, together with a reasonably detailed statement by a Responsible Officer on behalf of the Borrowers’ Agent of the steps being taken to cure the effect of such Default or Event of Default;

		
	(iv)
	the occurrence of a default or event of default by any Credit Party or any of their Subsidiaries under any agreement or series of related agreements to which it is a party, which default or event of default could reasonably be expected to have a Material Adverse Effect;

		
	(v) 
	any written notice of any violation by, or investigation of any Credit Party or any of their Subsidiaries in connection with any actual or alleged violation of any Legal Requirement imposed by the Environmental Protection Agency, the Occupational Safety Hazard Administration or any other Governmental Authority which has or is likely to have, in the reasonable judgment of any Responsible Officer of the applicable Credit Parties, a Material Adverse Effect;

		
	(l) 
	To the knowledge of any Responsible Officer, incurred any material loss or destruction of, or substantial damage to, any portion or component of the Collateral with Fair Market Value in excess of $5,000,000 and no other matters occurred that materially affected the value, enforceability or collectability of any of the Collateral with Fair Market Value in excess of $5,000,000, unless a notice of such loss, destruction or damage has previously been provided to the Collateral Agent; [and]

		
	(m) 
	Acquired any additional Mortgaged Property, with a Fair Market Value exceeding $5,000,000, unless a notice of such acquisition has previously been provided to the Administrative Agent[; and][.]

		
	(n)
	[List exceptions, if any, to paragraphs (e) through (m) above.]

The foregoing certifications are made and delivered this day of [•], 20[•].
Very truly yours,

NGL ENERGY OPERATING LLC

By:                                     
Name:                                    
Title:ex_115651.htm

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement, dated on and as of May 28, 2018 (this “Agreement”), is made by and among Nuo Therapeutics, Inc., a Delaware corporation (the “Company”), and Rohto Pharmaceutical Co., Ltd., a Japanese corporation with its principal office at 1-8-1 Tatsumi-nishi, Ikuno-ku, Osaka Japan 544-8666, the undersigned purchaser (“Rohto”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder, the Company desires to offer, issue and sell to Rohto (the “Offering”), and Rohto desires to purchase from the Company, 1,000,000 shares (the “Shares”) of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”). The Shares are sometimes referred to herein as the “Securities”.

 

WHEREAS, the net proceeds of the Offering are intended to be used by the Company to for working capital and other general corporate purposes of the Company and its subsidiaries.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the Company and Rohto agree as follows:

 

	
			1

				
			SUBSCRIPTION

			

 

(a)     Subject to the conditions to closing set forth herein, Rohto hereby irrevocably subscribes for and agrees to purchase Securities for the aggregate purchase price of five hundred thousand dollars ($500,000)(the “Subscription Amount”). The Securities to be issued to Rohto hereunder shall consist of Shares in an amount equal to the quotient of (x) the Subscription Amount, divided by (y) the Share Purchase Price, rounded down to the nearest whole number.

 

(b)     For the purposes of this Agreement, the purchase price for each Share shall be $0.50 (the “Share Purchase Price”).

 

(c)     The Company shall use its reasonable best efforts to hold the closing of the Offering (the “Closing”, and the date of the Closing, the “Closing Date”) no later than June 15, 2018. Prior to the Closing, Rohto shall deliver the Subscription Amount by wire transfer to a bank account in accordance with the wire transfer instructions set forth on Schedule A.

 

(d)     Upon receipt by the Company of the requisite payment for all Securities to be purchased by Rohto whose subscriptions are accepted, the Company shall, at the Closing: (i) issue to Rohto stock certificates representing the shares of Common Stock purchased at such Closing under this Agreement or deliver written evidence that such shares have been or will be issued (as of the Closing Date) in book-entry form, (ii) deliver to Rohto a certificate stating that the representations and warranties made by the Company in Section 3 of this Agreement are true and correct in all material respects on the date of such Closing relating to the Securities subscribed for pursuant to this Agreement as though made on and as of such Closing Date (provided, however, that representations and warranties that speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date), and (iii) cause to be delivered to Rohto’s an opinion of counsel to the Company substantially in the form of Exhibit A hereto.

 

 

 

 

(e)     Rohto acknowledges and agrees, solely with respect to itself, that (i) the purchase of Shares by Rohto pursuant to the Offering is subject to all the terms and conditions set forth in this Agreement, and (ii) this Agreement shall be binding upon Rohto upon the execution and delivery to the Company of Rohto’s signed counterpart signature page to this Agreement.

 

	
			2

				
			REPRESENTATIONS AND WARRANTIES OF ROHTO

			

 

Rohto hereby represents and warrants to the Company, and agrees with the Company as follows:

 

(a)     Rohto understands and acknowledges and is fully aware that (i) the Securities are currently quoted on the OTC Markets Group marketplace, and (ii) the Securities are not presently quoted or listed for trading on any national securities exchange, and, notwithstanding the circumstances described in the preceding clauses (i) and (ii), (and without limiting any of the other representations and warranties or agreements of Rohto herein), Rohto has made its own investment decision to subscribe for and purchase Securities issued in the Offering.

 

(b)     Rohto has carefully read this Agreement (the “Offering Document”), and is familiar with and understands the terms of the Offering. Rohto has relied only on the information contained in the Offering Document and the Company’s filings made with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, through the date hereof (the “SEC Filings”), and has not relied on any representation made by any other person, other than as set forth in Sections 2(c) and (d) below. Rohto fully understands all of the risks related to the purchase of the Securities. Rohto has carefully considered and has discussed with Rohto’s professional legal, tax, accounting and financial advisors, to the extent Rohto has deemed necessary, the suitability of an investment in the Securities for Rohto’s particular tax and financial situation and has determined that the Securities being subscribed for by Rohto are a suitable investment for Rohto. Rohto recognizes that an investment in the Securities involves substantial risks, including the possible loss of the entire amount of such investment. Rohto further recognizes that the Company has broad discretion concerning the use and application of the proceeds from the Offering.

 

(c)     Rohto acknowledges that (i) Rohto has had the opportunity to request copies of any documents, records, and books pertaining to this investment and (ii) any such documents, records and books that Rohto requested have been made available for inspection by Rohto.

 

(d)     Rohto and Rohto’s advisors have had a reasonable opportunity to ask questions of and receive answers from representatives of the Company or persons acting on behalf of the Company concerning the Offering and all such questions have been answered to the full satisfaction of Rohto. Rohto understands that it is not relying on any representation of any kind made by the Company regarding the Company, the Securities or any other matter other than as set forth herein.

 

2

 

 

(e)     Rohto is not subscribing for Securities as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar, meeting or conference whose attendees have been invited by any general solicitation or general advertising.

 

(f)     Rohto has sufficient knowledge and experience in financial, tax and business matters to enable Rohto to utilize the information made available to Rohto in connection with the Offering, to evaluate the merits and risks of an investment in the Securities and to make an informed investment decision with respect to an investment in the Securities on the terms described in the Offering Document.

 

(g)     Rohto will not sell or otherwise transfer the Securities without registration under the Securities Act and applicable state securities laws or an applicable exemption therefrom. Rohto acknowledges that neither the offer nor sale of the Securities has been registered under the Securities Act or under the securities laws of any state. Rohto represents and warrants that Rohto is acquiring the Securities for Rohto’s own account and not with a current view toward resale or distribution within the meaning of the Securities Act. Rohto has not offered or sold the Securities being acquired nor does Rohto have any present intention of selling, distributing or otherwise disposing of such Securities either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstances in violation of the Securities Act. Rohto is aware that (i) the Securities are not currently eligible for sale in reliance upon Rule 144 promulgated under the Securities Act and (ii) the Company has no obligation to register the Securities subscribed for hereunder. By making these representations herein, Rohto is not making any representation or agreement to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an available exemption to the registration requirements of the Securities Act.

 

(h)     Rohto acknowledges that certificates representing the Shares shall be stamped or otherwise imprinted with a legend substantially in the following form:

 

The securities represented hereby have not been registered under the Securities Act of 1933, as amended, or any state securities laws and neither the securities nor any interest therein may be offered, sold, transferred, pledged or otherwise disposed of except pursuant to an effective registration under such act or an exemption from registration, which is available under such act.

 

Certificates evidencing the Shares shall not be required to contain such legend or any other legend (i) following any sale of such Shares pursuant to Rule 144, or (ii) if such Shares are eligible for sale under Rule 144(b), or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Securities and Exchange Commission), in each such case (i) through (iii) to the extent reasonably determined by the Company’s legal counsel. Subject to the foregoing, at such time and to the extent a legend is no longer required for the Shares, the Company will use its reasonable best efforts to, no later than five (5) trading days following the delivery by Rohto to the Company or to the Company and the Company’s transfer agent of a legended certificate representing such Shares (together with such accompanying documentation or representations as reasonably required by counsel to the Company), deliver or cause to be delivered a certificate representing such Shares that is free from the foregoing legend.

 

3

 

 

(i)     If this Agreement is executed and delivered on behalf of a partnership, corporation, limited liability company, trust, estate or other entity: (i) such partnership, corporation, limited liability company, trust, estate or other entity has the full legal right and power and all authority and approval required (a) to execute and deliver this Agreement and all other instruments executed and delivered by or on behalf of such partnership, corporation, limited liability company, trust, estate or other entity in connection with the purchase of its Securities, and (b) to purchase and hold such Securities, (ii) the signature of the party signing on behalf of such partnership, corporation, limited liability company, trust, estate or other entity is binding upon such partnership, corporation, limited liability company, trust, estate or other entity, and (iii) such partnership, corporation, limited liability company, trust or other entity has not been formed for the specific purpose of acquiring such Securities, unless each beneficial owner of such entity is qualified as an accredited investor within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act and has submitted information to the Company substantiating such individual qualification.

 

(j)     Rohto is an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act on the basis indicated therein.

 

(k)     Rohto acknowledges that the Company may issue shares of Common Stock in excess of those being issued in connection with the Offering from time to time. The issuance of additional shares of Common Stock may cause dilution of the existing shares of Common Stock and a decrease in the market price of such existing shares. Rohto acknowledges and agrees that it shall have no preemptive rights, right of first refusal, or other rights to subscribe for or purchase any shares of Common Stock the Company may issue in the future as a result of Rohto’s purchase of Securities pursuant to this Agreement.

 

	
			3

				
			REPRESENTATIONS AND WARRANTIES OF THE COMPANY

			

 

The Company hereby makes the following representations and warranties to Rohto:

 

(a)     Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and, except as disclosed in the SEC Filings, the Company has full corporate power and authority to conduct its business as currently conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing in all jurisdictions in which the character of the property owned or leased or the nature of the business transacted by it makes qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the business, properties, assets, financial condition or results of operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”).

 

(b)     Capitalization. (i) The authorized capital stock of the Company consists of 31,500,000 shares of Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”), (ii) 22,722,400 shares of Common Stock and 29,308 shares of Series A Preferred Stock are issued and outstanding, (iii) warrants to purchase 6,180,000 shares of Common Stock are issued and outstanding, (iv) 742,084 shares of Common Stock are issuable upon the exercise of outstanding stock options under the Company’s 2016 Omnibus Incentive Compensation Plan, as amended (the “Omnibus Plan”), and (v) 943,316 unallocated shares of Common Stock are reserved for future issuance to employees, directors, officers and consultants pursuant to the Omnibus Plan. Collectively, the shares of Common Stock set forth in clauses (ii) through (v) are referred to herein as the “Issued or Reserved Shares” and the difference between the Company’s authorized shares of Common Stock and the Issued or Reserved Shares is referred to herein as the “Unreserved Shares.” Other than as set forth above or as contemplated in this Agreement, there are no other options, warrants, calls, rights, commitments or agreements of any character to which the Company is a party or by which either the Company is bound or obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company or obligating the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement.

 

4

 

 

(c)     Issuance; Reservation of Shares. The issuance of the Shares has been duly and validly authorized by all necessary corporate action, and the Shares, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and non-assessable shares of Common Stock of the Company; provided, however, that Rohto acknowledges and agrees that the number of Shares to be issued to it pursuant to this Agreement exceeds the number of Unreserved Shares by 87,800.

 

(d)     Authorization; Enforceability. The Company has all corporate right, power and authority to enter into this Agreement, and to consummate the transactions contemplated hereby and thereby. All corporate action on the part of the Company, its directors and stockholders necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of the Securities contemplated herein and the performance of the Company’s obligations hereunder and thereunder has been taken, subject to the proviso in Section 3(c) above. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms and subject to laws of general application relating to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The issuance and sale of the Securities contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person, except for those that which have been complied with or waived.

 

(e)     No Conflict; Governmental and Other Consents.

 

(i)     The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of, (i) any provision of the Certificate of Incorporation or Bylaws of the Company or any of its subsidiaries, or (ii) any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company or any of its subsidiaries is bound, and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company except to the extent that any such violation, conflict or breach would not be reasonably likely to have a Material Adverse Effect.

 

5

 

 

(ii)     No consent, approval, authorization or other order of any governmental authority or other third party is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issuance and sale of the Securities, except such post-Closing filings as may be required to be made with the SEC, the Financial Industry Regulatory Authority, Inc., and with any state or foreign blue sky or securities regulatory authority.

 

(f)     Litigation. There are no pending or, to the Company’s knowledge, threatened legal or governmental proceedings against the Company or any of its subsidiaries, which, if adversely determined, would be reasonably likely to have a Material Adverse Effect. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body (including, without limitation, the SEC) pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its subsidiaries wherein an unfavorable decision, ruling or finding could adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under this Agreement. Except as disclosed in the SEC Filings, neither the Company nor any of its subsidiaries are subject to any order, judgment or decree, which would be reasonably likely to have a Material Adverse Effect.

 

(g)     Investment Company. The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

 

(h)     Subsidiaries. The Company’s subsidiaries are set forth on Schedule B hereof (collectively referred to herein as the Company’s “subsidiaries”). Each of the Company’s subsidiaries has been duly formed, is validly existing and is in good standing under the law of the jurisdiction of its formation, has the requisite power and authority to own its property and to conduct its business and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

 

(i)     Indebtedness. The SEC Filings reflect, as of the date thereof, all outstanding secured and unsecured Indebtedness (as defined below) of the Company or any subsidiary, or for which the Company or any subsidiary has commitments. Neither the Company nor any of its subsidiaries has incurred any material Indebtedness or commitments for Indebtedness since the date of the filing of the most recent SEC Filing. For purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (c) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP. Except as disclosed in the SEC Filings, as of the Closing Date, (i) the Company is not in default with respect to any Indebtedness, and (ii) the Company will not be insolvent after giving effect to the transactions contemplated herein. For purposes of this Section 3(i), “insolvent” shall mean an inability to pay debts when due.

 

6

 

 

(j)     Certain Fees. Except as is set forth on Schedule C, no brokers’, finders’ or financial advisory fees or commissions will be payable by the Company with respect to the transactions contemplated by this Agreement.

 

(k)     Material Agreements. Except as disclosed in the SEC Filings, the Company is not in default under any material agreement now in effect to which the Company is a party, the result of which would be reasonably likely to have a Material Adverse Effect.

 

(l)     Transactions with Affiliates. Except as disclosed in the SEC Filings, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions between (a) the Company, its subsidiaries or any of their respective customers or suppliers on the one hand, and (b) on the other hand, any person who would be covered by Item 404(a) of Regulation S-K or any company or other entity controlled by such person.

 

(m)     Taxes. The Company and its subsidiaries have prepared and filed all federal, state, local, foreign and other tax returns for income, gross receipts, sales, use and other taxes and custom duties (“Taxes”) required by law to be filed by them, except for tax returns, the failure to file which, individually or in the aggregate, do not and would not have a Material Adverse Effect. Such filed tax returns are complete and accurate, except for such omissions and inaccuracies, which individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The Company and its subsidiaries have paid or made provisions for the payment of all Taxes shown to be due on such tax returns and all additional assessments, and adequate provisions have been and are reflected in the financial statements of the Company and the subsidiaries for all current Taxes to which the Company or any subsidiary is subject and which are not currently due and payable, except for such Taxes which, if unpaid, individually or in the aggregate, do not and would not have a Material Adverse Effect. None of the federal income tax returns of the Company or any of its subsidiaries for the past five years has been audited by the Internal Revenue Service. Neither the Company nor any of its subsidiaries has received written notice of any assessments, adjustments or contingent liability (whether federal, state, local or foreign) in respect of any Taxes pending or threatened against the Company or any subsidiary for any period which, if unpaid, would have a Material Adverse Effect.

 

(n)     Insurance. The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes are prudent and customary in the businesses in which the Company and its subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its and its subsidiaries’ businesses without an increase in cost significantly greater than general increases in cost experienced for similar companies in similar industries with respect to similar coverage.

 

7

 

 

(o)     Environmental Matters. To the Company’s knowledge, all real property owned, leased or otherwise operated by the Company and its subsidiaries is free of contamination from any substance, waste or material currently identified to be toxic or hazardous pursuant to, within the definition of a substance which is toxic or hazardous under, or which may result in liability under, any Environmental Law (as defined below), including, without limitation, any asbestos, polychlorinated biphenyls, radioactive substance, methane, volatile hydrocarbons, industrial solvents, oil or petroleum or chemical liquids or solids, liquid or gaseous products, or any other material or substance (“Hazardous Substance”) which has caused or would reasonably be expected to cause or constitute a threat to human health or safety, or an environmental hazard in violation of Environmental Law or to result in any environmental liabilities that would be reasonably likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has caused or suffered to occur any release, spill, migration, leakage, discharge, disposal, uncontrolled loss, seepage, or filtration of Hazardous Substances that would reasonably be expected to result in environmental liabilities that would be reasonably likely to have a Material Adverse Effect. The Company and its subsidiaries have generated, treated, stored and disposed of any Hazardous Substances in compliance with applicable Environmental Laws, except for such non-compliances that would not be reasonably likely to have a Material Adverse Effect. The Company and its subsidiaries have obtained, or has applied for, and is in compliance with and in good standing under all permits required under Environmental Laws (except for such failures that would not be reasonably likely to have a Material Adverse Effect) and neither the Company nor any of its subsidiaries has knowledge of any proceedings to substantially modify or to revoke any such permit. There are no investigations, proceedings or litigation pending or, to the Company’s knowledge, threatened against the Company, its subsidiaries or any of their respective facilities relating to Environmental Laws or Hazardous Substances. “Environmental Laws” shall mean all federal, national, state, regional and local laws, statutes, ordinances and regulations, in each case as amended or supplemented from time to time, and any judicial or administrative interpretation thereof, including orders, consent decrees or judgments relating to the regulation and protection of human health, safety, the environment and natural resources.

 

(p)     Intellectual Property Rights and Licenses. Except as disclosed in the SEC Filings, (a) the Company and its subsidiaries own or have the right to use any and all information, know-how, trade secrets, patents, copyrights, trademarks, trade names, software, formulae, methods, processes and other intangible properties that are of a such nature and significance to the business that the failure to own or have the right to use such items would have a Material Adverse Effect (“Intangible Rights”), (b) neither the Company nor any of its subsidiaries has received any notice that it is in conflict with or infringing upon the asserted intellectual property rights of others in connection with the Intangible Rights, and, to the Company’s knowledge, neither the use of the Intangible Rights nor the operation of the Company’s and its subsidiaries’ businesses is infringing or has infringed upon any intellectual property rights of others in a manner that would be reasonably expected to have a Material Adverse Effect, (c) all payments have been duly made that are necessary to maintain the Intangible Rights in force, (d) no claims have been made, and to the Company’s knowledge, no claims are threatened, that challenge the validity or scope of any material Intangible Right of the Company or any of its subsidiaries, (e) the Company and its subsidiaries have taken reasonable steps to obtain and maintain in force all licenses and other permissions under Intangible Rights of third parties necessary to conduct their businesses as heretofore conducted by them, and now being conducted by them, and as expected to be conducted, and neither the Company nor its subsidiaries is or has been in material breach of any such license or other permission in a manner that would be reasonably expected to have a Material Adverse Effect.

 

8

 

 

(q)     Labor, Employment and Benefit Matters.

 

(i)     There are no existing, or to the Company’s knowledge, threatened strikes or other labor disputes against the Company or any of its subsidiaries that would be reasonably likely to have a Material Adverse Effect. There is no organizing activity involving employees of the Company or its subsidiaries pending or, to the Company’s knowledge, threatened by any labor union or group of employees. There are no representation proceedings pending or, to the Company’s knowledge, threatened with the National Labor Relations Board, and no labor organization or group of employees of the Company or its subsidiaries has made a pending demand for recognition.

 

(ii)     Neither the Company nor any of its subsidiaries is, or during the five years preceding the date of this Agreement was, a party to any labor or collective bargaining agreement and there are no labor or collective bargaining agreements which pertain to employees of the Company or any of its subsidiaries.

 

(iii)     Each employee benefit plan is in compliance with all applicable law, except for such noncompliance that would not be reasonably likely to have a Material Adverse Effect.

 

(iv)     Neither the Company nor any of its subsidiaries have any liabilities, contingent or otherwise, including, without limitation, liabilities for retiree health, retiree life, severance or retirement benefits, which are not fully reflected, to the extent required by GAAP, on the Company’s financial statements or fully funded. The term “liabilities” used in the preceding sentence shall be calculated in accordance with reasonable actuarial assumptions.

 

(v)     Neither the Company nor any of its subsidiaries has (i) terminated any “employee pension benefit plan” as defined in Section 3(2) of ERISA (as defined below) under circumstances that present a material risk of the Company or any of its subsidiaries incurring any liability or obligation that would be reasonably likely to have a Material Adverse Effect, or (ii) incurred or expects to incur any outstanding liability under Title IV of the Employee Retirement Income Security Act of 1974, as amended and all rules and regulations promulgated thereunder (“ERISA”).

 

(r)     Compliance with Law. Except as disclosed in the SEC Filings, the Company and its subsidiaries are in compliance in all material respects with all applicable laws, including, to the extent applicable, U.S. anti-money laundering laws and U.S. Treasury Department’s Office of Foreign Assets Control regulations, except for such noncompliance that would not reasonably be likely to have a Material Adverse Effect. Neither the Company or its subsidiaries has received any notice of, nor does the Company have any knowledge of, any violation (or of any investigation, inspection, audit or other proceeding by any governmental entity involving allegations of any violation) of any applicable law involving or related to the Company or any of its subsidiaries which has not been dismissed or otherwise disposed of that would be reasonably likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received notice or otherwise has any knowledge that the Company or any of its subsidiaries is charged with, threatened with or under investigation with respect to, any violation of any applicable law that would reasonably be likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any subsidiary has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law. The Company, its subsidiaries and, to the Company’s knowledge, their respective directors, officers, employees and agents have complied in all material respects with the Foreign Corrupt Practices Act of 1977, as amended, and any related rules and regulations. The Company expects to be in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder within 180 days of the Closing, except where such noncompliance would not reasonably be likely to have a Material Adverse Effect.

 

9

 

 

(s)     Ownership of Property. Except as disclosed in the SEC Filings, the Company and its subsidiaries has (i) good and marketable fee simple title to its owned real property, if any, free and clear of all liens, except for liens which do not individually or in the aggregate have a Material Adverse Effect, (ii) a valid leasehold interest in all leased real property, and each of such leases is valid and enforceable in accordance with its terms (subject to laws of general application relating to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy) and is in full force and effect, and (iii) good title to, or valid leasehold interests in, all of its other properties and assets free and clear of all liens, except for liens which do not individually or in the aggregate have a Material Adverse Effect.

 

(t)     No Integrated Offering. Assuming the accuracy of Rohto’s representations and warranties set forth in Section 2 of this Agreement, neither the Company, nor any of its affiliates or other person acting on the Company’s behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the Offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act, when integration would cause the Offering not to be exempt from the requirements of Section 5 of the Securities Act.

 

(u)     General Solicitation. Neither the Company nor, to its knowledge, any person acting on behalf of the Company, has offered or sold any of the Securities by any form of “general solicitation” within the meaning of Rule 502 under the Securities Act. To the knowledge of the Company, no person acting on its behalf has offered the Securities for sale other than to Rohto and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(v)     No Manipulation of Stock. The Company has not taken and will not take, in violation of applicable law, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Securities.

 

10

 

 

(w)     No Registration. Assuming the accuracy of the representations and warranties made by, and compliance with the covenants of, Rohto, no registration of the Securities under the Securities Act is required in connection with the offer and sale of the Securities by the Company to Rohto as contemplated by this Agreement.

 

(x)     Disclosure. The Company understands and acknowledges that Rohto will rely on the foregoing representations in purchasing the Securities of the Company hereunder. All disclosure provided by the Company to Rohto in the Company’s SEC Filings regarding the Company, its business and the transactions contemplated hereby furnished by or on the behalf of the Company are, taken as a whole, true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. To the Company’s knowledge, no material event or circumstance has occurred or information exists with respect to the Company or its business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

 

	
			4

				
			UNDERSTANDINGS

			

 

Rohto understands, acknowledges and agrees with the Company as follows:

 

(a)     The execution of this Agreement by Rohto or solicitation of the investment contemplated hereby shall create no obligation on the part of the Company to accept any subscription or complete the Offering. If the Company accepts the subscription for Securities made by Rohto, it shall countersign this Agreement. Rohto hereby acknowledges and agrees that the subscription hereunder, once accepted by the Company, is irrevocable by Rohto, and that, except as required by law, Rohto is not entitled to cancel, terminate or revoke this Agreement or any agreements of Rohto hereunder.

 

(b)     No federal or state agency or authority has made any finding or determination as to the accuracy or adequacy of the Offering Document or as to the fairness of the terms of the Offering nor any recommendation or endorsement of the Securities. Any representation to the contrary is a criminal offense. In making an investment decision, Rohto must rely on their own examination of the Company and the terms of the Offering, including the merits and risks involved.

 

(c)     The Offering is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) of the Securities Act and the provisions of Rule 506 of Regulation D thereunder, which is in part dependent upon the truth, completeness and accuracy of the statements made by Rohto herein.

 

(d)     Notwithstanding the registration obligations provided herein, there can be no assurance that Rohto will be able to sell or dispose of the Securities. It is understood that in order not to jeopardize the Offering’s exempt status under Section 4(2) of the Securities Act and Regulation D, any transferee may, at a minimum, be required to fulfill the investor suitability requirements thereunder.

 

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(e)     Rohto acknowledges that the Offering is confidential and non-public and agrees that all information about the Offering shall be kept in confidence by Rohto until the public announcement of the Offering by the Company. Rohto acknowledges that the foregoing restrictions on Rohto’s use and disclosure of any such confidential, non-public information contained in the above-described documents restricts Rohto from trading in the Company’s securities to the extent such trading is on the basis of material, non-public information of which Rohto is aware. Except for the terms of the transaction documents and the fact that the Company is considering consummating the transactions contemplated therein (which information the Company has agreed to disclose in accordance with this Agreement), the Company confirms that neither the Company nor, to its knowledge, any other person acting on its behalf, has provided Rohto or their agents or counsel with any information that constitutes material, non-public information as of the Closing Date.

 

	
			5

				
			COVENANTS OF THE COMPANY

			

 

(a)     The Company shall make a public announcement of the execution of this Agreement and the terms of the transaction documents by filing with the SEC a Current Report on Form 8-K not later than 8:30 a.m. New York City time on the business day following the date of this Agreement. As a result of the forgoing issuance and filing, all material, non-public information previously provided to Rohto or their agents or counsel shall have been publicly announced and disclosed. Notwithstanding anything in this Agreement to the contrary, following the foregoing issuance and filing the Company shall have no obligation to, and will not, disclose or provide any material, non-public information to Rohto or their agents or counsel.

 

(b)     The Company shall use its reasonable best efforts to file in a timely manner all required reports under the Exchange Act.

 

(c)     The Company agrees to file one or more Forms D with respect to the Securities on a timely basis as required under Regulation D under the Securities Act to claim the exemption provided by Rule 506 of Regulation D and to provide a copy thereof to Rohto and their counsel promptly after such filing.

 

(d)     The Company will not sell, offer to sell, solicit offers to buy or otherwise negotiate in respect of any “security” (as defined in the Securities Act) that is or could be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the Securities Act.

 

(e)     The Company intends that the net proceeds from the Offering will be used for working capital and other general corporate purposes of the Company.

 

	
			6

				
			MISCELLANEOUS

			

 

(a)     Notices. Any notice or other document required or permitted to be given or delivered to Rohto shall be in writing and sent (x) by fax if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid) or (y) by an internationally recognized overnight delivery service (with charges prepaid):

 

12

 

 

(i)           if to the Company, at

 

Nuo Therapeutics, Inc.

207A Perry Parkway, Suite 1

Gaithersburg, MD 20877

Attention: Chief Executive Officer

Facsimile: (240) 499-2690

 

or such other address as it shall have specified to Rohto in writing, with a copy (which shall not constitute notice) to:

 

Hill, Ward & Henderson, P.A.

101 East Kennedy Blvd. Suite 3700

Tampa, FL 33602

Attention: Roland S. Chase, Esq.

Facsimile: (813) 221-2900

 

and

 

(ii)         if to Rohto, at its address set forth on the signature page to this Agreement, or such other address as it shall have specified to the Company in writing.

 

(b)     Section Headings. The article and section headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. References in this Agreement to a designated “Section” refer to a Section of this Agreement unless otherwise specifically indicated.

 

(c)     Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

 

(d)     Consent to Jurisdiction and Service of Process. The parties to this Agreement hereby agree to submit to the jurisdiction of the courts of the State of Delaware and the courts of the United States of America located in the District of Delaware, and appellate courts from any thereof in any action or proceeding arising out of or relating to this Agreement.

 

(e)     Waiver of Jury Trial. Each of the parties to this Agreement hereby unconditionally agrees to waive, to the fullest extent permitted by applicable law, its respective rights to a jury trial of any claim or cause of action (whether based on contract, tort or otherwise) based upon, arising out of or relating to this Agreement or the transactions contemplated hereby. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including contract claims, tort claims and all other common law and statutory claims. Each party hereto: (i) acknowledges that this waiver is a material inducement to enter into this Agreement, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings, (ii) acknowledges that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not in the event of any action or proceeding, seek to enforce the foregoing waiver and (iii) warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 6(E) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

 

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(f)     Amendments. This Agreement may be amended only by an instrument in writing executed by the Company and Rohto.

 

(g)     Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and thereby.

 

(h)     Severability. The invalidity or unenforceability of any specific provision of this Agreement shall not invalidate or render unenforceable any of its other provisions. Any provision of this Agreement held invalid or unenforceable shall be deemed reformed, if practicable, to the extent necessary to render it valid and enforceable and to the extent permitted by law and consistent with the intent of the parties to this Agreement.

 

(i)     Arms Length Negotiations. The Company acknowledges and Rohto confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.

 

(j)     Counterparts. This Agreement may be executed in multiple counterparts, including by means of facsimile, each of which shall be deemed an original, but all of which together shall constitute the same instrument.

 

(SIGNATURE PAGE FOLLOWS)

 

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Rohto hereby subscribes for such number of Shares as shall equal (x) the Subscription Amount as set forth below divided by the Share Purchase Price, rounded down to the nearest whole number, and agrees to be bound by the terms and conditions of this Agreement.

 

PURCHASER

 

	
			Dated

				
			May 28, 2018

			
	 	 
	
			Total Subscription Amount:

				
			$500,000.00

			
	 	 
	
			Signature of Subscriber

				
			/s/ Kunio Yamada

			
	 	 
	
			Name and Title of Officer (if applicable)

				
			Kunio Yamada, Chairman & CEO

			
	 	 
	
			Signature of Joint Subscriber (if any):

				
			Not applicable.

			
	 	 
	
			Social Security Number:

				
			------

			
	 	 
	
			Taxpayer Identification (if applicable)

				
			------

			
	 	 
	
			Social Security Number of Joint Subscriber (if any):

				
			Not applicable.

			
	 	 
	
			Name (please print as name will appear on stock certificate):

				
			Rohto Pharmaceutical Co., Ltd.

			
	 	 
	
			Number and Street:

				
			1-8-1 Tatsumi-nishi, Ikuno-ku,

			
	 	 
	
			City, State/Country:

				
			Osaka, Japan

			
	 	 
	
			Zip Code:

				
			544-8666

			
	 	 
	 	 
	 	 
	 	
			ACCEPTED BY:

			
	 	
			NUO THERAPEUTICS, INC.

			
	 	 
	 	
			By:

				/s/ David Jorden
	 	Name:	David Jorden
	 	Title:	CEO
	 	Dated:	May 25, 2018

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