Document:

Exhibit 10.1

 

Renovacare, inc.

 

Executive Services
CONSULTING AGREEMENT

 

This Executive Services Consulting Agreement (this “Agreement”)
is dated August 15, 2019, by and between RenovaCare, Inc., a Nevada corporation (the “Company”), and Robin Robinson,
Ph.D., an individual having his place of business at 20419 Peach Tree Road, Dickerson, MD 20842 (“Consultant”).

 

Recitals:

 

A.        The Company wishes
to engage Consultant to provide consulting services on the terms set forth on Exhibit A, attached hereto and incorporated
herein in full (collectively, the “Services”), and Consultant is willing to provide the Services on such terms;
and

 

B.        Since the introduction
of the parties there have been various discussions, negotiations, understandings and agreements between them relating to the terms
and conditions of the Services and, correspondingly, that it is their intention by the terms and conditions of this Agreement to
hereby replace, in their entirety, all such prior agreements, discussions, negotiations and understandings with respect to the
Services to be provided, all in accordance with the terms and conditions of this Agreement.

 

Accordingly, the Company and the Consultant agree as follows:

 

1.                 
Consulting Relationship. During the term of this Agreement, Consultant will provide consulting Services to
the Company as described in Exhibit A hereto. Consultant represents that Consultant is duly licensed (as applicable)
and has the qualifications, the experience and the ability to properly perform the Services.

 

2.                 
Fees and Benefits. As consideration for the Services to be provided by Consultant and other obligations, the
Company shall pay to Consultant the amounts specified in Exhibit B attached hereto and incorporated herein in
full, at the times specified therein. Consultant acknowledges and agrees that Consultant shall have only such benefits as are specified
in Exhibit B hereto.

 

3.                 
Expenses. Consultant shall not be authorized to incur on behalf of the Company any expenses and will be responsible
for all expenses incurred while performing the Services except as expressly specified in Exhibit C hereto unless
otherwise agreed to by the Company’s Chief Executive Officer, Chief Operating Officer, or Chief Financial Officer, which
consent shall be evidenced in writing for any such expenses in excess of $250. As a condition to receipt of reimbursement, Consultant
shall be required to submit to the Company reasonable evidence that the amount involved was both reasonable and necessary to the
Services provided under this Agreement.

 

4.                 
Term and Termination. Consultant shall serve as a consultant to the Company commencing on the Effective Date
(as defined below) and shall cease to provide such Services on the date that this Agreement is terminated as provided below (the
“Consulting Period”):

 

    	1

     

    

 

This Agreement shall terminate (i) on a date which is 5 Business
Days’ following the date of written notice by either party to this Agreement terminating this Agreement. or (ii) at any time
by the mutual written consent of the Consultant and the Company. In the event of such termination, Consultant shall be paid for
any portion of the Services that have been performed prior to the date of termination. For purposes of this Agreement, the term
“Business Day” means any day on which the New York Stock Exchange is open for business.

 

Termination off this Agreement shall constitute the Consultant’s
notice of resignation from any and all directorships, officerships, or other positions held in the Company.

 

5.                 
Independent Contractor. Consultant’s relationship with the Company will be that of an independent contractor
and not that of an employee.

 

6.                 
Method of Provision of Services. Consultant shall provide the Services primarily from his place of business
in Maryland, and from time to time, as required, in the Company’s offices in the United States and in Canada.

 

(a)              
No Authority to Bind Company. Consultant acknowledges and agrees that Consultant has no authority to enter
into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of
the Company.

 

(b)              
Taxes; Indemnification. Consultant shall have full responsibility for all applicable taxes for all compensation
paid to Consultant or its Assistants under this Agreement, including any withholding requirements that apply to any such taxes,
and for compliance with all applicable labor and employment requirements with respect to Consultant’s self-employment, sole
proprietorship or other form of business organization. Consultant agrees to indemnify, defend and hold the Company harmless from
any liability for, or assessment of, any claims or penalties or interest with respect to such taxes, labor or employment requirements,
including any liability for, or assessment of, taxes imposed on the Company by the relevant taxing authorities with respect to
any compensation paid to Consultant or its Assistants or any liability related to the withholding of such taxes.

 

7.                 
Supervision of Consultant’s Services. All of the services to be performed by Consultant, including but
not limited to the Services, will be as agreed between Consultant and the Company’s Chief Executive Officer or Chief Operating
Officer. Consultant will be required to report to the Company’s Chief Executive Officer or Chief Operating Officer concerning
the Services performed under this Agreement. The nature and frequency of these reports will be left to the discretion of the Chief
Operating Officer.

 

8.                 
Consulting or Other Services for Competitors. Consultant represents and warrants that Consultant does not
presently perform or intend to perform, during the term of the Agreement, consulting or other services for, or engage in or intend
to engage in an employment relationship with, companies whose businesses or proposed businesses in any way involve products or
services which would be competitive with the Company’s products or services, or those products or services proposed or in
development by the Company during the term of the Agreement (except for those companies, if any, listed on Exhibit C
hereto). If, however, Consultant decides to do so, Consultant agrees that, in advance of accepting such work, Consultant will promptly
notify the Company in writing, specifying the organization with which Consultant proposes to consult, provide services, or become
employed by and to provide information sufficient to allow the Company to determine if such work would conflict with the terms
of this Agreement, including the terms of the Confidentiality Agreement (defined below), the interests of the Company or further
services which the Company might request of Consultant. If the Company determines that such work conflicts with the terms of this
Agreement, the Company reserves the right to terminate this Agreement immediately. Except as provided herein, the Services shall
not be performed for the Company at the facilities of a third party or using the resources of a third party.

 

    	-2-

     

    

 

9.                 
Confidential Information and Invention Assignment Agreement. As a condition to the Consultant’s engagement
pursuant to this Agreement, Consultant shall sign, or has signed, a Confidential Information and Invention Assignment Agreement
in the form set forth as Exhibit D hereto (the “Confidentiality Agreement”), on or before
the date Consultant begins providing the Services.

 

10.             
Conflicts with this Agreement. Consultant represents and warrants that he is not under any pre-existing obligation
in conflict or in any way inconsistent with the provisions of this Agreement. Consultant represents and warrants that Consultant’s
performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired
by Consultant in confidence or in trust prior to commencement of this Agreement. Consultant warrants that Consultant has the right
to disclose and/or or use all ideas, processes, techniques and other information, if any, which Consultant has gained from third
parties, and which Consultant discloses to the Company or uses in the course of performance of this Agreement, without liability
to such third parties. Notwithstanding the foregoing, Consultant agrees that Consultant shall not bundle with or incorporate into
any deliveries provided to the Company herewith any third party products, ideas, processes, or other techniques, without the express,
written prior approval of the Company. Consultant represents and warrants that Consultant has not granted and will not grant any
rights or licenses to any intellectual property or technology that would conflict with Consultant’s obligations under this
Agreement. Consultant will not knowingly infringe upon any copyright, patent, trade secret or other property right of any former
client, employer or third party in the performance of the Services.

 

11.             
Trading In the Company’s Securities. Consultant acknowledges that the Company is a U.S. “public”
company with its common stock currently quoted for trading on the OTC Markets Group Inc. Pink Sheets. As the Company’s independent
contractor, the Consultant acknowledges that he may have access to certain material, non-public information of the Company that,
if used in connection with any transaction in the Company’s securities, could constitute a violation of the securities laws
of the United States. As such, the Consultant agrees that he shall not engage, directly or indirectly, in any transactions in the
Company’s securities on the basis of any such information, including, but not limited to, providing any other individual
with such information. Additionally, the Consultant acknowledges and agrees that in order to sell any Company securities he owns
he may be required to enter into an insider trading plan that complies with the requirements of, among others, Rule 10b-1 of the
Securities Act. Without limiting the foregoing, the Consultant agrees that during the term of this Agreement he will not, and will
not direct any broker, dealer or other individual on his behalf, to engage in any transactions related to the Company’s securities
except in compliance with applicable laws.

 

    	-3-

     

    

 

12.             
Miscellaneous.

 

(a)       Entire Agreement.
This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes
all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating to the
subject matter hereof.

 

(b)       Further assurances.
The Parties will from time to time after the execution of this Agreement make, do, execute or cause or permit to be made, done
or executed, all such further and other acts, deeds, things, devices and assurances in law whatsoever as may be required to carry
out the true intention and to give full force and effect to this Agreement.

 

(c)       Amendments and Waivers.
No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless
in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this Agreement
shall constitute a waiver of that provision as to that or any other instance.

 

(d)       Successors and Assigns.
Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be
binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.
The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement may assign, whether
voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent
of the Company.

 

(e)       Notices.
Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient
when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified
or registered mail with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the
signature page to this Agreement, as subsequently modified by written notice, or if no address is specified on the signature page,
at the most recent address set forth in the Company’s books and records.

 

(f)       Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance
with its terms.

 

(g)       Construction.
This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel,
if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

 

    	-4-

     

    

 

(h)       Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original,
and all of which together shall constitute one and the same agreement. Execution of a facsimile or scanned copy will have the same
force and effect as execution of an original, and a facsimile or scanned signature will be deemed an original and valid signature.

 

(i)       Electronic Delivery.
The Company may, in its sole discretion, decide to deliver any documents related to this Agreement or any notices required by applicable
law or the Company’s Certificate of Incorporation or Bylaws by email or any other electronic means. Consultant hereby consents
to (i) conduct business electronically (ii) receive such documents and notices by such electronic delivery and (iii) sign documents
electronically and agrees to participate through an on-line or electronic system established and maintained by the Company or a
third party designated by the Company.

 

(j)       Currency.
Unless otherwise stipulated, all payments required to be made pursuant to the provisions of this Agreement and all money amount
references contained herein are in lawful currency of the United States.

 

(k)       Voluntary Execution.
Consultant certifies and acknowledges that Consultant has carefully read all of the provisions of this Agreement, that Consultant
understands and has voluntarily accepted such provisions, and that Consultant will fully and faithfully comply with such provisions.

 

(l)       Public Comment. 
The Consultant, during the Consulting Period and at all times thereafter, shall not make any derogatory comment concerning the
Company or any of its current or former directors, officers, stockholders or employees.  Similarly, the then current (i) members
of the Board and (ii) members of the Company's senior management shall not make any derogatory comment concerning the Consultant.
Notwithstanding anything to the contrary herein, the Consultant understands that nothing in this Agreement restricts or prohibits
the Consultant from initiating communications directly with, responding to any inquiries from, providing testimony before, providing
confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an
investigation directly with a self-regulatory authority or a government agency or entity (collectively, “Government Agencies"),
or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation, and
pursuant to 18 USC § 1833(b), an individual may not be held liable under any criminal or civil federal or state trade secret
law for disclosure of a trade secret: (i) made in confidence to a government official, either directly or indirectly, or to an
attorney, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.  Additionally, an individual suing an entity for
retaliation based on the reporting of a suspected violation of law may disclose a trade secret to the individual's attorney and
use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal
and the individual does not disclose the trade secret except pursuant to court order.  Nothing in this Agreement is intended
to conflict with 18 USC § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 USC
§ 1833(b).

 

    	-5-

     

    

 

(m)       Advice of Counsel.
Consultant acknowledges THAT, IN EXECUTING THIS AGREEMENT, Consultant
Has HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND Consultant
Has read and understands ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST
ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

(n)       Effective Date.
Regardless of the date on which this Agreement is executed by the parties hereto, the effective date of this Agreement is August
15, 2019.

 

(o)Non-Competition. Non-Competition and
Non-Solicitation and Non-Circumvention.

 

(i)       Non-Competition.
Except as authorized by the Company’s Board of Directors, during the Consulting Period and for a period of twelve (12) months
thereafter, the Consultant will not (except as an officer, director, stockholder, employee, agent or consultant of the Company
or any subsidiary or affiliate thereof) either directly or indirectly, whether or not for consideration, (i) in any way, directly
or indirectly, solicit, divert, or take away the business of any person who is or was a customer of the Company, or in any manner
influence such person to cease doing business in part or in whole with Company; (ii) engage in a Competing Business; or (iii) except
for investments or ownership in public entities, mutual funds and similar investments, none of which constitute more than 5% of
the ownership (provided such ownership interest is acquired solely for investment purposes) or control of such entities, own, operate,
control, finance, manage, advise, be employed by or engaged by, perform any services for, invest or otherwise become associated
in any capacity with any person engaged in a Competing Business; or (iv) engage in any practice the purpose or effect of which
is to intentionally evade the provisions of this covenant. For purposes of this section, “Competing Business”
means any company or business which is engaged directly or indirectly in any Company Business carried on or planned to be carried
on (if such plans were developed the term of the Relationship) by the Company; and “Company Business” means
the Company’s business activities and operations as conducted during the term of the Relationship and all products conceived,
planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company,
together with all services provided or planned by the Company, during your relationship with the Company.

 

(ii)       Non-Solicitation
and Non-Circumvention. For a period of twelve (12) months following the termination of the Consulting Period, the Consultant
will not directly or indirectly, whether for your account or for the account of any other individual or entity, solicit or canvas
the trade, business or patronage of, or sell to, any individuals or entities that were investors, customers or employees of the
Company during the Consulting Period, or prospective customers with respect to whom a sales effort, presentation or proposal was
made by the Company or its affiliates, during the one year period prior to the termination of the Consulting Period. Without limiting
the foregoing, the Consultant shall not, directly or indirectly (i) solicit, induce, enter into any agreement with, or attempt
to influence any individual who was an employee or consultant of the Company at any time during the Consulting Period, to terminate
his or her employment relationship with the Company or to become employed or engaged by the Consultant or any individual or entity
by which the Consultant are employed or for which you are acting as a consultant or other advisory capacity, and/or (ii) interfere
in any other way with the employment, or other relationship, of any employee of, or consultant to, the Company.

 

    	-6-

     

    

 

(iii)        Injunctive
Relief.  The Consultant acknowledges and agrees that the covenants and obligations of the Consultant set forth in
this Agreement relate to special, unique and extraordinary Services rendered by the Consultant to the Company and that a violation
of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are
not available at law.  Therefore, the Consultant agrees that the Company shall be entitled to seek an injunction, restraining
order or other temporary or permanent equitable relief (without the requirement to post bond) restraining the Consultant from committing
any violation of the covenants and obligations contained herein.  These injunctive remedies are cumulative and are in addition
to any other rights and remedies the Company may have at law or in equity.

 

(p)       Governing Law.
The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the
state of Nevada without giving effect to principles of conflicts of law.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

    	-7-

     

    

 

SIGNATURES

 

The parties have executed this Agreement as of the date first written
above.

 

the company:

 

renovacare, Inc.

 

 

By: /s/Jatinder (Jay) S. Bhogal 08-15-19

(Signature)

 

Name: Jatinder (Jay) S. Bhogal

Title: Chief Operating Officer

 

Address:

RenovaCare, Inc.

9375 East Shea Blvd.,

Suite 107-A

Scottsdale, AZ 85260

Attention: Jay S. Bhogal

Facsimile: 604-866-5432

Email Address: jsbhogal@renovacareinc.com

 

 

CONSULTANT:

 

robin robinson, PH.D.

 

 

 

/s/Robin Robinson 08-12-19

(Signature)

 

20419 Peach Tree Road

Dickerson, MD 20842

301-349-4035 (home)

240-330-9951 (mobile)

 

 

Email: robinsor1@comcast.net

 

 

    	-8-

     

    

 

EXHIBIT A

 

TO THE RENOVACARE, INC.—ROBIN ROBINSON

CONSULTING AGREEMENT

DATED

AUGUST 15, 2019

****

 

DESCRIPTION OF CONSULTING
SERVICES

 

1.                 
Description of Duties.

During the term of this Consulting Agreement, it is expected that Consultant will serve
as Vice President, Scientific Affairs and expend about 4 hours per week on behalf of the Company on matters related to the Company’s
scientific affairs, as follows:

 

Interface with the Company’s scientific, technology,
engineering, regulatory, intellectual property, and business teams on matters relevant to each team

Pursue and arrange for scientific, technology, government,
regulatory, and business introductions to the Company in support of its mandate

Help identify personnel, contractors, advisors, and
service providers to enable improvements and efficiencies in the Company’s product development, engineering, clinical, regulatory,
and government relations programs

When appropriate, provide reports, advice, guidance,
and insights to Company Officers, Directors, scientists, investors, attorneys, and auditors on matters related to the Consultant’s
expertise

Assist the Company with strategy, tactical execution,
and the preparation and presentation of materials to key opinion leaders, industry influencers, academic institutions, commercial
research groups, and government agencies in furtherance of the Company’s government relations program

 

Consultant shall use Consultant’s reasonable efforts to perform the Services such
that the results are satisfactory to the Company.

 

2.                 
Place of Services.

 

The Company anticipates that Consultant will perform his services principally
from the Consultant’s offices located in Dickerson, MD.

 

3.                 
Code of Ethics.

Consultant agrees to abide by the Code of Ethics and Business Conduct, a copy of which
is attached as Appendix 1 to this Exhibit A hereto.

 

 

    	1

     

    

 

APPENDIX 1 TO EXHIBIT A

TO THE RENOVACARE, INC.—ROBIN ROBINSON

CONSULTING AGREEMENT

DATED

AUGUST 15, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	1

     

    

 

RenovaCare, Inc.

 

Code of Corporate Governance
And Ethics

 

This Employee Code of Corporate Governance and
Ethics applies to all employees, officers and directors of RenovaCare Technologies, Inc., its subsidiaries and affiliates (collectively,
“RenovaCare” or the “Company.”)

 

RenovaCare is proud of its reputation for integrity
and honesty and is committed to these core values. Personal responsibility is at the core of the Company’s principles and
culture. RenovaCare’s reputation depends on you maintaining the highest standards of conduct in all business endeavors. You
have a personal responsibility to protect this reputation, to “do the right thing,” and to act with honesty and integrity
in all dealings with customers, business partners and each other. You should not take unfair advantage of anyone through manipulation,
concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

 

The principles set forth in this document describe
how you should conduct yourself. This Code does not address every expectation or condition regarding proper and ethical business
conduct. Good common sense is your best guide. It does not substitute for Company policies and procedures. In every business-related
endeavor, you must follow the ethics and compliance principles set forth in this Code as well as all other applicable corporate
policies and procedures.

 

You are accountable for reading, understanding
and adhering to this Code. Further, compliance with all laws, rules and regulations related to Company activities is mandatory
and your conduct must be such as to avoid even the appearance of impropriety. Failure to so comply could result in disciplinary
action, up to and including termination of employment.

 

If you are uncertain about what to do, refer
to the relevant section of this Code. If you are still unsure, speak with your supervisor or, if you prefer,  a member
of the Company’s Corporate Ethics and Compliance Committee, if any.

 

In the Workplace

 

RenovaCare is committed to providing a diverse
and inclusive work environment, free of all forms of unlawful discrimination, including any type of harassment.

 

Respect

 

The Company’s greatest strength lies in
the talent and ability of its associates. Since working in partnership is vital to RenovaCare’s continued success, mutual
respect must be the basis for all work relationships. Engaging in behavior that ridicules, belittles, intimidates, threatens or
demeans, affects productivity, can negatively impact the Company’s reputation and may violate the law. You are expected to
treat others with the same respect and dignity that any reasonable person may wish to receive, creating a work environment that
is inclusive, supportive and free of harassment and unlawful discrimination. 

 

    	1

     

    

 

Equal Employment Opportunity

 

The talents and skills needed to conduct business
successfully are not limited to any particular group of people. RenovaCare has a long-standing commitment to a meaningful policy of
equal employment opportunity. The Company’s policy is to ensure equal employment and advancement opportunity for all qualified
individuals without distinction or discrimination because of race, color, religion, gender, sexual orientation, gender identity,
age, national origin, disability, covered veteran status, marital status or any other unlawful basis. As part of this commitment,
RenovaCare will make reasonable accommodations for applicants and qualified employees.

 

Sexual Harassment and Other Discriminatory Harassment

 

Sexual harassment and other discriminatory harassment
are illegal and violate Company policies. Actions or words of a sexual nature that harass or intimidate others are prohibited.
Similarly, actions or words that harass or intimidate based on race, color, religion, gender, sexual orientation, gender identity,
age, national origin, disability, covered veteran status, marital status or any other unlawful basis are also prohibited.

 

Corporate Governance Certification Program

 

The responsibility for maintaining the Company’s
reputation for integrity and compliance rests in large measure on associates who guide its operations and others in particularly
sensitive positions. The Corporate Governance Certification Program is designed to have you affirm your compliance with the standards
contained in this Code and to help identify situations that may in fact, or in appearance, involve conflicts of interest or other
improper conduct. If you are required to complete or update a Corporate Governance Certificate, you must do so in a timely and
forthright manner with accurate responses. Above all, you must remember that any act that gives the appearance of being improper
can damage RenovaCare’s reputation and impair the public’s confidence in the Company. All such acts must be avoided.

 

You must acknowledge that you have read and
understand this Employee Code of Corporate Governance and Ethics.

 

Conflicts of Interest

 

Company policy prohibits conflicts of interest.
A “conflict of interest” occurs when your private interest interferes in any way with the interests of RenovaCare.
In addition to avoiding conflicts of interest, you should also avoid even the appearance of a conflict. A conflict situation can
arise when you or a member of your family takes actions or has interests that may make it difficult for you to perform your
work for the Company objectively and effectively. A conflict of interest can also arise when you or a member of your family receives
improper personal benefits as a result of your position at RenovaCare. Though it is impossible to list every activity or situation
that could present a problem, certain of the more obvious ones are noted below.

 

    	-2-

     

    

 

Corporate Opportunities

 

You owe a duty to RenovaCare to advance its
legitimate interests. You are prohibited from competing with the Company and from using corporate property, information or position
for personal opportunities or gain. You may not use or offer for use RenovaCare resources (time, technology, property or information)
for non-RenovaCare business.

 

Outside Activities

 

Officer or Director of Another Business

 

Officers and employees may not serve as a director,
officer, trustee, partner or in any other principal position of another for-profit or publicly held organization or company without
the prior approval of RenovaCare’s Chief Executive Officer (or a designee). Such requests for approval should be directed
through the office of the Chief Compliance Officer. You should obtain approval from RenovaCare’s Chief Executive Officer
(or a designee), before agreeing to serve on the board or in a principal position of a trade or professional association or of
a non-profit organization. In any event, these outside activities must not impact in any way your daily job responsibilities in
your current position.

 

Second Job

 

Your first loyalty as an employee is to the
Company. Because employment outside of RenovaCare could interfere with your responsibilities to RenovaCare or be detrimental to
the Company, you are encouraged to discuss the situation with the Chief Executive Officer or the Chairperson of the Corporate Ethics
and Compliance Committee.

 

Communication of Conflicts

 

All potential and actual conflicts of interest
or material transactions or relationships that reasonably could be expected to give rise to such a conflict or the appearance of
such a conflict must be disclosed. If you have any doubt about whether a conflict of interest exists after consulting this Code,
you should seek assistance from the Corporate Ethics and Compliance Committee.

 

Compliance with Laws, Rules and Regulations

 

You are required to comply fully with all laws,
rules and regulations affecting RenovaCare’s business and its conduct in business matters. Regarding international operations,
it is expected that the Company will comply with the laws of the countries in which we operate. Where Company policy differs from
local law or custom, you should follow the more restrictive policy. Because the laws that are applicable to the Company’s
businesses are often very complex and penalties for violations are severe, you should consult the Chief Executive Officer, who
may direct you to our legal counsel, if you have any questions or concerns. If you suspect or become aware of a violation by an
employee or the Company, it is your responsibility to report this immediately. Certain key laws are listed below.

 

    	-3-

     

    

 

Insider Trading

 

It is unlawful to buy or sell securities on
the basis of material, non-public information (whether such information is gained in the course of employment or otherwise) for
Company-owned or managed accounts, for personal accounts, or for any accounts that associates may influence, including, but not
limited to, accounts of family members. This type of activity is known as “insider trading” and is prohibited by securities
laws and Company policy.

 

Information may be material if there
is a substantial likelihood that the information would affect the price of the security or that a reasonable investor would consider
the information significant in deciding whether to buy or sell a security. Information is considered to be non-public if
it has not been disclosed to the public. Generally, information is considered disclosed to the public if it has been published
in newspapers or other media, has been the subject of a press release or a public filing with the SEC and, in all cases, at least
48 hours has passed since the publication, release or filing.

 

Substantial penalties may be assessed against
people who trade while in possession of material inside information and can also be imposed upon companies and so-called controlling
persons such as officers and directors, who fail to take appropriate steps to prevent or detect insider trading violations by their
employees or subordinates. If you violate the Company’s insider trading policy, sanctions imposed by law enforcement officials,
as well as Company-imposed sanctions, up to and including termination of employment, could result.

 

Antitrust

 

Antitrust laws are designed to preserve and
foster free and open competition and thereby assure reasonable prices, efficient services and a productive economy. Any activity
that reduces or limits free and open competition is subject to antitrust scrutiny. Deliberate or even accidental violations of
these laws must not occur. For example, the Company may not agree with competitors to fix prices or terms of financial services,
to designate pre-determined geographical areas where each will do business or to boycott anyone.

 

Money Laundering

 

Money laundering involves an attempt to conceal
the true source of funds and typically takes one of two forms. There are transactions used to transform the proceeds from illicit
activities into funds with an apparently legal source and there are transactions that take legitimate funds and funnel them through
organizations to fund illegitimate activities, such as terrorism. Money laundering often involves complex financial transactions
and encompasses many different types of financial products and services.

 

    	-4-

     

    

 

Under the existing money laundering laws of
the U.S., it is a crime if you engage knowingly in a financial transaction that involves proceeds from criminal activities or is
intended to promote illegal activity. Such knowledge includes “willful blindness” to the legitimacy of the source of
the funds. Severe penalties, including substantial fines and even imprisonment, can be imposed on companies and their associates
for involvement in or failure to report actual or even suspicious activities relating to money laundering.

 

Foreign Corrupt Practices Act

 

The Foreign Corrupt Practices Act (FCPA) prohibits
the giving or offering of money or anything of value, including gifts or services:

 

	 	·	directly or indirectly to a foreign official, a foreign political party or an official or candidate of that party, an officer or employee of the United Nations or other public international organization or a representative of any foreign official,

 

	 	·	for the purpose of influencing any act or decision by a foreign official, or for the purpose of persuading a foreign official to use the official’s influence to affect any act or decision of a foreign government or agency or public international organization, or for the purpose of securing any improper advantage, and

 

	 	·	to assist the Company in doing business.

 

The FCPA does not prohibit any of the following:

 

	 	·	payments of reasonable and bona fide expenses, such as travel and lodging, that are directly related to the promotion, demonstration or explanation of a product or service, so long as the payment is not for a corrupt purpose,

 

	 	·	payments that are legal under a foreign country’s written laws or regulations, and

 

	 	·	“facilitating” or “expediting” payments of small value to effect routine, non-discretionary governmental action (unrelated to the process of awarding business), such as obtaining visas, arranging for utility hookups or the like, where the practice is usual or customary in the country concerned.

 

While the law allows certain payments to foreign
officials to facilitate routine government actions, determining what is a permissible “facilitating” payment involves
difficult legal judgments. Therefore, except for legally prescribed fees and similar payments, no payment or gift may be made to
a foreign official related to business activities unless the transaction is approved in advance by the General Counsel or a designee.
You should make every effort to eliminate or minimize such payments. If such payments are approved, they must be properly recorded
in the Company’s books and records.

 

    	-5-

     

    

 

RenovaCare and its associates will not directly
or indirectly engage in bribery, kickbacks, payoffs or other corrupt business practices, in their relations with governmental agencies
or customers.

 

Boycotts

 

U.S. anti-boycott laws and regulations prohibit
or severely restrict the Company from participating in boycotts against countries friendly to the U.S. and require us to report
both legal and illegal boycott requests to the government.

 

Financial Management and Disclosure

 

The Company’s goal and intention is to
comply with the laws, rules and regulations by which we are governed. In fact, we strive to comply not only with requirements of
the law but also with recognized compliance practices. All illegal activities or illegal conduct are prohibited whether or not
they are specifically set forth in this Code. Where law does not govern a situation or where the law is unclear or conflicting,
you should discuss the situation with the Chief Financial Officer or Chief Executive Officer and management should seek advice
from the Company’s General Counsel. Business should always be conducted in a fair and forthright manner. Directors, officers
and employees are expected to act according to high ethical standards.

 

The continuing excellence of the Company’s
reputation depends upon our full and complete disclosure of important information about the Company that is used in the securities
marketplace. Our financial and non- financial disclosures and filings with the SEC must be transparent, accurate and timely. Proper
reporting of reliable, truthful and accurate information is a complex process involving cooperation between many departments and
disciplines. We must all work together to insure that reliable, truthful and accurate information is disclosed to the public. The
Company must disclose to the SEC, current security holders and the investing public information that is required, and any additional
information that may be necessary to ensure the required disclosures are not misleading or inaccurate. The Company requires you
to participate in the disclosure process, which is overseen by the Chief Financial Officer and/or Chief Executive Officer.

 

The disclosure process is designed to record,
process, summarize and report material information as required by all applicable laws, rules and regulations. Participation in
the disclosure process is a requirement of a public company, and full cooperation and participation by Chief Financial Officer,
Chief Executive Officer and, upon request, other employees in the disclosure process is a requirement of this Code.

 

Officers and employees must fully comply with
their disclosure responsibilities in an accurate and timely manner or be subject to discipline of up to and including termination
of employment.

 

    	-6-

     

    

 

Accounting Standards

 

RenovaCare maintains its accounting records and prepares its financial
statements in accordance with accounting principles generally accepted in the U.S. (GAAP) and with statutory accounting principles,
as promulgated by the Securities and Exchange Commission and other regulating authorities. If you are aware or have reason to believe
that there are violations of either law or policy regarding the Company’s financial records or operations, you are obligated
to report such information promptly.

 

Audits and Outside Examinations

 

There may be occasions when the operations of RenovaCare are subject
to audit or examination. These reviews may be conducted by the Company’s external auditor, state and federal regulatory agencies.
Both the law and RenovaCare policy require that you cooperate fully with all appropriate requests for information, and prohibit
attempting to influence, interfere with or provide inaccurate information in response to a legitimate audit or examination request.
You may not fraudulently influence, mislead, manipulate or coerce outside auditors if you know or you are unreasonable in not knowing
that by doing so you could render the financial statements materially misleading or affect the auditors in other ways. If you are
contacted by an outside agency regarding a financial examination or audit, you must immediately notify the Chief Executive Officer
or the Chief Financial Officer before responding. If the contact is initiated by a state or federal agency you should contact the
Corporate Ethics & Compliance Committee.

 

Protection and Proper Use of Company Assets

 

Safeguarding and appropriately using Company assets, whether those
assets take the form of paper files, electronic data, computer resources, trademarks or otherwise, is critical.

 

Confidentiality

 

RenovaCare is committed to preserving customer and employee trust.
All information, whether it is business, customer or employee-related, must be treated in a confidential manner, and disclosing
it is limited to those people who have an appropriate business or legal reason to have access to the information. You need to take
special precautions when transmitting information via e-mail, fax, the Internet or other media. Remember to treat all such communications
as if they were public documents and printed on letterhead.

 

In addition, Company meetings are confidential. You may not use audio
or video equipment to record these meetings without the specific prior authorization of the head of your department.

 

Technology

 

Safeguarding computer resources is critical because the Company relies
on technology to conduct daily business. Software is provided to enable you to perform your job and is covered by federal copyright
laws. You cannot duplicate, distribute or lend software to anyone unless permitted by the license agreement.

 

    	-7-

     

    

 

RenovaCare provides electronic mail (e-mail) and Internet access
to assist and facilitate business communications. All information stored, transmitted, received, or contained in these systems
is the Company’s sole property and is subject to its review at any time. All e-mail and Internet use must be consistent with
RenovaCare’s policies, practices and commitment to ensuring a work environment where all persons are treated with respect
and dignity. Because these systems provide access to a worldwide audience, you should act at all times as if you are representing
RenovaCare to the public, and should preserve RenovaCare’s system security and protect its name and trademarks. You must
act responsibly and adhere to all laws and Company policies when using e-mail or the Internet.

 

You must use your computer appropriately in accordance with Company
standards and be sure to secure both the computer and all data from loss, damage or unauthorized access.

 

Intellectual Property: Patents, Copyrights and Trademarks

 

Except as otherwise agreed to in writing between the Company and
an officer or employee, all intellectual property you conceive or develop during the course of your employment shall be the sole
property of the Company. The term intellectual property includes any invention, discovery, concept, idea, or writing whether protectable
or not by any United States or foreign copyright, trademark, patent, or common law including, but not limited to designs, materials,
compositions of matter, machines, manufactures, processes, improvements, data, computer software, writings, formula, techniques,
know-how, methods, as well as improvements thereof or know-how related thereto concerning any past, present, or prospective activities
of the Company. Officers and employees must promptly disclose in writing to the Company any intellectual property developed or
conceived either solely or with others during the course of your employment and must render any and all aid and assistance, at
our expense to secure the appropriate patent, copyright, or trademark protection for such intellectual property.

 

Works of authorship including literary works such as books, articles,
and computer programs; musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes
and choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings;
and architectural works are protected by United States and foreign copyright law as soon as they are reduced to a tangible medium
perceptible by humans with or without the aid of a machine. A work does NOT have to bear a copyright notice in order to be protected
and without the copyright owner’s permission, no one may make copies of the work, create derivative works, distribute the
work, perform the work publicly, or display the work publicly.

 

Copyright laws may protect items posted on a website. Unless a website
grants permission to download the Internet content you generally only have the legal right to view the content. If you do not have
permission to download and distribute specific website content you should contact the Company’s General Counsel. If you are
unclear as to the application of this Intellectual Property Policy, or if questions arise, please consult with the Company’s
General Counsel.

 

    	-8-

     

    

 

Additional Matters Pertaining to Directors

 

Annex A hereto, which is incorporated herein by reference, applies
to the Company’s directors.

 

Administration

 

Reporting of Any Illegal or Unethical Behavior; Points of Contact

 

If you are aware of any illegal or unethical behavior or if you believe
that an applicable law, rule or regulation or this Code has been violated, the matter must be promptly reported to the Chief Executive
Officer, the Chief Financial Officer or the Corporate Ethics & Compliance Committee. In addition, if you have a concern about
the Company’s accounting practices, internal controls or auditing matters, you should report your concerns to these same
persons or entities. If you have questions about anything in this Code or if you believe RenovaCare or an associate is violating
the law or Company policy or engaging in conduct that appears unethical you may contact anyone of the foregoing entities.  You
should take care to report violations to a person who you believe is not involved in the alleged violation. All reports of alleged
violations will be promptly investigated and, if appropriate, remedied, and if legally required, immediately reported to the proper
governmental authority.

 

You will be expected to cooperate in assuring that violations of
this Code are promptly addressed. RenovaCare has a policy of protecting the confidentiality of those making reports of possible
misconduct to the maximum extent permitted by law. In no event will there be any retaliation against someone for reporting an
activity that he or she in good faith believes to be a violation of any law, rule, regulation, internal policy or this Code.
Any supervisor intimidating or imposing sanctions on someone for reporting a matter will be subject to discipline up to and including
termination.

 

You should know that it is unlawful to retaliate against a person,
including with respect to their employment, for providing truthful information to a law enforcement officer relating to the possible
commission of any federal offense. Employees who allege that they have been retaliated against for providing information to a federal
agency, Congress or a person with supervisory authority over the employee about suspected fraud may file a complaint with the Department
of Labor, or in federal court if the Department of Labor does not take action.

 

Responding to Improper Conduct

 

This Code will be enforced on a uniform basis for everyone without
regard to his or her position. Violators of this Code will be subject to disciplinary action. Supervisors and managers of a disciplined
employee or an employee reporting a violation may also be subject to disciplinary action for failure to properly oversee an employee’s
conduct, or for retaliation against an employee who reports a violation.

 

    	-9-

     

    

 

The response will depend upon a number of factors including whether
the improper behavior involved illegal conduct. Disciplinary action may include, but is not limited to, reprimands and warnings,
probation, suspension, demotion, reassignment, reduction in compensation or termination. In any disciplinary action arising from
violations of this Code, prior truthful disclosure, or the failure to fully disclose the issue and all pertinent information with
respect to the issue, will weigh heavily in the disposition of the matter. Certain actions and omissions prohibited by the Code
might also be unlawful and could lead to individual criminal prosecution and, upon conviction, to fines and imprisonment.

 

Waivers of or exceptions to this Code will be granted only under
exceptional circumstances. There shall be no amendment or modification to this Code except by a vote of the Board of Directors
or a designated board committee that will ascertain whether an amendment or modification is appropriate. In case of any amendment
or modification of this Code that applies to an officer or director of the Company, the amendment or modification shall be made
publicly available.

 

 

 

 

 

 

 

    	-10-

     

    

 

Annex A

To

RENOVCARE, INC.

 

Amended Code of Corporate
Governance And Ethics

 

Provisions Related to Directors

 

 

1. Responsibilities and Functions of Board of Directors

 

The Board of Directors, elected each year by
the Company’s stockholders at an annual meeting of stockholders, fosters and encourages an environment of strong disclosure
controls and procedures, including internal controls, financial accountability, high ethical standards and compliance with applicable
policies, laws and regulations. The primary responsibility of members of the Company's Board of Directors is to uphold the best
interests of the Company and its stockholders as a whole by overseeing the management of the Company's business and affairs. While
the Board may call special meetings in order to address specific needs of the Company from time to time, it is generally expected
that the Board of Directors will meet at regular intervals and are expected to hold approximately four meetings or more per fiscal
year during which the Board will perform a number of specific functions, including but not limited to:

 

	 	a.	Reviewing and discussing the performance of the Company, as well as any immediate issues facing the company;
	 	b.	Reviewing, approving and monitoring fundamental financial and business strategies and major corporate actions;

	 	c.	Ensuring processes are in place for maintaining the integrity of its financial statements, the integrity of compliance with law and ethics and
	 	d.	Assessing and reviewing major risks facing the Company and planning options, if any, for their mitigation.

 

Board members are encouraged to suggest the
inclusion of item(s) for the agenda for each quarterly meeting of the Board of Directors in consultation with each other and senior
management of the Company. It is expected that each Director will make every effort to attend each Board meeting. While attendance
in person is preferred, attendance by teleconference is permitted if necessary under the circumstances. The proceedings and deliberations
of the Board are confidential. Each Director will maintain the confidentiality of information received in connection with his or
her service as a Director.

 

2. Board Access to Management

 

At all times, Board members shall be able to
freely access Company management without hindrance or undue delay while ensuring that such contact is not distracting to the business
operations of the Company and that such contact, if in writing, is copied to the Chairman and Chief Executive Officer. In addition,
management may be invited to attend Board meetings, during which time management may brief the Board on items of particular interest
and/or concern. Senior management is encouraged to offer presentations at such meetings by individuals who can provide additional
insight into items being considered or who may have potential for greater responsibility and should be given exposure to the Board.

 

    	-11-

     

    

 

3. Board Access to Independent/Outside
Advisors

 

As may be required by applicable law or rule,
the Board of Directors has the authority, when it should be deemed necessary to carry out its duties, to retain independent legal,
financial or other advisors and to approve each such advisor's fees and other retention terms at the expense of the Company.

 

4. Size of Board

 

The Company's Bylaws provides that the number
of Directors shall be fixed from time to time by the Board of Directors, but in no event shall be less than the minimum required
by law. The Board should be large enough to maintain the Company’s required expertise but not too large to function efficiently.
At this time, the Board of Directors believes that the optimal number of Board members is five (5), while recognizing and allowing
however, for changing circumstances that may warrant a higher or lower number from time to time.

 

5. Ethics and Conflicts of Interest of
the Board

 

All Directors, as well as officers and employees,
are expected to act ethically at all times and to acknowledge their adherence to the policies comprising the Company's Code of
Ethics. At any time that a Board member develops an actual or potential conflict of interest with the Company, the conflict should
be reported without delay to the Chairman of the Board and Chief Executive Officer. In the event that a conflict of interest cannot
be effectively resolved, the Board member shall resign. Should a member of the Board or any member of his or her immediate family
have a matter before the Board in which they have a personal interest, then this interest and the material facts and relationships
relating thereto must be disclosed promptly. Furthermore, if a Board member becomes aware of a business opportunity that could
be of potential benefit to the Company, then he or she must first introduce this opportunity to the Board of Directors for consideration
and not endeavor to profit personally from the opportunity unless the Company declines to pursue it.

 

6. Criteria and Selection of Board Membership

 

The Board of Directors is responsible to the
Company’s stockholders for identifying and recommending the most qualified Director candidates to fill newly created directorship
positions and vacancies and further recommend these candidates for election by stockholders. Directors should possess the highest
personal and professional ethics, responsibility, fairness, integrity and values and be committed to representing the long-term
interests of the Company’s stockholders. They must also have an inquisitive and objective perspective, practical wisdom and
mature judgment. The Company’s general counsel or its Chief Financial Officer shall be responsible for providing an orientation
for all new Directors and for periodically providing materials or briefing sessions on subjects that would assist Directors in
discharging their duties. Each new Director shall, within six weeks of election to the Board, spend a reasonable amount of time
at corporate headquarters for an in-depth overview of the Company's strategic plans, its financial statements and key policies
and practices. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively
and should be committed to serve on the Board for an extended period of time. Directors should offer their resignation in the event
of any significant change in their personal circumstances, including a change in their principal job responsibilities or in the
event that a conflict of interest cannot be effectively resolved.

 

    	-12-

     

    

 

7. Term Limits for Board Members

 

There is no time term-limit for service to the
Board, nor does the Board believe that a term limit should be established. By abstaining from term limits, the Company believes
it can successfully retain Board members who, over time, have been able to garner industry knowledge and are intimate with the
Company’s operations. Such Directors are able to significantly contribute to the Board’s function since they have helped
to foster the Company’s corporate vision and better understand industry trends.

 

8. Outside Board Directorships

 

Directors must be willing to devote sufficient
time to carrying out their duties and responsibilities effectively. Since service to the Company’s Board of Directors may
require significant time and responsibility commitments, although not mandatory, Board members are encouraged to limit the number
of public company boards that they may concurrently serve on to four. Board members shall notify the Chairman and Chief Executive
Officer of any and/or all other public company boards on which they may serve or to which they have received an invitation to serve
prior to accepting such positions.

 

9. Board Performance Assessment and Review

 

Meaningful Board evaluation may require a self-assessment
of the effectiveness of the full Board and individual Directors. Accordingly, the Board shall perform an annual self-evaluation
through its Directors. This review may require establishing protocols and procedures for evaluation of individual Board members
in order to ensure that each sitting member brings expertise that is relevant to the Company’s needs at that time and that
the skills and contributions of the Directors are conducive to the Board’s function as a group. While individual Board member
review may be of value, the purpose of this evaluation is to increase the effectiveness of the Board, not to focus on the performance
of individual Board members.

 

10. Stock Option Grants and Cash Compensation

 

Directors, Officers, employees of and consultants
to the Company, selected by the Board of Directors may be eligible to receive stock grants in accordance with the terms of the
Company’s Incentive Stock Compensation Plan, as in effect from time to time. The grant may be in the form of a stock award,
restricted stock purchase offer, incentive stock option or a non-statutory option. The Board of Directors designates the times
at which the grant will be made, the type and number of options (and the number of shares subject to those options) or stock awards
to be granted. In addition Board members may be eligible for cash compensation in accordance with the Company’s compensation
guidelines. All Board members will be reimbursed for travel and related meeting attendance expenses.

 

    	-13-

     

    

 

11. Prohibition on Personal Loans

 

The Company and the Board of Directors will
not engage in offering or making available credit or loan arrangements to any member of the Board or the Company’s executive
management.

 

 

 

 

 

 

 

 

 

    	-14-

     

    

 

Acknowledgment

of

 

Receipt Of Code of Corporate
Governance And Ethics

 

I have received and read the Company's Code
of Corporate Governance and Ethics (including to the extent applicable, Annex A thereto). I understand the standards and policies
contained in the Company Code of Corporate Governance and Ethics and understand that there may be additional policies or laws specific
to my job. I further agree to comply with the Company Code of Corporate Governance and Ethics. If I have questions concerning the
meaning or application of the Company Code of Corporate Governance and Ethics, any Company policies, or the legal and regulatory
requirements applicable to my job, I know I can consult the Chief Executive Officer, Chief Financial Officer or a member of the
Corporate Ethics & Compliance Committee, if any, knowing that my questions or reports to these sources will be maintained in
confidence.

 

 

 

 

	Signature:	 /s/Robin Robinson 08-12-19 ________________	 	Date: August 15, 2019
	 	 	 	 	 	 
	Name (print):	  Robin Robinson	 	 
	 	 	 	 	 	 
	Title:	 Vice President, Scientific Affairs 	 	 	 	 
	 	 	 	 	 	 

 

 

 

 

 

 

    	-15-

     

    

 

EXHIBIT B

 

TO THE RENOVACARE, INC.—ROBIN ROBINSON

CONSULTING AGREEMENT

DATED

AUGUST 15, 2019

****

 

COMPENSATION

 

The parties agree that fees for the Services and any subsequently
agreed upon Services to be provided shall be paid to Consultant as follows:

 

1. Cash Compensation. Consultant shall receive $5,000.00
monthly. Additionally, any work performed in excess of sixteen hours will be compensated at the rate of $500.00 per hour to a maximum
of $10,000 per month. Consultant will track time spent on projects and provide a summary and invoice when compensation exceeds
$5,000.00 in a month. Consultant will provide a summary for any month if requested by the Company.

 

2.       
Equity Compensation. At the discretion of the Company’s Board of Directors, Consultant shall be eligible for
equity stock options or equity awards pursuant to the Company’s equity incentive compensation plans in effect from time to
time.

 

3. Other Benefits. [None]

 

 

 

 

 

 

 

    	1

     

    

 

EXHIBIT C

 

 

TO THE RENOVCARE, INC.—ROBIN ROBINSON

CONSULTING AGREEMENT

DATED

AUGUST 15, 2019

****

 

 

ALLOWABLE Expenses

 

 

 

The Company shall reimburse the Consultant
for reasonable costs associated with the Consultant’s travel on behalf of the Company and for such other reasonable expenses
incurred by the Executive on behalf of the Company; provided, however, that any expenditure in excess of $250 will first require
the Company’s approval.

 

 

 

 

 

 

 

    	1

     

    

 

EXHIBIT D

 

 

TO THE RENOVACARE, INC.—ROBIN ROBINSON

CONSULTING AGREEMENT

DATED

AUGUST 15, 2019

****

 

 

Confidential information
and

invention assignment agreement

 

[See Attached]

 

 

 

 

 

 

 

 

     

     

    

 

RENOVACARE, INC.

 

CONFIDENTIAL INFORMATION
AND

INVENTION ASSIGNMENT AGREEMENT

 

Confidential
Information and Invention Assignment Agreement is dated as of August 15, 2019, by and between RenovaCare, Inc., a Nevada corporation
(the “RCAR”),
and Robin Robinson, an individual having his place of business in Dickerson, Maryland (“Consultant”).

 

As a condition of becoming retained (or Consultant’s consulting
relationship being continued) by RCAR, or any of its current or future subsidiaries, affiliates, successors or assigns (collectively,
the “Company”), and in consideration of Consultant’s consulting relationship with the Company and receipt
of the compensation now and hereafter paid by the Company, the receipt of Confidential Information (as defined below) while associated
with the Company, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Consultant
hereby agrees to the following:

 

1.                 
Relationship. This Confidential Information and Invention Assignment Agreement (this “Agreement”)
will apply to Consultant’s consulting relationship with the Company. If that relationship ends and the Company, within one
(1) year thereafter, either employs Consultant or re-engages Consultant as a consultant, this Agreement will also apply to such
later employment or consulting relationship, unless the parties hereto otherwise agree in writing. Any employment or consulting
relationship between the parties hereto, whether commenced prior to, upon or after the date of this Agreement, is referred to herein
as the “Relationship.”

 

2.                 
Applicability to Past Activities. The Company and Consultant acknowledge that Consultant may have performed
work, activities, services or made efforts on behalf of or for the benefit of the Company, or related to the current or prospective
business of the Company in anticipation of Consultant’s involvement with the Company, that would have been “Services”
if performed during the term of this Agreement, for a period of time prior to the Effective Date of this Agreement (the “Prior
Consulting Period”). Accordingly, if and to the extent that, during the Prior Consulting Period: (i) Consultant received
access to any information from or on behalf of the Company that would have been Confidential Information (as defined below) if
Consultant received access to such information during the term of this Agreement; or (ii) Consultant (a) conceived, created, authored,
invented, developed or reduced to practice any item (including any intellectual property rights with respect thereto) on behalf
of or for the benefit of the Company, or related to the current or prospective business of the Company in anticipation of Consultant’s
involvement with the Company, that would have been an Invention (as defined below) if conceived, created, authored, invented, developed
or reduced to practice during the term of this Agreement; or (b) incorporated into any such item any pre-existing invention, improvement,
development, concept, discovery or other proprietary information that would have been a Prior Invention (as defined below) if incorporated
into such item during the term of this Agreement; then any such information shall be deemed “Confidential Information”
hereunder and any such item shall be deemed an “Invention” or “Prior Invention” hereunder,
and this Agreement shall apply to such activities, information or item as if disclosed, conceived, created, authored, invented,
developed or reduced to practice during the term of this Agreement.

 

    	1

     

    

 

3.                 
Executive Services Consulting Agreement. Consultant has entered into an agreement with the Company on or about
the date hereof to provide various services to the Company (the “Consulting Agreement”). The services rendered
by Consultant under the Consulting Agreement are referred to herein as the “Services” and this Agreement is
intended to supplement and form an integral part of the Consulting Agreement.

 

4.                 
Confidential Information.

 

(a)              
Protection of Information. Consultant understands that during the Relationship, the Company intends to provide
Consultant with certain information, including Confidential Information (as defined below), without which Consultant would not
be able to perform Consultant’s duties to the Company. Consultant further acknowledges and understands that, at all times
during the term of the Relationship and thereafter, Consultant shall hold in strictest confidence, and not use, except for the
benefit of the Company to the extent necessary to perform the Services and in pursuance of his relationship with the Company, and,
accordingly, will not disclose to any person, firm, corporation or other entity, without written authorization from the Company
in each instance, any Confidential Information that Consultant obtains from the Company or otherwise obtains, accesses or creates
in connection with, or as a result of, the Services during the term of the Relationship, whether or not during working hours, until
such Confidential Information becomes publicly and widely known and made generally available through no wrongful act of Consultant
or of others who were under confidentiality obligations as to the item or items involved. Consultant shall not make copies of such
Confidential Information except as authorized by the Company or in the ordinary course of the provision of Services. Consultant
will segregate Confidential Information from the confidential materials of third parties to prevent commingling.

 

(b)              
Confidential Information. Consultant understands that “Confidential Information” means
any and all information and physical manifestations thereof not generally known or available outside the Company and information
and physical manifestations thereof entrusted to the Company in confidence by third parties, whether or not such information is
patentable, copyrightable or otherwise legally protectable. Confidential Information includes, without limitation: (i) Company
Inventions (as defined below); and (ii) technical data, trade secrets, know-how, research, product or service ideas or plans, software
codes and designs, algorithms, developments, inventions, patent applications, laboratory notebooks, processes, formulas, techniques,
biological materials, mask works, engineering designs and drawings, hardware configuration information, agreements with third parties,
lists of, or information relating to, employees and consultants of the Company (including, but not limited to, the names, contact
information, jobs, compensation, and expertise of such employees and consultants), lists of, or information relating to, suppliers
and customers (including, but not limited to, customers of the Company on whom Consultant called or with whom Consultant became
acquainted during the Relationship), price lists, pricing methodologies, cost data, market share data, marketing plans, licenses,
contract information, business plans, financial forecasts, historical financial data, budgets or other business information disclosed
to Consultant by the Company either directly or indirectly, whether in writing, electronically, orally, or by observation.

 

    	2

     

    

 

The Consultant understands that the above list is not exhaustive,
and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary,
or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which
the information is known or used. The Consultant understands and agrees that Confidential Information developed by him or her in
the course of his engagement with the Company shall be subject to the terms and conditions of this Agreement as if the Company
furnished the same Confidential Information to the Consultant in the first instance. Confidential Information shall not include
information that is generally available to and known by the public, provided that such disclosure to the public is through no direct
or indirect fault of the Consultant or person(s) acting on the Consultant’s behalf.

 

(c)              
Third Party Information. Consultant’s agreements in this Agreement are intended to be for the benefit
of the Company and any third party that has entrusted information or physical material to the Company in confidence. During the
term of the Relationship and thereafter, Consultant will not improperly use or disclose to the Company any confidential, proprietary
or secret information of Consultant’s former clients or any other person, and Consultant will not bring any such information
onto the Company’s property or place of business.

 

(d)              
Other Rights. This Agreement is intended to supplement, and not to supersede, any rights the Company may have
in law or equity with respect to the protection of trade secrets or confidential or proprietary information.

 

(e)              
U.S. Defend Trade Secrets Act. Notwithstanding the foregoing, the U.S. Defend Trade Secrets Act of 2016 (“DTSA”)
provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly
or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or
(iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition,
DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law
may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if
the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except
pursuant to court order.

 

(f)               
Disclosure Required by Law. Nothing herein shall be construed to prevent disclosure of Confidential Information
as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized
government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order.
The Consultant shall provide written notice of any such order to the Company’s Chief Executive Officer or Chief Operating
Officer within forty-eight (48) hours of receiving such order, but in any event sufficiently in advance of making any disclosure
to permit the Company to contest the order or seek confidentiality protections, as determined in the Company’s sole discretion.

 

    	3

     

    

 

5.                 
Ownership of Inventions.

 

(a)              
Inventions Retained and Licensed. Consultant has attached hereto, as Exhibit A, a complete list
describing with particularity all Inventions (as defined below) that, as of the Effective Date: (i) have been created by or on
behalf of Consultant, and/or (ii) are owned exclusively by Consultant or jointly by Consultant with others or in which Consultant
has an interest, and that relate in any way to any of the Company’s actual or proposed businesses, products, services, or
research and development, and which are not assigned to the Company hereunder (collectively “Prior Inventions”);
or, if no such list is attached, Consultant represents and warrants that there are no such Inventions at the time of signing this
Agreement, and to the extent such Inventions do exist and are not listed on Exhibit A, Consultant hereby forever
waives any and all rights or claims of ownership to such Inventions. Consultant understands that Consultant’s listing of
any Inventions on Exhibit A does not constitute an acknowledgement by the Company of the existence or extent
of such Inventions, nor of Consultant’s ownership of such Inventions.

 

(b)              
Use or Incorporation of Inventions.

 

(i)                
Consultant shall not use, disclose or disseminate any of the Company’s Confidential Information except as specifically
permitted in this Section 5. Consultant may use the Confidential Information of the Company solely to perform the Services,
his obligations under this Agreement, and in pursuance of Relationship, for the benefit of the Company. Consultant will exercise
the same degree of care as it takes to protect his own confidential information, but in no event less than reasonable care. .

 

(ii)             
If in the course of the Relationship, Consultant uses or incorporates into any of the Company’s products, services,
processes or machines any Invention not assigned to the Company pursuant to Section 5(d).. of this Agreement in which
Consultant has an interest, Consultant will promptly so inform the Company in writing. Whether or not Consultant gives such notice,
Consultant hereby irrevocably grants to the Company a nonexclusive, fully paid-up, royalty-free, assumable, perpetual, worldwide
license, with right to transfer and to sublicense, to practice and exploit such Invention and to make, have made, copy, modify,
make derivative works of, use, sell, import, and otherwise distribute such Invention under all applicable intellectual property
laws without restriction of any kind. The Consultant may not incorporate any Inventions into any business, venture, academic, other
pursuit that Consultant may engage in during or following the termination of the Relationship. The Consultant may not incorporate
any Company Inventions into any business, venture, academic, other pursuit that Consultant may engage in during or following the
termination of the Relationship.

 

    	4

     

    

 

(c)              
Inventions. Consultant understands that “Inventions” means discoveries, developments, concepts,
designs, ideas, know how, modifications, improvements, derivative works, inventions, trade secrets and/or original works of authorship,
whether or not patentable, copyrightable or otherwise legally protectable. Consultant understands this includes, but is not limited
to, any new product, machine, article of manufacture, biological material, method, procedure, process, technique, use, equipment,
device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement
thereon. Consultant understands that “Company Inventions” means any and all Inventions that Consultant or Consultant’s
personnel may solely or jointly author, discover, develop, conceive, or reduce to practice in connection with, or as a result of,
the Services performed for the Company or otherwise in connection with the Relationship, except as otherwise provided in Section
5(i) below.

 

(d)              
Assignment of Company Inventions. Consultant will promptly make full written disclosure to the Company, will
hold in trust for the sole right and benefit of the Company, and hereby assigns and agrees to assign to the Company, or its designee,
all of Consultant’s right, title and interest throughout the world in and to any and all Company Inventions and all patent,
copyright, trademark, trade secret and other intellectual property rights and other proprietary rights therein. Consultant hereby
waives and irrevocably quitclaims to the Company or its designee any and all claims, of any nature whatsoever, that Consultant
now has or may hereafter have for infringement of any and all Company Inventions. Any assignment of Company Inventions includes
all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world
that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,”
or the like (collectively, “Moral Rights”). To the extent that Moral Rights cannot be assigned under
applicable law, Consultant hereby waives and agrees not to enforce any and all Moral Rights, including, without limitation, any
limitation on subsequent modification, to the extent permitted under applicable law. If Consultant has any rights to the Company
Inventions, other than Moral Rights, that cannot be assigned to the Company, Consultant hereby unconditionally and irrevocably
grants to the Company during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, fully paid and royalty-free
license, with rights to sublicense through multiple levels of sublicensees, to reproduce, distribute, display, perform, prepare
derivative works of and otherwise modify, make, have made, sell, offer to sell, import, practice methods, processes and procedures
and otherwise use and exploit, such Company Inventions.

 

(e)              
Work for Hire.  The Consultant agrees that all marketing, operating and training ideas, sourcing data,
processes and materials, including all inventions, discoveries, improvements, enhancements, written materials and development related
to the business of the Company (“Proprietary Materials”) to which the Consultant may have access or that the
Consultant may develop or conceive while employed by the Company shall be considered works made for hire for the Company and prepared
within the scope of employment and shall belong exclusively to the Company.  Any Proprietary Materials developed by the Consultant
that, under applicable law, may not be considered works made for hire, are hereby assigned to the Company without the need for
any further consideration, and the Consultant agrees to take such further action, including executing such instruments and documents
as the Company may reasonably request, to evidence such assignment.

 

    	5

     

    

 

(f)               
No License. The Consultant understands that this Agreement does not, and shall not be construed to, grant
the Consultant any license or right of any nature with respect to any Proprietary Materials, Moral Rights, any Confidential Information,
materials, software or other tools made available to him or her by the Company, or other intellectual property rights relating
thereto.

 

(g)              
Maintenance of Records. Consultant shall keep and maintain adequate and current written records of all Company
Inventions made or conceived by Consultant or Consultant’s personnel (solely or jointly with others) during the term of the
Relationship. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory
notebooks, or any other format. The records will be available to and remain the sole property of the Company at all times. Consultant
shall not remove such records from the Company’s place of business or systems except as expressly permitted by Company policy
which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the Company’s
business. Consultant shall deliver all such records (including any copies thereof) to the Company at the time of termination of
the Relationship as provided for in Section 6 and Section 7.

 

(h)              
Intellectual Property Rights. Consultant shall assist the Company, or its designee, at its expense, in every
proper way in securing the Company’s, or its designee’s, rights in the Company Inventions and any copyrights, patents,
trademarks, mask work rights, Moral Rights, or other intellectual property rights relating thereto in any and all countries, including
the disclosure to the Company or its designee of all pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments, recordations, and all other instruments which the Company or its designee shall
deem necessary in order to apply for, obtain, maintain and transfer such rights, or if not transferable, waive and shall never
assert such rights, and in order to assign and convey to the Company or its designee, and any successors, assigns and nominees
the sole and exclusive right, title and interest in and to such Company Inventions, and any copyrights, patents, mask work rights
or other intellectual property rights relating thereto. Consultant’s obligation to execute or cause to be executed, when
it is in Consultant’s power to do so, any such instrument or papers shall continue during and at all times after the end
of the Relationship and until the expiration of the last such intellectual property right to expire in any country of the world.
Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Consultant’s
agent and attorney-in-fact, to act for and in Consultant’s behalf and stead to execute and file any such instruments and
papers and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer
of letters patent, copyright, mask work and other registrations related to such Company Inventions. This power of attorney is coupled
with an interest and shall not be affected by Consultant’s subsequent incapacity.

 

    	6

     

    

 

(i)                
Exception to Assignments. Subject to the requirements of applicable state law, if any, exempting certain Company
Inventions, from the assignment provisions of this Agreement, Consultant understands that all Company Inventions must be, and are,
assigned to the Company pursuant to this Agreement In order to assist in the determination of which inventions qualify for such
state law exclusion, Consultant will advise the Company promptly in writing, during and for a period of forty-eight (48) months
immediately following the termination of the Relationship, of all Inventions solely or jointly conceived or developed or reduced
to practice by Consultant or Consultant’s personnel during the period of the Relationship.

 

6.                 
Company Property; Returning Company Documents. Consultant acknowledges that Consultant has no expectation
of privacy with respect to the Company’s telecommunications, networking or information processing systems (including, without
limitation, files, e-mail messages, and voice messages) and that Consultant’s activity and any files or messages on or using
any of those systems may be monitored or reviewed at any time without notice. Consultant further acknowledges that any property
situated on the Company’s premises or systems and owned by the Company, including disks and other storage media, filing cabinets
or other work areas, is subject to inspection by Company personnel at any time with or without notice. At the time of termination
of the Relationship, Consultant will deliver to the Company (and will not keep in Consultant’s possession, recreate or deliver
to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of
any of the aforementioned items developed by Consultant or Consultant’s personnel pursuant to the Relationship or otherwise
belonging to the Company, its successors or assigns.

 

7.                 
Termination Certification. In the event of the termination of the Relationship, Consultant shall sign and
deliver the “Termination Certification” attached hereto as Exhibit B; however, Consultant’s
failure to sign and deliver the Termination Certification shall in no way diminish Consultant’s continuing obligations under
this Agreement.

 

8.                 
Notice to Third Parties. During the periods of time during which Consultant is restricted in taking certain
actions by the terms of Section 9. of this Agreement (the “Restriction Period”), Consultant shall
inform any entity or person with whom Consultant may seek to enter into a business relationship (whether as an owner, employee,
independent contractor or otherwise) of Consultant’s contractual obligations under this Agreement. Consultant acknowledges
that the Company may, with or without prior notice to Consultant and whether during or after the term of the Relationship, notify
third parties of Consultant’s agreements and obligations under this Agreement. Upon written request by the Company, Consultant
will respond to the Company in writing regarding the status of Consultant’s engagement or proposed engagement with any party
during the Restriction Period.

 

    	7

     

    

 

9.                 
Solicitation of Employees, Consultants and Other Parties. As described above, Consultant acknowledges that
the Company’s Confidential Information includes information relating to the Company’s employees, consultants, customers
and others, and Consultant will not use or disclose such Confidential Information except as authorized by the Company in advance
in writing. Consultant further agrees as follows:

 

(a)              
Employees, Consultants. During the term of the Relationship, and for a period of twelve (12) months immediately
following the termination of the Relationship for any reason, whether with or without cause, Consultant shall not, directly or
indirectly, solicit any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt
to solicit employees or consultants of the Company, either for Consultant or for any other person or entity.

 

(b)              
Other Parties. During the term of the Relationship, Consultant will not influence any of the Company’s
clients, licensors, licensees or customers from purchasing Company products or services or solicit or influence or attempt to influence
any client, licensor, licensee, customer or other person either directly or indirectly, to direct any purchase of products and/or
services to any person, firm, corporation, institution or other entity in competition with the business of the Company. 

 

10.             
No Change to Duration of Relationship. Consultant understands and acknowledges that this Agreement does not
alter, amend or expand upon any rights Consultant may have to continue in the consulting relationship with, or in the duration
of Consultant’s consulting relationship with, the Company under any existing agreements between the Company and Consultant,
including without limitation the Consulting Agreement, or under applicable law.

 

11.             
Representations and Covenants.

 

(a)       Facilitation of
Agreement. Consultant shall execute promptly, both during and after the end of the Relationship, any proper oath, and to
verify any proper document, required to carry out the terms of this Agreement, upon the Company’s written request to do so.

 

(b)       No Conflicts.
Consultant represents and warrants that Consultant’s performance of all the terms of this Agreement does not and will
not breach any agreement Consultant has entered into, or will enter into, with any third party, including without limitation any
agreement to keep in confidence proprietary information or materials acquired by Consultant in confidence or in trust prior to
or during the Relationship. Consultant will not disclose to the Company or use any inventions, confidential or non-public proprietary
information or material belonging to any previous client, employer or any other party. Consultant will not induce the Company to
use any inventions, confidential or non-public proprietary information, or material belonging to any previous client, employer
or any other party. Consultant represents and warrants that Consultant has listed on Exhibit C all agreements (e.g.,
non-competition agreements, non-solicitation of customers agreements, non-solicitation of employees agreements, confidentiality
agreements, inventions agreements, etc.), if any, with a current or former client, employer, or any other person or entity, that
may restrict Consultant’s ability to perform services for the Company or Consultant’s ability to recruit or engage
customers or service providers on behalf of the Company, or otherwise relate to or restrict Consultant’s ability to perform
Consultant’s duties for the Company or any obligation Consultant may have to the Company. Consultant shall not enter into
any written or oral agreement that conflicts with the provisions of this Agreement.

 

    	8

     

    

 

(c)       No Other Consulting
Agreements. Consultant represents and warrants that Consultant does not presently perform nor will he perform, during the
term of the Agreement, consulting or other services for, or engage in or intend to engage in an employment relationship with, companies
whose businesses or proposed businesses in any way, in the opinion of the Company, involve products or services which would be
competitive with the Company’s products or services, or those products or services proposed or in development by the Company
during the term of the Agreement or would adversely affect the Consult’s ability to perform the Services hereunder. If, however,
Consultant desire to perform such services for a third party, Consultant agrees that, in advance of accepting such work, Consultant
will promptly notify the Company in writing, specifying the organization with which Consultant proposes to consult, provide services,
or become employed by and to provide information sufficient to allow the Company to determine if such work would conflict with
the terms of this Agreement, the interests of the Company or further services which the Company might request of Consultant. If
the Company determines, in its so discretion, that such work conflicts with the terms of this Agreement, the Consultant shall not
undertake such engagements. Nothing herein shall be deemed to release the Consultant with respect to his obligations with respect
to the Confidential Information pursuant to this Agreement.

 

(d)Non-Competition and Non-Solicitation and Non-Circumvention.

 

1.                 
(i)Non-Competition. Except as authorized by the Company’s Board of Directors, during the term
of the Relationship and for a period of twelve (12) months thereafter, the Consultant will not (except as an officer, director,
stockholder, employee, agent or consultant of the Company or any subsidiary or affiliate thereof) either directly or indirectly,
whether or not for consideration, (i) in any way, directly or indirectly, solicit, divert, or take away the business of any person
who is or was a customer of the Company, or in any manner influence such person to cease doing business in part or in whole with
Company; (ii) engage in a Competing Business; or (iii) except for investments or ownership in public entities, mutual funds and
similar investments, none of which constitute more than 5% of the ownership (provided such ownership interest is acquired solely
for investment purposes) or control of such entities, own, operate, control, finance, manage, advise, be employed by or engaged
by, perform any services for, invest or otherwise become associated in any capacity with any person engaged in a Competing Business;
or (iv) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant. For purposes
of this section, “Competing Business” means any company or business which is engaged directly or indirectly
in any Company Business carried on or planned to be carried on (if such plans were developed the term of the Relationship) by the
Company; and “Company Business” means the Company’s business activities and operations as conducted during
the term of the Relationship and all products conceived, planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company, together with all services provided or planned by the Company,
during your relationship with the Company. The Company acknowledges that Consultant is engaged in the investigation and development
of technologies and products for wound healing and diabetic ulcers.

 

    	9

     

    

 

(ii)       Non-Solicitation
and Non-Circumvention. For a period of twelve (12) months following the termination of the Relationship, the Consultant will
not directly or indirectly, whether for your account or for the account of any other individual or entity, solicit or canvas the
trade, business or patronage of, or sell to, any individuals or entities that were investors, customers or employees of the Company
during the term of this Agreement, or prospective customers with respect to whom a sales effort, presentation or proposal was made
by the Company or its affiliates, during the one year period prior to the termination of the Relationship. Without limiting the
foregoing, the Consultant shall not, directly or indirectly (i) solicit, induce, enter into any agreement with, or attempt to influence
any individual who was an employee or consultant of the Company at any time during the term of Relationship, to terminate his or
her employment relationship with the Company or to become employed or engaged by the Consultant or any individual or entity by
which the Consultant are employed or for which you are acting as a consultant or other advisory capacity, and/or (ii) interfere
in any other way with the employment, or other relationship, of any employee of, or consultant to, the Company.

 

(iii)        Injunctive
Relief.  The Consultant acknowledges and agrees that the covenants and obligations of the Consultant set forth in
this Agreement relate to special, unique and extraordinary Services rendered by the Consultant to the Company and that a violation
of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are
not available at law.  Therefore, the Consultant agrees that the Company shall be entitled to seek an injunction, restraining
order or other temporary or permanent equitable relief (without the requirement to post bond) restraining the Consultant from committing
any violation of the covenants and obligations contained herein.  These injunctive remedies are cumulative and are in addition
to any other rights and remedies the Company may have at law or in equity.

 

 

(e)       Voluntary Execution.
Consultant certifies and acknowledges that Consultant has carefully read all of the provisions of this Agreement, that Consultant
understands and has voluntarily accepted such provisions, and that Consultant will fully and faithfully comply with such provisions.

 

12.             
Electronic Delivery. Nothing herein is intended to imply a right to participate in any of the
Company’s equity incentive plans, however, if Consultant does participate in such plan(s), the Company may, in its sole
discretion, decide to deliver any documents related to Consultant’s participation in the Company’s equity incentive
plan(s) by electronic means or to request Consultant’s consent to participate in such plan(s) by electronic means. Consultant
hereby consents to receive such documents by electronic delivery and agrees, if applicable, to participate in such plan(s) through
an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

    	10

     

    

 

13.             
Miscellaneous.

 

(a)              
Governing Law. The validity, interpretation, construction and performance of this Agreement, and all acts
and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the state of Nevada, without giving effect to principles of conflicts of law. Consultant acknowledges
that he may not have the rights and privileges under applicable Nevada law that he might otherwise have under the applicable laws
of the United Kingdom with respect to this Agreement which he hereby knowingly and willingly waives.

 

(b)              
Entire Agreement. Except as described in Section Section 3, this Agreement sets forth the entire
agreement and understanding between the Company and Consultant relating to its subject matter and merges all prior discussions
between the parties to this Agreement. No amendment to this Agreement will be effective unless in writing signed by both parties
to this Agreement. The Company shall not be deemed hereby to have waived any rights or remedies it may have in law or equity, nor
to have given any authorizations or waived any of its rights under this Agreement, unless, and only to the extent, it does so by
a specific writing signed by a duly authorized officer of the Company. Any subsequent change or changes in Consultant’s duties,
obligations, rights or compensation will not affect the validity or scope of this Agreement.

 

(c)              
Successors and Assigns. This Agreement will be binding upon Consultant’s successors and assigns, and
will be for the benefit of the Company, its successors, and its assigns.

 

(d)              
Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in
writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or 48 hours after being
deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such
party’s address as set forth on the signature page, as subsequently modified by written notice, or if no address is specified
on the signature page, at the most recent address set forth in the Company’s books and records.

 

(e)              
Severability. If one or more of the provisions in this Agreement are deemed void or unenforceable to any extent
in any context, such provisions shall nevertheless be enforced to the fullest extent allowed by law in that and other contexts,
and the validity and force of the remainder of this Agreement shall not be affected. The Company and Consultant have attempted
to limit Consultant’s right to use, maintain and disclose the Company’s Confidential Information, and to limit Consultant’s
right to solicit employees and customers only to the extent necessary to protect the Company from unfair competition. Should a
court of competent jurisdiction determine that the scope of the covenants contained in Section 9 and 11 exceed the
maximum restrictiveness such court deems reasonable and enforceable, the parties intend that the court should reform, modify and
enforce the provision to such narrower scope as it determines to be reasonable and enforceable under the circumstances existing
at that time. In the event that any court or government agency of competent jurisdiction determines that, notwithstanding the terms
of the Consulting Agreement specifying Consultant’s Relationship with the Company as that of an independent contractor, Consultant’s
provision of services to the Company is not as an independent contractor but instead as an employee under the applicable laws,
then solely to the extent that such determination is applicable, references in this Agreement to the Relationship between Consultant
and the Company shall be interpreted to include an employment relationship, and this Agreement shall not be invalid and unenforceable
but shall be read to the fullest extent as may be valid and enforceable under the applicable laws to carry out the intent and purpose
of this Agreement.

 

    	11

     

    

 

(f)               
Remedies. Consultant acknowledges that violation of this Agreement by Consultant may cause the Company irreparable
harm, and therefore Consultant agrees that the Company will be entitled to seek extraordinary relief in court, including, but not
limited to, temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a
bond or other security (or, where such a bond or security is required, that a $1,000 bond will be adequate), in addition to and
without prejudice to any other rights or remedies that the Company may have for a breach of this Agreement.

 

(g)              
Advice of Counsel. Consultant acknowledges THAT, IN EXECUTING
THIS AGREEMENT, Consultant Has HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT
LEGAL COUNSEL, AND Consultant Has read and understands ALL OF THE TERMS AND PROVISIONS
OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

(h)              
Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution of
a facsimile or scanned copy will have the same force and effect as execution of an original, and a facsimile or scanned signature
will be deemed an original and valid signature.

 

(i)                
Effective Date. Regardless of the date on which this Agreement is executed by the parties hereto, the effective
date of this Agreement is August 15, 2019.

 

[Signature Page Follows]

 

 

    	12

     

    

 

SIGNATURES

 

The parties have executed this Confidential Information
and Invention Assignment Agreement on the respective dates set forth below, to be effective as of the Effective Date.

 

the company:

 

renovacare, Inc.

 

 

By: /s/Jatinder (Jay) S. Bhogal 08-15-19

(Signature)

 

Name: Jatinder (Jay) S. Bhogal

Title: Chief Operating Officer

 

Address:

RenovaCare, Inc.

9375 East Shea Blvd.,

Suite 107-A

Scottsdale, AZ 85260

Attention: Jay S. Bhogal

Facsimile: 604-336-8609

Email Address: jsbhogal@renovacareinc.com

 

 

CONSULTANT:

 

ROBIN ROBINSON, PH.D.

 

 

 

/s/Robin Robinson 08-12-19

(Signature)

 

20419 Peach Tree Road

Dickerson, MD 20842

 

301-349-4035 (home)

240-330-9951 (mobile)

 

 

Email: robinsor1@comcast.net

 

 

    	1

     

    

 

EXHIBIT A

 

to the Confidential Information
and Invention Assignment Agreement dated AUGUST 15, 2019 

by and between 

Renovacare, Inc., and
ROBIN ROBINSON

 

 

 

 

 

 

 

 

 

 

    	2

     

    

 

LIST
OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

EXCLUDED UNDER SECTION 

 

The following is a list of all Inventions that, as of the Effective
Date: (A) have been created by Consultant or on Consultant’s behalf, and/or (B) are owned exclusively by Consultant or jointly
by Consultant with others or in which Consultant has an interest, and that relate in any way to any of the Company’s actual
or proposed businesses, products, services, or research and development, and which are not assigned to the Company hereunder: NONE

 

	

        Title        	

   Date   	Identifying Number

or Brief Description
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

Except as indicated above on this Exhibit A, Consultant has no inventions, improvements
or original works to disclose pursuant to Section 5(a) of this Agreement.

 

___ Additional sheets attached

 

Signature of Consultant:                                                               

 

Print Name of Consultant: ROBIN ROBINSON

 

Date: August 15, 2019

 

 

 

    	1

     

    

 

EXHIBIT B

 

to the Confidential Information
and Invention Assignment Agreement dated AUGUST 15, 2019 

by and between 

Renovacare, Inc., and
ROBIN ROBINSON

 

 

 

 

 

 

 

 

 

 

 

    

     

    

 

TERMINATION CERTIFICATION

 

This is to certify that Consultant does not have in Consultant’s
possession, nor has Consultant failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property,
or copies or reproductions of any aforementioned items belonging to RenovaCare, Inc., a Nevada corporation, its subsidiaries, affiliates,
successors or assigns (collectively, the “Company”).

 

Consultant further certifies that Consultant has complied with all
the terms of the Company’s Confidential Information and Invention Assignment Agreement (the “Confidentiality
Agreement”) signed by Consultant, including the reporting of any Inventions (as defined therein), conceived or made
by Consultant or Consultant’s personnel (solely or jointly with others) covered by the Confidentiality Agreement, and Consultant
acknowledges Consultant’s continuing obligations under the Confidentiality Agreement.

 

Consultant further agrees that, in compliance with the Confidentiality
Agreement, Consultant will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information
relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases,
other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to
any business of the Company or any of its employees, clients, consultants or licensees.

 

Consultant further agrees that for twelve (12) months immediately
following the termination of Consultant’s Relationship with the Company, Consultant shall not either directly or indirectly
solicit any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit
employees or consultants of the Company, either for Consultant or for any other person or entity.

 

Further, Consultant agrees that Consultant shall not use any Confidential
Information of the Company to influence any of the Company’s clients or customers from purchasing Company products or services
or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct
any purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the
business of the Company.

 

	Date: 08-12-19	Consultant:	 
	 	 	 
	 	 	/s/Robin Robinson 08-12-19
	 	 	 
	 	 	ROBIN ROBINSON
	 	 	(Signature)

 

 

 

 

 

    

     

    

 

EXHIBIT C

 

to the Confidential Information
and Invention Assignment Agreement dated AUGUST 15, 2019 

by and between 

Renovacare, Inc., and
RoBIN ROBINSON

 

 

 

 

 

 

 

 

 

 

 

 

 

    	1

     

    

 

LIST OF CONFLICTS AND AGREEMENTS PURSUANT TO 

SECTION 11(b) 

 

 

 

__X_ No conflicts

 

__X_ No agreements under Section 11(b). 

 

___ Additional sheets attached

 

 

 

 

 

 

 

Consultant agrees: /s/Robin Robinson 08-12-19

(Signature)

 

 

	Print Name: RoBIN ROBINSON	Date: August 15, 2019

 

 

 

 

 

 

 

 

2Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of August 20, 2019, is by and among Trovagene, Inc., a Delaware corporation with headquarters located at 11055 Flintkote Avenue, Suite B, San Diego, CA 92121 (the “Company”), and Lincoln Park Capital Fund, LLC, an Illinois limited liability company (the “Buyer”).

 

RECITALS

 

A.                                           The Buyer wishes to purchase, and the Company wishes to sell, upon the terms and subject conditions stated in this Agreement, (i) (X) 271,744 shares of Common Stock (as defined herein) (collectively, the “Common Shares”), and (Y) a Series E Warrant, in the form attached hereto as Exhibit A-1 (the “Series E Warrant”), to initially purchase an aggregate of up to 456,058 shares of Common Stock (collectively, the “Series E Warrant Shares”, and, together with the Series E Warrant, the “Series E Securities”), at an exercise price of $0.01 per share, in each case pursuant to the Company’s shelf registration statement on Form S-3 (Registration Number 333-232321) (the “Registration Statement”), which has been declared effective in accordance with the Securities Act of 1933, as amended (the “1933 Act”), by the United States Securities and Exchange Commission (the “SEC”), and (ii) a Series F Warrant, in the form attached hereto as Exhibit A-2 (the “Series F Warrant”, and together with the Series E Warrant, the “Warrants”), to initially purchase an aggregate of up to 727,802 shares of Common Stock (collectively, the “Series F Warrant Shares”, and together with the Series F Warrant, the “Series F Securities”, and collectively with the Series E Warrant Shares, the “Warrant Shares”), at an exercise price of $1.936 per share, in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the SEC under the 1933 Act.

 

B.                                           The Common Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:

 

1.                                      PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.

 

(a)                                        Purchase of Common Shares and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company on the Closing Date (as defined below), (i) 271,744 Common Shares, (ii) the Series E Warrant to initially acquire an aggregate of up to 456,058 Series E Warrant Shares and (iii) the Series F Warrant to initially acquire an aggregate of up to 727,802 Series F Warrant Shares.

 

(b)                                        Closing. The closing (the “Closing”) of the purchase of the Common Shares and the Warrants by the Buyer shall occur at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and

 

 

Popeo, P.C., 666 Third Avenue, New York, NY 10017. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day (as defined below) on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and the Buyer). As used herein “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.

 

(c)                                         Purchase Price. The aggregate gross purchase price for the Common Shares and the Warrants to be purchased by the Buyer hereunder shall be $1,500,000 (the “Purchase Price”).

 

(d)                                        Form of Payment; Deliveries. On the Closing Date, (i) the Buyer shall pay the Purchase Price (less the amount withheld pursuant to Section 4(g)) to the Company for the Common Shares and the Warrants to be issued and sold to the Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (ii) the Company shall (A) cause Philadelphia Stock Transfer, Inc. (together with any subsequent transfer agent, the “Transfer Agent”) through the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, to credit 271,744 Common Shares to the Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, (B) deliver to the Buyer the Series E Warrant pursuant to which the Buyer shall have the right to initially acquire an aggregate of up to 456,058 Series E Warrant Shares, duly executed on behalf of the Company and registered in the name of the Buyer or its designee, and (C) deliver to the Buyer the Series F Warrant pursuant to which the Buyer shall have the right to initially acquire an aggregate of up to 727,802 Series F Warrant Shares, duly executed on behalf of the Company and registered in the name of the Buyer or its designee.

 

2.                                      BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The Buyer represents and warrants to the Company that, as of the date hereof and as of the Closing Date:

 

(a)                                        Organization; Authority. The Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder.

 

(b)                                        Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and shall constitute the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(c)                                         No Public Sale or Distribution of Series F Securities. The Buyer is acquiring the Series F Securities for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, the Buyer does not agree, or make any representation or warranty, to hold

 

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any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. The Buyer is acquiring the Securities hereunder in the ordinary course of its business. The Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities in violation of applicable securities laws.

 

(d)                                        Accredited Investor Status. At the time the Buyer was offered the Securities, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the 1933 Act.

 

(e)                                         Experience of Buyer. The Buyer, 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. The Buyer 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.

 

(f)                                          Reliance on Exemptions. The Buyer understands that the Series F Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.

 

(g)                                         Information. The Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its advisors, if any, or its representatives shall modify, amend or affect the Buyer’s right to rely on the Company’s representations and warranties contained herein 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. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

(h)                                        No Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(i)                                            Transfer or Resale. The Buyer understands that except as provided in Section 4(g) hereof: (i) the Series F Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred   unless

 

3

 

(A) subsequently registered thereunder, (B) the Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Buyer, in a form reasonably acceptable to the Company, to the effect that the Series F Warrant or the Series F Warrant Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Buyer provides the Company with reasonable assurance that the Series F Warrant or Series F Warrant Shares can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Series F Warrant or Series F Warrant Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Series F Warrant or Series F Warrant Shares under circumstances in which the seller (or the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Series F Warrant or any of the Series F Warrant Shares under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

(j)                                           Residency. The Buyer is a resident of the State of Illinois.

 

(k)                                        Certain Trading Activities. The Buyer represents and warrants to the Company that at no time prior to the date of this Agreement has any of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.

 

(l)                                            General Solicitation. The Buyer is not purchasing the Series F Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar.

 

(m)                                    Manipulation of Price. Since the time that such Buyer was first contacted by the Company or its agent regarding the investment in the Company contemplated herein, the Buyer has not, and, to the knowledge of the Buyer, no Person acting on its behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company 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.

 

3.                                             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Buyer that, as of the date hereof and as of the Closing Date:

 

(a)                                        Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in good standing under the laws of the

 

4

 

jurisdiction in which they are formed, and have the requisite power and authority to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company to perform any of their respective obligations under any of the Transaction Documents (as defined below). All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Documents. 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. “Subsidiaries” means any Person in which the Company, directly or indirectly, (A) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (B) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary”.

 

(b)                                        Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the offer and sale of the Common Shares, the offer and sale of the Series E Securities and the reservation for issuance and issuance of the Series E Warrant Shares issuable upon exercise of the Series E Warrant, the offer and sale of the Series F Securities and the reservation for issuance and issuance of the Series F Warrant Shares issuable upon exercise of the Series F Warrant) have been duly authorized by the Company’s board of directors and (other than (i) the filing with the SEC of the prospectus supplement relating to the offer and sale of the Common Shares and the Series E Securities pursuant to Rule 424(b) under the 1933 Act (the “Prospectus Supplement”) supplementing the base prospectus forming part of the Registration Statement (the “Prospectus”), (ii) the filing of a Form D with the SEC relating to the offer and sale of the Series F Securities pursuant to Regulation D, (iii) the filing of a Notice of Additional Listing with The Nasdaq Capital Market (the “Principal Market”) and (iv) any other filings as may be required by any state securities authorities) no further filing, consent or authorization is required by the Company, its board of directors or its stockholders or other governing body. This Agreement has been, and the other Transaction Documents will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or

 

5

 

affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement, the Warrants, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(c)                                         Issuance of Securities; Registration Statement. The issuance of the Common Shares and the Warrants are duly authorized and, upon issuance and payment in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 100% of the maximum number of shares of Common Stock issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants). Upon exercise in accordance with the terms of the Series E Warrants, the Series E Warrant Shares, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Upon exercise in accordance with the terms of the Series F Warrants, the Series F Warrant Shares, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Upon receipt of the Common Shares and the Warrants at the Closing, upon receipt of Series E Warrant Shares upon exercise of the Series E Warrants and upon receipt of Series F Warrant Shares upon exercise of the Series F Warrants, the Buyer will have good and marketable title to such Common Shares, Warrants, Series E Warrant Shares and Series F Warrant Shares, respectively. Subject to the accuracy of the representations and warranties of the Buyer in this Agreement, the offer and sale of the Series F Securities to the Buyer under this Agreement and the Series F Warrant, as applicable, are exempt from registration under the 1933 Act under Section 4(a)(2) of the 1933 Act and Rule 506(b) of Regulation D. The offer and sale of all of the Common Shares and the Series E Securities to the Buyer under this Agreement and the Series E Warrants, as applicable, is registered under the 1933 Act pursuant to the Registration Statement, and all of the Common Shares and the Series E Securities are freely transferable and freely tradable by the Buyer without restriction. The Registration Statement was declared effective under the Securities Act by the SEC on June 13, 2016, and any post-effective amendment thereto has also been declared effective by the SEC under the 1933 Act. The Company has not received from the SEC any notice pursuant to Rule 401(g)(1) under the 1933 Act objecting to the use of the shelf registration statement form. No stop order suspending the effectiveness of the Registration Statement or any related registration statement filed by the Company with the SEC under Rule 462(b) under the 1933 Act is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the SEC. At the time of (i) the initial filing of the Registration Statement with the SEC and (ii) the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), the Company met the then applicable requirements for use of Form S-3 under the 1933 Act. The Company and the offer, issuance and sale of the Common Shares and the Series E Securities to the Buyer hereunder  and

 

6

 

under the Series E Warrant, as applicable, meet the requirements for and comply with the applicable conditions set forth in Form S-3 under the Securities Act, including compliance with General Instructions I.A and I.B.6. of Form S-3. The Registration Statement and the offer, issuance and sale of the Common Shares and the Series E Securities as contemplated hereby and by the Series E Warrant, as applicable, meet the requirements of Rule 415(a)(1)(x) under the 1933 Act and comply in all material respects with said Rule. The Registration Statement is effective and available for the offer, issuance and sale of all of the Common Shares and the Series E Securities thereunder, and the Company has not received any notice that the SEC has issued or intends to issue a stop-order with respect to the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so. The “Plan of Distribution” section under the Registration Statement permits the issuance and sale of the Common Shares and the Series E Securities hereunder and under the Series E Warrant, as applicable. At the time the Registration Statement and any amendment thereto became effective and on the date of this Agreement, the Registration Statement and any amendment thereto complied and complies in all material respects with the requirements of the 1933 Act and did not and does 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. The Prospectus and any amendment or supplements thereto (including, without limitation the Prospectus Supplement), at the time the Prospectus or any amendment or supplement thereto was issued and on the date of this Agreement, complied and complies in all material respects with the requirements of the 1933 Act and did not and does not contain any 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. At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) relating to the Common Shares and the Series E Securities, the Company was not and is not an “Ineligible Issuer” (as defined in Rule 405 under the 1933 Act). The Company has not distributed any offering material in connection with the offer or sale of the Common Shares and the Series E Securities, other than the Registration Statement, the Prospectus and the Prospectus Supplement.

 

(d)                                        No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the offer and sale of the Common Shares, the offer and sale of the Series E Securities and the reservation for issuance and issuance of the Series E Warrant Shares issuable upon exercise of the Series E Warrant, the offer and sale of the Series F Securities and the reservation for issuance and issuance of the Series F Warrant Shares issuable upon exercise of the Series F Warrant) will not (i) result in a violation of the Certificate of Incorporation (as defined below) (including, without limitation, any certificate of designation contained therein), Bylaws (as defined below), or the certificate of incorporation, certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of any of the Company’s Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without

 

7

 

limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Principal Market and including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.

 

(e)                                         Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or registration with (other than (i) the filing with the SEC of the Prospectus Supplement relating to the offer, issuance and sale of the Common Shares and the Series E Securities to the Buyer, (ii) the filing with the SEC of a Form D relating to the offer, issuance and sale of the Series F Securities to the Buyer pursuant to Regulation D, (iii) the filing of a Notice of Additional Listing with the Principal Market and (iv) any other filings as may be required by any state securities authorities), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents. The Company is not currently in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.

 

(f)                                          Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that the Buyer is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by the Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

 

8

 

(g)                                         No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer, issuance and sale of the Series F Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions relating to or arising out of the transactions contemplated by the Transaction Documents. The Company shall pay, and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer and sale of any of the Securities contemplated by the Transaction Documents.

 

(h)                                        No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the issuance of any of the Securities to require approval of stockholders of the Company under any applicable stockholder approval laws, rules or regulations, including, without limitation, under the rules of any exchange or automated quotation system on which any securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers, issuances or sales of any security (including, without limitation, the offer, issuance and sale of the Common Shares and the Series E Securities to the Buyer hereunder and under the Series E Warrant, as applicable) or solicited any offers to buy any security (including, without limitation, any of the Common Shares, the Series E Warrant or any of the Series E Warrant Shares), under circumstances that would require registration of the offer, issuance or sale of the Series F Warrant or any of the Series F Warrant Shares under the 1933 Act, whether through integration with the offering of the Common Shares and the Series E Securities to the Buyer hereunder and under the Series E Warrant, as applicable, pursuant to the Registration Statement, any prior offering of securities of the Company or otherwise.

 

(i)                                            Dilutive Effect. The Company understands and acknowledges that the number of Series E Warrant Shares and the number of Series F Warrant Shares will increase in certain circumstances. The Company further acknowledges that its obligation to issue (i) the Series E Warrant Shares upon exercise of the Series E Warrant in accordance with this Agreement and the Series E Warrant and (ii) the Series F Warrant Shares upon exercise of the Series F Warrant in accordance with this Agreement and the Series F Warrant, in each case is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.

 

(j)                                           Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including, without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti- takeover provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Buyer’s ownership of the

 

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Securities. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.

 

(k)                                        SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered or has made available to the Buyer or its representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by or on behalf of the Company to the Buyer which is not included in the SEC Documents (including, without limitation, information in the disclosure schedules to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.

 

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

 

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

 

(n)           Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock

 

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of the Company, or any organizational charter, certificate of formation, memorandum of association, articles of association, certificate of incorporation or bylaws of any of the Subsidiaries. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.

 

(o)           Foreign Corrupt Practices. Neither the Company, any of its Subsidiaries or to the knowledge of the Company, any director, officer, agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”) have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti- corruption laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively, a “Government Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:

 

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

 

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

 

(p)           Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.

 

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(q)           Transactions With Affiliates. Except as disclosed in the SEC Documents, no current or former employee, partner, director, officer or stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently, or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or quoted through an Eligible Market (as defined below)), nor does any such Person receive income from any source other than the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee, officer, stockholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).

 

(r)                                    Equity Capitalization.

 

(i)            Definitions:

 

(A)          “Common Stock” means (x) the Company’s shares of common stock, $0.0001 par value per share, and (y) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(B)          “Preferred Stock” means (x) the Company’s blank check preferred stock, $0.001 par value per share, the terms of which may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).

 

(ii)           Authorized and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 150,000,000 shares of Common Stock, of which, 5,707,675 are issued and outstanding (excluding the Common Shares) and 5,329,236 shares are reserved for issuance pursuant to Convertible Securities (as defined below) (excluding the Warrant Shares issuable upon exercise of the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (B)  20,000,000

 

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shares of Preferred Stock, 277,100 are designated as Series A Convertible Preferred Stock, 60,600 of which are issued and outstanding, 8,860 are designated as Series B Convertible Preferred Stock, 0 of which are issued and outstanding and 200,000 are designated as Series C Convertible Preferred Stock, 0 of which are issued and outstanding. 0 shares of Common Stock are held in the treasury of the Company.

 

(iii)          Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common Stock that are (A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Warrants) and (B) that are, as of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption that all Convertible Securities (as defined below), whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”) contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).

 

(iv)          Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to this Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of any or all of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

 

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(v)           Organizational Documents. The Company has furnished to the Buyer true, correct and complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities and the material rights of the holders thereof in respect thereto.

 

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

 

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liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency thereof.

 

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

 

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

 

(v)           Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state,

 

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local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(w)          Title.

 

(i)            Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”) owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

 

(ii)           Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto.

 

(x)           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,

 

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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 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.

 

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

 

(z)           Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit,

 

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license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(aa)         [Intentionally Omitted.]

 

(bb)  Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

 

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

 

(dd) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off

 

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balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

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

 

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

 

(gg) U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the Securities are held by the Buyer, shall become, a U.S. real property holding corporation within the meaning of Section 897 of the Code, and the Company and each Subsidiary shall so certify upon the Buyer’s request.

 

(hh) Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance, sale and transfer of the Securities to be sold to the Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

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

 

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

 

(kk)  Illegal or Unauthorized Payments; Political Contributions.  Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any of the officers, directors, employees, agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated

 

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or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

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

 

(mm) Management. Except as set forth in Schedule 3(mm) hereto, during the past five year period, no current or former officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries has been the subject of:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(vi)          a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.

 

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

 

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

 

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

 

(qq) Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the 1933 Act of any securities of the Company or any Subsidiary.

 

(rr)           XBRL. The interactive data in eXtensible Business Reporting Language (“XBRL”)

 

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included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the SEC’s rules and guidelines applicable thereto.

 

(ss)    Disclosure.  The Company confirms that neither it nor any other Person acting on its behalf has provided the Buyer or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents. The Company understands and confirms that the Buyer will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyer regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to the Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve (12) months preceding the date of this Agreement, taken as a whole, are true and correct in all material respects. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company or any of its Subsidiaries and made available to the Buyer have been prepared in good faith based upon reasonable assumptions and represented, at the time each such financial projection or forecast was delivered to the Buyer, the Company’s best estimate of future financial performance (it being recognized that such financial projections or forecasts are not to be viewed as facts and that the actual results during the period or periods covered by any such financial projections or forecasts may differ from the projected or forecasted results). The Company acknowledges and agrees that the Buyer has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

 

(tt)  Accountants. BDO USA, LLP (“BDO”), whose report dated March 6, 2019 relating to the financial statements of the Company is filed with the SEC as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Commission and incorporated by reference into the Registration Statement and the Prospectus, are and, during the periods covered by their report, were an independent registered public accounting firm within the meaning of the 1933 Act and the Public Company Accounting Oversight Board (United States).

 

(uu)  Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the 1934 Act, and the Company has taken no action designed to, or which to

 

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its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the 1934 Act nor has the Company received any notification that the SEC is contemplating terminating such registration. The Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. Except as disclosed in the SEC Documents, during the two years prior to the date hereof, (i) the Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The 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.

 

(vv) Public Float Calculation. As of the close of trading on the Principal Market on August 19, 2019, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Rule 405) of the Company held by persons other than affiliates of the Company (pursuant to Rule 144, those that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company) (the “Non-Affiliate Shares”), was approximately $17,059,560 (calculated by multiplying (x) the price at which the common equity of the Company was last sold on the Principal Market on August 19, 2019 by (y) the number of Non-Affiliate Shares outstanding on August 19, 2019).

 

(ww) No Disqualification Events. With respect to the Series F Securities to be offered, issued and sold hereunder and under the Series F Warrant, as applicable, in reliance on Rule 506(b) of Regulation D, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) of Regulation D (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) of Regulation D. The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) of Regulation D, and has furnished to the Buyer a copy of any disclosures provided thereunder.

 

4.             COVENANTS.

 

(a)           Reasonable Best Efforts. The Buyer shall use its reasonable best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its reasonable best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b)           Form D and Blue Sky.

 

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(c)           The Company agrees to file with the SEC a Form D with respect to the Series F Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyer at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date. The Company shall make any filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

 

(c)           Reporting Status. Until the earlier of (i) the date on which the Buyer shall have sold all of the Securities and (ii) none of the Warrants remain outstanding (the “Reporting Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination. At any time during the Reporting Period, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to the Buyer’s other available remedies, the Company shall pay to the Buyer, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Warrant Shares, an amount in cash equal to two percent (2.0%) of the aggregate Exercise Price of the Buyer’s Warrants on the day of a Public Information Failure and on every thirtieth (30th) day (prorated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Buyer to transfer the Warrant Shares pursuant to Rule 144. The payments to which the Buyer shall be entitled pursuant to this Section 4(c) are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit the Buyer’s right to pursue actual damages for the Public Information Failure, and the Buyer shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

(d)           Use of Proceeds. The Company will use the proceeds from the sale of the Securities as described in the Prospectus Supplement, but not, directly or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.

 

(e)           Financial Information. The Company agrees to send the following to the Buyer during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and

 

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are available to the public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.

 

(f)            Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying Securities (as defined below) upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for quotation (as the case may be) of all Underlying Securities on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American, The Nasdaq Global Market or The Nasdaq Global Select Market (each, an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock (including, without limitation, the Underlying Securities) on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f). “Underlying Securities” means the (i) the Common Shares, (ii) the Series E Warrant Shares issuable upon exercise of the Series E Warrant, (iii) the Series F Warrant Shares issuable upon exercise of the Series F Warrant and (iv) any capital stock of the Company issued or issuable with respect to the Common Shares, the Series E Warrant, the Series F Warrant, the Series E Warrant Shares or the Series F Warrant Shares, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the shares of Common Stock are converted or exchanged and shares of capital stock of a Successor Entity (as defined in the Warrants) into which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations on exercise of the Warrants.

 

(g)           Fees. The Company shall reimburse the Buyer for all reasonable costs and expenses incurred by it or its affiliates in connection with the transactions contemplated by the Transaction Documents (including, without limitation, as applicable, all reasonable legal fees and disbursements of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the Buyer, any other reasonable fees and expenses in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith), in an aggregate amount set forth in a provision that is expressly binding on the Company and the Buyer in that certain term sheet, dated as of March 22, 2019, executed by the Company and the Buyer (the “Term Sheet”), which aggregate amount, less any portion thereof previously paid by the Company to the Buyer, shall be withheld by the Buyer from the Purchase Price at the Closing or paid by the Company on demand by the Buyer if the

 

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Buyer terminates its obligations under this Agreement in accordance with Section 8 (as the case may be). The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees, DTC fees or broker’s commissions (other than for Persons engaged by the Investor) relating to or arising out of the transactions contemplated by the Transaction Documents. The Company shall pay, and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of- pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyer.

 

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

 

(i)            Prohibition of Short Sales and Hedging Transactions. During the term of this Agreement, the Buyer and its agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.

 

(j)            Disclosure of Transactions and Other Material Information.

 

(i)            Disclosure of Transaction. The Company shall, on or before 9:00 a.m., New York time, on the first (1st) Business Day after the date of this Agreement, (i) issue a press release (the “Press Release”) reasonably acceptable to the Buyer disclosing all the material terms of the transactions contemplated by the Transaction Documents, (ii) file with the SEC a Current Report on Form 8-K reasonably acceptable to the Buyer describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement), the form of the Series E Warrant and the form of the Series F Warrant) (including all attachments, the “8-K Filing”), and (iii) file with the SEC the Prospectus Supplement pursuant to Rule 424(b) under the 1933 Act specifically relating to the transactions contemplated by, and describing the material terms and conditions of, the Transaction Documents, containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430B under the Securities Act, and disclosing all information relating to the transactions contemplated hereby required to be disclosed in the Registration Statement and the Prospectus as of the date of the Prospectus Supplement, including, without limitation, information required to be disclosed in the section captioned “Plan of Distribution” in the Prospectus. The Company shall permit the Buyer to review and comment upon the Press Release, the Current Report and the Prospectus Supplement within

 

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a reasonable time prior to their filing with the SEC, the Company shall give reasonable consideration to all such comments, and the Company shall not issue the Press Release or file the Current Report or the Prospectus Supplement with the SEC in a form to which the Buyer reasonably objects. The Buyer shall furnish to the Company such information regarding itself, the Securities beneficially owned by it and the intended method of distribution thereof, including any arrangement between the Buyer and any other Person relating to the sale or distribution of the Securities, as shall be reasonably requested by the Company in connection with the preparation and issuance of the Press Release and the preparation and filing of the Current Report and the Prospectus Supplement, and shall otherwise cooperate with the Company as reasonably requested by the Company in connection with the preparation and issuance of the Press Release and the preparation and filing of the Current Report and the Prospectus Supplement with the SEC. From and after the issuance of the Press Release, the Company shall have disclosed all material, non- public information (if any) provided to any of the Buyer 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 the 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, affiliates, employees or agents, on the one hand, and any of the Buyer or any of their affiliates, on the other hand, shall terminate.

 

(ii)           Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide the Buyer with any material, non-public information regarding the Company or any of its Subsidiaries from and after the issuance of the Press Release without the express prior written consent of the Buyer (which may be granted or withheld in the Buyer’s sole discretion). To the extent that the Company delivers any material, non-public information to the Buyer without the Buyer’s consent, the Company hereby covenants and agrees that the Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company nor any of its Subsidiaries shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval of the Buyer, to issue any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) the Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the Buyer (which may be granted or withheld in the Buyer’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of the Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that the Buyer shall not have (unless expressly agreed to by the Buyer after the date hereof in a written definitive and binding agreement executed by the Company and the Buyer) any duty of confidentiality with respect to, or a duty not to trade

 

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on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.

 

(iii)          Other Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth in this Section 4(j), and without limiting anything set forth in any other Transaction Document, at any time after the Closing Date if the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides the Buyer with material non-public information relating to the Company or any of its Subsidiaries (each, the “Confidential Information”), the Company shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information on a Current Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure, the Company shall have disclosed all Confidential Information provided to the Buyer by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon such Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyer or any of its affiliates, on the other hand, shall terminate. In the event that the Company fails to effect such Disclosure on or prior to the Required Disclosure Date and the Buyer shall have possessed Confidential Information for at least ten (10) consecutive Trading Days (as defined in the Warrants) (each, a “Disclosure Failure”), then, as partial relief for the damages to the Buyer by reason of any such delay in, or reduction of, its ability to buy or sell shares of Common Stock after such Required Disclosure Date (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to the Buyer an amount in cash equal to the greater of (I) two percent (2%) of the Purchase Price and (II) the applicable Disclosure Restitution Amount, on each of the following dates (each, a “Disclosure Delay Payment Date”): (i) on the date of such Disclosure Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier of (x) the date such Disclosure Failure is cured and (y) such time as all such non-public information provided to the Buyer shall cease to be Confidential Information (as evidenced by a certificate, duly executed by an authorized officer of the Company to the foregoing effect) (such earlier date, as applicable, a “Disclosure Cure Date”). Following the initial Disclosure Delay Payment for any particular Disclosure Failure, without limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day anniversary of such Disclosure Failure, then such Disclosure Delay Payment (prorated for such partial month) shall be made on the third (3rd) Business Day after such Disclosure Cure Date. The payments to which an Investor shall be entitled pursuant to this Section 4(j)(iii) are referred to herein as “Disclosure Delay Payments.” In the event the Company fails to make Disclosure Delay Payments in a timely manner in accordance with the foregoing, such Disclosure Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months) until paid in full.

 

(iv)          For the purpose of this Agreement the following definitions shall apply:

 

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(1)           “Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the quotient of (I) the sum of the five (5) highest VWAPs (as defined in the Warrants) of the Common Stock during the applicable Disclosure Restitution Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”). All such determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.

 

(2)           “Disclosure Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to the Buyer pursuant to this Agreement or either of the Warrants, multiplied by (y) 10% of the aggregate daily dollar trading volume (as reported on Bloomberg (as defined in the Warrants)) of the Common Stock on the Principal Market for each Trading Day either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the applicable Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay Payment Date or (2) with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure Delay Payment Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such applicable period, the “Disclosure Restitution Period”).

 

(3)           “Required Disclosure Date” means (x) if the Buyer authorized the delivery of such Confidential Information, either (I) if the Company and the Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such Confidential Information, such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date the Buyer first received any Confidential Information or (y) if the Buyer did not authorize the delivery of such Confidential Information, the first (1st) Business Day after the Buyer’s receipt of such Confidential Information.

 

(k)           Additional Issuance of Securities. So long as the Buyer beneficially owns any Securities, the Company will not, without the prior written consent of the Buyer (which may be granted or withheld in the Buyer’s sole discretion), issue any other securities that would cause a breach or default under any of the Warrants. The Company agrees that for the period commencing on the date hereof and ending on the date immediately following the 60th calendar day after the Closing Date (the “Restricted Period”), neither the Company nor any of its Subsidiaries shall directly or indirectly:

 

(i)            file a registration statement under the 1933 Act relating to securities that are not the Underlying Securities (other than (A) a registration statement on Form S-8, (B) a new shelf registration statement on Form S-3 filed with the SEC prior to the third anniversary of the effective date of the Registration Statement as the successor registration statement to the Registration Statement covering Common Stock, including the Series C

 

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Warrant Shares, and certain other securities of the company (but not with respect to any Subsequent Financing during the Restricted Period, other than the issuance of Series E Warrant Shares upon exercise of the Series E Warrants)), or (C) such supplements or amendments to registration statements that are outstanding and have been declared effective by the SEC as of the date hereof solely to the extent necessary to keep such registration statements effective and available and not with respect to any Subsequent Financing;

 

(ii)           amend or modify (whether by an amendment, waiver, exchange of securities, or otherwise) any of the Company’s warrants to purchase Common Stock that are outstanding as of the date hereof; or

 

(iii)          issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred stock or any purchase rights or any combination of units thereof (any such issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding the foregoing, this Section 4(j)(iii) shall not apply in respect of the issuance of (A) shares of Common Stock or standard options to purchase Common Stock to directors, officers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below), provided that the exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyer; (B) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) issued prior to the date hereof, provided that the conversion, exercise or other method of issuance (as the case may be) of any such Convertible Security is made solely pursuant to the conversion, exercise or other method of issuance (as the case may be) provisions of such Convertible Security that were in effect on the date immediately prior to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) is not lowered, none of such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are otherwise materially changed in any manner that adversely affects the Buyer; (C) the Common Shares, the Warrants and the Warrant Shares (each of the foregoing in clauses (A) through (C), collectively the “Excluded Securities”). “Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common Stock may be

 

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issued to any employee, officer or director for services provided to the Company in their capacity as such. “Convertible Securities” means any capital stock or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

 

(l)            Reservation of Shares. So long as any portion of any of the Warrants remains outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the sum of the maximum number of Warrant Shares issuable upon exercise in full of the Warrants (without regard to any limitations on the exercise of the Warrants set forth therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 4(l) be reduced other than proportionally in connection with any exercise of the Warrants. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve Amount.

 

(m)          Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.

 

(n)           Variable Securities. From the date hereof until the earlier of (i) such time as the Buyer no longer holds any of the Warrants and (ii) one (1) year from the date hereof, the Company and each Subsidiary shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (A) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (1) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (2) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (B) enters into any agreement (including, without limitation, an “equity line of credit” or an “at-the-market offering” (as defined in Rule 415(a)(4) under the 1933 Act)) with any Person other than the Buyer whereby the Company or any Subsidiary may sell securities at a future determined price. Notwithstanding the foregoing, beginning on the Trading Day immediately following the last day of the Restricted Period (and in no event during the Restricted Period), the Company may sell shares of Common Stock pursuant to a written equity distribution or sales

 

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agreement between the Company and one or more registered broker-dealers providing for an “at- the-market offering” (as defined in Rule 415(a)(4) under the 1933 Act) by the Company exclusively through such registered broker-dealer(s) acting primarily as agent(s) of the Company, provided that the per share sales price is equal to or greater than $3.275 per share (as adjusted for stock splits, reverse stock splits, stock dividends and similar events). The Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

(o)           Participation Right. From the date hereof until the date that is the twelve (12) month anniversary of the Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, effect or enter into any agreement to effect any Subsequent Placement for cash consideration (a “Subsequent Financing”), unless the Company shall have first complied with this Section 4(o).

 

(i)            Between 4:00 p.m. and 7:00 p.m., New York time, on the Business Day immediately preceding the Business Day of a proposed or intended Subsequent Financing (each, a “Subsequent Financing Date”), the Company shall deliver to the Buyer a written notice of its intention to effect a Subsequent Financing (each, a “Pre-Notice”) (the Company shall use best efforts to ensure that the Buyer has received and acknowledged receipt of the Pre-Notice within such time period), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (x) a statement that the Company proposes or intends to effect a Subsequent Placement (without disclosing the specific terms or conditions of the proposed Subsequent Financing or the securities to be offered and sold therein, (y) a representation that such statement (described in clause (x) above) does not constitute material, non-public information regarding the Company, its business or its securities and (z) a statement informing the Buyer that it is entitled to receive a Subsequent Financing Notice (as defined below) containing material, non-public information with respect to such Subsequent Placement upon its timely written request in accordance with this Section 4(o).

 

(ii)           If the Buyer consents to receive material, non-public information with respect to such Subsequent Placement, the Buyer shall deliver a written request therefor to the Company, not later than 9:00 p.m., New York time, on the Business Day on which the Buyer properly received such Pre-Notice from the Company, and upon such written request by the Buyer delivered to the Company prior to such time, and only upon such written request by the Buyer, the Company shall promptly thereafter, but not later than two (2) hours after such written request by the Buyer was properly delivered to the Company, deliver to the Buyer a written notice of the proposed Subsequent Financing (a “Subsequent Financing Notice”), which shall (A) describe in reasonable detail the proposed terms and conditions of such Subsequent Financing, including, without limitation, the proposed terms of the securities to be offered and sold in such Subsequent Financing (the “Offered Securities”), the total amount of proceeds intended to be raised and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected, (B) include, as an attachment thereto, a term sheet or similar document setting forth the material terms and conditions of such Subsequent Financing, including, without limitation, the material terms of the Offered Securities, and (C) offer to issue and sell to the Buyer, upon the terms and subject to the conditions of the Subsequent Financing set forth in the Subsequent

 

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Financing Notice, 50% of the Offered Securities (the “Participation Maximum”) at the same price per Offered Security to be paid by each other Person participating in such Subsequent Financing.

 

(iii)          In the event that the Buyer elects to participate in such Subsequent Financing for all or any part of the Participation Maximum, the Buyer must deliver a written notice to the Company prior to the later of (i) 11:00 a.m., New York time, on the Business Day on which such proposed or intended Subsequent Financing shall occur and (ii) two (2) hours after the time that the applicable Subsequent Financing Notice is received by the Buyer (the “Notice Termination Time”), setting forth: (A) a statement that the Buyer elects to participate in such Subsequent Financing, (B) the amount of Offered Securities, which shall not exceed the Participation Maximum, that the Buyer elects to purchase in such Subsequent Financing, and (C) a representation that the Buyer has sufficient funds available to purchase such Offered Securities in such Subsequent Financing on the terms and subject to the conditions set forth in the applicable Subsequent Financing Notice received by the Buyer (the “Notice of Acceptance”). If the Company does not receive a Notice of Acceptance from the Buyer prior to the applicable Notice Termination Time, the Buyer shall be deemed to have elected not to participate in the Subsequent Financing on the terms set forth in the applicable Subsequent Financing Notice received by the Buyer.

 

(iv)          Notwithstanding the foregoing, if the Company desires to change, modify or amend any of the terms or conditions of a Subsequent Financing, or the Offered Securities to be sold therein, set forth in a Subsequent Financing Notice delivered to the Buyer hereunder, the Company shall promptly, but not later than 10:00 p.m., New York time, on the Business Day immediately preceding the Business Day on which such Subsequent Financing is intended to occur, deliver to the Buyer a new written Subsequent Financing Notice describing in reasonable detail the terms and conditions of such Subsequent Financing and Offered Securities, as amended, and the Buyer will again have the right to participate in such Subsequent Financing upon the terms and conditions, as amended, set forth in such new Subsequent Financing Notice, provided the Buyer delivers to the Company a Notice of Acceptance providing the information described in the penultimate sentence of Section 4(o)(iii) above, prior to the Notice Termination Time with respect to such new Subsequent Financing Notice, which shall be the later of (I) 11:00 a.m., New York time, on the Business Day on which such proposed Subsequent Financing providing for such amended terms and conditions as set forth in the new Subsequent Financing Notice delivered to the Buyer hereunder is intended to occur and (II) two (2) hours after the time that such new Subsequent Financing Notice was received by the Buyer. If by the Notice Termination Time, the Buyer has delivered to the Company a Notice of Acceptance in which it has elected to purchase in such Subsequent Financing an aggregate amount of Offered Securities that is greater than the Participation Maximum, the Buyer shall be deemed to have elected to participate for the applicable Participation Maximum in the Subsequent Financing on the terms set forth in the applicable Subsequent Financing Notice received by the Buyer.

 

(v)           If by the Notice Termination Time, the Buyer has elected to purchase in such Subsequent Financing an aggregate amount of Offered Securities that is equal to or

 

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less than the Participation Maximum, as reflected in an Acceptance Notice delivered by the Buyer to the Company prior to the Termination Time, or the Buyer has not elected to participate in such Subsequent Financing, then the Company may (A) offer, issue and sell all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyer, including any Offered Securities the Buyer did not elect to purchase pursuant to a Notice of Acceptance as part of the Participation Maximum (all such Offered Securities that are not designated in a Notice of Acceptance as Offered Securities to be purchased by the Buyer in such Subsequent Financing, the “Other Securities”), pursuant to a definitive agreement(s) (the “Subsequent Financing Agreement”), but only to the offerees described in the Subsequent Financing Notice and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the most recent Subsequent Financing Notice received by the Buyer and (B) to publicly announce (x) the execution of such Subsequent Financing Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Financing Agreement or (II) the termination of such Subsequent Financing Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Financing Agreement and any documents contemplated therein filed as exhibits thereto. If a definitive agreement containing the terms and conditions of such Subsequent Financing as set forth in the Subsequent Financing Notice delivered to the Buyer is not entered into by the Company for any reason within five (5) Business Days after the date the initial Subsequent Financing Notice for such Subsequent Financing was first delivered to the Buyer hereunder, the Company shall promptly, but not later than 10:00 p.m., New York time, on the Business Day immediately preceding the Business Day on which such Subsequent Financing is intended to occur, deliver to the Buyer a new written Subsequent Financing Notice describing in reasonable detail the terms and conditions of such Subsequent Financing and Offered Securities, as amended, and the Buyer will again have the right to participate in such Subsequent Financing upon the terms and conditions, as amended, set forth in such new Subsequent Financing Notice, provided the Buyer delivers to the Company a Notice of Acceptance providing the information described in the penultimate sentence of Section 4(o)(iii) above, prior to the Notice Termination Time with respect to such new Subsequent Financing Notice, which shall be the time period described in Section 4(o)(iv) above.

 

(vi)          In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(o)(v) above), then the Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that the Buyer elected to purchase pursuant to Section 4(o)(iii) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o) prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that the Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyer in accordance with Section 4(o)(i) and (ii) above.

 

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(vii)         Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyer shall acquire from the Company, and the Company shall issue to the Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 4(o)(vi) above if the Buyer has so elected, upon the terms and conditions specified in the Subsequent Financing Agreement. The purchase by the Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Buyer and its counsel. Any Offered Securities not acquired by the Buyer or other Persons in accordance with this Section 4(o) may not be issued, sold or exchanged until they are again offered to the Buyer under the procedures specified in this Section 4(o).

 

(viii)        The Company and the Buyer agree that if the Buyer elects to participate in the Subsequent Financing, neither the Subsequent Financing Agreement with respect to such Subsequent Financing nor any other transaction documents related thereto (collectively, the “Subsequent Financing Documents”) shall include any term or provision whereby the Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.

 

(ix)          Notwithstanding anything to the contrary in this Section 4(o) and unless otherwise agreed to by the Buyer, the Company shall either confirm in writing to the Buyer that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that the Buyer will not be in possession of any material, non-public information, by the fifth (5th) Business Day following delivery of the Subsequent Financing Notice. If by such fifth (5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by the Buyer, such transaction shall be deemed to have been abandoned and the Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide the Buyer with another Subsequent Financing Notice and the Buyer will again have the right of participation set forth in this Section 4(o).

 

(x)           The restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities.

 

(p)           Passive Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the Code.

 

(q)           Corporate Existence. So long as the Buyer beneficially owns any portion of any of the Warrants, the Company shall not be party to any Fundamental Transaction (as defined in the

 

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Warrant) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Warrants.

 

(r)            Exercise Procedures. The form of Exercise Notice (as defined in the Warrants) included in the Series E Warrants sets forth the totality of the procedures required of the Buyer in order to exercise the Series E Warrants. The form of Exercise Notice (as defined in the Warrants) included in the Series F Warrants sets forth the totality of the procedures required of the Buyer in order to exercise the Series F Warrants. No legal opinion or other information or instructions shall be required of the Buyer to exercise any portion of any of the Warrants. The Company shall honor exercises of the Warrants and shall deliver the applicable number of Warrant Shares in accordance with the terms, conditions and time periods set forth in the Warrants. Without limiting the preceding sentences, no ink-original Exercise Notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice form be required in order to exercise any portion of any of the Warrants.

 

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

 

(t)            Passive Foreign Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the Code.

 

(u)           General Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Series F Warrants or any Series F Warrant Shares by means of any form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(v)           Integration. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would (i) require registration of the offer, issuance or sale of the Series F Warrant or any of the Series F Warrant Shares under the 1933 Act, (ii) cause the offer, issuance or sale of the Common Shares and the Series E Securities to the Buyer hereunder pursuant to the Registration Statement to be integrated with any other offering of securities of the Company (including, without limitation, the offer, issuance or sale of the Series F Warrant or any of the Series F Warrant Shares, any prior or other offering of securities of the Company or otherwise), or (iii) cause the offer, issuance or sale of the Series F Warrant or any of the Series F Warrant Shares to be integrated with any other offering of securities of the Company (including, without limitation, the offer, issuance or sale of the Common Shares and the Series E Securities to the Buyer hereunder pursuant to the Registration Statement, any prior or other offering of securities of the Company or otherwise).

 

(w)          Notice of Disqualification Events. The Company will notify the Buyer in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become a

 

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Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.

 

(x)           Closing Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to the Buyer and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. a complete closing set of the executed Transaction Documents and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.

 

5.             REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a)           Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Common Shares and the Warrants in which the Company shall record the name and address of the Person in whose name the Common Shares and the Warrants have been issued (including the name and address of each transferee), the number of Common Shares held by such Person, the number of Series E Warrant Shares issuable upon exercise of the Series E Warrant held by such Person, and the number of Series E Warrant Shares issuable upon exercise of the Series E Warrant held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of the Buyer or its legal representatives.

 

(b)           Transfer Agent Instructions. The Company shall issue irrevocable instructions to its Transfer Agent and any subsequent transfer agent in a form acceptable to the Buyer (the “Irrevocable Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at DTC, registered in the name of the Buyer or its respective nominee(s), for the Common Shares and the Warrant Shares in such amounts as specified from time to time by the Buyer to the Company upon the exercise of the Warrants (as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b) will be given by the Company to its Transfer Agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If the Buyer effects a sale, assignment or transfer of the Common Shares or Series E Warrant Shares, the Company shall permit the transfer and shall promptly instruct its Transfer Agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by the Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Series F Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule 144 (assuming the transferor is not an affiliate of the Company), the transfer agent shall issue such shares to the Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance with Section 5(c) below. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that the Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to issue each legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer Agent as follows:

 

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(i) at the Closing with respect to the Common Shares, (ii) upon each exercise of the Warrants (unless such issuance covered by a prior legal opinion previously delivered to the Transfer Agent), and (iii) on each date a registration statement with respect to the issuance or resale of any of the Series F Warrant Shares is declared effective by the SEC. Any fees (with respect to the Transfer Agent, counsel to the Company or otherwise) associated with the issuance of such opinions or the removal of any legends on any of the Securities shall be borne by the Company.

 

(c)           Legends. Certificates and any other instruments evidencing the Common Shares, the Series E Warrants or the Series E Warrant Shares shall not bear any restrictive or other legend. The Buyer understands that the Series F Warrant and the Series F Warrant Shares are being issued pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth below, the Series F Warrant and the Series F Warrant Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

(d)           Removal of Legends. Certificates evidencing the Series F Warrant Shares shall not be required to contain the legend set forth in Section 5(c) above or any other legend (i) while a registration statement covering the resale of such Series F Warrant Shares is effective under the 1933 Act, (ii) following any sale of such Series F Warrant Shares pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Series F Warrant Shares are eligible to be sold, assigned or transferred under Rule 144 (provided that the Buyer provides the Company with reasonable assurances that such Series F Warrant Shares are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion of counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that the Buyer provides the Company with an opinion of counsel to the Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Series F Warrant Shares may be made without registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days following the delivery by the Buyer to the

 

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Company or the transfer agent (with notice to the Company) of a legended certificate representing such Series F Warrant Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries from the Buyer as may be required above in this Section 5(c), as directed by the Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program, credit the aggregate number of Series F Warrant Shares to which the Buyer shall be entitled to the Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the Buyer, a certificate representing such Series F Warrant Shares that is free from all restrictive and other legends, registered in the name of the Buyer or its designee (the date by which such credit is so required to be made to the balance account of the Buyer’s or the Buyer’s nominee with DTC or such certificate is required to be delivered to the Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”).

 

(e)           Buy-In. If the Company fails to so properly deliver such unlegended certificates representing the aggregate number of Series F Warrant Shares to which the Buyer shall be entitled, or so properly credit the aggregate number of Series F Warrant Shares to which the Buyer shall be entitled to the Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, in each case by the Required Delivery Date, then, in addition to all other remedies available to the Buyer, (i) the Company shall, pay to the Buyer, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Series F Warrant Shares (based on the VWAP of the Common Stock on the date such Series F Warrant Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 5(d), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend or such credit to such balance account with DTC is made and (ii) if after the Legend Removal Date the Buyer purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Buyer of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that the Buyer anticipated receiving from the Company without any restrictive legend, then an amount equal to the excess of the Buyer’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Series F Warrant Shares that the Company was required to deliver to the Buyer by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by the Buyer to the Company of the applicable Series F Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this Section 5(e).

 

(f)            FAST Compliance. While any portion of any of the Warrants remains outstanding, the Company shall maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program.

 

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6.                                      CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

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

 

(a)                                 The Buyer shall have executed this Agreement and delivered the same to the Company.

 

(b)                                 The Buyer shall have delivered to the Company the Purchase Price for the Common Shares and the Warrants being purchased by the Buyer at the Closing (less the amount withheld pursuant to Section 4(g)) by wire transfer of immediately available funds in accordance with the Flow of Funds Letter.

 

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

 

7.                                      CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

 

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

 

(a)                                 The Company shall have duly executed and delivered to the Buyer each of the Transaction Documents, and the Company shall have (A) caused the Transfer Agent to credit 271,744 Common Shares to the Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, (B) deliver to the Buyer the Series E Warrant (initially for an aggregate of up to 456,058 Series E Warrant Shares), duly executed on behalf of the Company and registered in the name of the Buyer or its designee, and (C) deliver to the Buyer the Series F Warrant (initially for an aggregate of up to 727,802 Series F Warrant Shares), duly executed on behalf of the Company and registered in the name of the Buyer or its designee.

 

(b)                                 The Buyer shall have received the opinion of Sheppard, Mullin, Richter and Hampton LLP, the Company’s counsel, dated as of the Closing Date, in the form reasonably acceptable to the Buyer.

 

(c)                                  The Company shall have delivered to the Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form reasonably acceptable to the Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.

 

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(d)                                 The Company shall have delivered to the Buyer a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within ten (10) days of the Closing Date.

 

(e)                                  The Company shall have delivered to the Buyer a certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and is required to so qualify, as of a date within ten (10) days of the Closing Date.

 

(f)                                   The Company shall have delivered to the Buyer a certificate, in the form acceptable to the Buyer, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s board of directors in a form reasonably acceptable to the Buyer, (ii) the Certificate of Incorporation of the Company and (iii) the Bylaws of the Company, each as in effect at the Closing.

 

(g)                                  Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer in the form acceptable to the Buyer.

 

(h)                                 The Company shall have delivered to the Buyer a letter from the Transfer Agent certifying the number of shares of Common Stock outstanding on the Closing Date immediately prior to the Closing.

 

(i)                                     The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or (II) by falling below the minimum maintenance requirements of the Principal Market.

 

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

 

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

 

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

 

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(m)                             The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Common Shares and the Warrant Shares.

 

(n)                                 The Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company, setting forth the wire transfer instructions of the Company (the “Flow of Funds Letter”).

 

(o)                                 From the date hereof to the Closing Date, (i) trading in the Common Stock shall not have been suspended by the SEC or the Principal Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, (ii) at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on the Principal Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

(p)                                 The Registration Statement shall be effective and available for the issuance and sale to the Buyer hereunder of (i) 271,744 Common Shares and (ii) the Series E Warrant and up to 456,058 Series E Warrant Shares issuable upon exercise of the Series E Warrants.

 

(q)                                 The Company shall have delivered to the Buyer the Prospectus and the Prospectus Supplement (which may be delivered in accordance with Rule 172 under the 1933 Act).

 

(r)                                    The Company and its Subsidiaries shall have delivered to the Buyer such other documents, instruments or certificates relating to the transactions contemplated by this Agreement as the Buyer or its counsel may reasonably request.

 

8.                                      TERMINATION.

 

In the event that the Closing shall not have occurred within five (5) days of the date hereof, then the Buyer shall have the right to terminate its obligations under this Agreement at any time on or after the close of business on such date without liability of the Buyer to the Company; provided, however, the right to terminate this Agreement under this Section 8 shall not be available to the Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of the Buyer’s breach of this Agreement, provided further that no such termination shall affect any obligation of the Company under this Agreement to reimburse the Buyer for the expenses described in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

 

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9.                                      MISCELLANEOUS.

 

(a)                                 Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Buyer or to enforce a judgment or other court ruling in favor of the Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(b)                                 Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

(c)                                  Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

 

(d)                                 Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be

 

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deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyer, under the Transaction Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to the Buyer, or collection by the Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of the Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of the Buyer, the amount of interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to the Buyer under the Transaction Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or received by the Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

(e)                                  Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyer, the Company, its Subsidiaries, their affiliates and Persons acting on their behalf, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any provision of the Term Sheet that is expressly binding on the Company and the Buyer, or any other agreements the Buyer has entered into with, or any instruments the Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by the Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company, or any rights of or benefits to the Buyer or any other Person, in any provision of the Term Sheet that is expressly binding on the Company and the Buyer, in any other agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and the Buyer, or in any instruments the Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof, and all such binding provisions

 

45

 

contained in the Term Sheet and all such other agreements and instruments shall continue in full force and effect. Except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. Provisions of this Agreement may be amended only with the written consent of the Company and the Buyer, and any amendment of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding upon the Buyer and the Company. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on the waiving party. The Company has not, directly or indirectly, made any agreements with the Buyer relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, the Buyer has not made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement for the Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (i) no due diligence or other investigation or inquiry conducted by the Buyer, any of its advisors or any of its representatives shall affect the Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document, (ii) nothing contained in the Registration Statement, the Prospectus or the Prospectus Supplement shall affect the Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document and (iii) unless a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect the Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document.

 

(f)                                   Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or electronic mail; or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

 

If to the Company:

 

Trovagene, Inc.

110 Flintkote Avenue 

San Diego, CA 92121

Telephone:  (858) 952-7570

Facsimile: (858) 952-7571 

Attention: Chief Executive Officer 

E-Mail: tadams@trovagene.com

 

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With a copy (for informational purposes only) to:

 

Sheppard, Mullin, Richter & Hampton LLP 

30 Rockefeller Plaza, 39th Floor

New York, NY 10112 

Telephone:  (212) 653-8700

Facsimile: (212) 653-8701 

Attention:  Jeffrey J. Fessler, Esq.

E-Mail: jfessler@sheppardmullin.com 

 

If to the Transfer Agent:

 

Philadelphia Stock Transfer, Inc. 

2320 Haverford Rd., Suite 230

Ardmore, PA 19003

Telephone:  (484) 416-3124

Facsimile: (484) 416-3597 

Attention: Bob Winterle

E-Mail: bwinterle@philadelphiastocktransfer.com 

 

If to the Buyer:

 

Lincoln Park Capital Fund, LLC 

440 North Wells, Suite 410

Chicago, IL 60654

Telephone:  (312) 822-9300

Facsimile:  (312) 822-9301

Attention:  Joshua Scheinfeld/Jonathan Cope

E-Mail: jscheinfeld@lpcfunds.com/jcope@lpcfunds.com 

 

with a copy (for informational purposes only) to:

 

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 

666 Third Avenue

New York, NY 10017 

Telephone: (212) 692-6267

Facsimile: (212) 983-3115 

Attention: Anthony J. Marsico, Esq.

Email: ajmarsico@mintz.com

 

or to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable

 

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evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(g)                                  Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any subsequent purchasers of any of the Warrants (but excluding any purchasers of Underlying Securities, unless pursuant to a written assignment by the Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer, including, without limitation, by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Warrants). The Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to be the Buyer hereunder with respect to such assigned rights.

 

(h)                                 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in Section 9(k).

 

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

 

(j)                                    Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(k)                                 Indemnification.

 

(i)                                     In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless the Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents, (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought

 

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on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) the status of the Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief), or (D) with respect to any registration statement of the Company providing for the resale by the Buyer of any Series F Warrant Shares issued and issuable upon exercise of the Series F Warrants filed by the Company with the SEC, (1) any untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding the Buyer furnished in writing to the Company by the Buyer expressly for use therein or (2) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act or any state securities law, or any rule or regulation thereunder in connection therewith. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

 

(ii)                                  Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case of clause (C) above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees. The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or

 

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Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 9(k), except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.

 

(iii)                               The indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.

 

(iv)                              The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.

 

(l)                                     Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement. It is expressly understood and agreed that for all purposes of this Agreement, and without implication that the contrary would otherwise be true, neither transactions nor purchases nor sales shall include the location and/or reservation of borrowable shares of Common Stock.

 

(m)                             Remedies. The Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of any Securities, shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to

 

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perform, observe, or discharge any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyer. The Company therefore agrees that the Buyer shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).

 

(n)                                 Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever the Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary does not timely perform its related obligations within the periods therein provided, then the Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of the Series E Warrant or the Series F Warrant, the Buyer shall be required to return any Series E Warrant Shares or Series F Warrant Shares, respectively, subject to any such rescinded exercise notice concurrently with the return to the Buyer of the aggregate exercise price paid to the Company for such Series E Warrant Shares or Series F Warrant Shares, as applicable, and the restoration of the Buyer’s right to acquire such Series E Warrant Shares or Series F Warrant Shares pursuant to such Series E Warrant or Series F Warrant (including, issuance of a replacement warrant certificate evidencing such restored right), respectively.

 

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

 

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(p)                                 Judgment Currency.

 

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

 

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

 

(2)                                 the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 9(p)(i)(1) being hereinafter referred to as the “Judgment Conversion Date”).

 

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

 

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

 

(q)                                 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.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
TROVAGENE, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Adams
    
	
 
    	
 
    	
Name:   Thomas Adams
    
	
 
    	
 
    	
Title:    CEO
    

 

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IN WITNESS WHEREOF, the Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

 

	
 
    	
BUYER:
    
	
 
    	
 
    
	
 
    	
LINCOLN PARK CAPITAL FUND, LLC 
    
	
 
    	
BY:
    	
LINCOLN PARK CAPITAL, LLC
    
	
 
    	
BY:
    	
ROCKLEDGE CAPITAL CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joshua Scheinfeld
    
	
 
    	
 
    	
Name:   Joshua Scheinfeld
    
	
 
    	
 
    	
Title:   President
    

 

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