Document:

Exhibit 10.3

 

 

DATED                             2017

(1) Altitude International Inc

(2) Woodway USA Inc

	
AMENDED AND RESTATED

SOLE DISTRIBUTION AGREEMENT

 

  

 

	
Clause

	 	
Page

	 	 	 
	 	
BACKGROUND

	
1

	
1

	
DEFINITIONS & INTERPRETATION

	
1

	
2

	
APPOINTMENT

	
3

	
3

	
DISTRIBUTOR’S UNDERTAKINGS

	
4

	
4

	
SUPPLY OF PRODUCTS

	
5

	
5

	
SUPPLIER’S UNDERTAKINGS

	
5

	
6

	
PRICES & PAYMENT

	
5

	
7

	
VAT,GST AND TAXES

	
6

	
8

	
ADVERTISING & PROMOTION

	
7

	
9

	
COMPLIANCE WITH LAWS & REGULATIONS

	
7

	
10

	
MARKET PRICING & DISTRIBUTOR MARGINS

	
7

	
11

	
OVER-RIDE COMMISSION

	
8

	
12

	
TRADEMARKS

	
8

	
13

	
WARRANTY

	
10

	
14

	
PAYMENT

	
10

	
15

	
PRODUCT LIABILITY & INSURANCE

	
10

	
16

	
DURATION & TERMINATION

	
11

	
17

	
EFFECTS OF TERMINATION

	
12

	
18

	
LIABILITY

	
12

	
19

	
CONFIDENTIALITY & OWNERSHIP OF INFORMATION

	
13

	
20

	
DEVELOPED WORK AND WEB SITE

	
13

	
21

	
FORCE MAJEURE

	
14

	
22

	
ENTIRE AGREEMENT

	
14

	
23

	
AMENDMENTS

	
14

	
24

	
ASSIGNMENT

	
15

	
25

	
FREEDOM TO CONTRACT

	
15

	
26

	
SEVERABILITY

	
15

	
27

	
NOTICES

	
15

	
28

	
THIRD PARTY RIGHTS

	
15

	
29

	
NO PARTNERSHIP OR AGENCY

	
16

	
30

	
COUNTERPARTS

	
16

	
31

	
GOVERNING LAWS & JURISDICTION

	
16

	
32

	
EXECUTION

	
16

	 	 	 
	
Schedule 1

	
The Products

	
17

	
Schedule 2

	
Trade Marks

	
18

	
Schedule 3

	
Minimum Quantity

	
19

	
Schedule 4

	
Market Pricing & Distributor Margins

	
20

  

THIS AGREEMENT is dated  June 14,  2017. This Agreement fully amends and restates that earlier Sole Distribution Agreement between Woodway USA, Inc. and Sporting Edge USA dated February 14, 2017. The reason for the amendment and restatement is that the supplier decided to use another name and is now known as Altitude International, Inc.

PARTIES:

	(1)	
Altitude International Inc, incorporated and registered in the state of Wisconsin  with company number 82-1804213  whose registered office is at 515 E Las Olas Boulevard Suite 120, Ste 120, Fort Lauderdale, FL 33301 (Supplier).

	(2)	
Woodway USA, Inc incorporated and registered in the State of Wisconsin with company number .............  whose registered office is at W229 N591 Foster Ct. 

Waukesha , WI 53186 , USA (Distributor).

BACKGROUND

The Supplier produces simulated altitude systems and environmentally controlled rooms and chambers and has developed unequalled technology allied to proven training protocols.  The Supplier wishes to appoint the Distributor as the sole distributor for the promotion and sale of the Products within the Territory as defined below, and the Distributor wishes to promote and sell the Products within the Territory, on the terms of this agreement.

	
1.

	
DEFINITIONS AND INTERPRETATION

	
1.1

	
Unless the context requires otherwise, in this Agreement the following terms have the following meanings:

Agreement means the agreement and any schedules to it;

Business Day means a day that is not a Saturday, Sunday or public holiday in the USA;

Commencement Date means the date of signing of this agreement;

Disclosed Information means information disclosed by Supplier to Distributor including information on the Products, their designs or embodiments or any confidential information, trade secret or non secret know how.

Territory means all States forming the United States of America together with all provinces of Canada, for customers within the listed Market Sectors. The Territory may be expanded as agreed in writing between the Supplier and Distributor from time to time

Initial Term has the meaning set out in Clause 13.1;

Local Regulations has the meaning set out in Clause 9.2;

Market Sectors means customers and end users that fall within the categories of Professional Sports teams and players, Colleges and Universities, National and 

1

Regional Sports bodies, National and Regional Sport Associations, the Government, the Military.

Minimum Quantity means the amount of the Products specified in Schedule 4 in respect of the first Period or another amount as may be agreed in writing between the parties in relation to each subsequent Period;

Products means the products of the type and specification manufactured and packed under the Trade Marks and listed in Schedule 1 together with any other products developed by the Supplier and which the Supplier may permit the Distributor, by express notice in writing, to distribute in the Territory;

Trade Marks: the trade mark registrations and applications identified in Schedule 3 together with any further trade marks which the Supplier may permit or procure permission for the Distributor by express notice in writing to use in the Territory in respect of the Products)

Period: an initial period of 18 months from the Commencement Date and each  period of 24 months thereafter during the term of this Agreement.

	
1.2

	
Clause, Schedule and paragraph headings are for convenience only and shall not affect the interpretation of this Agreement.

	
1.3

	
A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality) and that person’s legal and personal representatives, successors and permitted assigns.

	
1.4

	
A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established.

	
1.5

	
The Schedules form part of this Agreement and shall have effect as if set out in full in the body of this Agreement and any reference to this Agreement includes the Schedules.

	
1.6

	
Words in the singular shall include the plural and vice versa.

	
1.7

	
A reference to one gender shall include a reference to the other genders.

	
1.8

	
A reference to a statute, statutory provision or any subordinate legislation made under a statute is to such statute, provision or subordinate legislation as amended or re-enacted from time to time whether before or after the date of this Agreement and, in the case of a statute, includes any subordinate legislation made under that statute whether before or after the date of this Agreement.

	
1.9

	
A reference to writing or written includes faxes and e-mail if receipted

	
1.10

	
Any obligation in this Agreement on a person not to do something includes an obligation not to agree or allow that thing to be done.

2

	
1.11

	
A reference to an agreement is a reference to that agreement as varied or novated (in each case, other than in breach of the provisions of this Agreement) at any time.

	
1.12

	
References to Clauses and Schedules are to the Clauses and Schedules of this Agreement; references to paragraphs are to paragraphs of the relevant Schedule.

	
1.13

	
Any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.

	
2.

	
APPOINTMENT

	
2.1

	
The Supplier hereby appoints the Distributor as the sole distributor to distribute the Products in the Territory on the terms of this Agreement

	
2.2

	
The Distributor shall purchase the Products, as specified in Schedule 1 only from the Supplier, and shall not distribute or manufacture in the Territory during the term of this Agreement any competing Simulated Altitude or Environmental Control Systems.

	
2.3

	
The Distributor shall refrain from exporting or distributing the Products or actively seeking customers for the Products outside the Territory, and shall not establish any branch or maintain any distribution depot outside the Territory for the sale of the Products unless otherwise agreed in writing by the Supplier.

	
2.4

	
The Distributor shall not represent itself as an agent of the Supplier for any purpose, nor pledge the Supplier’s credit nor give any condition or warranty or make any representation on the Supplier’s behalf or commit the Supplier to any contracts.  Further, the Distributor shall not without the Supplier’s prior written consent make any promises or guarantees with reference to the Products beyond those contained in the promotional or other supporting material supplied by the Supplier or otherwise incur any liability on behalf of the Supplier.

	
2.5

	
The Distributor acknowledges that this Agreement does not confer any rights on it with respect to distribution of Products in the rest of the world.

3

	
3.

	
DISTRIBUTOR’S UNDERTAKINGS

	
3.1

	
The Distributor undertakes and agrees with the Supplier at all times during the term of this Agreement:

	
(a)

	
To raise awareness and understanding of the Products in the Territory by way of seminars, briefings, demonstrations, presentations, advertising and other sales activities;

	
(b)

	
to promote the sale of the Products in the Territory including presentation of the products at exhibitions attended by the Distributor, active promotion of the products  and the production of sales and marketing material in an appropriate language, both web based and hard copy;

	
(c)

	
to train a sufficient number of suitably qualified personnel to ensure the proper fulfilment of the Distributor’s obligations under this Agreement;

	
(d)

	
to promptly inform the Supplier in writing of any inquiry or request for the supply of the Products from a customer located outside the Territory;

	
(e)

	
to share with the Supplier any other information relating to the performance of its obligations under this agreement that the Supplier may require from time to time,

	
(f)

	
to keep records showing clearly all enquiries, quotations, transactions and proceedings relating to the Products;

	
(g)

	
to arrange (in conjunction with the Supplier) for proficient installation and after-sale repair and maintenance service for its customers in respect of the Products during the term of this Agreement and for a period of twelve months after the termination of this Agreement, however terminated;

	
(h)

	
to inform the Supplier immediately of any changes in ownership or Control of the Distributor and of any change in its organisation or method of doing which business might affect the performance of the Distributor’s duties in this Agreement.

	
(i)

	
to establish a demonstration facility at their manufacturing HQ.

4

	
4.

	
SUPPLY OF PRODUCTS

	
4.1

	
The Distributor acknowledges that there is a minimum lead time of 6 weeks from the date of receipt of the order by the Supplier for production of the Products.

	
4.2

	
The Supplier undertakes to use all reasonable endeavours to meet all orders for the Products forwarded to the Supplier by the Distributor in accordance with the Supplier’s terms of delivery.

	
4.3

	
The Supplier reserves the right to modify or stop manufacturing any product at any time if it deems it is not beneficial. The Supplier shall give six months written notice.

	
5.

	
SUPPLIER’S UNDERTAKINGS

	
5.1

	
The Supplier undertakes:

	
(a)

	
to supply the products to the Distributor for resale in the Territory;

	
(b)

	
to promptly notify the Distributor in writing, by fax or by email of any inquires or requests for the supply of Products from customers in the Territory;.

	
(c)

	
to provide information and support as may reasonably be requested by the Distributor to enable it properly and efficiently to discharge its duties under this Agreement;

	
(d)

	
subject to availability; to supply spare parts requested by the Distributor which are required to enable the Distributor to fulfil its repair and service obligations under this Agreement.

	
(e)

	
to refrain from seeking direct sales of the products in the Territory and from entering into any agreement with another distributor to supply its Products in the Territory.

	
(f)

	
to provide all necessary training to the Distributor to enable the Distributor to comply with its obligations under this Agreement.

	
(g)

	
to provide a simulated altitude system for use in the Distributor’s demonstration facility.

	
(h)

	
to provide training protocols specific to the requirement of clients of the Distributor.

	
6.

	
PRICES AND PAYMENT

5

	
6.1

	
Unless agreed otherwise for specific projects, the prices to be paid by the Distributor to the Supplier for the Products are to be as set out in the Supplier’s Distributor price list (appended).

	
6.2

	
The Supplier may change pricing as it deems necessary and shall give the Distributor 90 days’ notice of any increase in the prices for the Products.

	
6.3

	
Any and all expenses, costs and charges incurred by the Distributor in the performance of its obligations under this Agreement shall be paid by the Distributor unless the Supplier has expressly agreed beforehand in writing to pay such expenses, costs and charges.

	
6.4

	
The Distributor shall pay the purchase price for Products on the following terms:

	
(a)

	
40% of purchase price at the time of order (the delivery period commences with the receipt of the deposit amount).

	
(b)

	
30% of purchase price within 30 days of the time of dispatch of the Products from the Suppliers works.

	
(c)

	
30% of purchase price at the time of commissioning and handover of the product (within a maximum of 30 days of the date of commissioning or 60 days from the date of shipment, whichever is earlier).

	
6.5

	
The Distributor shall pay the Supplier in US dollars, or any other currency as agreed by the parties from time to time.

	
6.6

	
The Distributor shall not be entitled by reason of any set-off, counter-claim, abatement, or other similar deduction, to withhold payment of any amount due to the Supplier.

	
6.7

	
Interest may be chargeable on any amounts overdue by more than 14 days at the rate of 1% per month (or part thereof) to run from the due date for payment until receipt by the Supplier of the full amount whether or not after judgment and without prejudice to any other right or remedy of the Supplier.

	
7.

	
VAT, GST AND TAXES

	
7.1

	
All sums set out in this Agreement or otherwise payable by a party to the other party pursuant to this Agreement shall be deemed to be exclusive of any VAT, GST or other tax or tariff which is chargeable on the supply or supplies.

6

	
7.2

	
Where any party is required by the terms of this Agreement to reimburse or indemnify any other party for any cost or expense, such first party shall reimburse or indemnify such other party for the full amount of such cost or expense, including such part thereof as represents VAT or GST, save to the extent that such other party is entitled to credit or repayment in respect of such VAT or GST from any relevant tax authority.

	
7.3

	
All taxes, charges, levies, assessments and other fees of any kind imposed in respect of the purchase or importation of the Products shall be the responsibility of and for the account of the Distributor.

	
8.

	
ADVERTISING AND PROMOTION

	
8.1

	
The Distributor shall:

	
(a)

	
be responsible for the promotion of the Products in the Territory provided that the generation by the Distributor of any promotional literature shall be subject to the approval of the Supplier;

	
(b)

	
observe all reasonable directions and instructions given to it by the Supplier in relation to the promotion of the Products;

	
(c)

	
not make any written statement or representations as to the quality, performance or manufacture of the Products without the prior written approval of the Supplier.

	
(d)

	
provide translation of technical and marketing documents (where required).

	
8.2

	
The Supplier shall, where mutually agreed, support the Distributor by supplying personnel at fairs and exhibitions in the Territory and at key presentations.

	
9.

	
COMPLIANCE WITH LAWS AND REGULATIONS

	
9.1

	
The Supplier warrants to the Distributor that the Products comply with the laws and regulations of the country in which they are manufactured as regards the manufacture, sale, packaging and labelling of Products.

	
10.

	
MARKET PRICING AND DISTRIBUTOR MARGINS

The Distributor shall undertake to achieve at least the minimum recommended market price (as recommended by the Supplier) wherever possible.  This price shall be reviewed every 6 months or as agreed by mutual consent.   Whilst it is an objective that is designed to create some measure of uniformity across markets and on an International basis, it is recognised that strategic sales or sales of special significance may well merit special pricing.   Strategically significant sales opportunities should be discussed between Supplier and Distributor and where necessary a joint pricing approach agreed.

Initial market pricing and Distributor GMs are shown in Schedule 4.

7

	
11.

	
OVER-RIDE COMMISSION

The Supplier will not seek direct sales within the Territory and will refer enquiries arising in the Territory to the Distributor.  However, there may be exceptional occasions when an order is generated via (for instance) a Consultant or Sport Science Professional working with the Supplier and as a result that customer may choose to place their order directly on the Supplier.   Should this occur then the Supplier will pay to the Distributor an over-ride commission amounting to 5% of the value of the order.

	
12.

	
TRADE MARKS

	
12.1

	
The Supplier hereby grants to the Distributor the right in the Territory to use the Trade Marks in the promotion, advertisement and sale of the Products in accordance with the terms of and for the duration of this Agreement.  The Supplier will pay the cost of registration and retention of the Trade Marks.

	
12.2

	
The Distributor shall ensure that the Products are sold under the Trade Marks and that on all Products, containers and advertisements for the Products the symbol ® or  TM   shall be used in conjunction with the registered Trade Marks.

	
12.3

	
Any variations of the Trade Marks which the Distributor intends to use shall first be submitted to the Supplier for approval.

	
12.4

	
The Distributor shall not, without the prior written consent of the Supplier, alter or make any addition to the labelling or packaging of the Products displaying the Trade Marks, and shall not alter, deface or remove in any manner any reference to the Trade Marks, any reference to the Supplier or any other name attached or affixed to the Products or their packaging or labelling.

	
12.5

	
The Distributor shall not sub-license, transfer or otherwise deal in any way with the rights of use of the Trade Marks granted under this Agreement.

	
12.6

	
The Distributor shall not do or omit to do anything in its use of the Trade Marks that may or would adversely affect their validity.

8

	
12.7

	
With respect to trade mark infringement:

	
(a)

	
each party shall promptly give notice in writing to the other in the event that it becomes aware of:

	
(i)

	
any infringement or suspected infringement within any Territory of the Trade Marks or any other intellectual property rights in or relating to the Products; or

	
(ii)

	
any claim that any Product or the manufacture, use, sale or other disposal of any Product within any Territory, whether or not under the Trade Marks, infringes the rights of any third party;

	
(b)

	
in the case of any matter falling within Clause 12.7(a)(i):

	
(i)

	
the Supplier shall, in its absolute discretion, determine what action if any shall be taken in respect of the matter;

	
(ii)

	
the Supplier shall have sole control over and shall conduct any action as it shall deem necessary in pursuance of Clause 12.7(b)(i); and

	
(iii)

	
the Supplier shall pay all costs in connection with that action and shall be entitled to all damages and other sums which may be paid or awarded as a result of any such action.

	
12.8

	
In the case of any matter falling within Clause 12.7(a)(ii):

	
(a)

	
the Supplier and the Distributor shall consult to decide what steps shall be taken to prevent or terminate the infringement and the proportions in which they shall share the cost of those steps and any damages and other sums which may be awarded in their favour or against them; and

	
(b)

	
failing agreement between the parties, either party shall be entitled to take all action as it shall consider to be necessary or appropriate at its own expense to defend such a claim and shall be entitled and subject to all damages and other sums which may be recovered or awarded against it as a result of any such action.

	
12.9

	
Each party shall, at the request and expense of the other, provide all reasonable assistance to the other (including but not limited to the use of its name in or being joined as a party to proceedings) in connection with any action to be taken by the other party pursuant to this Clause 11.

9

	
13.

	
WARRANTY

The Supplier offers a 24 month or 5,000 hour (operating hours) warranty on all equipment supplied, subject to installation and servicing being carried out by approved personnel.

	
14.

	
PAYMENT

The default payment profile between Distributor and Supplier is as shown.  It is suggested that the Distributor adopts a similar profile for receiving payment from customers.   The requirement for a deposit payment is particularly important when any bespoke items are incorporated as these often require deposits to be made by the Supplier to specialist sub contractors.

	
·

	
Deposit with order:                                                                          40%

	
·

	
Equipment despatched:                                                                   40% (within 30 days)

	
·

	
Commissioning and hand over:                                                      20% (within 30 days)

Note:  Where delivery and hand over are anticipated to be within two weeks of the equipment being delivered to site, then a single 60% payment at commissioning/handover is acceptable.

	
15.

	
PRODUCT LIABILITY AND INSURANCE

	
15.1

	
Subject to fulfilment by the Distributor of all the conditions contained in this Clause 13, and the limitations of section 15, the Supplier shall indemnify the Distributor against any liability incurred by the Distributor in respect of damage to property, death or personal injury arising from any fault or defect in the materials or workmanship of the Products and any reasonable costs, claims, demands and expenses arising out of or in connection with that liability (the “Relevant Claim”), except to the extent that the liability arises as a result of the omission or negligence of the Distributor.

	
15.2

	
The Distributor shall, immediately it becomes aware of a matter which may result in a Relevant Claim:

	
(a)

	
give written notice to the Supplier of the details of the matter;

	
(b)

	
afford access to the Supplier and permit copies to be taken of any materials, records or documents as the Supplier may require to take action under Clause 12.2(c);

	
(c)

	
allow the Supplier the exclusive conduct of any proceedings and take whatever action as the Supplier shall direct to defend or resist the matter, including the use of professional advisers nominated by the Supplier; and

	
(d)

	
not admit liability or settle the matter without the written consent of the Supplier.

10

	
15.3

	
The Supplier shall for the duration of this Agreement maintain with a reputable insurance company, professional indemnity insurance, product liability insurance and public liability insurance to cover such heads of liability as may arise under or in connection with this Agreement, which as a minimum shall be not less than $5 million for any one occurrence and not less than $5 million in the aggregate in any one year and shall provide a copy of the insurance policy to the Distributor on written request.

	
15.4

	
The Distributor undertakes to maintain appropriate up-to-date and accurate records of the location of Products in the event that recall or remedial action be required.

The Distributor shall, at the Supplier’s cost, give such assistance as the Supplier shall require for the purpose of recalling or re-working as a matter of urgency any Products.

	
16.

	
DURATION AND TERMINATION

	
16.1

	
This Agreement comes into effect on the Commencement Date and, subject to termination earlier in accordance with this Agreement, shall continue in force for an initial term of 18 months (“Initial Term”) and thereafter the parties shall discuss in good faith whether to enter into a new agreement for a further term of 24 months and the terms of any such renewal.

	
16.2

	
Without prejudice to any other rights to which it may be entitled, either party may give notice in writing to the other terminating this Agreement with immediate effect if:

	
(a)

	
the other party commits any material breach of this Agreement and (if such a breach is remediable) fails to remedy that breach within 30 days of that party being notified in writing of the breach; or

	
(b)

	
the other party ceases to do business, becomes unable to pay its debts when they fall due, becomes or is deemed insolvent, or enters into liquidation (compulsorily or voluntarily), or if an order is made or a resolution is passed for the winding up of the other party, or an order is made for the appointment of an administrator to manage the affairs, business and/or property of the other party, or such an administrator is appointed, or documents are filed with the Court for the appointment of an administrator, or notice of intention to appoint an administrator is given by the other party or its directors or by a qualifying charge holder (as defined in paragraph 14 of Schedule B1 to the Insolvency Act 1986), or a receiver is appointed of any of the other party’s assets or undertaking, or circumstances arise which entitle the Court or a creditor to appoint a receiver or manager or which entitle the Court to make a winding-up order, or the other party takes or suffers any similar or analogous action in consequence of debt, or an arrangement or composition is made by the other party with its creditors or an application to a court for protection from 

11

	
 

	
its creditors is made by the other party, or if the other party takes or suffers any equivalent action under the laws of any jurisdiction to which it is subject.

	
16.3

	
Without prejudice to any other rights to which it may be entitled, the Supplier may give notice in writing to the Distributor terminating this Agreement with immediate effect if the Distributor purports to assign its rights or obligations under this Agreement.

	
16.4

	
For the avoidance of doubt, a breach of any of Clauses 2.2, 2.4, 2.5, 6, 8, 11, 16 and 21 is a material breach for the purposes of this Clause.

	
17.

	
EFFECTS OF TERMINATION

	
17.1

	
Termination of this Agreement however caused shall be without prejudice to any rights or liabilities accrued at the date of termination.

	
17.2

	
Subject to Clause 13.3 all other rights and licences of the Distributor under this Agreement shall terminate on the termination date.

	
17.3

	
The Supplier shall honour all orders placed by the Distributor prior to the termination date, whether or not such orders have been accepted by the Supplier.

	
18.

	
LIABILITY

Limits on Liability; To the greatest extent permitted by applicable law, even if such damages could have been foreseen or if a party has been appraised of the possibility of such damages, and regardless of whether such damages are arising in contract, tort, negligence or otherwise, in no event will either party be liable for  (a) damages for loss of profit, goodwill, or other special, incidental or consequential damages suffered by the other party or its customers or, (b) any amount of damages in excess of £5,000,000.  Furthermore, notwithstanding the foregoing or anything in this agreement to the contrary, the Supplier will have no liability, under any theory whatsoever, whether by contract, warranty (express or implied), tort, Strict liability or otherwise, with respect to any modifications made to the Products by Distributor, its customers or any third party other than the supplier. The Distributor acknowledges that the fees and limitations of liability set forth in this Agreement reflect the allocation of risk negotiated and agreed to by the parties and that the Supplier would not enter into this Agreement without these limitations on its liability.  Distributor agrees that these limitations shall apply notwithstanding any failure of essential purpose of any limited remedy.

12

	
19.

	
CONFIDENTIALITY AND OWNERSHIP OF INFORMATION AND TECHNOLOGY

	
19.1

	
Each party agrees and undertakes that during the term of this Agreement and thereafter it shall keep confidential and shall not use for its own purposes, nor without the prior written consent of the other party disclose to any third party, all information of a confidential nature (including, without limitation, information relating to a party’s products, operations, processes, plans or intentions, product information, know-how, design rights, trade secrets, market opportunities, business affairs, costs and information of commercial value) which may become known to that party from the other party (“Confidential Information”), unless the information is public knowledge or already known to that party at the time of disclosure or subsequently becomes public knowledge other than by breach of this Agreement or subsequently comes lawfully into the possession of that party from a third party who is not bound by any obligation to keep that information confidential.

	
19.2

	
To the extent necessary to implement the provisions of this Agreement, each party may disclose Confidential Information to those of its employees as may be reasonably necessary or desirable, provided that before any such disclosure each party shall make those employees aware of its obligations of confidentiality under this Agreement and shall at all times procure compliance by those employees with them.

	
19.3

	
Supplier shall retain all right, title and interest to Disclosed Information and to all improvements and modifications made thereto, whether made by Supplier or Distributor.  To ensure that ownership of Disclosed Information remains with Supplier Distributor hereby assigns all right, title and interest in all information conceived of and/or reduced to practice that in any way relates to Disclosed Information.

	
20.

	
DEVELOPED WORK AND WEB SITES

	
20.1

	
Development.  Where required, Distributor will be responsible for translations of contracts, warranties, terms of service, marketing materials, web sites and other documentation, materials or information provided by the Supplier. Distributor further agrees to promptly disclose and jointly assign to the Supplier all rights, title and interest in all works of authorship, inventions and other proprietary data including copyrights, patents, trade secrets and similar rights attendant thereto, conceived, authored, developed or reduced to practice by Distributor, its employees, either solely or working jointly with others, during and in connection with this Agreement.

	
20.2

	
Web site – During the term of this agreement the Distributor shall maintain current on its website information on the Products.

13

	
21.

	
FORCE MAJEURE

	
21.1

	
The obligations of each party under this Agreement shall be suspended during the period and to the extent that that party is prevented or hindered from complying with them by any cause beyond its reasonable control including (insofar as beyond such control but without prejudice to the generality of the foregoing expression) strikes, lock-outs, labour disputes, act of God, war, riot, civil commotion, malicious damage, compliance with any law or governmental order, rule, regulation or direction, accident, breakdown of plant or machinery, fire, flood, storm, or difficulty or increased expense in obtaining workmen, materials, goods or raw materials in connection with the performance of this Agreement.

	
21.2

	
In the event of either party being so hindered or prevented, the party concerned shall give notice of suspension as soon as reasonably possible to the other party stating the date and extent of the suspension and its cause, and the omission to give such notice shall forfeit the rights of that party to claim suspension.  Any party whose obligations have been suspended as aforesaid shall resume the performance of those obligations as soon as reasonably possible after the removal of the cause and shall so notify the other party.  In the event that the cause continues for more than 6 months either party may terminate this Agreement on 30 days’ notice.

	
22.

	
ENTIRE AGREEMENT

This Agreement and any document referred to in this Agreement constitutes the entire understanding between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, negotiations and discussions between the parties relating to it.

	
23.

	
AMENDMENTS

Save as expressly provided in this Agreement, no amendment or variation of this Agreement shall be effective unless in writing and signed by a duly authorised representative of each of the parties to it.

14

	
24.

	
ASSIGNMENT

The Distributor shall not assign, transfer, charge or deal in any other manner with this Agreement or its rights under it or part of it, or purport to do any of the same, nor sub-contract any or all of its obligations under this Agreement, without the Supplier’s prior written consent.

	
25.

	
FREEDOM TO CONTRACT

The parties declare that they each have the right, power and authority, and have taken all action necessary, to execute and deliver and to exercise their rights and perform their obligations under this Agreement.

The failure of a party to exercise or enforce any right under this Agreement shall not be deemed to be a waiver of that right, nor operate to bar the exercise or enforcement of it at any time or times thereafter, unless such waiver is in writing and signed by the party making it.

	
26.

	
SEVERABILITY

If any provision of this Agreement is, for any reason, held invalid or illegal in any respect, such invalidity or illegality will not affect the validity of this Agreement itself and there will be substituted for the affected provision, a valid and enforceable provision which most closely approximates the intent and economic effect of the invalid provision.  If such provision cannot be amended so as to be valid and enforceable, then such provision is severable from this Agreement, and the remaining provisions of this Agreement remain valid and enforceable.

	
27.

	
NOTICES

Any notice required to be given pursuant to this Agreement shall be in writing and given by delivering the notice by hand at, or by sending the same by surface or airmail with signature on receipt, or by receipted email, to the address of the relevant party as set out in this Agreement or such other address as either party notifies to the other in writing from time to time.  Any notice given according to the above procedure shall be deemed to have been given at the time of delivery (if delivered by hand) and within 5 business days.

	
28.

	
THIRD PARTY RIGHTS

	
28.1

	
A person who is not a party to this Agreement shall not have any rights under or in connection with it by virtue of the Contracts (Rights of Third Parties) Act 1999.

15

	
28.2

	
The rights of the parties to terminate or, rescind or agree any variation, waiver or settlement under this Agreement is not subject to the consent of any person that is not a party to this Agreement.

	
29.

	
NO PARTNERSHIP OR AGENCY

Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the parties, constitute any party the agent of the other party, nor authorise any party to make or enter into any commitments for or on behalf of the other party.

	
30.

	
COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this Agreement, but all the counterparts shall together constitute the same Agreement.  No counterpart shall be effective until each party has executed at least one counterpart.

	
31.

	
GOVERNING LAW AND JURISDICTION

	
31.1

	
This Agreement and any dispute or claim arising out of or in connection with it or its subject matter shall be governed by and construed in accordance with the law of ..............

	
31.2

	
The parties irrevocably agree that the courts of .................. shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter.

	
31.3

	
The Distributor irrevocably appoints Doug Beyerlein of Woodway Headquarters as its agent to receive on its behalf service of any proceedings arising out of or in connection with this Agreement.  Such service shall be deemed completed on delivery to such agent (whether or not it is forwarded to and received by the Distributor) and shall be valid until such time as the Supplier has received prior written notice from the Distributor that such agent has ceased to act as agent.

	
32.

	
EXECUTION

The parties have indicated their acceptance of the terms of this Agreement by signing the execution page following the Schedules.

16

SCHEDULE 1

THE PRODUCTS

The full range of equipment manufactured by Sporting Edge that is used for the creation of simulated altitude environments and/or partially or fully climatically controlled rooms and chambers.

The systems are powered by air compressors which form an integral part of the system.  The range of sizes offered span from 2.2kw to 132kW.

17

 SCHEDULE 2

THE TRADE MARKS

There are 4 marks registered.

(This little fellow is known as ‘BIFF’)

PERFORMANCE PLENUM This is registered as text with no particular style, but with a context.  It refers to an equipment configuration developed by Sporting Edge to provide superior uniformity in Environmental chambers.  It is also the subject of a European Patent Application, which if successful, will be extended to the USA.

18

SCHEDULE 3

MINIMUM QUANTITY

To be discussed between the Supplier and the Distributor with a view to setting targets to allow effective resource planning.

19

SCHEDULE 4

MARKET PRICING AND DISTRIBUTOR MARGINS

Product families

There are a number of configurations of the Products to create Simulated Altitude Environments of varying complexity.

	
1.

	
BASIC.  (Control of simulated altitude with no integrated control of temperature or humidity).

As an example:  The customer has an existing room (or can add two walls in the corner of an existing large room to create a contained volume) so the requirement is simply for the altitude equipment.  Climate control uses standard type AC units which can be supplied by us or the customer or may well already be in place.

	
2.

	
EXTENDED AMBIENT.  As above, but the customer wants an extended range of temperature and humidity control alongside the altitude – a typically temperature range being 45 to 90°F.  The addition of heat and/or humidity to the reduced oxygen level allows extra training stresses to be applied and better results obtained.  This can be achieved using virtually standard building materials for the room itself, but the cooling/heating system and humidity control system are bespoke and integrated with the altitude control system.

	
3.

	
FULL ENVIRONMENTAL.  This creates extremes of temperature and humidity as well as altitude and requires a complete integrated solution in which the room shell – using ‘cold store’ type sandwich panels, heated door frames, heated floors and windows – is very much a part of the overall design and supply package.  Favoured by Universities for scientific research but may well also be of interest to Sports teams who compete in significantly different climate zones to the ones they are resident in.  Having such a facility allows them to pre-condition for the exact environment in which they are about to compete.

Distributor Margins

Based on the Market Price being realised on a sale, the Distributor Margin (GM, expressed as a percentage of the Market Price) will be based on:-

	
·

	
25% GM on the first $50,000

	
·

	
20% GM on the value between $50,001 and $100,000

	
·

	
15% GM on the value between £100,001 and $200,000

	
·

	
10% GM                                for the value above $200,001

20

Simulated Altitude Systems – Market Prices

BASIC:   Standard configuration:  Single room, no room construction or climate control equipment.

EXTENDED AMBIENT & FULL ENVIRONMENTAL:   Bespoke pricing is required to reflect client requirements and any construction activity required.

Examples of Sales Values and Distributor Margins

	
End User (Market) Price

	 	
Retained by Distributor

	 	
GM%

	 	 	 	 	 
	
$25,000

	 	
£ ,250

	 	
25%

	 	 	 	 	 
	
$75,000

	 	
$17,500

	 	
23%

	 	 	 	 	 
	
$125,000

	 	
$26,250

	 	
21%

This Agreement has been entered into on the date stated at the beginning of it.                       

	 	
 

	
Signed by David Vincent

for and on behalf Altitude International Inc

  

 

 

 

 

 

	
/s/ David Vincent                                

Director

	
Signed 

for and on behalf of Woodway USA Inc

  

	
/s/ Doug BeyerleinExhibit 10-1

 

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this
“Agreement”)
is dated as of August 11, 2017, between MabVax Therapeutics
Holdings, Inc., a Delaware corporation (the
“Company”),
and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser”
and collectively the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set
forth in this Agreement and pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the
“Securities
Act”), the Company
desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Acquiring
Person” shall have the
meaning ascribed to such term in Section 4.6.

 

“Action”
shall have the meaning ascribed to such term in Section
3.1(j).

 

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

 

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

 

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

 

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

 

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

 

“Closing
Date” means the Trading
Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers’ obligations to pay the
Subscription Amount and (ii) the Company’s obligations to
deliver the Securities, in each case, have been satisfied or
waived, but in no event later than the third Trading Day following
the date hereof.

 

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

 

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

 

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

 

 

 

-1-

 

 

“Company
Counsel” means Sichenzia
Ross Ference Kesner LLP, with offices located at 61 Broadway,
32nd
Floor, New York, New York
10006.

 

“Conversion
Price” shall have the
meaning ascribed to such term in the Certificate of
Designation.

 

“Conversion
Shares” means,
collectively, the shares of Common Stock issuable upon conversion
of the shares of Preferred Stock in accordance with the terms
hereof.

 

“Disclosure
Schedules” shall have the
meaning ascribed to such term in Section 3.1.

 

“Escrow
Agent” means Sichenzia
Ross Ference Kesner LLP, with offices located at 61 Broadway,
32nd
Floor, New York, New York
10006.

 

“Escrow
Agreement” means the
escrow agreement by and among the Company, the Escrow Agent and the
Purchasers pursuant to which the Purchasers shall deposit
Subscription Amounts with the Escrow Agent to be applied to the
transactions contemplated hereunder.

 

“Evaluation
Date” shall have the
meaning ascribed to such term in Section
3.1(s).

 

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

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as
amended.

 

“FDA” shall have the meaning ascribed to such
term in Section 3.1(ii).

 

“FDCA”
shall have the meaning ascribed to such term in Section
3.1(ii).

 

“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).

 

“Indebtedness”
shall have the meaning ascribed to such term in Section
3.1(aa).

 

“Intellectual Property
Rights” shall have the
meaning ascribed to such term in Section
3.1(p).

 

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

 

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

 

“Material
Permits” shall have the
meaning ascribed to such term in Section
3.1(n).

 

“Per Share Purchase
Price” equals
$550.

 

 

 

-2-

 

 

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

 

“Pharmaceutical
Product” shall have the
meaning ascribed to such term in Section
3.1(ii). 

 

“Preferred
Stock” means up
to 4,273 shares of the
Company’s Series J Convertible Preferred Stock issued
hereunder having the rights, preferences and privileges set forth
in the Certificate of Designation, in the form of
Exhibit
A hereto

 

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

 

“Prospectus”
means the final prospectus filed for the Registration
Statement.

 

“Prospectus
Supplement” means the
supplement to the Prospectus complying with Rule 424(b) of the
Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.

 

 “Purchaser
Party” shall have the
meaning ascribed to such term in Section 4.9.

 

“Registration
Statement” means the
effective registration statement with the Commission file No.
333- 219291
which registers the sale of the Preferred Stock and the Conversion
Shares to the Purchasers.

 

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

 

“Required
Minimum” means, as of any
date, the maximum aggregate number of shares of Common Stock then
issued or potentially issuable in the future pursuant to the
Transaction Documents, including any Conversion Shares issuable
upon conversion in full of all shares of Preferred Stock, ignoring
any conversion limits set forth therein.

 

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

 

“Rule
424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.

 

“SEC
Reports” shall have the
meaning ascribed to such term in Section
3.1(h).

 

“Securities”
means the Preferred Stock and the Conversion
Shares.

 

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

 

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

 

 

 

-3-

 

 

“Subscription
Amount” means, as to each
Purchaser, the aggregate amount to be paid for the Preferred Stock
as specified below such Purchaser’s name on the signature
page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately
available funds.

 

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

 

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

 

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

 

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

 

“Transfer Agent” means
Computershare Investor Services, the current transfer agent of the
Company, with a mailing address of 8742 Lucent Blvd., Suite 225,
Highlands Ranch, CO 80129, and any successor transfer agent of the
Company.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1             
  Closing. 
On the Closing Date, upon the terms and subject to the conditions
set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $2,350,000
of shares of Preferred Stock. 
The aggregate number of shares of Preferred Stock sold hereunder
shall be up to 4,273 shares.  Each Purchaser shall deliver to the
Escrow Agent, via wire transfer or a certified check, immediately
available funds equal to its Subscription Amount, and the Company
shall deliver to each Purchaser its respective shares of Preferred
Stock, and the Company and each Purchaser shall deliver the other
items set forth in Section 2.2 deliverable at the Closing. 
Upon satisfaction of the covenants and conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the offices of
Company Counsel or such other location as the parties shall
mutually agree.  The Company covenants that, if the Purchaser
delivers a Notice of Conversion (as defined in the Certificate of
Designation) to convert any shares of Preferred Stock between the
date hereof and the Closing Date, the Company shall deliver such
Conversion Shares, in lieu of such number of shares of Preferred
Stock being converted, to the Purchaser on the Closing Date in
accordance with such Notice of Conversion.

 

2.2                Deliveries.

 

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

 

(i)        
      this Agreement duly executed by the
Company;

 

(ii)          
  
           
reserved;

 

(iii)            a
certificate evidencing a number of shares of Preferred Stock, equal
to such Purchaser’s Subscription Amount divided by the Per
Share Purchase Price, registered in the name of such Purchaser and
evidence of the filing and acceptance of the Certificate of
Designation from the Secretary of State of Delaware;
and

 

(iv)            the
Prospectus and Prospectus Supplement (which may be delivered in
accordance with Rule 172 under
the Securities Act).

 

 

-4-

 

 

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

 

(i)             
 this Agreement duly
executed by such Purchaser; and

 

(ii)            to
the Escrow Agent, such Purchaser’s Subscription Amount by
wire transfer to the account specified in the Escrow
Agreement.

 

2.3       Closing
Conditions.

 

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

 

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

 

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

 

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

 

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

 

(i)            
  the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations
and warranties of the Company contained herein;

 

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

 

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

 

(iv)            there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

 

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

 

 

-5-

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1            
  Representations and
Warranties of the Company.  Except as set forth in the disclosure
schedules separately delivered to the Purchasers concurrently
herewith (“Disclosure
Schedules”), which
Disclosure Schedules shall be deemed a part hereof and shall
qualify any representation or otherwise made herein to the extent
of the disclosure contained in the corresponding section of the
Disclosure Schedules, the Company hereby makes the following
representations and warranties to each
Purchaser:

 

(a)          Subsidiaries. 
All of the direct and indirect subsidiaries of the Company are set
forth on Schedule
3.1(a).  Except as set
forth on Schedule
3.1(a), the Company owns,
directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all
of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or
purchase securities.  If the Company has no subsidiaries, all
other references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.

 

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

 

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

 

 

-6-

 

 

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

 

(e)           Filings,
Consents and Approvals. 
The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing
or registration with, any court or other federal, state, local or
other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required
pursuant to Section 4.5 of this Agreement, (ii) the filing with the
Commission of the Prospectus Supplement, (iii) the notice and/or
application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Conversion Shares
for trading thereon in the time and manner required thereby, (iv)
such filings as are required to be made under applicable state
securities laws, and (v) the approvals set forth on
Schedule
3.1(e) (collectively, the
“Required
Approvals”).

 

(f)           Issuance
of the Securities; Registration.  The Securities are duly authorized and,
when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the
Transaction Documents.  The Conversion Shares, when issued in
accordance with the terms of the Transaction Documents, will be
validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents.  The Company has
reserved from its duly authorized capital stock a number of shares
of Common Stock for issuance of the Conversion Shares at least
equal to the Required Minimum on the date hereof. The Company has
prepared and filed the Registration Statement in conformity with
the requirements of the Securities Act, which became effective on
July 27, 2017, including the Prospectus, and such amendments and
supplements thereto as may have been required to the date of this
Agreement.  The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted
or, to the knowledge of the Company, are threatened by the
Commission.  The Company, if required by the rules and
regulations of the Commission, shall file the Prospectus with the
Commission pursuant to Rule 424(b).  At the time the
Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the
Registration Statement and any amendments thereto conformed and
will conform in all material respects to the requirements of the
Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendments or
supplements thereto, at time the Prospectus or any amendment or
supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading. The
Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company is eligible to use Form S-3
under the Securities Act and it meets the transaction requirements
with respect to the aggregate market value of securities being sold
pursuant to this offering and during the twelve (12) months prior
to this offering, as set forth in General Instruction I.B.6 of Form
S-3.

 

 

-7-

 

 

(g)          Capitalization. 
The capitalization of the Company is as set forth on
Schedule
3.1(g), which
Schedule
3.1(g) shall also include the
number of shares of Common Stock owned beneficially, and of record,
by each executive officer and director of the Company as of the
date hereof.  The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of
shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents outstanding as of the date of
the most recently filed periodic report under the Exchange
Act.  Except as set forth on Schedule
3.1(g), Person has any right of
first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by
the Transaction Documents.  Except as set forth on
Schedule
3.1(g) or as a result of the
purchase and sale of the Securities, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents.  Except as set forth
on Schedule
3.1(g), the issuance and sale
of the Securities will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. Except as set forth on
Schedule
3.1(g), there are no
outstanding securities or instruments of the Company or any
Subsidiary that contain any redemption or similar provisions, and
there are no contracts, commitments, binding understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to redeem a security of the Company or such
Subsidiary. The Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar
plan or agreement. All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities.  No further approval or
authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. 
Except as set forth on Schedule 3.1(g), there are no stockholders
agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.

 

(h)          SEC
Reports; Financial Statements.  The Company has filed all reports,
schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, together with the
Prospectus and the Prospectus Supplement, being collectively
referred to herein as the “SEC
Reports”) on a timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and none of the
SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The Company has never been an issuer subject
to Rule 144(i) under the Securities Act. The financial statements
of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at
the time of filing.  Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“GAAP”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

 

 

-8-

 

 

(i)            Material
Changes; Undisclosed Events, Liabilities or
Developments.  Since the
date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC
Report filed prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock
option plans.  Except as disclosed in Schedule 3.1(i), the
Company does not have pending before the Commission any request for
confidential treatment of information.  Except for the
issuance of the Securities contemplated by this Agreement or as set
forth on Schedule
3.1(i), no event, liability,
fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist with respect to
the Company or its Subsidiaries or their respective businesses,
properties, operations, assets or financial condition that would be
required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that
has not been publicly disclosed at least 1 Trading Day prior to the
date that this representation is made.

 

(j)       
    Litigation. 
Except as set forth on Schedule
3.1(j), there is no action,
suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an
“Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect.  Except as set forth on Schedule
3.1(j), neither the Company nor
any Subsidiary any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action
involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty. 
There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer
of the Company (in his or her capacity as such).  The
Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities
Act.

 

(k)           Labor
Relations.  Except as set
forth on Schedule
3.1(k), no labor dispute exists
or, to the knowledge of the Company, is imminent with respect to
any of the employees of the Company, which could reasonably be
expected to result in a Material Adverse Effect.  Except as
set forth on Schedule
3.1(k), none of the
Company’s or its Subsidiaries’ employees is a member of
a union that relates to such employee’s relationship with the
Company or such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that their relationships
with their employees are good.  To the knowledge of the
Company, no executive officer of the Company or any Subsidiary is,
or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any
third party, and to the Company’s knowledge, the continued
employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.  The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

 

-9-

 

 

(l)            Compliance. 
Except as set forth on Schedule
3.1(l), neither the Company nor
any Subsidiary: (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it
is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment,
decree, or order of any court, arbitrator or other governmental
authority or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local
laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and
labor matters, except in each case as could not have or reasonably
be expected to result in a Material Adverse
Effect.

 

(m)         Regulatory
Permits.  The Company and
the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the
failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (“Material
Permits”), and neither
the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
Material Permit.

 

(n)    
     Title to
Assets.  The Company and
the Subsidiaries have good and marketable title in fee simple to
all real property owned by them and good and marketable title in
all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and
clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the
Company and the Subsidiaries, (ii) Liens listed on
Schedule
3.1(n) and (iii) Liens for the
payment of federal, state or other taxes, for which appropriate
reserves have been made therefor in accordance with GAAP and, the
payment of which is neither delinquent nor subject to
penalties.  Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

 

(o)           Intellectual
Property.  The Company and
the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks,
trade names, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and similar rights necessary or
required for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could
have a Material Adverse Effect (collectively, the
“Intellectual Property
Rights”).  Except as
set forth on Schedule 3.1(o), none of, and neither the Company nor
any Subsidiary has received written notice that any of, the
Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement.  Neither
the Company nor any Subsidiary has received, since the date of the
latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could not have or reasonably be
expected to not have a Material Adverse Effect.  To the
knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.  The Company and
its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(p)          Insurance. 
The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses
in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at
least equal to the aggregate Subscription Amount.  Neither the
Company nor any Subsidiary has any 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 business without a
significant increase in cost.

 

 

 

-10-

 

 

(q)          Transactions
With Affiliates and Employees.  Except as set forth in the SEC Reports,
none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$120,000 other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the
Company.

 

(r)           Sarbanes-Oxley;
Internal Accounting Controls.  Except as set forth on Schedule
3.1(r), the Company and the
Subsidiaries are in material compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are
effective as of the date hereof and as of the Closing Date. 
The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and forms.  The Company’s
certifying officers have evaluated the effectiveness of the
disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the most
recently filed periodic report under the Exchange Act (such date,
the “Evaluation
Date”).  The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date.  Since the
Evaluation Date, there have been no changes in the internal control
over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially
affected, or is reasonably likely to materially affect, the
internal control over financial reporting of the Company and its
Subsidiaries.

 

(s)           Certain
Fees.  Except as set forth
in the Prospectus Supplement, no brokerage or finder’s fees
or commissions are or will be payable by the Company or any
Subsidiary to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction
Documents.  The Purchasers shall have no obligation with
respect to any fees or with respect to any claims (other than such
fees or commissions owed by a Purchaser pursuant to agreements
entered into by such Purchaser, which fees or commission shall be
the sole responsibility of such Purchaser) made by or on behalf of
other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the
Transaction Documents due to an arrangement or agreement made by
the Company.

 

(t)            Reserved.

 

(u)          Investment
Company. The Company is not,
and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended.  The Company shall
conduct its business in a manner so that it will not become an
“investment company” subject to registration under the
Investment Company Act of 1940, as amended.

 

 

-11-

 

 

(v)          Registration
Rights.  Other than the
Purchasers and except as set forth on Schedule
3.1(v), no Person has any right
to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any
Subsidiary.

 

(w)         Listing
and Maintenance Requirements.  The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration.  Except as set forth on Schedule
3.1(w), the Company has not, in
the 12 months preceding the date hereof, received notice from any
Trading Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The
Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such
listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with
such electronic transfer.

 

(x)           Application
of Takeover Protections. 
The Company and the Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of
incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the
Purchasers as a result of the Purchasers and the Company fulfilling
their obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the
Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

 

(y)          Disclosure. 
Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf
has provided any of the Purchasers or their agents or counsel with
any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed
in the Prospectus Supplement.   The Company understands
and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Company.  All of the written materials furnished by or on
behalf of the Company to the Purchasers regarding the Company and
its Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this
Agreement, taken as a whole, is true and correct and does not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken
as a whole do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made and when made, not
misleading.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those
specifically set forth in the Transaction
Documents.

 

(z)           No
Integrated Offering. Assuming
the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any
of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to
be integrated with prior offerings by the Company for purposes of
(i) the Securities Act which would require the registration of any
such securities under the Securities Act, or (ii) any applicable
shareholder approval provisions of any Trading Market on which any
of the securities of the Company are listed or
designated.

 

 

-12-

 

 

(aa)        Solvency. 
Based on the consolidated financial condition of the Company as of
the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and currently planned capital requirements
and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to
pay all amounts on or in respect of its liabilities when such
amounts are required to be paid.  The Company does not intend
to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable
on or in respect of its debt).  The Company has no knowledge
of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
Closing Date.  Schedule
3.1(aa) sets forth as of the
date hereof all outstanding secured or unsecured Indebtedness of
the Company or any Subsidiary, or for which the Company or any
Subsidiary are contractually obligated to incur additional
Indebtedness.  For the purposes of this Agreement,
“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in
excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness for
borrowed money of others, whether or not the same are or should be
reflected in the Company’s consolidated 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 (z) the present value of any
lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor
any Subsidiary is in default with respect to any
Indebtedness.

 

(bb)      Tax
Status.  Except for
matters that would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, the
Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 

(cc)      
Reserved. 

 

(dd)       Foreign
Corrupt Practices. 
Neither the Company nor any Subsidiary, nor to the knowledge of the
Company or any Subsidiary, any agent or other person acting on
behalf of the Company or any Subsidiary, has (i) directly or
indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or
domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law,
or (iv) violated in any material respect any provision of
FCPA.

 

(ee)        Accountants. 
The Company’s accounting firm is set forth on
Schedule
3.1(ee) of the Disclosure
Schedules.  To the knowledge and belief of the Company, such
accounting firm, except as set forth on Schedule
3.1(ee), (i) is a registered
public accounting firm as required by the Exchange Act and (ii)
shall express its opinion with respect to the financial statements
to be included in the Company’s Annual Report for the fiscal
year ending December 31, 2017.

 

(ff)          No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise,
between the Company and the accountants and lawyers formerly or
presently employed by the Company and the Company is current with
respect to any fees owed to its accountants and lawyers which could
affect the Company’s ability to perform any of its
obligations under any of the Transaction
Documents.

 

 

 

-13-

 

 

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

 

(hh)     
 Acknowledgement
Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f)
and 4.14 hereof), it is understood and acknowledged by the Company
that: (i) none of the Purchasers has been asked by the Company to
agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser,
specifically including, without limitation, Short Sales or
“derivative” transactions, before or after the closing
of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded
securities; (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser
is a party, directly or indirectly, may presently have a
“short” position in the Common Stock, and (iv) each
Purchaser shall not be deemed to have any affiliation with or
control over any arm’s length counter-party in any
“derivative” transaction.  The Company further
understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation,
during the periods that the value of the Conversion Shares
deliverable with respect to Securities are being determined, and
(z) such hedging activities (if any) could reduce the value of the
existing stockholders’ equity interests in the Company at and
after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the
Transaction Documents.

 

(ii)           Regulation
M Compliance.  The Company
has not, and to its knowledge no one acting on its behalf has, (i)
taken, directly or indirectly, any action designed to cause or to
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the Securities, or
(iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the
Company.

 

(jj)          
FDA. As to each product subject to the jurisdiction
of the U.S. Food and Drug Administration
(“FDA”)
under the Federal Food, Drug and Cosmetic Act, as amended, and the
regulations thereunder (“FDCA”)
that is manufactured, packaged, labeled, tested, distributed, sold,
and/or marketed by the Company or any of its Subsidiaries (each
such product, a “Pharmaceutical
Product”), such
Pharmaceutical Product is being manufactured, packaged, labeled,
tested, distributed, sold and/or marketed by the Company in
compliance with all applicable requirements under FDCA and similar
laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application
approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse
Effect. There is no pending, completed or, to the Company’s
knowledge, threatened, action (including any lawsuit, arbitration,
or legal or administrative or regulatory proceeding, charge,
complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its Subsidiaries
has received any notice, warning letter or other communication from
the FDA or any other governmental entity, which (i) contests the
premarket clearance, licensure, registration, or approval of, the
uses of, the distribution of, the manufacturing or packaging of,
the testing of, the sale of, or the labeling and promotion of any
Pharmaceutical Product, (ii) withdraws its approval of, requests
the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating
to, any Pharmaceutical Product, (iii) imposes a clinical hold on
any clinical investigation by the Company or any of its
Subsidiaries, (iv) enjoins production at any facility of the
Company or any of its Subsidiaries, (v) enters or proposes to enter
into a consent decree of

 

 

 

-14-

 

 

permanent injunction with the Company or any of
its Subsidiaries, or (vi) otherwise alleges any violation of any
laws, rules or
regulations by the Company or any of its Subsidiaries, and which,
either individually or in the aggregate, would have a Material
Adverse Effect. The properties, business and operations of the
Company have been and are being conducted in all material respects
in accordance with all applicable laws, rules and regulations of
the FDA. The Company has not been informed by the FDA that the FDA
will prohibit the marketing, sale, license or use in the United
States of any product proposed to be developed, produced or
marketed by the Company nor has the FDA expressed any concern as to
approving or clearing for marketing any product being developed or
proposed to be developed by the Company.

 

(kk)       
Office of
Foreign Assets Control. 
Neither the Company nor any Subsidiary nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of
the Company  or any Subsidiary is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”).

 

(ll)           U.S.
Real Property Holding Corporation.  The Company is not and has never been a
U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and
the Company shall so certify upon Purchaser’s
request.

 

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

 

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

 

(oo)       Reserved. 

 

(pp)       Money
Laundering.  The
operations of the Company and its Subsidiaries are and have been
conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering
Laws”), and no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any
Subsidiary with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company or any Subsidiary,
threatened.

 

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

 

 

-15-

 

 

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

 

(b)           Understandings
or Arrangements.  Such
Purchaser is acquiring the Securities as principal for its own
account and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution
of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the
Registration Statement or otherwise in compliance with applicable
federal and state securities laws).  Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its
business.  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its
business.

 

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

 

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

 

(e)           Access
to Information. Such Purchaser
acknowledges that it has had the opportunity to review the
Transaction Documents (including all exhibits and schedules
thereto) and the SEC Reports and has been afforded, (i) the
opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities;
(ii) access to information about the Company and its financial
condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment
decision with respect to the investment. .  Such
Purchaser acknowledges and agrees that such Purchaser is not
relying on any forecasts or guidance provided by the Company
regarding the Company’s results of operations for periods
ending after the date of this Agreement.

 

 

-16-

 

 

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

 

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

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1               Conversion
Shares. The shares of Common Stock underlying the shares of
Preferred Stock shall be issued free of legends.

 

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

 

4.3             
  Furnishing of
Information.  Until no
Purchaser owns Securities, the Company covenants to maintain the
registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then
subject to the reporting requirements of the Exchange
Act.

 

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

 

 

 

 

-17-

 

 

4.5        
     Securities Laws
Disclosure; Publicity. 
The Company shall (a) by 9:00 a.m. (New York City time) on the
Trading Day immediately following the date hereof issue a press
release disclosing the material terms of the transactions
contemplated hereby and file a Current Report on Form 8-K,
including the Transaction Documents and Disclosure Schedule as
exhibits thereto with the Commission. From and after the issuance
of such press release, the Company represents to the Purchasers
that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or
any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents.  In addition,
effective upon the issuance of such press release, the Company
acknowledges and agrees that any and all confidentiality or similar
obligations under any agreement, whether written or oral, between
the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one
hand, and any of the Purchasers or any of their Affiliates on the
other hand, shall terminate. The Company and each Purchaser shall
consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the
Company nor any Purchaser shall issue any such press release nor
otherwise make any such public statement without the prior consent
of the Company, with respect to any press release of any Purchaser,
or without the prior consent of each Purchaser, with respect to any
press release of the Company, which consent shall not unreasonably
be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company
shall not publicly disclose the name of any Purchaser, or include
the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except to the extent such disclosure is
required by law or Trading Market regulations, in which case the
Company shall provide the applicable Purchasers with prior notice
of such disclosure permitted under this Section
4.5.

 

4.6          
     Shareholder Rights
Plan.  No claim will be
made or enforced by the Company or, with the consent of the
Company, any other Person, that any Purchaser is an
“Acquiring
Person” under any control
share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or similar anti-takeover
plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement
between the Company and the Purchasers.

 

4.7            
   Non-Public
Information.   Except
with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, which shall
be disclosed pursuant to Section 4.5, the Company covenants and
agrees that neither it, nor any other Person acting on its behalf
will provide any Purchaser or its agents or counsel with any
information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto
such Purchaser shall have consented to the receipt of such
information, which consent shall constitute such Purchaser’s
agreement to keep such information confidential.  The Company
understands and confirms that each Purchaser shall be relying on
the foregoing covenant in effecting transactions in securities of
the Company.  To the extent that the Company delivers any
material, non-public information to a Purchaser without such
Purchaser’s consent, the Company hereby covenants and agrees
that such Purchaser shall not have any duty of confidentiality to
the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to
the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates not to trade
on the basis of, such material, non-public information, provided
that the Purchaser shall remain subject to applicable law. To the
extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.  The Company understands and
confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the
Company.

 

4.8           
    Use of
Proceeds.  Except as set
forth on Schedule 4.8
attached hereto, the Company shall use
the net proceeds from the sale of the Securities hereunder for
working capital purposes and shall not use such proceeds: (a) for
the satisfaction of any portion of the Company’s debt (other
than payment of trade payables in the ordinary course of the
Company’s business and prior practices), (b) for the
redemption of any Common Stock or Common Stock Equivalents, (c) for
the settlement of any outstanding litigation or (d) in violation of
FCPA or OFAC regulations.

 

 

-18-

 

 

4.9          
     Indemnification of
Purchasers.   Subject
to the provisions of this Section 4.9, the Company will indemnify
and hold each Purchaser and its directors, officers, shareholders,
members, partners, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls such Purchaser (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid
in settlements, court costs and reasonable attorneys’ fees
and costs of investigation that any such Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents or
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such
Purchaser Parties, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser
Parties may have with any such stockholder or any violations by
such Purchaser Parties of state or federal securities laws or any
other conduct by such Purchaser Parties which constitutes fraud,
gross negligence, willful misconduct or malfeasance).  If any
action shall be brought against any Purchaser Party in respect of
which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and
the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser
Party.  Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party,
in which case the Company shall be responsible for the reasonable
fees and expenses of no more than one such separate counsel. 
The Company will not be liable to any Purchaser Party under this
Agreement (y) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not
be unreasonably withheld or delayed; or (z) to the extent, but only
to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction
Documents.  The indemnification required by this Section 4.9
shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, within thirty days of when
bills relating to indemnifiable amounts are received by the
Company. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser
Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.

 

4.10              Reservation
of Common Stock. As of the date
hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights,
a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue shares of Common Stock upon
conversion of the Preferred Stock.

 

4.11         
   Listing of Common
Stock. The Company hereby
agrees to use best efforts to maintain the listing of the Common
Stock on the Trading Market on which it is currently listed, and
concurrently with the Closing, the Company shall apply to list or
quote all of the Conversion Shares on such Trading Market and
promptly secure the listing of all of the Conversion Shares on such
Trading Market. The Company further agrees, if the Company applies
to have the Common Stock traded on any other Trading Market, it
will then include in such application all of the Conversion Shares,
and will take such other action as is necessary to cause all of the
Conversion Shares to be listed or quoted on such other Trading
Market as promptly as possible.  The Company will then take
all action reasonably necessary to continue the listing or
quotation and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the
Trading Market.  The Company agrees to maintain the
eligibility of the Common Stock for electronic transfer through the
Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of
fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic
transfer.

 

 

-19-

 

 

4.12        
    Reserved.

 

4.13  
          Equal
Treatment of Purchasers. 
No consideration (including any modification of any Transaction
Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered
to all of the parties to the Transaction Documents.  For
clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately
by each Purchaser, and is intended for the Company to treat the
Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or
otherwise.

 

4.14     
       Certain Transactions
and Confidentiality. Each
Purchaser, severally and not jointly with the other Purchasers,
covenants that neither it nor any Affiliate acting on its behalf or
pursuant to any understanding with it will execute any purchases or
sales, including Short Sales of any of the Company’s
securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions
contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section
4.5.  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the
Company pursuant to the initial press release as described in
Section 4.5, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information
included in the Transaction Documents and the Disclosure
Schedules.  Notwithstanding the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the Company
expressly acknowledges and agrees that (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage
in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as
described in Section 4.5, (ii) no Purchaser shall be restricted or
prohibited from effecting any transactions in any securities of the
Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release
as described in Section 4.5 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of
the Company to the Company or its Subsidiaries after the issuance
of the initial press release as described in Section 4.5. 
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the covenant set forth
above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this
Agreement.

 

4.15      
       Conversion
Procedures.  The form of
Notice of Conversion included in the Certificate of Designation
sets forth the totality of the procedures required of the
Purchasers in order to convert the Preferred Stock.  Without
limiting the preceding sentences, no ink-original Notice of
Conversion shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of
Conversion form be required in order to convert the Preferred
Stock.  No additional legal opinion, other information or
instructions shall be required of the Purchasers to convert their
Preferred Stock.  The Company shall honor conversions of the
Preferred Stock and shall deliver Conversion Shares in accordance
with the terms, conditions and time periods set forth in the
Transaction Documents.

 

ARTICLE V.

MISCELLANEOUS

 

5.1             
  Termination. 
This Agreement may be terminated before the Closing by any
Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the
Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or
before August 17, 2017; provided,
however,
that such termination will not affect the right of any party to sue
for any breach by any other party (or parties).

 

 

 

-20-

 

 

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

 

5.3            
   Entire
Agreement.  The
Transaction Documents, together with the exhibits and schedules
thereto, the Prospectus and the Prospectus Supplement, contain the
entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents,
exhibits and schedules.

 

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

 

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

 

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

 

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

 

 

-21-

 

 

5.8            
   No Third-Party
Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Section 4.9 and this
Section 5.8.

 

5.9               
Governing
Law.  All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of
conflicts of law thereof.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.  If either
party shall commence an action or proceeding to enforce any
provisions of the Transaction Documents, then in addition to the
obligations of the Company under Section 4.9, the prevailing party
in such action, suit or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

 

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

 

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

 

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

 

5.13        
    Rescission and
Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in
its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and
rights.

 

 

 

-22-

 

 

 

 

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

 

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

 

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

 

5.17      
      Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each Purchaser under
any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of
the obligations of any other Purchaser under any Transaction
Document.  Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant
hereof or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. 
Each Purchaser shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own
separate legal counsel in its review and negotiation of the
Transaction Documents.  The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or
requested to do so by any of the Purchasers.  It is expressly
understood and agreed that each provision contained in this
Agreement and in each other Transaction Document is between the
Company and a Purchaser, solely, and not between the Company and
the Purchasers collectively and not between and among the
Purchasers.

 

5.18    
        Liquidated
Damages.  The
Company’s obligations to pay any partial liquidated damages
or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until
all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security
pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.

 

5.19    
        Saturdays, Sundays,
Holidays, etc.If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then
such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

 

 

-23-

 

 

5.20        
    Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.

 

5.21    
        WAIVER
OF JURY TRIAL.  IN
ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

 

 

(Signature Pages Follow)

 

 

 

 

-24-

 

 

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

 

 

	

MABVAX THERAPEUTICS HOLDINGS, INC.

	
 

	

Address for Notice:

	
 

	
 

	
 

	
 

	

By:

	
 

	
 

	

Fax:

	
 

	

Name:

	
 

	
 

	
 

	

Title:

	
 

	

E-mail:

	

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

	
 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

 

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

-25-

 

 

 

 

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]

 

 

 

 

 

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

 

 

Name of Purchaser:

 

Signature of Authorized
Signatory of Purchaser :

 

Name of Authorized Signatory: 
 

 

Title of Authorized Signatory:

 

Email Address of Authorized Signatory:

 

 

Facsimile Number of Authorized Signatory: 
 

 

Address for Notice to Purchaser:

 

 

Fax:

 

 

E-mail:

 

 

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

 

 

Subscription Amount: $_________________

 

 

Shares of Preferred Stock: _________________

 

 

EIN Number: _______________________

 

 

 

 

-26-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}]]