UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): February 19, 2016
AMARANTUS
BIOSCIENCE HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
000-55016 |
|
26-0690857 |
(State
or other jurisdiction of
incorporation or organization) |
|
(Commission
File Number) |
|
IRS
Employer
Identification
No.) |
655
Montgomery Street, Suite 900
San
Francisco, CA |
|
94111 |
(Address
of Principal Executive Offices) |
|
(Zip
Code) |
(408)
737-2734
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01 Entry Into a Material Definitive Agreement.
On
February 19, 2016, Amarantus BioScience Holdings, Inc. (the “Company”) entered into a Securities Purchase Agreement
(the “Series H SPA”) with an accredited investor for the sale of 3,300 (including 10% OID) shares of the Company’s
12% Series H Preferred Stock (the “Series H Preferred Stock”) and a warrant to purchase 13,200,000 shares of common
stock (the “RD Warrant” and together with the Series H Preferred Stock, the “Securities”) in a registered
direct offering (the “RD Offering”), subject to customary closing conditions. The gross proceeds to the Company
from the RD Offering were $3,000,000. Each share of Series H Preferred Stock has a stated value of $1,000 and is convertible into
shares of common stock at an initial conversion price of the lower of (i) $0.40, subject to adjustment and (ii) 75%, subject
to adjustment, of the lowest volume weighted average price, or VWAP, during the fifteen (15) Trading Days immediately prior to
the date a conversion notice is sent to the Company by a holder, at any time at the option of the holder.
The
RD Warrant is exercisable at any time on or prior to the close of business on the five-year anniversary of the Initial Exercise
Date at an exercise price of $0.40 per share.
The
Securities were issued pursuant to a prospectus supplement dated February 24, 2016 filed with the Securities and Exchange Commission
on February 22, 2016, in connection with a takedown from the Registration Statement on Form S-3 (File No. 333-203845),
which was declared effective by the SEC on May 22, 2015.
In
addition, the Company and certain of its investors agreed to a leak-out agreement dated February 19, 2016 pursuant to which the
investors agreed to certain trading restrictions with respect to its holdings of preferred stock and convertible notes of the
Company until the earlier of April 30, 2016 or when a stockholder vote on whether to increase the Company’s authorized common
stock to 500,000,000 share is held.
The
foregoing is only a summary of the material terms of the documents related to the RD Offering. The foregoing description of the
Series H SPA is qualified in its entirety by reference to the Series H SPA, which is filed as Exhibit 10.1 to this Current Report
on Form 8-K, which is incorporated herein by reference. The foregoing description of the RD Warrant is qualified in its entirety
by reference to the RD Warrant, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, which is incorporated herein
by reference. The foregoing description of the Leak-Out Agreement is qualified in its entirety by reference to the Leak-Out Agreement,
which is filed as Exhibit 10.3 to this Current Report on Form 8-K. The Placement Agency Agreement with Chardan Capital Markets,
LLC is filed as Exhibits 10.4 to this Current Report on Form 8-K which is incorporated herein by reference.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On
February 22, 2016, the Company filed an amendment to its Series E Preferred Stock Certificate of Designations with the State of
Nevada providing that the Series E Preferred Stock would not be convertible until March 31, 2016. On February 23, 2016, the Company
filed an amended and restated Series H Preferred Stock Certificate of Designations with the State of Nevada providing, among other
things, for an increase in the authorized Series H Preferred Stock to 25,000 shares and amending the conversion price of the Series
H Preferred Stock.
The
foregoing is only a summary of the material terms of the documents related to the Series E Preferred Stock and Series H Preferred
Stock. The foregoing description of the amendment to the Series E Preferred Stock Certificate of Designations (the “Amendment”)
is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 3.1 to this Current Report on Form 8-K,
which is incorporated herein by reference. The foregoing description of the Amended and Restated Series H Certificate of Designations
(the “Amended and Restated COD”)is qualified in its entirety by reference to the Amended and Restated COD, which is
filed as Exhibit 3.2 to this Current Report on Form 8-K, which is incorporated herein by reference.
Item
8.01 Other Items.
On
February 19, 2016, the Company issued a press release announcing a $3M investment from an institutional investor. A copy of the
Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
Exhibit No. |
|
Description
|
|
|
|
3.1 |
|
Amended
and Restated Certificate of Designation of Preferences, Rights and Limitations of Series H 12% Convertible Preferred Stock |
|
|
|
3.2 |
|
Amendment
to Certificate of Designation of Preferences, Rights and Limitations of Series E 12% Convertible Preferred Stock. |
|
|
|
10.1 |
|
Form
of Securities Purchase Agreement |
|
|
|
10.2 |
|
Form
of Warrant |
|
|
|
10.3 |
|
Form
of Leak-Out Agreement dated February 19, 2016 between the Company and certain holders of the Company’s Series E Convertible
Preferred Stock, Series H Convertible Preferred Stock and Five Year Common Stock Purchase Warrants. |
|
|
|
10.4 |
|
Form
of Placement Agency Agreement dated February 19, 2016. |
|
|
|
99.1 |
|
Amarantus
Bioscience Holdings, Inc. Press Release, dated February 19, 2016. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
AMARANTUS
BIOSCIENCE HOLDINGS, INC. |
|
|
|
Date: February 24,
2016 |
By: |
/s/
Gerald E. Commissiong |
|
Name: |
Gerald E. Commissiong
|
|
Title: |
Chief Executive Officer
|
4
Exhibit 3.1
EXECUTION
VERSION
AMARANTUS
BIOSCIENCE HOLDINGS, INC.
AMENDED
AND RESTATED CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
H 12% CONVERTIBLE PREFERRED STOCK
PURSUANT
TO SECTION 78, 1955 OF THE NEVADA REVISED STATUTES
The
undersigned, Gerald Commissioner, does hereby certify that:
1.
He is the President and Chief Executive Officer, of Inc., a Nevada corporation (the “Corporation” or the “Company”).
2.
The Corporation is authorized to issue 10,000,000 shares of preferred stock, of which 761,893.22 have been issued.
3.
The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):
WHEREAS,
the Articles of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting
of 10,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;
WHEREAS,
the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms
of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting
any series and the designation thereof, of any of them; and
WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions
and other matters relating to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase
Agreement, up to 25,000 shares of the preferred stock which the Corporation has the authority to issue, as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for
cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions
and other matters relating to such series of preferred stock as follows:
TERMS
OF PREFERRED STOCK
Section
1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“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 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 7(e).
“Alternative
Conversion Price” means 60% of the lowest of traded price of a share of Common Stock in the thirty (30) consecutive
Trading Days prior to the Conversion Date.
“Amendment”
means the proposed amendment to the Corporation’s Articles of Incorporation that increases the number of authorized shares
of Common Stock from 150,000,000 shares of Common Stock to no less than 500,000,000 shares of Common Stock.
“Bankruptcy
Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined
in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Corporation or any Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary
thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Corporation or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like
for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment,
(e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the
Corporation or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment
or restructuring of its debts, or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act,
expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action
for the purpose of effecting any of the foregoing.
“Base
Conversion Price” shall have the meaning set forth in Section 7(b).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).
“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.
“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).
“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date
hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange
Act) of effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise)
of in excess of 33% of the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock
and the Securities issued together with the Preferred Stock), (b) the Corporation merges into or consolidates with any other
Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders
of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the Corporation or
the successor entity of such transaction, (c) the Corporation sells or transfers all or substantially all of its assets to
another Person and the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate
voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a one year
period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals
who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the
Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board
of Directors who are members on the Original Issue Date), or (e) the execution by the Corporation of an agreement to which
the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the respective Purchase Agreements.
“Closing
Date” means the applicable Trading Day on which all of the Transaction Documents have been executed and delivered by
the applicable parties thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription
Amount and (ii) the Corporation’s obligations to deliver the Securities have been satisfied or waived.
“Commission”
or the “SEC” means the United States Securities and Exchange Commission.
“Common
Stock” means the Corporation’s common stock, par value $0.001 per share, and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants 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.
“Conversion
Amount” means the sum of the Stated Value at issue.
“Conversion
Date” shall have the meaning set forth in Section 6(a).
“Conversion
Price” shall have the meaning set forth in Section 6(b).
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof.
“Corporation
Redemption” has the meaning set forth in Section 8.
“Corporation
Redemption Price” has the meaning set forth in Section 8.
“Corporation
Redemption Payment Date” has the meaning set forth in Section 8.
“Corporation
Redemption Notice” has the meaning set forth in Section 8.
”Dilutive
Issuance” shall have the meaning set forth in Section 7(b).
“Dilutive
Issuance Notice” shall have the meaning set forth in Section 7(b).
“DTC”
means the Depository Trust Company.
“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.
“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
including without limitation transfer through DTC’s DWAC system, (b) the Corporation has been approved (without revocation)
by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion
Shares and Warrants are otherwise eligible for delivery via DWAC, and € the Transfer Agent does not have a policy prohibiting
or limiting delivery of the Conversion Shares via DWAC.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Equity
Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) the Corporation shall have paid all liquidated damages, late fees and other amounts owing to the applicable
Holder in respect of the Preferred Stock, (c)(i) the Conversion Shares Registration Statement pursuant to which the Holders are
permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Transaction
Documents (and the Corporation believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable
future), or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents (and Conversion Shares issuable in
lieu of cash payments of dividends) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current
public information requirements as determined by the counsel to the Corporation as set forth in a written opinion letter to such
effect, addressed and acceptable to the Transfer Agent and the affected Holders, (d) the Common Stock is trading on a Trading
Market and all of the Conversion Shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such
Trading Market (and the Corporation believes, in good faith, that trading of the Common Stock on a Trading Market will continue
uninterrupted for the foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved,
shares of Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is
no existing Triggering Event and no existing event which, with the passage of time or the giving of notice, would constitute a
Triggering Event, (g) the issuance of the shares in question to the applicable Holder would not violate the limitations set forth
in Section 6(d) herein, (h) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of
Control Transaction that has not been consummated, (i) the applicable Holder is not in possession of any information provided
by the Corporation that constitutes, or may constitute, material non-public information, (j) for each Trading Day in a period
of 20 consecutive Trading Days prior to the applicable date in question, the daily dollar trading volume for the Common Stock
on the principal Trading Market exceeds $30,000 per Trading Day and (k) the shares of Common Stock are DWAC Eligible and not subject
to a “DTC Freeze” or a “DTC Chill”
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FDA”
means the U.S. Food and Drug Administration.
“Fundamental
Transaction” shall have the meaning set forth in Section 7(e).
“GAAP”
means United States generally accepted accounting principles.
“Holder”
shall have the meaning given such term in Section 2.
“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $10,000 (other than trade accounts payable incurred
in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Corporation’s balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business, and (c) the present value of any lease payments in excess of $10,000 due under leases required to be capitalized
in accordance with GAAP.
“Issuable
Maximum” shall have the meaning set forth in Section 6(e).
“Junior
Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities
which are explicitly senior or pari passu to the Preferred Stock in dividend rights or liquidation preference.
“Liabilities”
means all direct or indirect liabilities, indebtedness and obligations of any kind of the Corporation to Delafield and/or Dominion
to either any Purchaser, howsoever created, arising or evidenced, whether now existing or hereafter arising (including those acquired
by assignment), absolute or contingent, due or to become due, primary or secondary, joint or several, whether existing or arising
through discount, overdraft, purchase, direct loan, participation, operation of law, or otherwise, including, but not limited
to, pursuant to the Notes, this Certification of Designation, any other Transaction Document and/or any of the other Documents,
(as defined in the NPA) or referred to in the “Notes,” any letter of credit, any standby letter of credit, and/or
outside attorneys’ and paralegals’ fees or charges relating to the preparation of the Transaction Documents, the Documents
and the enforcement of rights, remedies and powers under this Agreement, the Notes and/or the other Documents.
“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Liquidation”
shall have the meaning set forth in Section 5.
“Mandatory
Conversion” shall have the meaning set forth in Section 6(e).
“New
York Courts” shall have the meaning set forth in Section 11(d).
“Notes”
has the meaning set forth in Section 10.
“Notice
of Conversion” shall have the meaning set forth in Section 6(a).
“NPA”
has the meaning set forth in Section 10.
“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such
Preferred Stock.
“Permitted
Governmental Indebtedness” means Indebtedness provided by the Export and Import Bank of the United States of America
or other similar governmental entity for the purpose of supporting product sales by the Borrower.
“Permitted
Indebtedness” means (i) Indebtedness of the Corporation evidenced by the Notes, any document, agreement and/or instrument
referenced in the Notes in favor of such persons, this Certificate of Designation and/or any other Transaction Document in favor
of Dominion and/or Delafield including all Liabilities, (ii) Indebtedness of the Corporation set forth in Corporation’s
most recent SEC report filed with the SEC by the Corporation on Form 10-Q or Form 10-K (the “SEC Reports”)
provided none of such Indebtedness, has been increased, extended and/or otherwise changed), (iii) Indebtedness secured by Permitted
Liens described in clauses “(iv)” of the definition of Permitted Liens, and (iv) Permitted Governmental Indebtedness.
“Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (a) upon or in any equipment acquired or held by the Borrower or any of its Subsidiaries to secure the purchase price
of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, and
(b) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment and (v) any Liens for Permitted Indebtedness set forth in (i) and
(ii) of the definition of Permitted Indebtedness provided as to “(ii)” of Permitted Indebtedness such Liens
were in existence and not amended, supplemented and/or modified since the original issuance date any such Indebtedness was incurred.
“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.
“Preferred
Stock” shall have the meaning set forth in Section 2.
“Purchase
Agreement” means those certain Securities Purchase Agreements, dated on or about the first Original Issue Date, among
the Corporation and the original Holders, and that certain Securities Purchase Agreement dated on or about the filing date of
this Amended and Restated Certificate of Designation as amended, modified or supplemented from time to time in accordance with
its terms.
“Public
Offering” means any firm commitment underwritten public offering of gross proceeds of at least $4,000,000 of securities
of the Company pursuant to a registration statement on Form S-1 or Form S-3.
“Qualified
Public Offering” means (i) a firm commitment underwritten public offering of shares of Common Stock (and any other securities
of the Company that may be sold along with shares of Common Stock in any such underwritten firm commitment public offering including,
but not limited to, any Common Stock Equivalents), (ii) the gross proceeds resulting from such underwritten firm commitment public
offering equal or exceed, $9,000,000, and (iii) (x) the shares of Common Stock including, but not limited to, all Underlying Shares
have been approved for listing on one of the exchanges or markets set forth below in this definition of Qualified Public Offering,
and (y) on the next trading day following the date the SEC declares the registration statement registering under the Securities
Act the sale of the shares of Common Stock being sold to investors in such firm commitment underwritten public offering effective,
and any of securities of the Company being issued and/or sold in addition to shares of Common Stock by the Company including,
but not limited to, any Common Stock Equivalent (the “Qualified Offering Conversion Date”), the shares of Common
Stock commence trading on the New York Stock Exchange, NYSE MKT, the Nasdaq Global Market, the Nasdaq Global Select Market or
the Nasdaq Capital Market.
“Qualified
Public Offering Conversion Amount” means the product of (i) 130%, multiplied by (ii) the sum of (x) the Stated Value
of all Preferred Stock owned by a Holder on and including the Qualified Public Offering Conversion Date, (y) all accrued but unpaid
dividends (including all dividends deemed earned pursuant to Section 3(a)), as of and including the Qualified Public Offering
Conversion Date (regardless of whether or not the Company accrued for any such dividends on its books and records), and (z) all
liquidated damages, Late Fees, and/or any other amounts owed to a Holder pursuant to this Certification of Designation or otherwise
related to the Preferred Stock through and including the Qualified Public Offering Conversion Date, including, but not limited
to, any and all Late Fees, liquidated damages, premium payments, redemption payments and all other fees and expenses owed to the
Holder and/or its legal counsel or otherwise.
“Qualified
Public Offering Conversion Price” means the lowest of (i) the Conversion Price on the Qualified Public Offering Conversion
Date, and (ii) (A) if a Public Offering constituting a Qualified Public Offering has previously occurred, seventy-five (75%) percent
of, and (B) if a Public Offering not constituting a Qualified Public Offering has not previously occurred, eighty (80%) percent
of the lowest of (x) the price a share of Common Stock is sold to a purchaser in the Qualified Public Offering, and (y) the lowest
conversion price, exchange price and/or exercise price that any Common Stock Equivalents issued and/or sold to investors in the
Qualified Public Offering, if any, are convertible, exchangeable, and/or exercisable into shares of Common Stock, and (z) the
price any Common Stock Equivalents are sold (or deemed sold) and/or issued to investors in the Qualified Public Offering.
“Securities”
means the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Delivery Date” shall have the meaning set forth in Section 6(c).
“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.
“Subscription
Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to
the Purchase Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and next to
the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Corporation as set forth on Schedule 3.1(a) of the Purchase Agreement and shall, where applicable,
also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.
“Successor
Entity” shall have the meaning set forth in Section 7(e).
“Trading
Day” means a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any
other Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question:
the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock
Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace or any other tier
operated by OTC Markets Group Inc. (or any successor to any of the foregoing).
“Transaction
Documents” means this Certificate of Designation, the Purchase Agreement, the Warrants, all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant to the Purchase
Agreement.
“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 a facsimile number of (646) 536-3179, and any successor transfer agent of the Company.
“Triggering
Event” shall have the meaning set forth in Section 10(a).
“Triggering
Redemption Amount” means, for each share of Preferred Stock, the sum of (a) the greater of (i) 130% of the
Stated Value and (ii) the product of (y) the VWAP on the Trading Day immediately preceding the date of the Triggering
Event, multiplied by (z) the Stated Value divided by the then Conversion Price, (b) all accrued but unpaid dividends
thereon and (c) all liquidated damages, Late Fees and other costs, expenses or amounts due in respect of the Preferred Stock
including, but not limited to legal fees and expenses of legal counsel to the Holder in connection with, related to and/or arising
out of a Triggering Event.
“Triggering
Redemption Payment Date” shall have the meaning set forth in Section 10(b).
“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock and upon exercise
of the Warrants.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b) of the Purchase Agreement.
“VWAP”
means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading
Market is not the principal trading market for such security, then on the principal securities exchange or securities market on
which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New
York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours,
the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as
reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Holder at the Closing in accordance with Section 2.2(a)
of the Purchase Agreement, which Warrants shall be immediately exercisable, have full-ratchet anti-dilution protection, cashless
exercise provision only in the event a registration statement is not effective with respect to the Warrant Shares and have a term
of exercise equal to 5 years from the Original Issuance Date, in the form of Exhibit C attached to the Purchase Agreement.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
Section
2. Designation, Amount and Par Value. The series of preferred stock shall be designated as Series H 12% Convertible Preferred
Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 25,000 (which shall not
be subject to increase without the written consent of all of the holders of the Preferred Stock (each, a “Holder”
and collectively, the “Holders”)). Each share of Preferred Stock shall have a par value of $0.001 per share
and a stated value of $1,000, subject to increase set forth in Section 3 and/or elsewhere in this Certificate of Designation
below (the “Stated Value”).
Section
3. Dividends.
(a) Dividends
in Cash or in Kind. Each share of Preferred Stock shall be entitled to receive, and the Corporation shall pay, cumulative
dividends (i) for the 12 month period beginning on the Original Issuance Date (the “Initial 12 Month Period”),
and (ii) for each subsequent twelve 12 month period beginning on the first calendar day (the “First Day of a Subsequent
12 Month Period”) following the last calendar day of the prior twelve (12) month period and terminating 12 months thereafter
(each a “Subsequent 12 Month Period”), provided that for each Subsequent 12 Month Period the share of Preferred
Stock is issued and outstanding on the First Day of a Subsequent 12 Month Period, at the rate per Preferred Share (as a percentage
of the Stated Value per share) equal to 12% per annum (which may be increased pursuant to Section 10 or elsewhere herein) all
of which dividends shall be guaranteed and the total amount of dividends due on each share of Preferred Stock for each twelve
(12) month period shall be deemed earned (i) as to the Initial 12 Month Period, on the Original Issue Date; and (ii) for each
Subsequent 12 Month Period, on the First Day of a Subsequent 12 Month Period. Dividends shall be payable for the first dividend
payment on September 30, 2015, and, thereafter, quarterly on each December 31, March 31, June 30 and September 30, and on each
Conversion Date, Qualified Offering Conversion Date, Trigger Redemption Payment Date and Corporation Redemption Payment Date,
(with respect only to Preferred Stock being converted.), (each such date, a “Dividend Payment Date”), provided
(if any Dividend Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day.
All dividends shall be paid in cash, or at the Corporation’s option, in duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock as set forth in this Section 3(a), or a combination thereof (the amount to be paid in shares
of Common Stock, the “Dividend Share Amount”); provided all dividends payable on each Preferred Share
shall be determined in the following order of priority: (i) if funds are legally available for the payment of dividends and the
Equity Conditions have not been met during the 15 consecutive Trading Days immediately prior to the applicable Dividend Payment
Date or Conversion Date (the “Dividend Notice Period”), in cash only, (ii) if funds are legally available for
the payment of dividends and the Equity Conditions have been met during the Dividend Notice Period, at the sole election of the
Corporation, in any combination of cash or shares of Common Stock which shall be valued solely for such purpose at the lower of
(x) the Conversion Price; and (y) 65% of the average of the VWAPs for the 15 consecutive Trading Days ending on the Trading Day
that is immediately prior to the applicable Dividend Payment Date or Conversion Date, (iii) if funds are not legally available
for the payment of dividends and the Equity Conditions have been met during the Dividend Notice Period, in shares of Common Stock
which shall be valued solely for such purpose at 60% of the average of the VWAPs for the 15 consecutive Trading Days ending on
the Trading Day that is immediately prior to the applicable Dividend Payment Date or Conversion Date, (iv) if funds are not legally
available for the payment of dividends and the Equity Condition relating to an effective Conversion Shares Registration Statement
has been waived by such Holder, as to such Holder only, in unregistered shares of Common Stock which shall be valued solely for
such purpose at the lower of (x) the Conversion Price; and (y) 55% of the average of the VWAPs for the 15 consecutive Trading
Days ending on the Trading Day that is immediately prior to the applicable Dividend Payment Date or Conversion Date (the “Lowest
Section 3 Divided Share Price”), and (v) if funds are not legally available for the payment of dividends and the Equity
Conditions have not been met during the Dividend Notice Period, then, at the election of such Holder, such dividends shall accrue
to the next applicable Dividend Payment Date or Conversion Date or shall be accreted to, and increase, the outstanding Stated
Value. The Holders shall have the same rights and remedies with respect to the delivery of any such shares as if such shares were
being issued pursuant to Section 6. In the event the Corporation notifies the Holders that it will pay dividends in whole or in
part in shares of Common Stock based on its good faith and reasonable belief that the Corporation it will be in compliance with
the Equity Conditions during the Dividend Notice Period, and the Corporation determines on or before the first day of the Dividend
Notice Period that it will not be in compliance with the Equity Conditions, it shall so notify the Holders and each Holder may
elect to receive Common Stock or cash. Notwithstanding anything to the contrary provided herein or elsewhere, in no event shall
any provision set forth herein or elsewhere be deemed to directly and/or indirectly constitute a waiver of any provision herein
and/or in any other Transaction Documents including, but not limited to any Event of Default, event of default, and/or a Triggering
Event.
(b) Participating
Dividends on As-Converted Basis. From and after the initial Closing Date, in addition to the payment of dividends pursuant
to Section 2(a), each Holder shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock
equal to (on an as-if-converted-to-Common-Stock basis) and in the same form as dividends actually paid on shares of the Common
Stock when, as and if such dividends are paid on shares of the Common Stock. The Corporation shall pay no dividends on shares
of the Common Stock unless it simultaneously complies with the previous sentence.
(c) Dividend
Calculations. Subject to Section 3(a), dividends on the Preferred Stock shall be calculated on the basis of a 360-day year,
consisting of twelve 30 calendar day periods, and shall accrue and compound daily commencing on the Original Issue Date, and shall
be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds
of the Corporation legally available for the payment of dividends. Dividends shall cease to accrue with respect to any Preferred
Stock converted, provided that the Corporation actually delivers the Conversion Shares within the time period required by Section 6(c)(i)
herein.
(d) Late
Fees. Any dividends that are not paid a Dividend Payment Date shall continue to accrue and shall entail a late fee (“Late
Fees”), which must be paid in cash, at the rate of 18% per annum or the lesser rate permitted by applicable law
which shall accrue and compound daily from the Dividend Payment Date through and including the date of actual payment in full.
(e) Other
Securities. So long as any Preferred Stock shall remain outstanding, neither the Corporation nor any Subsidiary thereof shall
redeem, purchase or otherwise acquire directly or indirectly any Junior Securities or pari passu securities other than any Preferred
Stock purchased to the terms of this Certificate of Designation. So long as any Preferred Stock shall remain outstanding, neither
the Corporation nor any Subsidiary thereof shall directly or indirectly pay or declare any dividend or make any distribution upon
(other than a dividend or distribution described in Section 6 or dividends due and paid in the ordinary course on preferred
stock of the Corporation at such times when the Corporation is in compliance with its payment and other obligations hereunder),
nor shall any distribution be made in respect of, any Junior Securities or pari passu securities as long as any
dividends due on the Preferred Stock remain unpaid, nor shall any monies be set aside for or applied to the purchase or redemption
(through a sinking fund or otherwise) of any Junior Securities or pari passu securities.
Section
4. Voting Rights. Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have no
voting rights. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative
vote of the Holders of a majority of the then outstanding shares of the Preferred Stock directly and/or indirectly (a) alter
or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation,
(b) authorize or create any class of stock ranking as to redemption or distribution of assets upon a Liquidation (as defined
in Section 5) senior to, or otherwise pari passu with, the Preferred Stock or, authorize or create any class of stock
ranking as to dividends senior to, or otherwise pari passu with, the Preferred Stock, (c) amend its Articles of Incorporation
or other charter documents in any manner that adversely affects any rights of the Holders, (d) increase the number of authorized
shares of Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing.
Section
5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a
“ Liquidation ”), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of
the Corporation an amount equal to the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated
damages then due and owing thereon under this Certificate of Designation, for each share of Preferred Stock before any distribution
or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to
pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders
in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
A Fundamental Transaction or Change of Control Transaction shall not be deemed a Liquidation. The Corporation shall mail written
notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.
Section
6. Conversion.
a) Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after
the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations
set forth in Section 6(d) and Section 6(e)) determined by dividing the Stated Value of such share of Preferred Stock
by the Conversion Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached
hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of
shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the
number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be
effected, which date may not be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the
Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion,
the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original
Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any
Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the
absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required
to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred
Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of
Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed
in accordance with the terms hereof shall be canceled and shall not be reissued.
b)
Conversion Price. The conversion price for the Preferred Stock shall equal the lower of (i) $0.40 (subject
to adjustment as provided herein), (ii) 75% of the lowest daily VWAP during the fifteen (15) Trading Days immediately prior
to the date a Conversion Notice is sent to the Company by the Holder and (iii) (A) if a Public Offering that is not a Qualified
Public Offering has occurred, 75% of, or (B) if a Qualified Public Offering has occurred, 80% of the lowest of the (x) per share
price of shares of Common Stock, and (y) the lowest conversion price, exercise price or exchange price of any Common Stock Equivalents,
that are sold or issued to the public in the Public Offering or the Qualified Public Offering, respectively (the “Conversion
Price”). Notwithstanding anything herein to the contrary, at any time after the occurrence of any Triggering Event,
the Holder may require the Company to, at such Holder’s option and otherwise in accordance with the provisions for conversion
herein, convert all or any part of any Preferred Shares into Common Stock at the Alternative Conversion Price. All such foregoing
determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar
transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit
a Holder’s right to pursue actual damages including, but not limited to, as a result of a Triggering event pursuant to Section
10 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit
the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
c)
Mechanics of Conversion
i.
Delivery of Conversion Shares Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the
“ Share Delivery Date ”), the Corporation shall deliver, or cause to be delivered, to the converting Holder
(A) the number of Conversion Shares being acquired upon the conversion of the Preferred Stock, which Conversion Shares shall
be free of restrictive legends and trading restrictions, and (B) a bank check in the amount of accrued and unpaid dividends
(if the Corporation has elected or is required to pay accrued dividends in cash). The Corporation shall deliver the Conversion
Shares electronically through the Depository Trust Company or another established clearing corporation performing similar functions.
ii.
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event
the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation and
the Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Conversion
Notice.
iii.
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion
Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged
violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided ,
however , that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may
have against such Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock,
the Corporation may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder
has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder,
restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained,
and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred
Stock which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of
the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence
of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion.
If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) on the second Trading
Day after the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated
damages and not as a penalty, for each $5,000 of Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing
to $100 per Trading Day on the third Trading Day and increasing to $200 per Trading Day on the sixth Trading Day after such damages
begin to accrue) for each Trading Day after such second Trading Day after the Share Delivery Date until such Conversion Shares
are delivered or Holder rescinds such conversion. All liquidated damages shall be paid to the Holder not later than the fifth
(5th) Trading Day after notice is provided to the Company by the Holder stating that any such liquidated damages are
due pursuant to this Section 6(c) (iii). Nothing herein shall limit a Holder’s right to pursue actual damages or declare
a Triggering Event pursuant to Section 10 hereof for the Corporation’s failure to deliver Conversion Shares within
the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights
shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
iv.
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the
Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage
firm 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 such Holder of the Conversion Shares which such Holder was entitled to
receive upon the conversion relating to such Share Delivery Date (a “ Buy-In ”), then the Corporation shall
(A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if
any, by which (x) such Holder’s total purchase price (including any brokerage commissions) for the Common Stock so
purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled
to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such
purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue
(if surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which
case, such conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that would have
been issued if the Corporation had timely complied with its delivery requirements under Section 6(c)(i). For example, if
a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding
sentence, the Corporation shall be required to pay such Holder $1,000. The payment of all amounts due by the Company to the Holder
shall be paid in cash no later than the fifth (5th) Business Day after notice is provided by a Holder to the Company
requesting the payment of any such liquidated damages. The Holder shall provide the Corporation written notice indicating the
amounts payable to such Holder in respect of the Buy-In and, upon request of the Corporation, 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 Corporation’s
failure to timely deliver the Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms
hereof.
v.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 300% of the Required
Minimum for the sole purpose of issuance upon conversion of the Preferred Stock and payment of dividends on the Preferred Stock,
all as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Purchasers,
not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the
Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 7, but ignoring any Beneficial
Ownership Limitations or other restrictions and/or limitations on conversions set forth herein or elsewhere) upon the conversion
of the then outstanding Preferred Stock and payment of dividends hereunder. The Company covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and, at such times
as a registration statement covering such shares is then effective under the Securities Act, will be registered for public resale
in accordance with such registration statement. For purposes of this Certification of Designation, the term “Required
Minimum” shall be defined as the product of (i) 300%, multiplied by (ii) the
quotient of (A)(x) all outstanding Stated Value of all issued and outstanding Preferred Stock, (y) all unpaid dividends
thereon (whether accrued or not), and (z) all fees and/or any costs and expenses relating to the Transaction Documents including,
but not limited to Late Fees and liquidation damages, divided by (B) the lower of (x) the Conversion Price on the date of
Closing, and (y) in the event that the price of the Common Stock is below the Conversion Price, the Alternative Conversion Price.
The Company shall be required to calculate the Required Minimum on the first trading day of each month that any shares of Preferred
Stock are outstanding and provide such calculation to the Holder and the transfer agent promptly. For purposes of calculating
the Required Minimum, Company shall assume that all Preferred Stock will remain outstanding for eighteen (18) months and all accrued
but unpaid dividends thereon accrues at the rate of 18% per annum, is paid on the date 18 months from the Closing.
vi.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Corporation 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 Conversion Price or round up to the next whole share.
vii.
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without
charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of
such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or
until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall
have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent
fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.
d)
Beneficial Ownership Limitation. The Corporation shall not affect any conversion of the Preferred Stock, and a Holder shall
not have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set
forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting
as a group together with such Holder or any of such Holder’s Affiliates) 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 such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Preferred
Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are
issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder
or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including,
without limitation, the Preferred Stock or the Warrants) beneficially owned by such Holder or any of its Affiliates. Except
as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation
contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other
securities owned by such Holder together with any Affiliates) and of how many shares of Preferred Stock are convertible shall
be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s
determination of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder
together with any Affiliates) and how many shares of the Preferred Stock are convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each
time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph
and the Corporation 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 6(d), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of
the following: (i) the Corporation’s most recent periodic or annual report filed with the Commission, as the case may
be, (ii) a more recent public announcement by the Corporation or (iii) a more recent written notice by the Corporation
or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Corporation shall within two Trading Days confirm orally and in writing to such 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 Corporation, including the Preferred Stock, by such Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 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 conversion of Preferred Stock held by the applicable Holder. A Holder, upon
not less than 61 days’ prior notice to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 6(d) applicable to its Preferred Stock 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 conversion of this Preferred Stock held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any
such increase or decrease will not be effective until the 61st day after such notice is delivered to the Corporation
and shall only apply to such Holder and no other Holder. The provisions of this paragraph shall be construed and implemented in
a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein 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 Preferred Stock.
e)
Mandatory Conversion. At any time after the Original Issuance Date, if the Corporation effectuates a Qualified Public Offering,
then on the Qualified Public Offering Conversion Date, provided all Equity Conditions are satisfied (or waived by Holders owing
in the aggregate no less than 75% of the then issued and outstanding Preferred Stock), all (but not less than all), issued and
outstanding Preferred Shares then outstanding shall automatically convert (a “Mandatory Conversion”), into
Conversion Shares. The number of Conversion Shares that a Holder shall receive from the Corporation upon a Mandatory Conversion
shall equal the quotient of (i) such Holder’s Qualified Public Offering Conversion Amount, divided by (ii) the Qualified
Public Offering Conversion Price, which amount, however, shall not exceed the Beneficial Ownership Limitation. All Conversion
Shares issued to each Holder upon a Mandatory Conversion shall be and the Corporation converts and agrees will be fully paid,
validly issued and non-assessable. Each Holder of Preferred Shares shall have all rights and remedies with regard to the conversion
of such Holder’s Preferred Shares in a Mandatory Conversion as if such Holder submitted to the Corporation a timely Notice
of Conversion pursuant to Section 6(c) with the Conversion Amount being the Qualified Public Offering Conversion Amount, the Conversion
Price being the Qualified Public Offering Conversion Price and the Share Delivery Date being the Qualified Public Offering Conversion
Date. Notwithstanding anything to the contrary provided herein or elsewhere, all Preferred Stock may be converted by a Holder
hereunder, until the Trading Day that the Holder receives (or his account is credited with) the required amount of unlegended
and non-restricted Conversion Shares pursuant to this Section 6(e) as if the Holder had submitted a Notice of Conversion to the
Corporation. Notwithstanding anything to the contrary provided herein, if on a Mandatory Conversion a Holder is not able to convert
any Preferred Shares as a result of a Beneficial Ownership Limitation, the Conversion Price for all Preferred Shares a Holder
is not so able to convert as a result of such Beneficial Ownership Limitations shall be reduced to the Qualified Public Offering
Conversion Price. The Corporation shall cause notice of the Mandatory Conversion (the “Mandatory Conversion Notice”)
to be mailed to the Holder, at such Holder’s address, at least ten (10) days prior to the Mandatory Conversion Date. Notwithstanding
the foregoing provisions of this Section 6, the Holder may convert any portion of this Note pursuant to Section 6 on or prior
to the date immediately preceding the date of such Mandatory Conversion.
Section 7.
Certain Adjustments.
a)
Stock Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays
a stock dividend or otherwise makes a distribution or distributions that is payable in shares of Common Stock on shares of Common
Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued
by the Corporation upon conversion of, or payment of a dividend on, the Preferred Stock), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares
of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common
Stock, any shares of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately
before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to this Section 7(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 Equity Sales. If, at any time while any Preferred Stock is outstanding the Corporation or any Subsidiary, as
applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues
(or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such
lower price, the “ Base Conversion Price ” and such issuances, collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion
Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no
adjustment will be made under this Section 7(b) in respect of an Exempt Issuance. If the Corporation enters into a Variable
Rate Transaction, despite the prohibition set forth in the Purchase Agreement, the Corporation shall be deemed to have issued
Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or
exercised. The Corporation shall notify the Holders in writing, no later than the Trading Day following the issuance of any Common
Stock or Common Stock Equivalents subject to this Section 7(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Corporation provides a Dilutive Issuance Notice pursuant to this Section 7(b),
upon the occurrence of any Dilutive Issuance, the Holders are entitled to receive a number of Conversion Shares based upon the
Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether a Holder accurately refers to the
Base Conversion Price in the Notice of Conversion.
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation
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 of
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 conversion of such Holder’s
Preferred Stock (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).
d)
Pro Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation 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 Preferred Stock, 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 Preferred Stock (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).
e)
Fundamental Transaction.
1) General.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Holders of any Notes and Series H Preferred
stock, as those are defined in those certain Securities Purchase Agreements and/or Exchange Agreements dated of even date herewith;
(ii) the Successor Entity (as defined below) assumes in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 7.e) pursuant to written agreements in form and substance satisfactory to the Holder and approved
by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for shares of Preferred
Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the
Preferred Stock, including, without limitation, which is convertible into a corresponding number of shares of capital stock equivalent
to the shares of Common Stock acquirable and receivable upon conversion of the Preferred Stock (without regard to any limitations
on the conversion of the Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies the
conversion 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 adjustments to the number of
shares of capital stock and such conversion price being for the purpose of protecting the economic value of the Preferred Stock
immediately prior to the consummation of such Fundamental Transaction) and (iii) if the Fundamental Transaction occurs within
six (6) months of the Closing Date, the Successor Entity (including its Parent Entity) is a publicly traded corporation whose
common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction,
the provisions of this Certificate of Designation 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
Certificate of Designation with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
conversion of the Preferred Stock at any time after the consummation of the applicable Fundamental Transaction, in lieu of the
shares of Common Stock (or other securities, cash, assets or other property) issuable upon the conversion of the Preferred Stock
prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had the Preferred Stock been converted immediately prior to the applicable Fundamental Transaction (without
regard to any limitations on the conversion of the Preferred Stock), as adjusted in accordance with the provisions of this Certificate
of Designation. Notwithstanding the foregoing, and without limiting Section 6 hereof, the Holder may elect, at its sole option,
by delivery of written notice to the Company to waive this Section 7.e) to permit the Fundamental Transaction without the assumption
of the Preferred Stock. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets
with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon a conversion of the Preferred Stock at any
time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property) issuable upon the conversion of the Preferred Stock
prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of
the applicable Fundamental Transaction had this Note been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the conversion of the Preferred Stock). Provision made pursuant to the preceding sentence
shall be in a form and substance reasonably satisfactory to the Holder.
2) Black
Scholes Value. Notwithstanding the foregoing and the provisions of Section 6 above, at the request of the Holder delivered
at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the consummation
of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the date that is
ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a
Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase the Preferred
Stock from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.
3) Fundamental
Transaction. If, at any time while any Preferred Stock 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 conversion of the Preferred Stock, the Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, at the
option of the Holder (without regard to any limitation in Section 6 on the conversion of the Preferred Stock), 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 into which each share of Preferred Stock is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 6 on the conversion of the Preferred Stock). For purposes of any such
conversion, the determination of the Conversion 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 Conversion 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 conversion of this Note following such Fundamental Transaction. Notwithstanding anything to
the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity shall, at the Holder’s option,
exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase
the shares of Preferred Stock from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the
remaining unconverted shares of Preferred Stock on the date of the consummation of such Fundamental Transaction. “Black
Scholes Value” means the value of the unconverted shares of Preferred Stock remaining on the date of the Holder’s
request pursuant to Section 7(e)(2) which value is calculated using the Black Scholes Option Pricing Model for a “call”
or “put” option, as elected by the Holder, as obtained from the “OV” function on Bloomberg utilizing (i)
an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock during the period
beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation
of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to
Section 7(e)(2) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if any)
plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price
equal to the Conversion Price in effect on the date of the Holder’s request pursuant to Section 7(e)(2), (iii) a risk-free
interest rate corresponding to the U.S. Treasury rate as of the date of the Holder’s request pursuant to Section 7(e)(2)
if such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow
and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function
on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to
occur of (A) the public disclosure of the applicable Fundamental Transaction, (B) the consummation of the applicable Fundamental
Transaction and (C) the date on which the Holder first became aware of the applicable 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 Certificate of Designation and the other Transaction Documents
in accordance with the provisions of this Section 7(e) 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 the Preferred Stock a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to the Preferred Stock which is convertible into 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 conversion of the Preferred Stock (without regard to any limitations on the conversion of the Preferred Stock)
prior to such Fundamental Transaction, and with a conversion price which applies the Conversion 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 conversion price being for the
purpose of protecting the economic value of the Preferred Stock 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 Note 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 Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein.
f)
Calculations. All calculations under this Section 7 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 7, 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 any treasury shares of the Corporation)
issued and outstanding.
g)
Notice to the Holders.
i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7,
the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of 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 Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger
to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any
compulsory share exchange whereby the Common Stock is converted into other securities, cash or property (E) the Corporation
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation (F) the
Corporation shall take any action to effectuate, and/or its actions could result in, a Mandatory Conversion, (G) the Corporation
shall take any action to effectuate an Corporation Redemption, or (H) a Triggering Event shall have occurred, then, in each case,
the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock,
and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified (unless a greater
or lesser time period is expressly required elsewhere in this Certificate of Designation), 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 hereunder constitutes, or contains, material, non-public
information regarding the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of
this Preferred Stock (or any part hereof) during the 20-day period commencing on the date of such notice through the effective
date of the event triggering such notice except as may otherwise be expressly set forth in this Certificate of Designation.
Section 8.
Corporation Redemption.
(a) The
Corporation shall have the right to redeem (a “Corporation Redemption”), all (but not less than all), shares
of the Preferred Stock issued and outstanding at any time after the Original Issue Date, at a redemption price per Preferred Stock
then issued and outstanding (the “Corporation Redemption Price”), equal to the product of (i) (A) 120%, or
(B) 130% if a Qualified Public Offering has previously occurred multiplied by (ii) the sum of (x) the Stated Value, (y) all accrued
but unpaid dividends, and (z) all other amount due to the Holder pursuant to this Certificate of Designation and/or any Transaction
Document including, but not limited to Late Fees, liquidated damages and the legal fees and expenses of the Holder’s counsel
relating to this Certification of Designation, any other Transaction Document and/or the transactions contemplated thereunder
and/or hereunder.
(b) In
connection with any Corporation Redemption, the Corporation shall provide no less than five (5) calendar days advance written
notice (a “Corporation Redemption Notice”) to all Holders of shares of Preferred Stock of a Corporate Redemption.
(c) The
Corporation may not deliver to a holder a Corporation Redemption Notice unless on or prior to the date of delivery of such Corporation
Redemption Notice, the Corporation shall have segregated on the books and records of the Corporation an amount of cash sufficient
to pay the Corporation Redemption Price for each share of Preferred Stock then issued and duly. Any Corporation Redemption
Notice delivered shall be irrevocable and shall be accompanied by a statement executed by Corporation duly authorized officer
of the Corporation.
(d) The
Corporation Redemption Price required to be paid by the Corporation to each Holder shall be paid in the cash to each Holder of
shares of Preferred Stock no later than 5 calendar days from the date of mailing of the Corporation Redemption Notice (the “Corporation
Redemption Payment Date”).
(e) Notwithstanding
the delivery of a Corporation Redemption Notice, a Holder may convert some or all of its shares of Preferred Stock until the date
it receives in full Corporation Redemption Price, provided, however, that notwithstanding anything to the contrary
provided herein or elsewhere (i) in the event a Holder would be precluded from converting any shares of Preferred Stock, due to
the limitation contained in Section 6(d), the Corporation Redemption Payment Date, for such Holder only, shall automatically be
extended by 120 days (or such shorter period as so provided to the Corporation by the Holder at any time and (ii) if a Mandatory
Conversion has occurred prior to the Corporation Redemption Payment Date and for whatever reason including, but not limited to,
the Beneficial Ownership Limitation, a Holder still owns Preferred Stock, any such Holder may elect to extend the Corporation
Redemption Payment Date as to any or all of such Holder’s Preferred Stock for up to 120 days following the Corporation Redemption
Payment Date to allow such Holder to convert its remaining Preferred Stock into Conversion Shares.
Section 9.
Negative Covenants. From the date hereof until the date no shares of Preferred Stock are issued and outstanding, unless
Holders of at least 75% in Stated Value of the then outstanding shares of Preferred Stock shall have otherwise given prior written
consent, the Corporation shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:
(a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;
(b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;
(c)
except for the Amendment, amend its charter documents, including, without limitation, its articles of incorporation and bylaws,
in any manner that materially and adversely affects any rights of the Holder;
(d)
repay, repurchase or offer to repay, repurchase or otherwise acquire of any shares of its Common Stock, Common Stock Equivalents
or Junior Securities, other than as to the Conversion Shares or Warrant Shares as permitted or required under the Transaction
Documents,
(e)
pay cash dividends or distributions on Junior Securities of the Corporation;
(f)
enter into any transaction with any Affiliate of the Corporation which would be required to be disclosed in any public filing
with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the
disinterested directors of the Corporation (even if less than a quorum otherwise required for board approval); or
(g)
hire and/or pay directly and/or indirectly, whether in cash, securities or otherwise and/or any investment banker, borrower/dealer
and/or advisor for the purpose and/or in connection with any direct and/or indirect capital raise including any loans of and/or
for the Company and/or any of its Subsidiaries; or
(h)
enter into any agreement with respect to any of the foregoing.
Section 10.
Redemption Upon Triggering Events.
(a)
“Triggering Event” means, wherever used herein any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):
i.
if the Corporation fails to provide at all times the Registration Statement or usable prospectus that permits the Corporation
to issue the Conversion Shares or which allows the Holder to sell the Conversion Shares pursuant thereto, subject to a grace period
of 10 Trading Days in the aggregate in any 365-day period or the Corporation cannot issue the Conversion Shares pursuant to Section 3(a)(9)
of the Securities Act;
ii.
the Corporation shall fail to deliver Conversion Shares issuable upon a conversion hereunder (including, but not limited to, a
Mandatory Conversion), that comply with the provisions hereof prior to the fifth Trading Day after such shares are required to
be delivered hereunder, or the Corporation shall provide written notice to any Holder, including by way of public announcement,
at any time, of its intention not to comply with requests for conversion of any shares of Preferred Stock in accordance with the
terms hereof;
iii.
the Corporation shall fail for any reason to pay in full the amount of cash due pursuant to a Buy-In within five Trading Days
after notice therefor is delivered hereunder.
iv.
the Corporation shall fail to have available a sufficient number of authorized and unreserved shares of Common Stock to issue
to such Holder upon a conversion hereunder;
v.
unless specifically addressed elsewhere in this Certificate of Designation as a Triggering Event, the Corporation shall fail to
observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of the Transaction Documents,
and such failure or breach shall not, if subject to the possibility of a cure by the Corporation, have been cured within 5 calendar
days after the date on which written notice of such failure or breach shall have been delivered;
vi.
the Corporation shall redeem Junior Securities or pari passu securities;
vii.
the Corporation shall be party to a Change of Control Transaction;
viii.
there shall have occurred a Bankruptcy Event;
ix.
the Common Stock shall fail to be listed or quoted for trading on a Trading Market for more than five Trading Days, which need
not be consecutive Trading Days;
x.
any monetary judgment, writ or similar final process shall be entered or filed against the Corporation, any subsidiary or any
of their respective property or other assets for more than $50,000 (provided that amounts covered by the Corporation’s insurance
policies are not counted toward this $50,000 threshold), and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 30 Trading Days;
xi.
the electronic transfer by the Corporation of shares of Common Stock through the Depository Trust Company or another established
clearing corporation is no longer available or is subject to a ‘freeze” and/or “chill”; or
xii.
the 2015 Meeting did not occur on September 2, 2015, or did occur but was not held in compliance with all applicable laws, rules
and regulations including, but not limited to, applicable quorum requirements, and/or any proposals including, but not limited
to, the Amendment, voted on at the 2015 Meeting by the Company’s shareholders are not approved; or
xiv.
the authorized Common Stock has not been increased from 150,000,000 shares to 500,000,000 shares by April 30, 2016, or
xii.
any breach, Event of Default and/or any event of default occurs (or with the passage of time and/or the providing of notice could
occur), with respect to (x) the Securities Purchase Agreement dated on or about the date hereof by and among the Corporation and
the Lenders named therein pursuant to which such Lenders purchased from the Corporation 12% Senior Secured Convertible Promissory
Notes of the Corporation Due September 30, 2016 (the “Notes”), and in certain cases common stock purchase warrants
of the Corporation (the “NPA”), (y) the Notes issued and/or transferred pursuant to the NPA, and/or pursuant
to any other document and/or agreement, and/or (z) any other document, agreement and/or instrument contemplated under the Notes
and/or the NPA including, but not limited to, the registration rights agreement, the security agreement, the Intercreditor and
Subordination Agreement, and/or any warrants.
b)
Upon the occurrence of a Triggering Event, each Holder shall (in addition to all other rights it may have hereunder or under applicable
law) have the right, exercisable at the sole option of such Holder, to require the Corporation to (A) redeem all of the Preferred
Stock then held by such Holder for a redemption price, in cash, equal to the Triggering Redemption Amount, or (B) at the
option of each Holder either (i) redeem all of the Preferred Stock then held by such Holder though the issuance to such Holder
of such number of shares of Common Stock equal to the quotient of (x) the Triggering Redemption Amount, divided by (y) the lowest
of (1) the Conversion Price, (2) the Qualified Public Offering Conversion Price and (3) 75% of the average of the 10 VWAPs immediately
prior to the date of election hereunder, or (ii) increase the dividend rate on all of the outstanding Preferred Stock held
by such Holder retroactively to the initial Closing Date to 18% per annum thereafter. The Triggering Redemption Amount, whether
payable in cash or in shares, shall be due and payable or issuable, as the case may be, within five (5) Trading Days of the date
on which the notice for the payment therefor is provided by a Holder (the “Triggering Redemption Payment Date”).
If the Corporation fails to pay in full the Triggering Redemption Amount hereunder on the date such amount is due in accordance
with this Section (whether in cash or shares of Common Stock), the Corporation will pay interest thereon at a rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable law, accruing and compounding daily from such date until
the Triggering Redemption Amount, plus all such interest thereon, is paid in full.
Section 11.
Miscellaneous.
a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally or sent by a nationally recognized overnight
courier service and by facsimile or e-mail, addressed to the Corporation, at 655 Montgomery Street, Suite 900, San Francisco,
CA 94111; Attention: Gerald E. Commissiong, facsimile number (408) 852-4427, or e-mail gerald.commissiong@amarantus.com ,
or such other facsimile number, e-mail or address as the Corporation may specify for such purposes by prior written notice to
the Holders delivered in accordance with this Section 11. Any and all notices or other communications or deliveries to be
provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of
the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of
business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall
be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the
next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be given.
b)
Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or
impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages, accrued dividends and
accrued interest, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein
prescribed.
c)
Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost,
stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated
certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of
Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.
d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate
of Designation 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 conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party
hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper
or 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 Certificate of Designation 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 applicable law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party
shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding.
e)
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall
not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of
this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict
adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive
that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this
Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.
f)
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of
this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it
shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount
deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall
automatically be lowered to equal the maximum rate of interest permitted under applicable law.
g)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.
h)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions hereof.
i)
Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to a Purchase Agreement.
If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status
of authorized but unissued shares of preferred stock and shall no longer be designated as Series H 12% Convertible Preferred Stock.
RESOLVED,
FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation
be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and
Limitations in accordance with the foregoing resolution and the provisions of Delaware law.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate this 22nd day of February 2016.
/s/ Gerald E. Commissiong |
|
Name: |
Gerald
E. Commissiong |
|
Title: |
President
and Chief Executive Officer |
|
ANNEX
A
NOTICE
OF CONVERSION
(TO
BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of Series H 12% Convertible Preferred Stock indicated below into shares
of common stock, par value $0.001 per share (the “ Common Stock ”), of Amarantus BioScience Holdings, Inc.
a Nevada corporation (the “ Corporation ”), according to the conditions hereof, as of the date written below.
If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation
in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer
taxes.
Conversion
calculations:
Date
to Effect Conversion: __________________________________________________________________________
Number
of shares of Preferred Stock owned prior to Conversion: _____________________________________________
Number
of shares of Preferred Stock to be Converted: _____________________________________________________
Stated
Value of shares of Preferred Stock to be Converted: __________________________________________________
Dollar
amount of Interest to be Converted: __________________________________________________
Other
amounts owed to the Undersigned by the
Corporation under the Certificate of Designation and/or
any other Transaction Document
to be Converted:
Number
of shares of Common Stock to be Issued: _________________________________________________________
Applicable
Conversion Price: ________________________________________________________________________
Number
of shares of Preferred Stock subsequent to Conversion: ______________________________________________
Address
for Delivery: ____________________________
or
DWAC
Instructions:
Broker
no: ________________
Account
no: ____________________
Name
of Entity Holder______________ (Please Print)
By:
_____________________________________
Name:
Title:
Name
of Individual Holder______________ (Please Print)
______________________
(Signature of Individual Holder)
24
Exhibit 3.2
CERTIFICATE
OF AMENDMENT OF
CERTIFICATE
OF DESIGNATION OF
AMARANTUS
BIOSCIENCE HOLDINGS, Inc.
Pursuant
to Section 78.1955 of the
Nevada
Revised Statutes
SERIES
E CONVERTIBLE PREFERRED STOCK
On
behalf of Amarantus BioScience Holdings, Inc., a Nevada corporation (the “Corporation”), the undersigned hereby
certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the “Board”):
RESOLVED,
that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation
(the “Articles of Incorporation”):
| 1. | Section
6(a) of the Second Amended and Restated Certificate of Designation of the Corporation
for the Series E Convertible Preferred Stock shall be modified by adding the following
sentence to the end of Section 6(a): |
“Notwithstanding
the foregoing, none of the Preferred Stock may be converted until March 31, 2016.”
IN
WITNESS WHEREOF, the undersigned have duly signed this Certificate of Amendment to the Certificate of Designation of the Series
E Convertible Preferred Stock as of this 22nd day of February 2016.
|
Amarantus
BioScience Holdings, Inc. |
|
|
|
/s/ Gerald
Commissiong |
|
By:
Gerald Commissiong
Title:
Chief Executive Officer |
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of February 18, 2016, between Amarantus BioScience
Holdings, Inc., a Nevada corporation (the “Company”), and each purchaser identified on the signature pages
hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Certificate of Designation (as defined herein), and (b) the following terms have the meanings
set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Authorized
Share Vote” means the affirmative vote of the Company’s shareholders to increase the number of the Company’s
authorized shares of Common Stock to 500,000,000, and the filing by the Company of an amendment to its Articles of Incorporation
so increasing the number of authorized shares of Common Stock.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.
“Certificate
of Designation” means the Certificate of Designation, as corrected, to be filed prior to the first Closing by the Company
with the Secretary of State of Nevada, in the form of Exhibit A attached hereto.
“Closings”
means the First Closing and the Second Closing.
“Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.
“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.
“Company
Counsel” means Sichenzia Ross Friedman Ference LLP, with offices located at 61 Broadway, 32nd Floor, New York, New York
10006.
“Conversion
Price” shall have the meaning ascribed to such term in the Certificate of Designation.
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.
“Equity
Conditions” mean (i) the Preferred Stock and Warrants to be issued in the Second Closing are to be issued pursuant to
an effective shelf registration statement, (ii) the Common Stock has traded at least an average of $250,000 per day in the previous
ten (10) Trading Days, and (iii) all prior conversions for Preferred Shares and exercises for Warrants, if any, have been timely
honored, with free trading shares of Common Stock delivered within three (3) Trading Days of the applicable date of exercise or
conversion.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(hh).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(hh).
“First
Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1(a).
“First
Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the initial Subscription
Amount and (ii) the Company’s obligations to deliver the Securities purchased at such First Closing, in each case, have
been satisfied or waived, but in no event later than the third Trading Day following the date hereof.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.
“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(hh).
“Placement
Agent” means Chardan Capital Markets, LLC
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).
“Preferred
Stock” means the up to 8,800,000 shares of the Company’s 12% Series H Convertible Preferred Stock issued hereunder
having the rights, preferences and privileges set forth in the Certificate of Designation, as corrected, in the form of Exhibit
A hereto.
“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).
“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.
“Registration
Statement” means the effective registration statement with the Commission file No. 333-203845 which registers the sale
of the Preferred Stock, Warrants and Underlying Shares.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Required
Minimum” means, as of the First Closing Date, 35,000,000 shares, and as of any date after the Authorized Share Vote,
300% of the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the
Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants or conversion in full of
all shares of Preferred Stock, ignoring any conversion or exercise limits set forth therein, and that any previously unconverted
shares of Preferred Stock are held until such time as there is no Preferred Stock or Warrants outstanding.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Second
Closing” shall have the meaning ascribed to such term in Section 2.1(b).
“Second
Closing Date” means the date of the Second Closing.
“Securities”
means the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
“Stated
Value” means $1,000 per share of Preferred Stock.
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Preferred Stock and Warrants purchased
hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.
“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).
“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Certificate of Designation, the Warrants, the Leakout Agreements (as defined in
Section 2.2), all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with
the transactions contemplated hereunder.
“Transfer
Agent” means VStock Transfer LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place, Woodmere, NY 11598 and a facsimile number of _______________, and any successor transfer agent of the Company.
“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Preferred Stock and
upon exercise of the Warrants and issued and issuable in lieu of the cash payment of dividends on the Preferred Stock in accordance
with the terms of the Certificate of Designation.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b).
“VWAP”
has the meaning set forth in the Certificate of Designation.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at each Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five (5) years, in the form
of Exhibit C attached hereto.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Closings.
(a)
First Closing. On the First Closing Date, upon the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, up to an aggregate of $3,000,000 of shares of Preferred Stock with an aggregate
Stated Value for each Purchaser equal to 110% of such Purchaser’s Subscription Amount as set forth on the signature page
hereto executed by such Purchaser, and Warrants as determined by pursuant to Section 2.2(a). The aggregate number of shares of
Preferred Stock sold hereunder shall be up to 3,300. Each Purchaser shall deliver to the Company, via wire transfer, immediately
available funds equal to its Subscription Amount, and the Company shall deliver to each Purchaser its respective shares of Preferred
Stock and Warrants, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items
set forth in Section 2.2 deliverable at the First Closing. Upon satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the First Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.
(b)
Second Closing. On the Second Closing Date, upon the terms and subject to the conditions set forth herein, the Company
agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $5,000,000 of shares of
Preferred Stock with an aggregate Stated Value for each Purchaser equal to 110% of such Purchaser’s Subscription Amount
for the Second Closing as set forth on the signature page hereto executed by such Purchaser, and Warrants as determined by pursuant
to Section 2.2(a), which closing shall occur on, or as soon as reasonably practicable following, and in any event within 3 Trading
days of the earlier of (i) the Purchasers’ consent to the Second Closing or (ii) the Equity Conditions being met and the
Authorized Share Vote having been validly adopted by the Company’s stockholders (the “Second Closing”.
The aggregate number of shares of Preferred Stock sold hereunder at the Second Closing shall be up to 5,500. Each Purchaser shall
deliver to the Company, via wire transfer, immediately available funds equal to its remaining Subscription Amount, and the Company
shall deliver to each Purchaser its respective shares of Preferred Stock and Warrants, as determined pursuant to Section 2.2(a),
and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other
location as the parties shall mutually agree. The Purchasers may instead, at their option, elect to purchase an aggregate of $5M
worth of securities in a transaction or series of transactions that results in the Company’s Common Stock being traded on
a national stock exchange (the “Fundamental Transaction”).
2.2 Deliveries.
(a) On
or prior to each Closing, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i)
as to the First Closing this Agreement duly executed by the Company;
(ii) as
to the First Closing, a legal opinion of Company Counsel, substantially in the form of Exhibit C attached hereto; and as
to the Second Closing, a bringdown letter reasonably satisfactory to the Purchasers;
(iii) as
to each Closing, a certificate evidencing a number of shares of Preferred Stock equal to 110% such Purchaser’s Subscription
Amount divided by the Stated Value, registered in the name of such Purchaser and evidence of the filing and acceptance of the
Certificate of Designation, as corrected, from the Secretary of State of Nevada;
(iv) as
to each Closing, a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal
to 100% of such Purchaser’s Conversion Shares on the date hereof, based upon an assumed Conversion Price of $0.25, and an
exercise price equal to $0.40, subject to adjustment therein (such Warrant certificate may be delivered within three Trading Days
of the Closing Date);
(v) as
to the First Closing, agreements restricting the sales of securities owned by Delafield Investments Limited, Dominion Capital,
LLC, Dustin Johns and Infusion International LLC (the “Leakout Agreements”), substantially in the form of Exhibit
D attached hereto; and
(vi) as
to each Closing, the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities
Act).
(b) On
or prior to each Closing, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i)
as to the First Closing, this Agreement duly executed by such Purchaser; and
(ii) as
to each Closing, to the Company, such Purchaser’s Subscription Amount as to the applicable Closing by wire transfer to the
account specified in writing by the Company.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with each Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the applicable Closing of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the applicable Closing shall have
been performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with each Closing (except as noted) are subject to the following
conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the applicable Closing of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing shall have
been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) as
to the Second Closing, the Purchasers have either consented to the Second Closing, or the Company shall have met the Equity Conditions
and successfully completed the Authorized Share Vote; and
(vi) from
the date hereof to the applicable Closing, trading in the Common Stock shall not have been suspended by the Commission or the
Company’s principal Trading Market, and, at any time prior to the applicable Closing, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either
by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the
Securities at the applicable Closing.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser as
of the date hereof and as of the each Closing:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the
issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.6 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement,
and (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the
listing of the Underlying Shares for trading thereon in the time and manner required thereby, if any, and (iv) the Authorized
Share Vote (collectively, the “Required Approvals”).
(f) Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum
on the date hereof. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities
Act, which became effective on May 22, 2015 (the “Effective Date”), including the Prospectus, and such amendments
and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under
the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted
or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of
the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement
and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement
and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did
not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at time
the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material
respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(g) Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g). The Company has not issued any capital stock since
its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act and as set forth on Schedule 3.1(g). No Person has any
right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents except for those Persons who have waived such rights of participation set forth in Schedule 3.1(g).
Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock or the capital stock
of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance
and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities
to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities, except as set forth in Schedule 3.1(g). There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem
a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale
of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension (except for its Form 10-K for the year ended December 31, 2013). As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time
of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required
by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as
of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof and as set
forth in Schedule 3.1(i): (i) there has been no event, occurrence or development that has had or that could reasonably be expected
to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate,
except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for
confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth
on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably
expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations,
assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time
this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that
this representation is made.
(j) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company
or of any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to
pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or
subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license
or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens
for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP
and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance, except for any failures to comply as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.
(r) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option
plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof and as of each Closing, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing.
The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and
procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.
The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or
is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be
payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(v) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection
with such electronic transfer.
(x) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of
this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.
(aa) Solvency.
Based on the consolidated financial condition of the Company as of each Closing, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from each Closing. Schedule 3.1(aa) sets
forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which
the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x)
any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether
or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and
local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for any such claim.
(cc) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any
provision of FCPA.
(dd) Accountants.
The Company’s accounting firm is set forth in the Prospectus Supplement. To the knowledge and belief of the Company, such
accounting firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December
31, 2015.
(ee) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents
to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been
based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(ff) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with
or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the
Securities are outstanding, including, without limitation, during the periods that the value of the Underlying Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing
stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(gg) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s
placement agent in connection with the placement of the Securities.
(hh) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA
that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced
or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed
or proposed to be developed by the Company.
(ii) Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has
been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of
stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.
(jj) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer,
agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).
(kk) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.
(ll) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(mm) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company or any Subsidiary, threatened.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of each Closing to the Company as follows (unless as of a specific date therein, in which case they
shall be accurate as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation
and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise
in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on
which it exercises any Warrants or converts any shares of Preferred Stock it will be an “accredited investor” as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such
Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such
Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.
Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities
and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser
agrees need not be provided to it. In connection with the issuance of the Securities to such Purchaser, neither the Placement
Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations
and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection
with this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Underlying
Shares. The shares of Common Stock underlying the shares of Preferred Stock shall be issued free of legends. If all or any
portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale
of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to any such exercise
shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration
statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale or
resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that such registration
statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective
again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not
limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal
and state securities laws). The Company shall use reasonable best efforts to keep a registration statement (including the Registration
Statement) registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.
4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.
4.3 Furnishing
of Information; Public Information.
(a) Until
the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to maintain
the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
(b) At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the
future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an
amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day
of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty
days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public
information is no longer required for the Purchasers to transfer the Underlying Shares pursuant to Rule 144. The payments to which
a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments.”
Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which
such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event
or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.4 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent transaction.
4.5 Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Certificate of Designation set forth the totality of the procedures required of the Purchasers in order to exercise
the Warrants or convert the Preferred Stock. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice
of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice
of Exercise or Notice of Conversion form be required in order to exercise the Warrants or convert the Preferred Stock. No additional
legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their
Preferred Stock. The Company shall honor exercises of the Warrants and conversions of the Preferred Stock and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
4.6 Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) on the Trading Day immediately following
the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby and (b) file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the
Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or
any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or
any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing
any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except:
(a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and
(b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this clause (b).
4.7 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that
any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.8 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to
the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such purchaser shall not have any duty of confidentiality to Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and of
it Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that
any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.
4.9 Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion
of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior
practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC regulations.
4.10 Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will
not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that
a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section 4.10 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to
any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may
be subject to pursuant to law.
4.11 Reservation
and Listing of Securities.
(a) The
Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents
in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.
(b) If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required
Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.
(c) The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.
4.12 Participation
in Future Financing.
(a) From
the date hereof until the date that no Preferred Stock is outstanding, upon any issuance by the Company or any of its Subsidiaries
of Common Stock, Common Stock Equivalents for cash consideration, Indebtedness or a combination of units hereof (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal
to 50% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing.
(b) At
least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of
proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed
to be effected and shall include a term sheet or similar document relating thereto as an attachment.
(c) Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that
such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and
representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth
in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th)
Trading Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate.
(d) If
by 5:30 p.m. (New York City time) on the fifth (5th ) Trading Day after all of the Purchasers have received the Pre-Notice,
notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to
participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining
portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.
(e) If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount
of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of
the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities
purchased on the Closing Date by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription
Amounts of Securities purchased on the Closing Date by all Purchasers participating under this Section 4.12.
(f) The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after
the date of the initial Subsequent Financing Notice.
(g) The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree
to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or
termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written
consent of such Purchaser.
(h) Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to
by such Purchaser, the Company shall either confirm in writing to such Purchaser that the transaction with respect to the Subsequent
Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in
either case in such a manner such that such Purchaser will not be in possession of any material, non-public information, by the
tenth (10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment
of such transaction has been received by such Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser
shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.
(i) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance.
4.13 Subsequent
Equity Sales.
(a) From
the date hereof until March 31, 2016 (or, if the Second Closing occurs, 90 calendar days from the Second Closing Date), neither
the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of
any shares of Common Stock or Common Stock Equivalents.
(b) From
the date hereof until such time as no Purchaser holds any of the Warrants, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(c) [RESERVED]
(d) Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.
4.14 Equal
Treatment of Preferred Stock Holders. No consideration (including any modification of the Certificate of Designation) shall
be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Certificate of Designation
or any other Transaction Document unless the same consideration is also offered to all of the parties to such Transaction Documents,
including any holder of Preferred Stock. For clarification purposes, this provision constitutes a separate right granted to each
Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the holders of
the Preferred Stock as a class and shall not in any way be construed as such holders acting in concert or as a group with respect
to the purchase, disposition or voting of Securities or otherwise.
4.15 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time
as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release
as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and
the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes
any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.6, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any
securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated
by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6 and (iii) no
Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries
after the issuance of the initial press release as described in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
4.16 Capital
Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split
or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of
the shares of Preferred Stock, unless such reverse stock split is in connection with the listing of the Common Stock on a registered
national securities exchange.
4.17 Authorized
Share Approval, Early Redemption. The Company shall file a preliminary proxy statement with the Commission seeking the Authorized
Share Approval within five Trading Days of the First Closing Date, and shall use reasonable best efforts to obtain Commission
clearance of such proxy statement and to hold a special meeting (which may be combined with the annual meeting, in the discretion
of the Company) of its shareholders within 90 calendar days of the First Closing Date. If the Company shall not have obtained
Authorized Share Approval by such 90-day deadline, each Purchaser may require the Company to redeem its Preferred Shares at a
price equal to 130% of Stated Value, as if such event was a Triggering Event under the Certificate of Designation; provided, however,
the Company shall have an additional 30 calendar days in which to obtain the Authorized Share Approval. In addition, if the Company
completes either a Public Offering or a Qualified Public Offering (each as defined in the Certificate of Designation), each Purchaser
may elect, by written notice to the Company, to require the Company to redeem for cash so many shares of the Preferred Stock held
by such Purchaser as are specified in such notice, at their Stated Value per share. Such redemption shall be completed within
five (5) Trading Days of the Company’s receipt or deemed receipt of such notice from the Purchaser.
ARTICLE
V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the First
Closing has not been consummated on or before February 22, 2016; provided, however, that such termination will not
affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. At the First Closing, the Company has agreed to reimburse Anson Investments Master Fund, LP (“Anson”)
the non-accountable sum of $50,000 for its legal fees and expenses. The Company shall deliver to each Purchaser, prior to the
First Closing, a completed and executed copy of the Closing Statement, attached hereto as Annex A. Except as expressly
set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any
fees required for same-day processing of any instruction letter delivered by the Company and any conversion or exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to
the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus
Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on
a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Preferred Stock based
on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser
(or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.
No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely
affected Purchaser, Any amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser
and holder of Securities and the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties
of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended
for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.10 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such 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 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 any party shall commence
an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company
under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the
case of a rescission of a conversion of the Preferred Stock or exercise of a Warrant, the applicable Purchaser shall be required
to return any shares of Common Stock subject to any such rescinded conversion or exercise notice concurrently with the return
to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s
right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate
evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation
the defense that a remedy at law would be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed
such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the Closing Date
thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess
of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the
Company, the manner of handling such excess to be at such Purchaser’s election.
5.18 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company through EGS. EGS does not represent any of the
Purchasers and only represents Anson. The Company has elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly
understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company
and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.19 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.
5.20 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.
5.21 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
5.22 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
AMARANTUS
BIOSCIENCE HOLDINGS, INC.
|
Address
for Notice:
655
Montgomery Street, Suite 900
San
Francisco, CA 94111 |
|
|
By:__________________________________________
Name:
Title:
With
a copy to (which shall not constitute notice): |
Fax: |
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO AMBS SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name
of Purchaser: ________________________________________________________
Signature
of Authorized Signatory of Purchaser: __________________________________
Name
of Authorized Signatory: ____________________________________________________
Title
of Authorized Signatory: _____________________________________________________
Email
Address of Authorized Signatory: _____________________________________________
Facsimile
Number of Authorized Signatory: __________________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription
Amount (First Closing): $_____________
Subscription
Amount (Second Closing): $___________
Shares
of Preferred Stock: First Closing ____________ Second Closing_____________
Warrant
Shares: First Closing _________________ Second Closing ________________
EIN Number:
_______________________
☐ Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase
the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company
to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the third (3rd) Trading Day following the date of this Agreement and (iii) any condition to
Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company
or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be
a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such
agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.
[SIGNATURE
PAGES CONTINUE]
Annex
A
CLOSING
STATEMENT
Pursuant
to the attached Securities Purchase Agreement, dated as of the date hereto, the purchasers shall purchase up to $8,000,000 of
Preferred Stock and Warrants from Amarantus BioScience Holdings, Inc., a Nevada corporation (the “Company”).
All funds will be wired into an account maintained by the Company. All funds will be disbursed in accordance with this Closing
Statement. This Closing Statement is delivered in connection with the [First Closing [Second Closing
Disbursement
Date: [________ ___, 2016
I.
PURCHASE PRICE |
|
|
|
|
Gross
Proceeds to be Received |
$ |
|
|
II.
DISBURSEMENTS |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Total
Amount Disbursed: |
$ |
|
|
|
|
|
|
WIRE
INSTRUCTIONS: |
|
|
|
To:
_____________________________________
|
|
To:
_____________________________________
|
|
42
Exhibit 10.2
COMMON STOCK PURCHASE WARRANT
AMARANTUS
BIOSCIENCE HOLDINGS, INC.
Warrant
Shares: 13,200,000 |
Initial
Exercise Date: February __, 2016 |
THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, Anson Investments Master Fund LP 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 date hereof (the “Initial Exercise Date”) and on or prior to the close
of business on the five year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Amarantus BioScience Holdings, Inc., a Nevada corporation (the “Company”),
up to 13,200,000 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 in that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated February 18, 2016, among the Company and the purchasers signatory
thereto.
Section 2. Exercise.
a) 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 and, within three
(3) Trading Days of the date said Notice of Exercise is delivered to the Company, payment the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, if available, pursuant to
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 form 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.
b) Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $0.40, 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) = the last
VWAP immediately preceding the time of delivery of the Notice of Exercise giving rise to the applicable “cashless exercise”,
as set forth in the applicable Notice of Exercise (to clarify, the “last VWAP” will be the last VWAP as calculated
over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market is open, the
prior Trading Day’s VWAP shall be used in this calculation);
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(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).
“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).
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 one (1) Trading Day 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 payment of the aggregate Exercise Price (other than in the
case of a Cashless Exercise) is received within three Trading Days of 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 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 exerciseable.
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.
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.
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 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 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.
f) Redemption
of Warrant. In the event that (i) the Closing Bid Price or Closing Sale Price of the Common Stock is at least equal to $1.00
(subject to adjustment for stock splits, stock dividends, reorganizations, and the like) for a thirty (30) consecutive Trading
Day period prior to the Trading Day a Redemption Notice (as defined below) is sent by the Company to the Holder (“Pre-Call
Period”), and (ii) for each trading day during the Pre-Call Period, the trading volume for the Common Stock is at least
equal to 1,000,000 shares then Company shall have the right, upon at least ten (10) Trading Days' prior written notice to the
Holder (the “Redemption Notice”), to redeem all or any portion of the Warrant Shares underlying this Warrant
(not previously exercised), at a redemption price equal to the greater of (i) $1.00 or (ii) the difference between the average
of the daily VWAPs for each Trading Day during the Post-Call Period minus the then-current Exercise Price, per Warrant Share issuable
hereunder for the portion hereof being redeemed. However, the Company may not exercise such redemption right more than once.
Any redemption
hereunder shall occur on the date specified in the Redemption Notice (“Redemption Date”), provided that such
Redemption Date may not occur until at least ten (10) Trading Days following the date on which the Holder received the Redemption
Notice (the “Redemption Notice Date”). The period from the Redemption Notice Date to the Redemption Date shall
be referred to herein as the “Post-Call Period.” The Holder may exercise this Warrant, including any portion
subject to a Redemption Notice, at any time and from time to time during the Post-Call Period, and the Company shall honor all
exercises of this Warrant by the Holder during the Post-Call Period. Any Redemption Notice under this Section shall be irrevocable.
If the Company intends to redeem less than all of the then outstanding Warrants issued to Holders under the Purchase Agreement,
it shall do so on a pro rata basis among such holders in accordance with this Section. Failure by the Company to redeem this Warrant
on a timely basis after delivering a Redemption Notice shall result in the Company being prohibited from exercising such right
pursuant to this Section again.
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
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective
price per share less than the Exercise Price then in effect (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than
the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive
Issuance at such effective price), then simultaneously with the consummation of each Dilutive Issuance the Exercise Price shall
be reduced and only reduced to equal the Base Share Price. Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(b)
in respect of an Exempt Issuance. The Company shall notify the Holder, in writing, no later than the Trading Day following the
issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the
applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the
“Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive
a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share
Price in the Notice of Exercise. If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the
Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible
conversion or exercise price at which such securities may be converted or exercised.
c) 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).
d) 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).
e) 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. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all
cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental
Transaction involving a person or entity not traded on a national securities exchange, including, but not limited to, the Nasdaq
Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any Successor Entity (as defined
below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation
of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black
Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction.
“Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation
of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the
HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction,
(C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option
time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination
Date. 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(e) 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.
f) 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.
g) 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.
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 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.
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 initial
issuance 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, 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 executing stock certificates to execute and issue 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).
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 determined in accordance
with the provisions of the Purchase Agreement.
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 Purchase Agreement, 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.
h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
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)
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.
|
AMARANTUS
BIOSCIENCE HOLDINGS, INC.
|
|
By: ___________________________
Name:
Title: |
NOTICE OF EXERCISE
To: Amarantus
bioscience holdings, 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: ______________________ |
|
Exhibit 10.3
EXHIBIT
D
LEAK-OUT
AGREEMENT
THIS
LEAK-OUT AGREEMENT (the “Agreement”) is made and entered into as of the 19th day of February 2016, and effective
as of 22nd February 2016, between Amarantus Bioscience Holdings, Inc.,
a Nevada corporation (the “Company”) and the holders (the “Holders” and each a “Holder”)
of the Company’s issued and outstanding Series E Convertible Preferred Stock and Series H Convertible Preferred Stock (collectively,
the “Preferred Stock”), 12% Senior Secured Convertible Promissory Notes, due September 29, 2016 (the “Notes”)
or five year Common Stock Purchase Warrants (the “Warrants” and together with the Preferred Stock and Notes,
the “Securities”) and
RECITALS
WHEREAS,
each of the Securities provide the Holders with the right to receive shares of the Company’s common stock, par value $0.001
of the Company (the “Common Stock”) through the conversion or exercise of the Notes, Preferred Stock or Warrants;
and
WHEREAS,
the Company and the Holders agree to enter into this Agreement in order to provide for the orderly conversion, exercise and sale
of the Securities; and
WHEREAS,
the Company and the Holders agree that with respect to those parties to that certain Securities Purchase Agreement dated as of
September 30, 2015, and that certain Exchange Agreement dated September 30, 2015, that any and all previously existing leak
out agreements are of no further force and effect and are superseded by this Agreement in their respective entirety; and
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1.
Representations and Warranties. Each of the parties hereto, by their respective execution and delivery of this Agreement,
hereby represents and warrants to the others and to all third party beneficiaries of this Agreement that: (a) such party has the
full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this
Agreement has been duly executed and delivered by such party and is the binding and enforceable obligation of such party, enforceable
against such party in accordance with the terms of this Agreement, and (c) the execution, delivery and performance of such party’s
obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding
to which such party is a party or to which the assets or securities of such party are bound.
2.
Leak Out.
(a)
Except as otherwise expressly provided herein, and subject to any other restrictions prohibiting the conversion, offer, sale or
transfer of the shares of Common Stock under applicable United States federal or state securities laws, rules and regulations
(collectively, the “Regulations”), the Company and the Holders agree that:
(i)
Commencing the date of this Agreement, subject to any applicable Regulations, each Holder, as applicable, together with its affiliates,
shall be entitled to convert the Note or Preferred Stock or exercise the Warrant and sell the underlying shares, in accordance
with the restrictions contained on Schedule A (the “Leak Out”). The Leak Out will remain in effect until
the earlier of the date the Company holds a stockholder vote on whether to increase the Company’s authorized common stock
to 500,000,000 shares (including any adjourned meeting dates), or April 30, 2016, unless otherwise expressly extended in writing
by the Holders (the “Leak Out Period”), at which time the Holders shall no longer be subject to the Leak Out
restrictions, and shall be entitled to convert and exercise the Securities, as the Holders in their sole discretion may determine.
(ii)
Upon a breach of any representation, warranty or covenant of the Company pursuant to this Agreement, the Company shall be entitled
to a two (2) day cure period (the “Cure Period”). During the Cure Period the Holders shall no longer be subject to
the Leak Out restrictions until such time as the Company provides written notification and demonstrable proof that such breach
has been cured. If such breach is not cured to the satisfaction of any of the Holders during the Cure Period, any of the Holders
may submit written notification of such breach to the Company and the Holders shall no longer be subject to the Leak Out restrictions,
subject to any applicable Regulations.
(iii)
The Company shall facilitate any conversion notice or exercise notice received from the Holders, and shall cause to be issued
such shares, as contained in such conversion notice or exercise notice, on a timely basis, as provided for in the respective Security.
3.
Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the trading day immediately
following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K, including the transaction documents as exhibits thereto, with the Commission within the time
required by the Securities Exchange Act of 1934, as amended.
4.
Conflict. In the event there is a conflict between the terms of any of the Securities with this Agreement, the terms of
this Agreement shall control any interpretation; provided, however, that, unless this Agreement expressly amends or supplements
the language of the respective Security, the Security shall remain in full force and effect.
5.
Remedies. Each Holder shall have the right to specifically enforce all of the obligations of the Company under this
Agreement (without posting a bond or other security) and the obligations of the other Holder, in addition to recovering damages
by reason of any breach by either the Company or the other Holder of any provision of this Agreement and to exercise all other
rights granted by law and/or any of the documents related to the acquisition of the Securities by the Holder.
The Company shall have the right to request statements and/or any transaction or trading records from any Holder at any time during
the term of this Agreement which shall be delivered to counsel to the Company promptly within one (1) trading day. In the event
that a Holder is found to have intentionally violated its obligations under this Agreement, such Holder will be precluded from
trading for a period of ten (10) trading days (the “Standstill Period”) and the Company shall not be required to honor
any conversions, conversion notices, or exercise notices during such Standstill Period.
6.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
7.
Notices. All notices, instructions or other communications required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by facsimile, certified mail, return receipt requested or overnight courier by a nationally
recognized courier service to the respective address as set forth in the Note. All notices shall be deemed to be given on the
same day if delivered by facsimile, on the following business day if sent by overnight delivery or on the third business day following
the date of mailing.
8.
Entire Agreement. Except for the Letter Agreement and/or otherwise provided herein, this Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof, and may not be amended except by a written instrument
executed by the parties hereto. This Agreement supersedes any prior agreement (including, without limitation any prior
lock-up or leak-out agreements), representation or understanding with respect to such subject matter.
9.
Governing Law. This Agreement and the terms and conditions set forth herein, shall be governed by and construed
solely and exclusively in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this Agreement shall be brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereto covenant and irrevocably submit to the in personam jurisdiction of the
federal and state courts located in the City, County and State of New York and agree that any process in any such action may be
served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested,
with the same full force and effect as if personally served upon them in New York, New York. The parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense
or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other parties hereto of all of its reasonable counsel fees and disbursements.
10.
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
11.
Severability. In the event any provision of this Agreement is held to be invalid, illegal or unenforceable for any reason
and in any respect, such invalidity, illegality, or unenforceability shall in no event affect, prejudice or disturb the validity
of the remainder of this Agreement, which shall remain in full force and effect, enforceable in accordance with its terms.
12.
Records Request. Each Holder shall have the right to request statements and/or any transaction or trading records from
the Company at any time during the term of this Agreement which shall be delivered to the applicable Holder promptly within one
(1) trading day.
13.
Effectiveness. This Agreement shall become effective immediately upon the full execution of this Agreement by the Company
and the Holders.
[Signature
page follows]
IN WITNESS WHEREOF,
the undersigned have duly executed and delivered this Agreement as of the day and year first above written.
HOLDERS:
By:
___________________________
Name:
Title:
By:
___________________________
Name:
Title:
By:
___________________________
Name:
Title:
International
Infusion LLC
By:
___________________________
Name:
Title:
COMPANY:
Amarantus
Bioscience Holdings, Inc.
By:
___________________________
Name:
Title:
Schedule A
Notwithstanding anything to the contrary provided in this
Schedule A, the Leak-Out Agreement (the “LOA”) that this Schedule A is attached to and/or otherwise, all numbers
below (as applicable) shall be adjusted for forward and reverse stock splits and similar transactions effecting all holders of
Common Stock equally.
Each Holder may sell
shares underlying the Securities per the following schedule:
Each of the Preferred Holders,
Note Holders and International Infusion LLC can trade no more than 10% of the daily number of shares of the common stock traded
on any Trading Day without restriction. To the extent a signatory hereto is both a Note Holder and a Preferred Holder, such daily
limit shall apply to such signatory in the aggregate, and not separately for each status.
Each of the Preferred Holders,
Note Holders and International Infusion LLC may sell an unlimited amount of shares at a price at or above $0.40 per common share.
Exhibit 10.4
PLACEMENT AGENCY AGREEMENT
February
19, 2016
Chardan
Capital Markets, LLC
17
State Street, Suite 1600
New
York, NY 10004
Ladies
and Gentlemen:
Introduction.
Subject to the terms and conditions herein (this “Agreement”), Amarantus BioScinece Holdings, Inc., a Nevada
corporation (the “Company”), hereby agrees to sell up to an aggregate of $8,800,000 of securities (the “Securities”)
of the Company consisting of shares of Series H Preferred Stock (the “Shares”) and Warrants to purchase Common
Stock (the “Warrants”) directly to various investors (each, an “Investor” and, collectively,
the “Investors”) through Chardan Capital Markets, LLC, as non-exclusive placement agent (the “Placement
Agent”). The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf
in connection with the Offering (as defined below).
The
Company hereby confirms its agreement with the Placement Agent as follows:
Section
1. Agreement to Act as Placement Agent.
(a) On
the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and
conditions of this Agreement, the Placement Agent shall be the exclusive Placement Agent in connection with the offering and sale
by the Company of the Securities pursuant to the Company's registration statement on Form S-3 (File No. 333-203845) (the “Registration
Statement”), with the terms of such offering (the “Offering”) to be subject to market conditions
and negotiations between the Company, the Placement Agent and the prospective Investors. The Placement Agent will act on a reasonable
best efforts basis and the Company agrees and acknowledges that there is no guarantee of the successful placement of the Securities,
or any portion thereof, in the prospective Offering. Under no circumstances will the Placement Agent or any of its “Affiliates”
(as defined below) be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing.
The Placement Agent shall act solely as the Company’s agent and not as principal. The Placement Agent shall have no authority
to bind the Company with respect to any prospective offer to purchase Shares and the Company shall have the sole right to accept
offers to purchase Securities and may reject any such offer, in whole or in part. Subject to the terms and conditions hereof,
payment of the purchase price for, and delivery of, the Securities shall be made at one or more closings (each a “Closing”
and the date on which each Closing occurs, a “Closing Date”). As compensation for services rendered, on each
Closing Date, the Company shall pay to the Placement Agent the fees and expenses set forth below:
(i) A
cash fee equal to 6.67% (rounded down to the nearest whole dollar) of the gross proceeds received by the Company from the sale
of the Securities at the closing of the Offering (the “Closing”); and
(ii) Such
number of Common Stock purchase warrants (the “Placement Agent Warrants”) to Placement Agent or its designees
at each Closing to purchase shares of Common Stock equal to 10% (of the aggregate number of Conversion Shares sold in the Offering
(based on the initial Conversion Price of the Shares). The Placement Agent Warrants shall have the same terms as the warrants
issued to the Investors in the Offering except that the exercise price shall be 125% of the public offering price per Conversion
Share and shall have an expiration date of 5 years from the date of the Prospectus Supplement (as further defined below). The
Placement Agent Warrants shall not be transferable for six months from the date of the Offering except as permitted by Financial
Industry Regulatory Authority (“FINRA”) Rule 5110(g)(1).
(b) The
term of the Placement Agent's engagement will be until a party hereto terminates the engagement with respect to itself at any
time upon five business days written notice to the other parties. Notwithstanding anything to the contrary contained herein, the
provisions concerning confidentiality, indemnification and contribution contained herein and the Company’s obligations contained
in the indemnification provisions will survive any expiration or termination of this Agreement, and the Company’s obligation
to pay fees actually earned and payable and to reimburse expenses actually incurred and reimbursable pursuant to Section 1 hereof
and which are permitted to be reimbursed under FINRA Rule 5110(f)(2)(D), will survive any expiration or termination of this Agreement.
Nothing in this Agreement shall be construed to limit the ability of the Placement Agent or its Affiliates to pursue, investigate,
analyze, invest in, or engage in investment banking, financial advisory or any other business relationship with Persons (as defined
below) other than the Company. As used herein (i) “Persons” 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 and (ii) “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 of 1933, as amended (the “Securities Act”).
Section
2. Representations, Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the
Placement Agent as of the date hereof, and as of each Closing Date, as follows:
(a) Issuance
of the Securities; Registration. The Shares, the Warrants and the Warrant Shares are duly authorized and, when issued and
paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum
number of shares of Common Stock issuable pursuant to this Agreement and upon exercise of the Warrants. The Company has prepared
and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on May
22, 2015 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop
order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus
has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company,
are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus
with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus and any amendments or supplements thereto, at time the Prospectus or any amendment or supplement
thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading.
(b) Assurances.
The Original Registration Statement, as amended, (and any further documents to be filed with the Commission) contains all exhibits
and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto,
at the time it became effective, complied in all material respects with the Securities Act and the applicable Rules and Regulations
and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Base Prospectus, and the Prospectus Supplement, each as of its respective
date, comply or will comply in all material respects with the Securities Act and the applicable Rules and Regulations. Each of
the Base Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof
any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations
promulgated thereunder, and none of such documents, when they were filed with the Commission, contained any untrue statement of
a material fact or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated Documents
incorporated by reference in the Base Prospectus or Prospectus Supplement), in light of the circumstances under which they were
made not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the
date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required
to be filed with the Commission. Except for this Agreement, there are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or
(y) will not be filed within the requisite time period. Except for this Agreement, there are no contracts or other documents required
to be described in the Base Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement,
which have not been described or filed as required.
(c) Offering
Materials. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior
to each Closing Date, any offering material in connection with the offering and sale of the Securities other than the Base Prospectus,
the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein and any other
materials permitted by the Securities Act.
(d) Subsidiaries.
All of the direct and indirect subsidiaries of the Company (the “Subsidiaries”) are set forth in the Incorporated
Documents. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions
(collectively, “Liens”), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(e) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of this Agreement or any other agreement entered into between the Company and the Investors, (ii) a material
adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company
and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under this Agreement or the transactions contemplated under the Prospectus Supplement
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened
(“Proceeding”) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to
revoke, limit or curtail such power and authority or qualification.
(f) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Prospectus Supplement and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby
and thereby and under the Prospectus Supplement have been duly authorized by all necessary action on the part of the Company and
no further action is required by the Company, the Company’s Board of Directors (the “Board of Directors”)
or the Company’s stockholders in connection therewith other than in connection with the Required Approvals (as defined below).
This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.
(g) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the transactions contemplated pursuant
to the Prospectus Supplement, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby to which it is a party do not and will not (i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
(h) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of this Agreement and the transactions contemplated
pursuant to the Prospectus Supplement, other than: (i) the filing with the Commission of the Prospectus Supplement, (ii) notice
to the OTCQX (the “Trading Market”) for the quoatation of the Securities for trading thereon in the time and
manner required thereby and (iii) such filings as are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).
(i) Capitalization.
The capitalization of the Company is as set forth in the Incorporated Documents. The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time any Common Stock, including, without limitation, any debt, preferred
stock, rights, options, warrants 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 (“Common Stock Equivalents”) outstanding
as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement and the
transactions contemplated pursuant to the Prospectus Supplement. Except as a result of the purchase and sale of the Securities,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance
and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other
than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.
There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(j) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(k) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there
has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.
Except for the issuance of the Securities contemplated by the Prospectus Supplement or disclosed in the Prospectus Supplement,
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or
exist with respect to the Company or its Subsidiaries or their respective business, prospects, properties, operations, assets
or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this
representation is made.
(l) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement and the transactions
contemplated pursuant to the Prospectus Supplement or the Securities or (ii) could, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer
of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(m) Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with their employees are good. No executive officer, to the knowledge of
the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(n) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or governmental body or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
(o) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
(p) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment
of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which
the Company and the Subsidiaries are in compliance.
(q) Patents
and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the
latest audited financial statements included within the SEC Reports, a notice (written or otherwise) of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant increase in cost.
(s) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and,
to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company
or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock
option plan of the Company.
(t) Sarbanes-Oxley;
Internal Accounting Controls. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of each Closing Date. The Company and the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s
internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting.
(u) Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus
Supplement. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement.
(v) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(w) Registration
Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities
of the Company.
(x) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
(y) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and
the Company fulfilling their obligations or exercising their rights under this Agreement and the transactions contemplated pursuant
to the Prospectus Supplement, including without limitation as a result of the Company’s issuance of the Securities and the
Investors’ ownership of the Securities.
(z) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by this Agreement and the transactions
contemplated pursuant to the Prospectus Supplement, the Company confirms that neither it nor any other Person acting on its behalf
has provided any of the Investors or their agents or counsel with any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms
that the Investors will rely on the foregoing representation in effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the Investors regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading.
(aa) No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable
shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(bb) Solvency.
Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof,
and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect
of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from each Closing Date. The SEC Reports sets forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $10,000 (other than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $10,000 due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.
(cc) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary (i) has made or filed all United States federal and state income and
all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on
such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all
material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim.
(dd) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
(ee) Accountants.
The Company’s accounting firm is set forth in the Incorporated Documents. To the knowledge and belief of the Company, such
accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the year ending December 31,
2015.
(ff) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s
placement agent in connection with the placement of the Securities.
(gg) Office
of Foreign Assets Control. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or
affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”).
(hh) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Investor’s
request.
(ii) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(jj) Money
Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(kk) Certificates.
Any certificate signed by an officer of the Company and delivered to the Placement Agent or to counsel for the Placement
Agent shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth
therein.
(ll) Reliance.
The Company acknowledges that the Placement Agent will rely upon the accuracy and truthfulness of the foregoing representations
and warranties and hereby consents to such reliance.
(nn) FINRA
Affiliations. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the Company.
Section
3. Delivery and Payment. Each Closing shall occur at the offices of the Ellenoff Grossman & Schole LLP, 1345 Avenue
of the Americas, New York, New York 10105 (or at such other place as shall be agreed upon by the Placement Agent and the Company)
(“Placement Agent Counsel”). Subject to the terms and conditions hereof, at each Closing payment of the purchase
price for the Securities sold on such Closing Date shall be made by Federal Funds wire transfer, against delivery of such Securities,
and such Securities shall be registered in such name or names and shall be in such denominations, as the Placement Agent may request
at least one business day before the time of purchase (as defined below).
Deliveries
of the documents with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent Counsel.
All actions taken at a Closing shall be deemed to have occurred simultaneously.
Section
4. Covenants and Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:
(a) Registration
Statement Matters. The Company will advise the Placement Agent promptly after it receives notice thereof of the time when
any amendment to the Registration Statement has been filed or becomes effective or any supplement to any Prospectus Supplement
or any amended Prospectus Supplement has been filed and will furnish the Placement Agent with copies thereof. The Company will
file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of any Prospectus Supplement and for so long
as the delivery of a prospectus is required in connection with the Offering. The Company will advise the Placement Agent, promptly
after it receives notice thereof (i) of any request by the Commission to amend the Registration Statement or to amend or supplement
any Prospectus Supplement or for additional information, and (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment thereto or any order directed at any Incorporated
Document, if any, or any amendment or supplement thereto or any order preventing or suspending the use of the Base Prospectus
or any Prospectus Supplement or any amendment or supplement thereto or any post-effective amendment to the Registration Statement,
of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the institution or threatened
institution of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the
Registration Statement or a Prospectus Supplement or for additional information. The Company shall use its best efforts to prevent
the issuance of any such stop order or prevention or suspension of such use. If the Commission shall enter any such stop
order or order or notice of prevention or suspension at any time, the Company will use its best efforts to obtain the lifting
of such order at the earliest possible moment, or will file a new registration statement and use its best efforts to have such
new registration statement declared effective as soon as practicable. Additionally, the Company agrees that it shall comply
with the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities Act, including with respect
to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) are received in a timely manner by the Commission.
(b) Blue
Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities
for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors
may reasonably request and will make such applications, file such documents, and furnish such information as may be reasonably
required for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided
further that the Company shall not be required to produce any new disclosure document other than a Prospectus Supplement. The
Company will, from time to time, prepare and file such statements, reports and other documents as are or may be required to continue
such qualifications in effect for so long a period as the Placement Agent may reasonably request for distribution of the Securities.
The Company will advise the Placement Agent promptly of the suspension of the qualification or registration of (or any such exemption
relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
(c) Amendments
and Supplements to a Prospectus Supplement and Other Matters. The Company will comply with the Securities Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement, the Incorporated Documents and any Prospectus Supplement. If during the period in which a prospectus
is required by law to be delivered in connection with the distribution of Securities contemplated by the Incorporated Documents
or any Prospectus Supplement (the “Prospectus Delivery Period”), any event shall occur as a result of which,
in the judgment of the Company or in the opinion of the Placement Agent or counsel for the Placement Agent, it becomes necessary
to amend or supplement the Incorporated Documents or any Prospectus Supplement in order to make the statements therein, in the
light of the circumstances under which they were made, as the case may be, not misleading, or if it is necessary at any time to
amend or supplement the Incorporated Documents or any Prospectus Supplement or to file under the Exchange Act any Incorporated
Document to comply with any law, the Company will promptly prepare and file with the Commission, and furnish at its own expense
to the Placement Agent and to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration
Statement, the Incorporated Documents or any Prospectus Supplement that is necessary in order to make the statements in the Incorporated
Documents and any Prospectus Supplement as so amended or supplemented, in the light of the circumstances under which they were
made, as the case may be, not misleading, or so that the Registration Statement, the Incorporated Documents or any Prospectus
Supplement, as so amended or supplemented, will comply with law. Before amending the Registration Statement or supplementing the
Incorporated Documents or any Prospectus Supplement in connection with the Offering, the Company will furnish the Placement Agent
with a copy of such proposed amendment or supplement and will not file any such amendment or supplement to which the Placement
Agent reasonably objects.
(d) Copies
of any Amendments and Supplements to a Prospectus Supplement. The Company will furnish the Placement Agent, without charge,
during the period beginning on the date hereof and ending on the later of the last Closing Date of the Offering, as many copies
of the Incorporated Documents and any Prospectus Supplement and any amendments and supplements thereto (including any Incorporated
Documents, if any) as the Placement Agent may reasonably request.
(e) Free
Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written consent of the Placement Agent,
make any offer relating to the Securities that would constitute an Company Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus” (as defined in Rule 405 of the Securities Act) required to be filed by the Company
with the Commission or retained by the Company under Rule 433 of the Securities Act. In the event that the Placement Agent expressly
consents in writing to any such free writing prospectus (a “Permitted Free Writing Prospectus”), the Company
covenants that it shall (i) treat each Permitted Free Writing Prospectus as an Company Free Writing Prospectus, and (ii) comply
with the requirements of Rule 164 and 433 of the Securities Act applicable to such Permitted Free Writing Prospectus, including
in respect of timely filing with the Commission, legending and record keeping.
(f) Transfer
Agent. The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock.
(g) Earnings
Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any event
not later than 18 months after the last Closing Date, the Company will make generally available to its security holders and to
the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after the last Closing
Date, that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.
(h) Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission
and the Trading Market all reports and documents required to be filed under the Exchange Act within the time periods and in the
manner required by the Exchange Act.
(i) Additional
Documents. The Company will enter into any subscription, purchase or other customary agreements as the Placement Agent
or the Investors deem necessary or appropriate to consummate the Offering, all of which will be in form and substance reasonably
acceptable to the Placement Agent and the Investors. The Company agrees that the Placement Agent may rely upon, and each is a
third party beneficiary of, the representations and warranties, and applicable covenants, set forth in any such purchase, subscription
or other agreement with Investors in the Offering.
(j) No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
(k) Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the
Board of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement
Agent's prior written consent.
Section
5. Conditions of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject
to the accuracy of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as
of the date hereof and as of each Closing Date as though then made, to the timely performance by each of the Company of its covenants
and other obligations hereunder on and as of such dates, and to each of the following additional conditions:
(a) Compliance
with Registration Requirements; No Stop Order; No Objection from the FINRA. Each Prospectus Supplement (in accordance with
Rule 424(b)) and “free writing prospectus” (as defined in Rule 405 of the Securities Act), if any, shall have
been duly filed with the Commission, as appropriate; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission;
no order preventing or suspending the use of any Prospectus Supplement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; no order having the effect of ceasing or suspending the distribution
of the Securities or any other securities of the Company shall have been issued by any securities commission, securities regulatory
authority or stock exchange and no proceedings for that purpose shall have been instituted or shall be pending or, to the knowledge
of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange; all requests for
additional information on the part of the Commission shall have been complied with; and the FINRA shall have raised no objection
to the fairness and reasonableness of the placement terms and arrangements.
(b) Corporate
Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement
and each Prospectus Supplement, and the registration, sale and delivery of the Securities, shall have been completed or resolved
in a manner reasonably satisfactory to the Placement Agent's counsel, and such counsel shall have been furnished with such papers
and information as it may reasonably have requested to enable such counsel to pass upon the matters referred to in this Section 5.
(c) No
Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, in the
Placement Agent's sole judgment after consultation with the Company, there shall not have occurred any Material Adverse Change
or Material Adverse Effect.
(d) Opinion
of Counsel for the Company. The Placement Agent shall have received on each Closing Date the favorable opinion of legal counsel
to the Company, dated as of such Closing Date, including, without limitation, a negative assurance letter, addressed to the Placement
Agent and in form and substance satisfactory to the Placement Agent.
(e) Officers’
Certificate. The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the Placement
Agent shall be satisfied that, the signers of such certificate have reviewed the Registration Statement, the Incorporated Documents,
any Prospectus Supplement, and this Agreement and to the further effect that:
(i) The
representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date;
(ii) No
stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or any Prospectus Supplement
has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge,
threatened under the Securities Act; no order having the effect of ceasing or suspending the distribution of the Securities or
any other securities of the Company has been issued by any securities commission, securities regulatory authority or stock exchange
in the United States and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company,
contemplated by any securities commission, securities regulatory authority or stock exchange in the United States;
(iii) When
the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Incorporated Documents, if any, when such documents became effective or were filed
with the Commission, contained all material information required to be included therein by the Securities Act and the Exchange
Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects conformed
to the requirements of the Securities Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder,
as the case may be, and the Registration Statement and the Incorporated Documents, if any, did not and do not include any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (provided, however, that the preceding representations
and warranties contained in this paragraph (iii) shall not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Placement Agent expressly for use therein) and, since the effective
date of the Registration Statement, there has occurred no event required by the Securities Act and the rules and regulations of
the Commission thereunder to be set forth in the Incorporated Documents which has not been so set forth; and
(iv) Subsequent
to the respective dates as of which information is given in the Registration Statement, the Incorporated Documents and any Prospectus
Supplement, there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company and the Subsidiaries
taken as a whole, except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent,
that is material to the Company and the Subsidiaries taken as a whole, incurred by the Company or any Subsidiary, except obligations
incurred in the ordinary course of business; (d) any material change in the capital stock (except changes thereto resulting from
the exercise of outstanding stock options or warrants) or outstanding indebtedness of the Company or any Subsidiary; (e) any dividend
or distribution of any kind declared, paid or made on the capital stock of the Company; or (f) any loss or damage (whether or
not insured) to the property of the Company or any Subsidiary which has been sustained or will have been sustained which has a
Material Adverse Effect.
(f) Stock
Exchange Listing. The Common Stock shall be registered under the Exchange Act and shall be listed or quoted on the Trading
Market, and the Company shall not have taken any action designed to terminate, or likely to have the effect of terminating, the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the Trading
Market, nor shall the Company have received any information suggesting that the Commission or the Trading Market is contemplating
terminating such registration or listing.
(g) Additional
Documents. On or before each Closing Date, the Placement Agent and counsel for the Placement Agent shall have received such
information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale
of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
If
any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated
by the Placement Agent by notice to the Company at any time on or prior to a Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Indemnification
and Contribution) and Section 8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.
Section
6. Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with
the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation:
(i) all expenses incident to the issuance, delivery and qualification of the Securities (including all printing and engraving
costs); (ii) all fees and expenses of the registrar and transfer agent of the Common Stock; (iii) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the Securities; (iv) all fees and expenses of the Company’s
counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection
with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Base Prospectus and each Prospectus Supplement, and all amendments
and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the
Company or the Placement Agent in an amount not to exceed $50,000, in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the state securities
or blue sky laws or the securities laws of any other country, and, if requested by the Placement Agent, preparing and printing
a “Blue Sky Survey,” an “International Blue Sky Survey” or other memorandum, and any supplements
thereto, advising the Placement Agent of such qualifications, registrations and exemptions; (vii) if applicable, the filing fees
incident to the review and approval by the FINRA of the Placement Agent's participation in the offering and distribution of the
Securities; (viii) the fees and expenses associated with including the Securities on the Trading Market; (ix) all costs and expenses
incident to the travel and accommodation of the Company’s and the Placement Agent's employees on the “roadshow,”
if any; and (x) all other fees, costs and expenses referred to in Part II of the Registration Statement.
Section
7. Indemnification and Contribution.
(a)
The Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling the Placement
Agent (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the
Placement Agent, its affiliates and each such controlling person (the Placement Agent, and each such entity or person. an “Indemnified
Person”) from and against any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively,
the “Liabilities”), and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable
fees and expenses of one counsel for all Indemnified Persons, except as otherwise expressly provided herein) (collectively, the
“Expenses”) as they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending
any Actions, whether or not any Indemnified Person is a party thereto, (i) caused by, or arising out of or in connection with,
any untrue statement or alleged untrue statement of a material fact contained in any Incorporated Document or by any omission
or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (other than untrue statements or alleged untrue statements in, or omissions or alleged omissions
from, information relating to an Indemnified Person furnished in writing by or on behalf of such Indemnified Person expressly
for use in the Incorporated Documents) or (ii) otherwise arising out of or in connection with advice or services rendered or to
be rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person's
actions or inactions in connection with any such advice, services or transactions; provided, however, that, in the case
of clause (ii) only, the Company shall not be responsible for any Liabilities or Expenses of any Indemnified Person that have
resulted primarily from such Indemnified Person's (x) gross negligence, bad faith or willful misconduct in connection with any
of the advice, actions, inactions or services referred to above or (y) use of any offering materials or information concerning
the Company in connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the
Company and which use constitutes negligence, bad faith or willful misconduct. The Company also agrees to reimburse each Indemnified
Person for all Expenses as they are incurred in connection with enforcing such Indemnified Person's rights under this Agreement.
(b) Upon
receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which indemnity
may be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that failure
by any Indemnified Person so to notify the Company shall not relieve the Company from any liability which the Company may have
on account of this indemnity or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced
by such failure. The Company shall, if requested by the Placement Agent, assume the defense of any such Action including the employment
of counsel reasonably satisfactory to the Placement Agent, which counsel may also be counsel to the Company. Any Indemnified Person
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense
and employ counsel or (ii) the named parties to any such Action (including any impeded parties) include such Indemnified Person
and the Company, and such Indemnified Person shall have been advised in the reasonable opinion of counsel that there is an actual
conflict of interest that prevents the counsel selected by the Company from representing both the Company (or another client of
such counsel) and any Indemnified Person; provided that the Company shall not in such event be responsible hereunder for the fees
and expenses of more than one firm of separate counsel for all Indemnified Persons in connection with any Action or related Actions,
in addition to any local counsel. The Company shall not be liable for any settlement of any Action effected without its written
consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the
Placement Agent (which shall not be unreasonably withheld), settle, compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened Action in respect of which indemnification or contribution may be sought hereunder
(whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination includes
an unconditional release of each Indemnified Person from all Liabilities arising out of such Action for which indemnification
or contribution may be sought hereunder. The indemnification required hereby shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and
payable.
(c) In
the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the
Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person,
on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding
clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the
one hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection with the matters as to which
such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the
Company contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for
any Liabilities and Expenses in excess of the amount of fees actually received by the Placement Agent pursuant to this Agreement.
For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent on the other
hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as (a) the total value paid or
contemplated to be paid to or received or contemplated to be received by the Company in the transaction or transactions that are
within the scope of this Agreement, whether or not any such transaction is consummated, bears to (b) the fees paid to the Placement
Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the Securities Act, as amended, shall be entitled to contribution from a party who was not guilty of fraudulent
misrepresentation.
(d) The
Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated thereby or any Indemnified Person's actions or inactions in connection with any such
advice, services or transactions except for Liabilities (and related Expenses) of the Company that have resulted primarily from
such Indemnified Person's gross negligence, bad faith or willful misconduct in connection with any such advice, actions, inactions
or services.
(e) The
reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification of this
Agreement and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person's
services under or in connection with, this Agreement.
Section
8. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company or any person controlling the Company, of its officers, and of the Placement Agent set forth
in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, or any of its or their partners, officers or directors or any controlling person, as the
case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.
A successor to a Placement Agent, or to the Company, its directors or officers or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.
Section
9. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed
to the parties hereto as follows:
If
to the Placement Agent to the address set forth above, attn: _______, Facsimile: ___________
With
a copy to:
Ellenoff
Grossman & Schole LLP
1345
Avenue of the Americas
New
York, New York 10105
Facsimile:
(201) 401-4741
Attention:
Robert Charron
If
to the Company:
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Facsimile:
______________________________ |
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Attention: _____________________________ |
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a copy to:
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Facsimile:
______________________________ |
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Attention:
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Any
party hereto may change the address for receipt of communications by giving written notice to the others.
Section
10. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit
of the employees, officers and directors and controlling persons referred to in Section 7 hereof, and to their respective successors,
and personal representative, and no other person will have any right or obligation hereunder.
Section
11. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
Section
12. Governing Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both
this engagement letter and the transactions contemplated hereby shall be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles
thereof. Each of the Placement Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating
to this engagement letter and/or the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court,
County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which
it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction
of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding. Each of the Placement Agent and the Company further agrees to accept and acknowledge service
of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New
York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the
Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process
upon the Company, in any such suit, action or proceeding, and service of process upon the Placement Agent mailed by certified
mail to the Placement Agent’s address shall be deemed in every respect effective service process upon the Placement Agent,
in any such suit, action or proceeding. Notwithstanding any provision of this engagement letter to the contrary, the Company agrees
that neither the Placement Agent nor its affiliates, and the respective officers, directors, employees, agents and representatives
of the Placement Agent, its affiliates and each other person, if any, controlling the Placement Agent or any of its affiliates,
shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with
the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities incurred
by us that are finally judicially determined to have resulted from the bad faith or gross negligence of such individuals or entities.
If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
Section
13. General Provisions.
(a) This
Agreement, together with that certain engagement letter between us dated February 10, 2016, constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. To the extent of any conflict between the engagement letter and this
Agreement, this Agreement shall prevail. This Agreement may be executed in two or more counterparts, each one of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not
be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit. Section headings herein are for the convenience
of the parties only and shall not affect the construction or interpretation of this Agreement.
(b) The
Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent has acted at arms length,
are not agents of, and owe no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only
those duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those
of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Placement
Agent arising from an alleged breach of fiduciary duty in connection with the offering of the Securities
[The
remainder of this page has been intentionally left blank.]
If
the foregoing is in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with
all counterparts hereof, shall become a binding agreement in accordance with its terms.
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Very
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amarantus
bioscience holdings, inc., |
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a
Nevada corporation |
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By:
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Name:
Gerald Commissiong |
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Title:
Chief Executive Officer |
The
foregoing Placement Agency Agreement is hereby confirmed and accepted as of the date first above written.
CHARDAN
CAPITAL MARKETS LLC
23
Exhibit 99.1
Amarantus Announces $3M Capital Infusion
SAN FRANCISCO, CA – February
19, 2016 – Amarantus BioScience Holdings, Inc. (OTCQX:AMBS), a biotechnology company developing products in Regenerative
Medicine, Neurology and Orphan diseases, today announced the closing of a $3M investment from an institutional investor. Under
the terms of the agreement, the investor will be issued $3.3M worth of Series H Convertible Preferred Stock (including 10% original
issue discount) from the Company and five year warrants exercisable for 13,200,000 shares of common stock at $0.40 per share.
It is expected that the net proceeds will be used to repurchase part of the Series H Preferred from the Company’s two largest
institutional investors, for preparations towards the initiation of the Phase 2 clinical study of Engineered Skin Substitute (ESS)
for the treatment of severe burns in collaboration with the US Army, and for general working capital purposes.
Chardan Capital Markets, LLC acted as sole placement
agent for the transaction.
“This much needed capital infusion provides
Amarantus with sufficient runway to judiciously accelerate the execution phase of the Company’s business plan,” said
Gerald E. Commissiong, President & CEO of Amarantus. “Amarantus’ groundbreaking ESS program represents a revolutionary
technology allowing for the growth of full-thickness human skin. We believe this program will dramatically change the practice
of medicine in severe burn care, and is grossly undervalued inside Amarantus. We are evaluating options to unlock the true value
of this revolutionary program to the benefit of the Company and its diverse group of shareholders, and will be communicating with
shareholders in this regard in the near future.”
The securities described above are being offered
pursuant to a shelf registration statement (File No. 333-203845), which was declared effective by the United States Securities
and Exchange Commission ("SEC") on May 22, 2015. This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any
state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction. When filed with the SEC, copies of the prospectus supplement and
the accompanying base prospectus relating to this offering may be obtained at the SEC's website at http://www.sec.gov.
About Amarantus BioScience Holdings, Inc.
Amarantus BioScience Holdings (OTCQX:AMBS) is
a biotechnology company developing treatments and diagnostics for diseases in the areas of Neurology, Regenerative Medicine and
Orphan diseases. The Company has an exclusive worldwide license to intellectual property rights associated with Engineered Skin
Substitute (ESS), an autologous full thickness skin replacement product in development for the treatment of adult severe burns,
currently preparing to enter Phase 2 clinical studies. In parallel, the Company is evaluating human clinical data from previously
conducted studies in pediatric severe burns and Congenital Giant Hairy Nevus to support clinical development expansion into those
areas. ESS has achieved Orphan Drug Designation (ODD) in the area of severe burns, and is seeking ODD status for additional serious
dermatologic indications. AMBS also has development rights to eltoprazine, a small molecule currently in clinical development for
Parkinson's disease levodopa-induced dyskinesia, an orphan disorder, with the potential to expand into adult ADHD and Alzheimer's
aggression. AMBS owns the intellectual property rights to a therapeutic protein known as mesencephalic astrocyte-derived neurotrophic
factor (MANF) and is developing MANF as a treatment for orphan ophthalmic disorders, initially in retinitis pigmentosa (RP) and
retinal artery occlusion (RAO). AMBS also owns the technology platform that led to MANF’s discovery (PhenoGuard™),
and which can be used to identify novel neurotrophic factors.
AMBS' Diagnostics division owns the rights to
MSPrecise®, a proprietary next-generation DNA sequencing-based test for identifying patients with relapsing-remitting
multiple sclerosis at first clinical presentation, has an exclusive worldwide license to the Lymphocyte Proliferation test (LymPro
Test®) for Alzheimer's disease, (developed by Prof. Thomas Arendt, Ph.D., from the University of Leipzig), and owns
intellectual property for the diagnosis of Parkinson's disease (NuroPro).
For further information please visit www.Amarantus.com,
or connect with the Company on Facebook, LinkedIn, Twitter and Google+.
Forward-Looking Statements
Certain statements, other than purely historical
information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results,
and the assumptions upon which those statements are based, are forward-looking statements. These forward-looking statements generally
are identified by the words "believes," "project," "expects," "anticipates," "estimates,"
"intends," "strategy," "plan," "may," "will," "would," "will
be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based
on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially
from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include,
but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates,
competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating
forward-looking statements and undue reliance should not be placed on such statements.
Amarantus Investor and Media Contact:
Ascendant Partners, LLC
Fred Sommer
732-410-9810
fred@ascendantpartnersllc.com
Source: Amarantus BioScience Holdings, Inc.
###
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