CORMEDIX, INC. COMMON STOCK EXCHANGE AND STOCKHOLDER AGREEMENT
CORMEDIX,
INC.
This
Common Stock Exchange and Stockholder Agreement (the “Agreement”)
is made and entered into as of October 6, 2009, by and between CorMedix,
Inc., a Delaware corporation (the “Company”),
and Shiva
Biomedical, LLC, a limited liability company organized under the laws of
New Jersey (the “Holder”).
Recitals
Whereas,
the Company’s Board of Directors has approved and submitted to a vote of the
Company’s stockholders the Amended and Restated Certificate of Incorporation in
the form attached hereto as Exhibit A
(the “Restated
Certificate”);
Whereas,
the Company issued (i) an aggregate of 800,000 shares of Series B Common
Stock, par value $0.001 per share, of the Company (the “Series
B Common”), (ii) an aggregate of 50,000 shares of Series C Common Stock,
par value $0.001 per share, of the Company (the “Series
C Common”), (iii) an aggregate of 50,000 shares of Series D Common Stock,
par value $0.001 per share, of the Company (the “Series
D Common”), (iv) an aggregate of 50,000 shares of Series E Common Stock,
par value $0.001 per share, of the Company (the “Series
E Common”) and (v) an aggregate of 50,000 shares of Series F Common
Stock, par value $0.001 per share, of the Company (the “Series
F Common” and, together with the Series B Common, the Series C Common,
the Series D Common and the Series E Common, the “Exchanged
Securities”) to Holder pursuant to that certain Contribution Agreement
dated as of July 28, 2006 (the “Prior
Shiva Agreement”);
Whereas,
the Company and Holder are entering into an amendment to the Prior Shiva
Agreement, dated on or about the date hereof (the “Shiva
Amendment”), pursuant to which the Company has authorized the issuance of
an aggregate of 773,717 shares (the “New
Securities”) of its Series A Common Stock, par value $0.001 per share
(the “Series A
Common”) in exchange for the Exchanged Securities;
Whereas,
Holder desires to exchange the Exchanged Securities for the New Securities;
and
Whereas,
the Company desires to issue and exchange the New Securities for the Exchanged
Securities.
Agreement
Now,
Therefore, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
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1. Agreement
To Exchange.
1.1 Authorization
and Issuance of Securities. On
or prior to the Closing (as defined in Section 2 below), the Company shall
have authorized the issuance to Holder of the New Securities. The New
Securities shall have the rights, preferences, privileges and restrictions set
forth in the Restated Certificate.
1.2 Exchange
of Securities. Subject
to the terms and conditions of this Agreement, effective upon the Closing,
Holder hereby surrenders, transfers and assigns the Exchanged Securities to the
Company in exchange for the issuance of the New Securities, which New Securities
represent no less than seven percent (7%) of the outstanding shares of Series A
Common on the date hereof (after giving effect to (i) the surrender of the
Exchanged Securities and the issuance of the New Securities, (ii) the assumed
conversion of all outstanding securities convertible by their terms into shares
of Series A Common on the date hereof and (iii) the assumed exercise of all
outstanding securities exercisable by their terms for shares of Series A Common
on the date hereof).
2. Closing,
Delivery And Payment.
2.1 Closing.
The closing of the exchange of the New Securities for the Exchanged
Securities under this Agreement (the “Closing”)
shall take place at 1:00 p.m. Eastern time on the date the conditions set forth
in Section 5 hereof has been satisfied at the offices of the Company, 00
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxx Xxxxxx, or at such other time or place as
the Company and Holder may mutually agree (such date is hereinafter referred to
as the “Closing
Date”).
2.2 Delivery. At
the Closing, subject to the terms and conditions hereof, the Company will
deliver to Holder a certificate representing the number of shares of Series A
Common to be received upon the exchange at the Closing by Holder, against the
delivery of the Exchanged Securities, duly endorsed for transfer.
3. Representations
of the Company. The
Company hereby represents and warrants to Holder as follows:
3.1 Corporate
Existence, Power and Authority. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all
necessary power and authority under all applicable provisions of law to execute
and deliver this Agreement and the Shiva Amendment and to carry out the
provisions hereof and thereof. All action on the Company’s part
required for the lawful execution and delivery of this Agreement and the Shiva
Amendment have been taken. Upon their execution and delivery, this
Agreement and the Shiva Amendment will be valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights and
(b) as limited by general principles of equity that restrict the availability of
equitable remedies.
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3.2 Series
A Common. The shares of Series A Common issued and delivered
pursuant to this Agreement will be, upon receipt of the shares of Exchanged
Securities exchanged therefor, duly authorized, validly issued, fully paid, and
non-assessable.
3.3 Order,
Action or Proceedings.
The Company is not subject to any order and is not bound by any contract
or other instrument that may have an adverse effect on the Company’s ability to
comply with this Agreement and to deliver the New Securities free of any liens,
encumbrances, claims or restrictions other than those described herein and
pursuant to applicable securities laws, and there is no legal, administrative,
regulatory or governmental proceeding or investigation (a “Proceeding”)
pending, and no person or entity has threatened to commence any Proceeding, that
may have such effect. No event has occurred, and no claim, dispute or
other condition or circumstance exists, that might directly or indirectly give
rise to or serve as a basis for the commencement of any such Proceeding against
the Company or the New Securities.
4. Representations
of Holder. Holder
understands that the Series A Common has not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”). Holder also understands that the New Securities are
being offered and sold pursuant to an exemption from registration contained in
the Securities Act based in part upon Holder’s representations contained in this
Agreement. Holder hereby represents and warrants to the Company as
follows:
4.1 Title.
Holder has good and valid title to the Exchanged Securities free of any
liens, encumbrances, claims or restrictions.
4.2 Requisite
Power and Authority.
Holder has all necessary power and authority under all applicable
provisions of law to execute and deliver this Agreement and the Shiva Amendment
and to carry out the provisions hereof and thereof. All action on
Holder’s part required for the lawful execution and delivery of this Agreement
and the Shiva Amendment have been taken. Upon their execution and
delivery, this Agreement and the Shiva Amendment will be valid and binding
obligations of Holder, enforceable in accordance with their respective terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors’ rights and (b) as limited by general principles of equity that
restrict the availability of equitable remedies.
4.3 Order,
Action or Proceedings.
Holder is not subject to any order and is not bound by any contract or
other instrument that may have an adverse effect on Holder’s ability to comply
with this Agreement and to deliver the Exchanged Securities free of any liens,
encumbrances, claims or restrictions other than those described herein and
pursuant to applicable securities laws, and there is no Proceeding pending, and
no person or entity has threatened to commence any Proceeding, that may have
such effect. No event has occurred, and no claim, dispute or other
condition or circumstance exists, that might directly or indirectly give rise to
or serve as a basis for the commencement of any such Proceeding against Holder
or the Exchanged Securities.
4.4 Holder
Bears Economic Risk.
Holder has substantial experience in evaluating and investing in private
placement transactions or securities in companies similar to the Company so that
it is capable of evaluating the merits and risks of its investment in the
Company and has the capacity to protect its own interests. Holder
must bear the economic risk of this investment indefinitely unless the New
Securities are registered pursuant to the Securities Act, or an exemption from
registration, is available. Holder understands that the Company has
no present intention of registering the New Securities or any shares of its
capital stock. Holder also understands that there is no assurance
that any exemption from registration under the Securities Act will be available
and that, even if available, such exemption may not allow Holder to transfer all
or any portion of the New Securities under the circumstances, in the amounts or
at the times that Holder might propose.
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4.5 Acquisition
for Own Account.
Holder is acquiring the New Securities for Holder’s own account for
investment only, and not with a view towards their distribution.
4.6 Holder
Can Protect Its Interest.
Holder represents that by reason of its, or of its management’s business
or financial experience, Holder has the capacity to protect its own interests in
connection with the transactions contemplated in this
Agreement.
4.7 Company
Information.
Holder has had an opportunity to discuss the Company’s business,
management and financial affairs with directors, officers and management of the
Company. Holder has also had the opportunity to ask questions of and
receive answers from, the Company and its management regarding the terms and
conditions of its investment.
4.8 Rule
144.
Holder acknowledges and agrees that the New Securities must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Holder has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, as in effect from time to time, which permits limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things; the availability of certain current
public information about the Company, the resale occurring following the
required holding period under Rule 144 and the number of shares being sold
during the three-month period not exceeding specified limitations.
4.9 Residence.
The office or offices of the Holder in which its investment decision was
made is located at the address of the Holder set forth on the signature page
hereto.
4.10 Ownership. Holder
does not own or have the right to acquire any other securities of the Company
other than (i) the Exchanged Securities being exchanged hereunder and (ii) the
New Securities to be issued hereunder.
5. Conditions
to Closing.
5.1 Mutual
Conditions. The obligations of each party to this Agreement at
the Closing are subject to the satisfaction, at or prior to the Closing Date, of
the following conditions:
(a) On the Closing Date, the
exchange and issuance of the New Securities shall be legally permitted by all
laws to which the Holder and the Company are subject.
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(b) The Restated Certificate
shall have been filed with the Secretary of the State of the State of Delaware
and shall continue to be in full force and effect as of the Closing
Date.
(c) Holder and the Company
shall have executed and delivered the Shiva Amendment.
6. Preemptive
Rights.
6.1 Subsequent
Offerings. Subject to applicable securities laws, the Holder
shall have a preemptive right to purchase its pro
rata share of all Equity Securities (as defined in the Shiva Amendment)
that the Company may, from time to time, propose to sell and issue after the
date of this Agreement, other than the Exempted Securities (as defined in the
Shiva Amendment). The Holder’s pro
rata share is equal to the ratio of (a) the number of shares of
Series A Common then held by Holder (after giving effect to (i) the assumed
conversion of all securities then held by Holder that are convertible by their
terms into shares of Series A Common Stock on the date of determination and (ii)
the assumed exercise of all securities then held by Holder that are exercisable
by their terms for shares of Series A Common Stock on the date of determination)
to (b) the number of shares of Series A Common Stock then outstanding
immediately prior to the issuance of such Equity Securities (after giving effect
to (i) the assumed conversion of all then-outstanding securities convertible by
their terms into shares of Series A Common Stock on the date of determination
and (ii) the assumed exercise of all then-outstanding securities exercisable by
their terms for shares of Series A Common Stock on the date of
determination).
6.2 Exercise
of Rights. If the Company proposes to issue any Equity
Securities, it shall give the Holder
written notice of its intention, describing the Equity Securities, the price and
the terms and conditions upon which the Company proposes to issue the
same. The Holder shall have fifteen (15) days
from the giving of such notice to agree to purchase its pro
rata share of the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the Company and
stating therein the quantity of Equity Securities to be
purchased. Notwithstanding the foregoing, the Company shall not be
required to offer or sell such Equity Securities to the Holder if such offer or
sale would cause the Company to be in violation of applicable federal securities
laws by virtue of such offer or sale.
6.3 Issuance
of Equity Securities to Other Persons. The Company shall have
ninety (90) days
thereafter to sell the Equity Securities in respect of which the Holder’s rights
were not exercised, at a price and upon general terms and conditions not
materially more favorable to the purchasers thereof than specified in the
Company’s notice to the Holder pursuant to Section 6.2
hereof. If the Company has not sold such Equity Securities within
ninety (90) days of the notice provided pursuant to Section 6.2, the
Company shall not thereafter issue or sell any Equity Securities, without first
offering such securities to the Holder in the manner provided
above.
6.4 Sale
Without Notice. In lieu of giving notice to the Holder prior
to the issuance of Equity Securities as provided in Section 6.2, the Company may
elect to give notice to the Holder within thirty (30) days after the issuance of
Equity Securities. Such notice shall describe the type, price and
terms of the Equity Securities. The Holder shall have twenty (20) days from the
date of receipt of such notice to elect to purchase up to the number of shares
that would, if purchased by the Holder, maintain the Holder’s pro
rata share (as set forth in Section 6.1) of the Company’s Equity
Securities. The closing of such sale shall occur within sixty (60)
days of the date of notice to the Holder.
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6.5 Termination
of Preemptive Rights. The preemptive rights granted to Holder
pursuant to this Section 6 shall terminate and be of no further force and effect
upon the earlier of (i) the consummation of one or more equity financings
following which the Qualifying Financing Amount (as defined in the Shiva
Amendment) has been received by the Company, provided that the Holder’s rights
under this Section 6 shall apply to the sale of Equity Securities up to and
including the Qualifying Financing Amount; (ii) any Sale (as defined in the
Restated Certificate), provided that the Holder’s rights under this Section 6
shall apply up to and including such Sale; (iii) any Reverse Merger (as defined
in the Shiva Amendment), provided that the Holder’s rights under this Section 6
shall apply up to and including such Reverse Merger; or (iv) the Company’s first
firm commitment underwritten public offering of its Series A Common Stock (or
similar equity security for which the Series A Common Stock may be exchanged or
recapitalized after the date hereof) registered under the Securities Act (the
“Initial
Offering”).
7. Covenants
of the Company.
7.1 Registration
Rights. If the Company shall issue any Equity Securities and
grant to the purchasers of such Equity Securities registration rights, the
Company shall grant the Holder pari
passu registration rights applicable to the New Securities and any other
shares of Series A Common Stock then held by Holder, subject to the terms,
conditions and restrictions applied to the purchasers receiving such
registration rights.
7.2 Liquidation
Rights. If the Company shall issue any Equity Securities
having rights senior to the New Securities in respect of the receipt of a
distribution or payment upon any liquidation, dissolution, or winding up of the
Company, whether voluntary or involuntary, the Company shall grant the Holder
pari
passu liquidation rights applicable to the New Securities, subject to the
terms, conditions and restrictions applied to the liquidation rights of the
purchasers of such Equity Securities.
7.3 Termination
of Covenants. The covenants of the Company contained in this
Section 7 shall terminate and be of no further force and effect upon the earlier
of (i) the consummation of one or more equity financings following which the
Qualifying Financing Amount has been received by the Company; (ii) any Sale;
(iii) any Reverse Merger; or (iv) the Company’s Initial Offering. The
Holder shall not assign any of its rights or the covenants contained in this
Section 7 without the express prior written consent of the Company, and any
attempted assignment of such rights or covenants by the Holder without such
consent shall be void and of no effect.
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8. Miscellaneous.
8.1 Governing
Law.
This Agreement shall be governed in all respects by the laws of the State
of Delaware as such laws are applied to agreements between Delaware residents
entered into and performed entirely in Delaware.
8.2 Successors
and Assigns. Except
as otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the New Securities from time
to time.
8.3 Entire
Agreement. This
Agreement, the exhibit hereto and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
8.4 Severability. In
case any provision of the Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
8.5 Amendment
and Waiver.
(a) This Agreement may be
amended or modified only upon the written consent of the Company and
Holder.
(b) The obligations of the
Company and the rights of Holder under the Agreement may be waived only with the
written consent of Holder.
8.6 Notices. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by electronic mail or confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications
shall be sent to the Company or Holder at the addresses as set forth on the
signature page hereof or at such other address as the Company or Holder may
designate by ten (10) days advance written notice to the other parties
hereto.
8.7 Attorneys’
Fees. In
the event that any suit or action is instituted to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.
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8.8 Titles
and Subtitles. The
titles of the sections and subsections of the Agreement are for convenience of
reference only and are not to be considered in construing this
Agreement.
8.9 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.
8.10 Broker’s
Fees. Each
party hereto represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker’s or finder’s fee or any other commission
directly or indirectly in connection with the transactions contemplated
herein. Each party hereto further agrees to indemnify each other
party for any claims, losses or expenses incurred by such other party as a
result of the representation in this Section 8.10 being
untrue.
8.11 Exculpation. Holder
acknowledges that it is not relying upon any person, firm, or corporation, other
than the Company and its officers and directors, in making its investment or
decision to invest in the Company.
8.12 Confidentiality.
Each party hereto agrees that, except with the prior written consent of
the other party, it shall at all times keep confidential and not divulge,
furnish or make accessible to anyone any confidential information, knowledge or
data concerning or relating to the business or financial affairs of the other
parties to which such party has been or shall become privy by reason of this
Agreement, discussions or negotiations relating to this Agreement, the
performance of its obligations hereunder or the ownership of the Securities
exchanged hereunder. The provisions of this Section 8.12 shall
be in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto.
8.13 Pronouns. All
pronouns contained herein, and any variations thereof, shall be deemed to refer
to the masculine, feminine or neutral, singular or plural, as to the identity of
the parties hereto may require.
8.14 Further
Assurances. The
parties hereto agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this
Agreement.
[SIGNATURE
PAGE FOLLOWS]
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In
Witness Whereof, the parties hereto have executed this Common
Stock Exchange and Stockholder Agreement as of the date set forth in the
first paragraph hereof.
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COMPANY:
CorMedix,
Inc.
By: /s/ Xxxx
Xxxxxxxx
Name: Xxxx
Xxxxxxxx
Title: Chief
Executive Officer
Address: 00
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Fax: _________________________
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HOLDER:
Shiva
Biomedical, LLC
By: /s/ Xxxxxxxx
Xxxxx
Name: Xxxxxxxx
Xxxxx
Title: Vice
President
Address: 10810
Executive Center Drive
Xxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax: _________________________
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[Common Stock Exchange and Stockholder Agreement
Signature Page]
