Document:

Exhibit 10.1

 

FIRST AMENDMENT TO 
 CREDIT AGREEMENT

 

This First Amendment to Credit Agreement (“Amendment”), dated as of March 28, 2017, is made by and among HSBC BANK USA, NATIONAL ASSOCIATION, as Administrative Agent (in such capacity, “Administrative Agent”), the Lenders (as defined in the Credit Agreement), and ALLIED MOTION TECHNOLOGIES INC. (“Allied Inc.”) and ALLIED MOTION TECHNOLOGIES B.V. (“Allied B.V.” and collectively with Allied Inc., the “Borrowers”).

 

Statement of the Premises

 

The Administrative Agent, the Lenders, the Borrowers, KeyBank National Association and Wells Fargo Bank, National Association, as co-syndication agents and HSBC Securities (USA) Inc., as sole lead arranger and sole book runner, have previously entered into a Credit Agreement dated as of October 28, 2016 (the “Credit Agreement”).  All capitalized terms not otherwise defined in this Amendment have the meanings given them in the Credit Agreement.

 

The Borrowers have requested that the Administrative Agent and the Lenders agree to amend certain terms set forth in the Credit Agreement.

 

The Administrative Agent and the Lenders have agreed to amend the Credit Agreement on the terms and conditions set forth herein.

 

Accordingly, for good and valuable consideration, the Administrative Agent, the Borrowers and the Lenders agree as follows:

 

Agreement

 

1.                                      Defined Terms.  Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.

 

2.                                      Amendments.  Effective upon the satisfaction of all conditions specified in Section 4 hereof, the Credit Agreement is hereby amended as follows:

 

(a)                                 Section 1.01 of the Credit Agreement (entitled “Defined Terms”) is amended so that the following terms are amended and restated as follows:

 

“Consolidated EBITDA” means, for any Reference Period and without duplication, (a) Consolidated Net Income for such period, plus (b) to the extent deducted in calculating Consolidated Net Income and without duplication (i) income taxes expensed during such period by the Company and its Subsidiaries, (ii) Interest Expenses during such period, (iii) depreciation, amortization and other Non-Cash Charges accrued for such period, (iv) non-cash losses from any Casualty Event, Disposition or discontinued operation during such period, and (v) stock compensation expense, minus (c) to the extent such items were added in calculating Consolidated Net Income (i) Extraordinary Gains during such period,

 

 

(ii) gains from any Casualty Event, Disposition or discontinued operation during such period, (iii) interest income, royalty payments and other income during such period, (iv) Federal, state, local and foreign income tax credits of the Company and its Subsidiaries for such period, and (v) all non-cash income items for such period; provided that notwithstanding anything to the contrary in this definition, for purposes of computing any pro-forma calculation required by this Agreement, the term “Consolidated EBITDA” shall be computed, on a consistent basis, to reflect purchases and acquisitions, whether a Permitted Acquisition or otherwise, and sales of assets of the Company or a Subsidiary or assets constituting a business line or division, by the Company or a Subsidiary during the Reference Period as if they had occurred at the beginning of such Reference Period, and Borrowers, during the twelve (12) month period following the date of any purchases and acquisitions, may include in the calculation of Consolidated EBITDA the necessary portion of the adjusted historical results attributable to the assets, businesses or entities acquired in acquisitions that were achieved prior to the applicable date of the acquisition for such time period as is necessary for Borrowers to have figures for a full Reference Period from the date of determination with respect to such acquired entities.

 

“Globe LDA” means Allied Motion Portugal, Lda.

 

3.                                      Representations and Warranties.  Each Borrower makes the following representations and warranties to the Administrative Agent and the Lenders which shall be deemed to be continuing representations and warranties so long as any Obligations, including indebtedness of either Borrower to Administrative Agent or the Lenders arising under the Credit Agreement or any Loan Documents, remain unpaid:

 

(a)                                 Authorization.  Such Borrower has full power and authority to execute, deliver and perform this Amendment,  which has been duly authorized by all proper and necessary action.  The execution and delivery of this Amendment by such Borrower will not violate the provisions of, or cause a default under, such Borrower’s Organizational Documents or any agreement to which such Borrower is a party or by which it or its assets are bound.

 

(b)                                 Binding Effect.  This Amendment has been duly executed and delivered by such Borrower and constitutes the legal, valid and binding obligation of such Borrower enforceable in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and laws affecting Creditor’s rights generally.

 

(c)                                  Consents; Governmental Approvals.  No consent, approval or authorization of, or registration, declaration or filing with, any governmental body or authority or any other party is required in connection with the valid execution, delivery or performance of this Amendment or any other document executed and delivered herewith or in connection with any other transactions contemplated hereby.

 

2

 

(d)                                 No Events of Default.  There is, on the date hereof, no event or condition which constitutes an Event of Default under any of the Loan Documents or which, with notice and/or the passage of time, would constitute an Event of Default.

 

(e)                                  No Material Misstatements.  Neither this Amendment nor any document delivered to the Administrative Agent or the Lenders by or on behalf of such Borrower to induce the Administrative Agent and the Lenders to enter into this Amendment or otherwise in connection with this Amendment contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading in light of the circumstances in which they were made.

 

(f)                                   Credit Agreement.  The representations and warranties of such Borrower set forth in Article 5 of the Credit Agreement are true and correct on and as of the date hereof with the same force and effect as if made on and as of such date.

 

4.                                      Conditions of Effectiveness.  This Amendment shall become effective when and only when the Administrative Agent shall have received counterparts of this Amendment executed by the Borrowers, the Administrative Agent and the Lenders.

 

5.                                      Reference to and Effect on Loan Documents.

 

(a)                                 Upon the effectiveness hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the Loan Documents to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment.

 

(b)                                 The Credit Agreement, as amended by this Amendment, represents the entire understanding and agreement between the parties hereto with respect to the subject matter hereof.  This Amendment supersedes all prior negotiations and any course of dealing between the parties with respect to the subject matter hereof.  This Amendment shall be binding upon each Borrower and its successors and assigns, and shall inure to the benefit of, and be enforceable by, the Administrative Agent, the Lenders and each of their successors and assigns.  The Credit Agreement, as amended hereby, is in full force and effect and, as so amended, is hereby ratified and reaffirmed in its entirety.  Each Borrower acknowledges and agrees that the Credit Agreement (as amended by this Amendment) and all other Loan Documents to which such Borrower is a party are in full force and effect, that such Borrower’s obligations thereunder and under this Amendment are its legal, valid and binding obligations, enforceable against it in accordance with the terms thereof and hereof, and that such Borrower has no defense, whether legal or equitable, setoff or counterclaim to the payment and performance of such obligations.

 

(c)                                  Each Guarantor signing below acknowledges and agrees that each Security Document to which it is a party is in full force and effect, that such Guarantor’s obligations under such Security Documents are its legal, valid and binding obligations, enforceable against it in accordance with the terms thereof, that such Guarantor has no defense, whether legal or equitable, setoff or counterclaim to the payment and performance of such obligations and that all Obligations, guaranteed or secured, thereby include, without limitation, the Revolving Loans, as increased pursuant to this Amendment.

 

3

 

(d)                                 Except as specifically set forth in this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.

 

6.                                      Costs and Expenses.  Borrowers agree to pay on demand all costs and expenses of the Administrative Agent and the Lenders in connection with the preparation, execution and delivery of this Amendment, including the fees and out-of-pocket expenses of counsel for the Administrative Agent and the Lenders.

 

7.                                      Governing Law.  This Amendment shall be governed and construed in accordance with the laws of the State of New York without regard to any conflicts-of-laws rules which would require the application of the laws of any other jurisdiction.

 

8.                                      Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

 

9.                                      Execution in Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same document.

 

[Signature Pages Follow]

 

4

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective representatives thereunto duly authorized, as of the date first above written.

 

	
 
    	
ALLIED MOTION TECHNOLOGIES INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ MICHAEL R. LEACH
    
	
 
    	
Name: Michael R. Leach
    
	
 
    	
Title: Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ALLIED MOTION TECHNOLOGIES B.V.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ HARRY CLOOS
    
	
 
    	
Name: Harry Cloos
    
	
 
    	
Title: General Manager
    

 

Accepted and Agreed to by each of the following

Guarantors as of this 28 day of March, 2017

 

	
ALLIED MOTION DORDRECHT B.V.
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ HARRY CLOOS
    	
 
    
	
Name: Harry Cloos
    	
 
    
	
Title: General Manager
    	
 
    
	
 
    	
 
    
	
ALLIED MOTION STOCKHOLM AB
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Authorized   Signatory
    	
 
    
	
 
    	
 
    
	
ALLIED   MOTION PORTUGAL, LDA.
    	
 
    
	
(formerly   known as GLOBE MOTORS
    	
 
    
	
PORTUGAL—MATERIAL   ELÉCTRICO
    	
 
    
	
PARA   A INDÚSTRIA AUTOMÓVEL, LDA.)
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ HARRY CLOOS
    	
 
    
	
Name: Harry Cloos
    	
 
    
	
Title: General Manager
    	
 
    

 

[Signature Page to First Amendment to

Credit Agreement]

 

 

	
EMOTEQ CORPORATION
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
MOTOR PRODUCTS CORPORATION
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AMOT I, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AMOT II, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AMOT III, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
STATURE ELECTRIC, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    

 

[Signature Page to First Amendment to

Credit Agreement]

 

 

	
GLOBE MOTORS, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ALLIED MOTION CONTROL   CORPORATION
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ MICHAEL R. LEACH
    	
 
    
	
Name: Michael R. Leach
    	
 
    
	
Title: Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
HEIDRIVE GmbH
    	
 
    
	
 
    	
 
    
	
By:
    	
 /s/ H.R. NUGTEREN
    	
 
    
	
Name: H.R. Nugteren
    	
 
    
	
Title: Managing   Director
    	
 
    

 

[Signature Page to First Amendment to

Credit Agreement]

 

 

	
 
    	
ADMINISTRATIVE   AGENT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HSBC BANK USA, NATIONAL   ASSOCIATION, AS ADMINISTRATIVE AGENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ SHAUN MALLEN
    
	
 
    	
Name:
    	
Shaun Mallen
    
	
 
    	
Title:
    	
Senior Vice President
    
				

 

[Signature Page to First Amendment to

Credit Agreement]

 

 

	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HSBC BANK USA, NATIONAL   ASSOCIATION, AS A LENDER, L/C ISSUER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ SHAUN MALLEN
    
	
 
    	
Name:
    	
Shaun Mallen
    
	
 
    	
Title:
    	
Senior Vice President
    
				

 

[Signature Page to First Amendment to

Credit Agreement]

 

 

	
 
    	
KEYBANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ MICHAEL P. MCMAHON
    
	
 
    	
Name:
    	
Michael P. McMahon
    
	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL   ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ THOMAS GRYS
    
	
 
    	
Name:
    	
Thomas Grys
    
	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CITIZENS BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ JASON D. HOUSEMAN
    
	
 
    	
Name:
    	
Jason D. Houseman
    
	
 
    	
Title:
    	
Vice President
    
				

 

[Signature Page to First Amendment to

Credit Agreement]Blueprint

 

Exhibit 4.1

 

SERIES A COMMON STOCK PURCHASE WARRANT

 

 

CORMEDIX INC.

 

 

	

Warrant
Shares: _______

	

Issue
Date: May 3, 2017

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, _____________ or its assigns (the
“Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the
Initial Exercise Date and on or prior to the close of business on
the day that is the thirteenth (13th) month after the
Initial Exercise Date (the “Termination Date”) but
not thereafter, to subscribe for and purchase from CorMedix Inc., a
Delaware corporation (the “Company”), up to ______
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).

 

Section 1.  Definitions. Capitalized terms
used and not otherwise defined herein shall have the meanings set
forth below:

 

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

 

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

 

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

 

“Common Stock” means the
common stock of the Company, par value $0.001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.

 

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

 

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

 

 

 
1

 

 

 

 

“Initial Exercise Date”
means the date that the Company publicly announces through the
filing of a Current Report on Form 8-K that the Company has
received Stockholder Approval and the amendment to the
Company’s Articles of Incorporation has become
effective.

 

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

 

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

 

“Stockholder Approval”
means the approval of the Company’s stockholders to amend the
Company’s Amended and Restated Certificate of Incorporation
to increase the number of authorized shares of Common Stock from
80,000,000 to 200,000,000.

 

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

 

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

 

“Transfer Agent” means
VStock Transfer, LLC, the current transfer agent of the Company,
with a mailing address of 18 Lafayette Place, Woodmere, New York
11598, and any successor transfer agent of the
Company.

 

Section
2.            
Exercise.

 

a)           Exercise
of Warrants. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office
or agency of the Company as it may designate by notice in writing
to the registered Holder at the address of the Holder appearing on
the books of the Company) of a duly executed facsimile copy (or
e-mail attachment) of the Notice of Exercise in the form annexed
hereto (the “Notice
of Exercise”). Within the earlier of (i) three (3)
Trading Days and (ii) the number of Trading Days comprising the
Standard Settlement Period (as defined in Section 2(d)(i) herein)
following the date of exercise as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the shares specified in
the applicable Notice of Exercise by wire transfer or
cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is
specified in the applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise be
required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in
full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date
the final Notice of Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a portion of
the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Business Day of receipt of
such notice. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given
time may be less than the amount stated on the face
hereof.

 

 

 

2

 

 

 

 

Without
limiting the rights of a Holder to receive Warrant Shares on a
“cashless exercise” and without limiting the liquidated
damages provision in Section 2(d)(i) and the buy-in provision in
Section 2(d)(iv), in no event will the Company be required to net
cash settle a Warrant exercise.

 

b)           Exercise
Price. The exercise price per share of the Common Stock
under this Warrant shall be $0.75, subject to adjustment hereunder
(the “Exercise
Price”).

 

c)           Cashless
Exercise. If at the time of exercise hereof there is no
effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant
Shares to the Holder, then this Warrant may also be exercised, in
whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a
number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:

 

(A)
=

as applicable: (i)
the VWAP on the Trading Day immediately preceding the date of the
applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a
day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2(a) hereof on a Trading Day prior to the
opening of “regular trading hours” (as defined in Rule
600(b)(64) of Regulation NMS promulgated under the federal
securities laws) on such Trading Day, (ii) at the option of the
Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Stock on the principal Trading Market as
reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on
a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 2(a) hereof or (iii) the VWAP on the date of
the applicable Notice of Exercise if the date of such Notice of
Exercise is a Trading Day and such Notice of Exercise is both
executed and delivered pursuant to Section 2(a) hereof after the
close of “regular trading hours” on such Trading
Day;

 

(B)
=

the
Exercise Price of this Warrant, as adjusted hereunder;
and

 

 

3

 

 

 

 

(X)
=

the
number of Warrant Shares that would be issuable upon exercise of
this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless
exercise.

 

If Warrant Shares are
issued in such a cashless exercise, the parties acknowledge and
agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered
characteristics of the Warrants being exercised.  The
Company agrees not to take any position contrary to this Section
2(c).

 

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

 

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

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).

 

 

4

 

 

 

 

d)           Mechanics
of Exercise.

 

i. 

Delivery of Warrant Shares Upon
Exercise. The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B)
this Warrant is being exercised via cashless exercise, and
otherwise by physical delivery of a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earlier of
(i) the earlier of (A) three (3) Trading Days after the delivery to
the Company of the Notice of Exercise and (B) one (1) Trading Day
after delivery of the aggregate Exercise Price to the Company and
(ii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise
(such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) three (3) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. If
the Company fails for any reason to deliver to the Holder the
Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the fifth
(5th)
Trading Day after such liquidated damages begin to accrue) for each
Trading Day after such Warrant Share Delivery Date until such
Warrant Shares are delivered or Holder rescinds such exercise. The
Company agrees to maintain a transfer agent that is a participant
in the FAST program so long as this Warrant remains outstanding and
exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Exercise.

 

ii.

Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

 

 

5

 

 

 

 

iii.

Rescission Rights. If the
Company fails to cause the Transfer Agent to transmit to the Holder
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share
Delivery Date, then the Holder will have the right to rescind such
exercise.

 

iv.

Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.

 

v.

No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.

 

vi.

Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event that
Warrant Shares are to be issued in a name other than the name of
the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.

 

vii.

Closing of Books. The Company
will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

 

 

 

6

 

 

 

 

e)           Holder’s
Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of
the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two (2) Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be [9.99/4.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock issuable
upon exercise of this Warrant. The Holder, upon notice to the
Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

 

 

 

7

 

 

 

 

Section
3.             
Certain
Adjustments.

 

a)           Stock
Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination
or re-classification.

 

b)           Subsequent
Rights Offerings. In addition
to any adjustments pursuant to Section 3(a) above, if at any time
the Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

c)           Pro
Rata Distributions. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
“Distribution”), at any
time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if
the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then
the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).

 

 

 

8

 

 

 

 

d)           Fundamental
Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of
the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii)
any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(d) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein.

 

e)           Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.

 

f)       
     Notice
to Holder.

 

i.      Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by facsimile or email a notice
setting forth the Exercise Price after such adjustment and any
resulting adjustment to the number of Warrant Shares and setting
forth a brief statement of the facts requiring such
adjustment.

 

 

 

9

 

 

 

 

ii.           Notice
to Allow Exercise by Holder. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein.

 

Section
4.             
Transfer of
Warrant.

 

a)           Transferability.
This Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and
this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this
Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to
the Company within three (3) Trading Days of the date the Holder
delivers an assignment form to the Company assigning this Warrant
in full. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

 

 

 

10

 

 

 

 

b)           New
Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. All Warrants issued on
transfers or exchanges shall be dated the Issue Date of this
Warrant and shall be identical with this Warrant except as to the
number of Warrant Shares issuable pursuant thereto.

 

c)           Warrant
Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the
“Warrant
Register”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for
all other purposes, absent actual notice to the
contrary.

 

Section
5.            
Miscellaneous.

 

a)           No
Rights as Stockholder Until Exercise. This Warrant does not
entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set
forth in Section 2(d)(i), except as expressly set forth in Section
3.

 

b)           Loss,
Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.

 

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

 

d)           Authorized
Shares.

 

   
          The Company
covenants that, subject to its receipt of Stockholder Approval,
during the period the Warrant is outstanding, it will reserve from
its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the
duty of issuing the necessary Warrant Shares upon the exercise of
the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed. The
Company covenants that all Warrant Shares which may be issued upon
the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this
Warrant and payment for such Warrant Shares in accordance herewith,
be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

 

 

 

11

 

 

 

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.

 

Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.

 

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

 

f)           Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.

 

g)           Nonwaiver
and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s
rights, powers or remedies. Without limiting any other provision of
this Warrant or the Underwriting Agreement pursuant to which this
Warrant was issued, if the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to the Holder
such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in
collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies
hereunder.

 

 

 

12

 

 

 

 

h)           Notices.
Any notices, consents, waivers or
other document or communications required or permitted to be given
or delivered under the terms of this Warrant must be in writing and
will be deemed to have been delivered: (i) upon receipt, if
delivered personally; (ii) when sent, if sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail
is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an
automatically generated message from the recipient’s e-mail
server that such e-mail could not be delivered to such recipient)
and (iv) if sent by overnight courier service, one (1) Trading 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. If notice is given by facsimile or email, a
copy of such notice shall be dispatched no later than the next
business day by first class mail, postage prepaid. The addresses,
facsimile numbers and e-mail addresses for such communications
shall be:

 

If to
the Company:

 

	
 

	

 CorMedix
Inc.  

	
 

	
 Address:

	
1430 U.S. Highway
206

	
 

	
 

	
Suite
200

	
 

	
 

	
Bedminster NJ
07921

	
 

	
  

	
 

	
 

	
 Telephone:

	
(908)
517-9500

	
 

	
 Attention:

	
Chief Financial
Officer (Robert Cook)

	
 

	
 Email:

	
rcook@cormedix.com

 

If
to a Holder, to its address, facsimile number or e-mail address set
forth herein or on the books and records of the
Company.

 

Or, in each of the above instances, to such other address,
facsimile number or e-mail address and/or to the attention of such
other Person as the recipient party has specified by written notice
given to each other party at least 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 containing the time, date and
recipient facsimile number or (C) provided by an overnight courier
service shall be rebuttable evidence of personal service, receipt
by facsimile or receipt from an overnight courier service in
accordance with clause (i), (ii) or (iv) above, respectively. A
copy of the e-mail transmission containing the time, date and
recipient e­mail address shall be rebuttable evidence of
receipt by e-mail in accordance with clause (iii)
above.

 

i)           Limitation
of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

 

j)           Remedies.
The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law
would be adequate.

 

k)        
Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns
of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit
of any Holder from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.

 

l)           Amendment.
This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

 

m)       
Severability.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.

 

n)           Headings.
The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

 

********************

 

(Signature Page Follows)

 

 

13

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.

 

 

 

	
 

	

CORMEDIX INC.

 

 

	
 

	

By:__________________________________________

     Name:

     Title:

 

 

 

 

14

 

 

NOTICE OF EXERCISE

 

TO:            

CORMEDIX INC.

 

(1)        
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.

 

(2)           Payment
shall take the form of (check applicable box):

 

[ ] in
lawful money of the United States; or

 

[ ] if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).

 

(3)           Please
issue said Warrant Shares in the name of the undersigned or in such
other name as is specified below:

 

_______________________________

 

 

The
Warrant Shares shall be delivered to the following DWAC Account
Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
________________________________________________________________________

Signature of Authorized Signatory of Investing
Entity:
_________________________________________________

Name of
Authorized Signatory:
___________________________________________________________________

Title
of Authorized Signatory:
____________________________________________________________________

Date:
________________________________________________________________________________________

 

 

 

 

 

 

 

 

  EXHIBIT B

 

ASSIGNMENT
FORM

 

 (To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)

 

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

 

	

Name:

	
______________________________________

	
 

	

(Please Print)

 

	

Address:

	
______________________________________

	

 

 

Phone Number:

Email Address:

 

	

(Please
Print)

______________________________________

 

______________________________________

 

	

Dated: _______________ __, ______

 

	
 

	

 

Holder’s
Signature:                                                                 

	
 

	

 

Holder’s
Address:

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