As filed with the Securities and
Exchange Commission on June 5, 2017
Registration No. 333-217418
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EyeGate Pharmaceuticals, Inc.
(Exact name of registrant as specified
in its Charter)
|
Delaware
|
|
2834
|
|
98-0443284
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(Primary Standard Industrial
Classification Code Number)
|
|
(I.R.S. Employer
Identification No.)
|
271 Waverley Oaks Road, Suite 108, Waltham,
MA 02452
(781) 788-9043
(Address, including
zip code, and telephone number, including area code, of registrant’s principal executive office)
Stephen From
President and Chief Executive Officer
EyeGate Pharmaceuticals, Inc.
271 Waverley Oaks Road, Suite 108, Waltham, MA 02452
(781) 788-9043
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
|
Stephen D. Brook, Esq.
Robert A. Petitt, Esq.
Burns & Levinson LLP
125 Summer Street
Boston, MA 02110
(617) 345-3000
|
Steven M. Skolnick, Esq.
Lowenstein Sandler LLP
1251 Avenue of the Americas
New York, New York 10020
(212) 262-6700
|
Approximate date of commencement of proposed sale to the
public
: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the
following box.
x
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
¨
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company . See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (check one)
|
Large Accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
x
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 7(a)(2)(B) of the Securities Act .
x
CALCULATION OF REGISTRATION FEE
Title of each Class of Securities
to be Registered
|
|
Proposed Maximum
Aggregate Offering
Price(1)
|
|
|
Amount of
Registration Fee
|
|
|
Common Stock, par value $0.01 per share (2)
|
|
$
|
5,595,704
|
|
|
|
—
|
|
|
Series B Convertible Preferred Stock, par value $0.01 per share (2)
|
|
$
|
1,865,234
|
|
|
|
—
|
|
|
Common Stock issuable upon conversion of Preferred
Stock (2)
|
|
|
—
|
|
|
|
—
|
|
|
Warrants to purchase Common Stock (2)
|
|
$
|
39,063
|
|
|
|
—
|
|
|
Common Stock issuable upon exercise of Warrants (2)
|
|
$
|
9,375,003
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
16,875,004
|
|
|
$
|
1,956
|
(3)
|
|
(1)
|
Estimated solely for the purpose of computing the amount
of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
|
|
(2)
|
Pursuant to Rule 416 under the Securities Act, the securities
being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the
date hereof as a result of stock splits, stock dividends or similar transactions.
|
|
(3)
|
Of this amount, $1,333 was previously paid. Calculated
in accordance with Rule 457(o) of the Securities Act based on an estimate of the proposed maximum aggregate offering price
at the statutory rate of $115.90 per $1,000,000 of securities registered.
|
The Registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to Section 8(a), may determine.
SUBJECT TO COMPLETION,
DATED JUNE 5, 2017
The information in this
preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PROSPECTUS
Up to 2,929,688 Shares of Common
Stock,
Warrants to Purchase up to 3,906,251 Shares of Common Stock and
Up to 1,875 Shares of Series B Convertible Preferred Stock
(976,563 shares of Common Stock underlying
the Series B
Convertible
Preferred Stock)
We are offering up to 2,929,688 shares
of common stock, together with warrants to purchase 3,906,251 shares of common stock (and the shares issuable from time to time
upon exercise of the warrants) at a combined purchase price of $ per share of common stock
and warrant pursuant to this prospectus. The shares and warrants will be separately issued but will be purchased together in this
offering. Each warrant will have an exercise price of $ per share, will be exercisable upon
issuance and will expire five years from the date on which such warrants were issued.
We are also offering to those purchasers,
whose purchase of shares of common stock in this offering would result in the purchaser, together with its affiliates and certain
related parties, beneficially owning more than 4.99% of our outstanding common stock following the consummation of this offering,
the opportunity to purchase, if they so choose, in lieu of the shares of our common stock that would result in ownership in excess
of 4.99%, shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”), convertible at any time
at the holder’s option into a number of shares of common stock equal to $1,000 divided by the combined public offering price
per share of common stock and warrant (the “Conversion Price”), at a public offering price of $1,000 per share of
Series B Preferred Stock. Each share of Series B Preferred Stock is being sold together with the same warrants described above
being sold with each share of common stock.
Our common stock is listed on The NASDAQ
Capital Market under the symbol “EYEG.” On June 2, 2017, the last reported sale price of our common stock on The NASDAQ
Capital Market was $1.92 per share. The public offering price per share and warrant will be determined between us and the placement
agent at the time of pricing, and may be at a discount to the current market price. The warrants and any shares of Series B Preferred
Stock that we issue are not and will not be listed for trading on The NASDAQ Capital Market.
Stephen From, our President and Chief
Executive Officer, has indicated an interest in purchasing up to 55,000 of the shares of our common stock to be sold in this offering
at the public offering price and on the same terms as the other purchasers in this offering. However, because indications of interest
are not binding agreements or commitments to purchase, the placement agent could determine to sell more, fewer or no shares to
Mr. From in this offering, or Mr. From could determine to purchase more, fewer or no shares in this offering.
We are an “emerging growth company”
as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, we have elected to comply with certain reduced
public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications
of Being an Emerging Growth Company.”
You should read this prospectus, together
with additional information described under the headings “Incorporation of Certain Information by Reference” and “Where
You Can Find More Information,” carefully before you invest in our common stock.
Investing in our securities involves
a high degree of risk. See “Risk Factors” beginning on page 11 of this prospectus, and under similar headings
in the other documents that are incorporated by reference into this prospectus, for a discussion of information that should be
considered in connection with an investment in our securities.
Neither the U.S. Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
|
|
|
Per Share
|
|
|
Total
|
|
|
Public offering price
|
|
$
|
|
|
|
$
|
|
|
|
Placement agent fees (1)
|
|
$
|
|
|
|
$
|
|
|
|
Proceeds, before expenses, to us
|
|
$
|
|
|
|
$
|
|
|
|
|
(1)
|
We have
also agreed to pay the placement agent a management fee equal to 0.5% of the gross proceeds
raised in this offering, a non-accountable expense allowance of $25,000 and reimbursement
for legal fees and expenses of the placement agent in the amount of up to $75,000. For
additional information about the compensation paid to the placement agent, see “Plan
of Distribution.”
|
We have retained H.C. Wainwright &
Co., LLC as our exclusive placement agent to use its reasonable best efforts to solicit offers to purchase the securities in this
offering. The placement agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of
any specific number or dollar amount of the securities. Because there is no minimum offering amount required as a condition to
closing in this offering, the actual public offering amount, placement agent fees, and proceeds to us, if any, are not presently
determinable and may be substantially less than the total maximum offering amounts set forth above.
We expect to deliver the shares and
the warrants to purchasers in this offering on or about ,
2017.
Rodman & Renshaw
a unit of H.C. Wainwright & Co.
Prospectus dated ,
2017.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
We have not, and the placement agent
has not, authorized anyone to provide you with information that is different from that contained in this prospectus or in any
free writing prospectus we may authorize to be delivered or made available to you. When you make a decision about whether to invest
in our securities, you should not rely upon any information other than the information contained in or incorporated by reference
in this prospectus or in any free writing prospectus that we may authorize to be delivered or made available to you. Neither the
delivery of this prospectus nor the sale of our securities means that the information contained in this prospectus or any free
writing prospectus is correct after the date of this prospectus or such free writing prospectus. This prospectus is not an offer
to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful.
For investors outside the United States:
We have not, and the placement agent has not, taken any action that would permit this offering or possession or distribution of
this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside
the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating
to, the offering of the securities covered hereby and the distribution of this prospectus outside the United States.
Unless otherwise indicated, information
contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and
market position, market opportunity and market share, is based on information from our own management estimates and research, as
well as from industry and general publications and research, surveys and studies conducted by third parties. Management estimates
are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge,
which we believe to be reasonable. Our management estimates have not been verified by any independent source, and we have not independently
verified any third-party information. In addition, assumptions and estimates of our and our industry’s future performance
are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk
Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates.
See “Special Note Regarding Forward-Looking Statements.”
We further note that the representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus
is a part were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating
risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover,
such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties
and covenants should not be relied on as accurately representing the current state of our affairs.
We have proprietary rights to trademarks
used in this prospectus, including EyeGate®. Solely for our convenience, trademarks and trade names referred to in this prospectus
may appear without the “®” or “™” symbols, but such references are not intended to indicate,
in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or the rights to these trademarks
and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply
a relationship with, or endorsement or sponsorship of us by, any other companies. Each trademark, trade name, or service mark of
any other company appearing in this prospectus is the property of its respective holder.
PROSPECTUS SUMMARY
The following summary highlights
information contained elsewhere in this prospectus. It may not contain all of the information that is important to you. You should
read the entire prospectus carefully, especially the discussion regarding the risks of investing in our securities under the heading
“Risk Factors,” before investing in our securities. All references to “Company” “we,” “our”
or “us” refer solely to EyeGate Pharmaceuticals, Inc. and its subsidiaries and not to the persons who manage us or
sit on our Board of Directors.
Overview
We are a clinical-stage specialty pharmaceutical
company focused on developing and commercializing products using our two proprietary platform technologies, crosslinked thiolated
carboxymethyl hyaluronic acid (“CMHA-S”) and iontophoresis drug delivery system for treating diseases and disorders
of the eye. Our most advanced platform is based on a CMHA-S, a modified form of the natural polymer hyaluronic acid (“HA”),
which is a gel that possesses unique physical and chemical properties such as hydrating and healing when applied to the ocular
surface. We believe that the ability of CMHA-S to adhere longer to the ocular surface, resist degradation and protect the ocular
surface makes it well-suited for treating various ocular surface injuries.
The EyeGate Ocular Bandage Gel (“OBG”)
is an eye drop formulation of a CMHA-S hydrogel capable of coating the ocular surface and designed to resist degradation under
conditions present in the eye. This prolongs residence time of the bandage on the ocular surface, thereby addressing the limitations
of current non-crosslinked hyaluronic acid formulations. Additionally, crosslinking allows the product’s viscosity to be
modified to meet optimum ocular needs. The increased viscosity and non-covalent muco-adhesive interfacial forces improve residence
time in the tear film, thus providing a coating that aids and promotes re-epithelization of the ocular surface via physical protection
without any optical blur.
Hyaluronic acid is a naturally occurring
polymer that is important in many physiological processes, including wound healing, tissue homeostasis, and joint lubrication.
To create this hydrogel, the HA is modified to create CMHA that is then crosslinked together through the thiol groups to CMHA-S.
Some products employ disulfide crosslinking while others utilize a Polyethylene Glycol Diacrylate, or PEGDA, crosslinker. Crosslinking
slows degradation of the HA backbone and provides a matrix for incorporating therapeutic agents. Variations in the number of thiols
per molecule, the molecular weight of the polymer, the concentration of the polymer, the type of crosslinking, and incorporation
of active ingredients, provides a highly versatile platform that can be tailored to a specific application and formulated as eye
drops, gels, or films.
Our first CMHA-S-based product candidate,
the EyeGate OBG, is a topically applied 0.75% CHMA-S eye drop formulation that has completed its first-in-man clinical trial. Preclinical
studies suggest that the specific CMHA-S chemical modification comprising the EyeGate OBG creates a favorable set of attributes,
including prolonged retention time on the ocular surface, and a smooth continuous clear barrier without blur that can minimize
mechanical lid friction, reduce repeat injury, and mechanically protect the ocular surface, allowing accelerated corneal re-epithelization.
It is intended for the management of corneal epithelial defects and to accelerate re-epithelization of the ocular surface following
surgery, infections, and other traumatic and non-traumatic conditions.
EyeGate OBG is being developed pursuant
to a
de novo
510(k) regulatory pathway for devices submitted for marketing clearance to the U.S. Food and Drug Administration,
or FDA. We believe that EyeGate OBG is the first and only eye drop being developed in the U.S. to target acceleration of corneal
re-epithelization. On May 4, 2017, we submitted an Investigational Device Exemption, or IDE, with the FDA. The IDE, if accepted,
will enable us to initiate a second pilot study. We anticipate initiating the second trial in the second quarter of 2017 for which
we expect to report top-line data in late third quarter or early fourth quarter of 2017. Assuming positive results from this trial
and a subsequent pivotal trial we expect to initiate in the second half of 2017 and to report topline data from in the first quarter
of 2018, we plan to file
de novo
510(k) and CE mark applications in the first half of 2018 with potential commercial launch
in late 2018, initially targeting an estimated 160,000 to 240,000 photorefractive keratectomy, or PRK, procedures in the US annually.
The same crosslinked HA in EyeGate OBG
is presently available commercially as a veterinary device indicated for use in the management of superficial noninfectious corneal
ulcers. Manufactured by SentrX Animal Care and sold in the U.S. by Bayer Animal Health as Remend® Corneal Repair, the product
has been used successfully for five years in dogs, cats and horses, without adverse effects. The composition of the veterinary
product is identical to that of the EyeGate OBG. We have obtained a license from BioTime, Inc. for the exclusive worldwide right
to commercialize CMHA-S for ophthalmic treatments in humans. We paid BioTime $50,000, and are required to pay royalties to BioTime
based on revenue relating to any product incorporating the CMHA-S technology. Our license agreement expires when patent protection
for the CMHA-S technology lapses, which is expected to occur in the U.S. in 2027. We do not have the rights to the CMHA-S platform
for animal health or veterinary medicine.
Our first product candidate from our second
platform is EGP-437, a reformulated topically active corticosteroid, dexamethasone phosphate, delivered into the ocular tissues
through our proprietary innovative iontophoresis drug delivery system, the EyeGate® II Delivery System. The EyeGate® II
Delivery System features a compact and easy-to-use device that we believe has the potential to deliver drugs non-invasively and
quickly into the ocular tissues through the use of iontophoresis, which can accelerate the onset of action, dramatically reduce
dosing frequency compared to regular eye drops, and sustain the duration of therapeutic effect. Iontophoresis employs the use of
a low electrical current that promotes the migration of a charged drug substance across biological membranes. The EyeGate®
II Delivery System is easy-to-use, taking only a few minutes to deliver medication. More than 2,400 treatments have been administered
to date using our EyeGate® II Delivery System in clinical trials. EGP-437 is currently in clinical development for the treatment
of various inflammatory conditions of the eye. Current programs include the treatment of ocular inflammation and pain in post-surgical
cataract patients, with a planned Phase 2b trial expected to commence in the second quarter of 2017 and the treatment of uveitis,
a debilitating form of intraocular inflammation of the anterior portion of the uvea, such as the iris and/or ciliary body, with
a Phase 3 trial currently enrolling. We expect to report top-line data from the cataract surgery trial by the end of 2017, and
for the uveitis trial in the first quarter of 2018.
EGP-437 is being developed pursuant to
a new drug application, or NDA, under the Section 505(b)(2) pathway, which enables an applicant to rely, in part, on the FDA’s
findings of safety and efficacy for an existing product, or published literature, in support of its NDA. In the case of EGP-437,
the existing reference product is dexamethasone eye drops. Based on guidance provided by the FDA, we believe that if the planned
confirmatory Phase 3 trial of EGP-437 in anterior uveitis meets non-inferiority criteria, the results of that trial, along with
data from our previously completed Phase 3 trial in anterior uveitis, will be sufficient to support a NDA filing in the first half
of 2018. We also believe, based on guidance provided by the FDA, that the design of the ongoing confirmatory Phase 3 anterior uveitis
trial is acceptable and that the nonclinical work completed to date is sufficient to support a NDA filing.
Medical products containing a combination
of new drugs, biological products, or medical devices may be regulated as “combination products” in the U.S. A combination
product generally is defined as a product comprised of components from two or more regulatory categories, such as drug/device,
device/biologic, or drug/biologic. Each component of a combination product is subject to the requirements established by the FDA
for that type of component, whether a new drug, biologic, or device. In order to facilitate premarket review of combination products,
the FDA designates one of its centers to have primary jurisdiction for the premarket review and regulation of both components.
We expect that the Center for Drug Evaluation and Research will have primary jurisdiction over our EGP-437 combination product.
The determination whether a product is a combination product or two separate products is made by the FDA on a case-by-case basis.
We have had discussions with the FDA about the status of our EGP-437 combination product as a combination product and we have been
advised that the FDA considers our product a combination drug/device.
We have entered into two exclusive global
license agreements with subsidiaries of Valeant Pharmaceuticals International, Inc. (“Valeant”), through which we have
granted Valeant exclusive, worldwide commercial and manufacturing rights to the combination of our EyeGate® II Delivery System
and our EGP-437 product in the fields of uveitis and ocular iontophoretic treatment for post-operative ocular inflammation and
pain in ocular surgery patients, as well as a right of last negotiation to license the combination product for other indications.
We are responsible for the clinical development of the product in the U.S. for the indications licensed, together with the costs
associated therewith. Valeant has the right to develop the product in the fields outside of the U.S. and has agreed to fund 100%
of any costs associated therewith.
Ophthalmic Market Opportunity
Ophthalmology is a specialty market with
commercial and regulatory dynamics that we believe make it possible for a small or medium sized company like us to develop and
commercialize products on our own. We believe that the specialists in the U.S. who treat ocular diseases are sufficiently concentrated
that we could effectively promote our products with a specialty sales and marketing group. We believe we can commercialize EyeGate
OBG on our own given our existing partnership for the EGP-437 combination product in the ocular iontophoretic development.
Clinical Pipeline
Current Targeted Indications
Large Corneal Epithelial Defects
EyeGate OBG is initially targeting the
accelerated re-epithelization of large corneal epithelial defects resulting from PRK.
PRK is an efficacious alternative to patients
seeking surgical correction of refractive errors who are not suitable candidates for laser in situ keratomileusis (“LASIK”)
due to inadequate corneal thickness, larger pupil size, history of keratoconjunctivitis sicca (“KCS”), or anterior
basement membrane disease. PRK involves controlled mechanical removal of corneal epithelium with subsequent excimer laser photoablation
of the underlying Bowman’s layer and anterior stroma, including the subepithelial nerve plexus.
The military prefers PRK as a refractive
surgery due to the stability of the PRK incision and the absence of risk for flap dislocation during military active duty. Although
this procedure yields desirable visual acuity results, common complications of the procedure include post-operative pain secondary
to the epithelial defects, risk of corneal infection prior to re-epithelization of the large epithelial defect, corneal haze formation,
decreased contrast sensitivity, and slower visual recovery.
Per our discussion with the FDA at the
pre-submission meeting that occurred in the fourth quarter of 2016, we also plan on designing and initiating trials during the
second half of 2017 that will broaden the indications for use of OBG beyond PRK, including ocular burns, microabrasions, superficial
punctate keratitis and other conditions. The designs will be based on size of defect and not a specific underlying cause or indication.
Market opportunity
Large corneal epithelial defects can result
from various etiologies such as ocular trauma, surgery, ocular surface disorders, systemic diseases, and epithelial injury due
to exposure. We believe EyeGate OBG has the potential to treat a wide variety of ocular diseases and disorders that result from
corneal epitheliopathy, and based on statistics from the National Eye Institute of the National Institutes of Health, the Centers
for Disease Control, the American Academy of Ophthalmology and Market Scope, we believe such diseases and disorders potentially
account for over 75,000,000 patients in the U.S. These conditions range from acute injury to chronic diseases and we believe EyeGate
OBG can potentially help restore vision to these patients faster and provide better visual outcomes by accelerating corneal re-epithelization.
The daily frequency for the EyeGate OBG treatments needed to treat the corneal epithelial conditions will most likely vary based
on the severity, cause and chronicity of the underlying pathology. They may vary from 2-3 times a day to as frequent as 8 times
during an acute and very painful episode. For patients who have undergone a PRK procedure, we believe the medical need to treat
the subacute condition is quite high. Based on data from the American Academy of Ophthalmology, we estimate that the annual prevalence
in the U.S. of patients who have had a PRK procedure is between 160,000 and 240,000. If approved, we believe EyeGate OBG is well
positioned to capture a large market share to treat patients who have had a PRK procedure because it will be the first and only
eye drop in the U.S. targeting the acceleration of re-epithelization claim. We also plan on designing and initiating clinical trials
during the second half of 2017 that will broaden the indications for use of OBG beyond PRK, including ocular burns, microabrasions,
superficial punctate keratitis and other conditions.
Clinical Trial Results
In January 2017, we reported topline results
from the first-in-human pilot trial of EyeGate OBG, the acceleration of re-epithelialization of large corneal epithelial defects
in patients having undergone PRK. The prospective, randomized, controlled study enrolled 39 subjects undergoing bilateral PRK surgery
and aimed to assess the safety and performance of EyeGate OBG on its own or combined with a Bandage Contact Lens (“BCL”)
compared to the current standard of care, artificial tears and BCL. The primary endpoint of the study was complete wound closure
by Day 3.
The enrolled subjects were randomized into
one of three study groups, with subjects receiving the same treatment in both eyes:
|
•
|
Patients in arm 1 (n=12)
received EyeGate Ocular Bandage Gel four times daily (QID) for two weeks after surgery.
|
|
|
•
|
Arm 2 (n=14) was comprised
of EyeGate Ocular Bandage Gel QID for two weeks after surgery in combination with a BCL.
|
|
|
•
|
Arm 3 (n=13) was comprised
of artificial tears administered four times daily and BCL.
|
The study
demonstrated safety and tolerability of EyeGate OBG, with encouraging potential efficacy. 83.3% of the subjects in Arm 1 (EyeGate
OBG alone) achieved complete wound closure by Day 3, compared to 53.8% of patients that received the standard of care. Also, on
Day 3, the average wound surface area was 94.4% smaller for the OBG arm versus the standard or care arm or 0.02mm
2
vs
0.37mm
2
respectively. Additionally, the average wound surface area on Day 1 (24 hours post-surgery) was 18.5 mm
2
for patients in the EyeGate OBG alone arm compared to 39.5mm
2
in the BCL arm, a 53.3% improvement.
Based
on these positive results, EyeGate plans to continue development with a double-masked, controlled trial evaluating EyeGate OBG
monotherapy against BCL in the second quarter of 2017.
|
|
|
# Subjects
|
|
|
Closed Wound: Day 3
|
|
|
Surface Area (mm
2
)
|
|
|
|
|
per arm
|
|
|
#
|
|
|
%
|
|
|
Day 1
|
|
|
Day 3
|
|
|
Arm 1: OBG
|
|
|
12
|
|
|
|
10
|
|
|
|
83.3
|
%
|
|
|
18.5
|
|
|
|
0.02
|
|
|
Arm 2: OBG + BCL
|
|
|
14
|
|
|
|
9
|
|
|
|
64.3
|
%
|
|
|
40.7
|
|
|
|
0.10
|
|
|
Arm 3: BCL + AT1
|
|
|
13
|
|
|
|
7
|
|
|
|
53.8
|
%
|
|
|
39.5
|
|
|
|
0.37
|
|
|
Total Subjects Enrolled
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OBG vs BCL: % Superior
|
|
|
|
|
|
|
|
|
|
|
54.8
|
%
|
|
|
53.3
|
%
|
|
|
94.4
|
%
|
EyeGate® II Delivery System and
EGP-437
Delivery of therapeutic agents using ocular
iontophoresis is a potential means of non-invasively achieving higher drug levels rapidly within the eye by promoting the migration
of a charged drug substance across biological membranes with a low electrical current. The EyeGate® II Delivery System applicator
utilizes an inert electrode, which stimulates the electrolysis of water to produce ions (hydroxide or hydronium), which via electrorepulsion,
drive a like-charged drug substance into the ocular tissues. The EyeGate® II Delivery System is a platform technology that
requires customized pharmaceutical formulations to enable delivery efficiency and safety while allowing for potential novel intellectual
property.
Many front of the eye conditions such as
pain and inflammation following cataract surgery and non-infectious anterior uveitis are acute inflammatory conditions. The current
standard of care to treat ocular surface and anterior segment inflammation is patient administered corticosteroids in the form
of eye drops. Topical corticosteroids suffer from a number of drawbacks including poor patient compliance, low ocular bioavailability,
rapid clearance, and steroid-related side effects including elevated intraocular pressure (IOP). We believe that our EGP-437 product
candidate has the potential to address these unmet needs by providing in-office treatments given by the eye care provider thereby
mitigating patient compliance issues and substantially reducing the burden of care. Also, the data from multiple clinical trials
suggests that EGP-437 does not significantly raise IOP, at the time points evaluated during the study period.
The primary route of administration for
drugs treating retinal diseases is through intravitreal injection into the vitreous of the eye. These injections must be given
as frequently as once per month when treating chronic diseases like macular degeneration. Unfortunately, there are known drawbacks
associated with administering intravitreal injections, including safety risks, adverse patient experience and the time and labor
to administer. Data from our Phase 1b/2a proof-of-concept trial in macular edema suggests that iontophoresis can non-invasively
deliver efficacious levels of EGP-437 to the back of the eye and or retina. The non-invasive delivery of EGP-437 demonstrated a
positive response in some macular edema patients in the trial.
Current Targeted Indications
Cataract Surgery
Cataracts are the leading cause of blindness
worldwide, and there are more than 24 million people age 40 and older who have cataracts in the U.S. alone, according to the
Vision
Problems in the U.S.
report from Prevent Blindness. A cataract is a clouding of the lens in the eye that affects vision. Most
cataracts are related to aging and are very common in older people. By age 80, more than half of the U.S. population either have
a cataract or have had cataract surgery. Cataract surgery is the most common surgical procedure in the population aged over 65
years. There are approximately four million cataract surgeries performed per year in the U.S. As the technology of cataract surgery
has progressed, so too, has the increased patient demand for excellent vision and safety after the procedure, but visual rehabilitation
after cataract surgery is sometimes delayed by the inflammatory processes that are induced by phacoemulsification where the eye’s
cloudy lens is emulsified with an ultrasonic hand piece and aspirated from the eye. Inflammation is induced in all cataract surgeries
by the mechanical transmission of energy into the eye, disruption of cell membranes, and the normal healing process. Postoperative
topical corticosteroids are used routinely to reduce inflammation and improve visual outcomes after cataract surgery. Despite their
use, transient corneal edema is one of the major factors that can hinder the improvement of vision in the first days after surgery,
and cystoid macula edema may reduce quality of vision for weeks or months after the procedure. Therefore, reducing inflammation
immediately following the procedure and any potential damage to the corneal endothelium and retina are high priorities for the
ophthalmic surgeon.
Non-Infectious Anterior Uveitis
Uveitis is a general term for inflammation
of the uveal tract and encompasses a wide range of etiologies. It may be idiopathic, associated with systemic diseases or result
from a variety of infectious agents. An annual estimated 17.6% of active uveitis patients experience transient or permanent loss
of vision. Uveitis is responsible for more than 2.8% of cases of blindness in the U.S., making this disorder an important cause
of vision loss and impairment. Non-infectious anterior uveitis is a debilitating form of intraocular inflammation of the anterior
portion of the uvea, such as the iris and/or ciliary body and is the most common form of uveitis. Incidence in the U.S. ranges
from approximately 26.6 to 102 per 100,000 adults annually with recent reports indicating occurrence in all age groups with the
highest incidence in those over age 65. Chronic or recurrent, anterior uveitis may lead to complications such as cataracts, glaucoma,
and macular edema.
Inflammation can be classified as either
acute or chronic. Acute inflammation is the initial response of the body to harmful stimuli and is achieved by the increased movement
of plasma and white blood cells from the blood into the injured tissues, in this case the uvea. Sometimes, the inflammation associated
with anterior uveitis is in response to a real infection. This is known as infectious anterior uveitis. However, anterior uveitis
often occurs for no apparent reason as the result of the immune system malfunctioning and triggering the process of inflammation
even though no infection is present. This is known as non-infectious anterior uveitis. Patients that have anterior uveitis exhibit
a large number of white blood cells in the anterior chamber of the eye. In order to count these cells in the anterior chamber,
the physician uses a slit lamp, an instrument consisting of a high-intensity light source that can be focused to shine a thin sheet
of light into the eye. The treatment objective is to eliminate the inflammation of the uvea which can be confirmed by an anterior
chamber cell count of zero.
Clinical Development
We submitted an IND for EGP-437 to the
FDA in April 2008, under which we have completed seven clinical trials. The first two trials were executed in parallel — a
Phase 1/2 non-infectious anterior uveitis trial and a Phase 2 dry eye trial. These two trials were followed by a Phase 3 dry eye
trial. Subsequently, we completed our first Phase 3 trial for non-infectious anterior uveitis. During the time that we executed
the Phase 3 non-infectious anterior uveitis trial we completed a Phase 2 proof-of-concept cataract surgery trial, with prophylactic
treatment of EGP-437. In December 2016, we completed a Phase 1b/2a dose ranging trial treating inflammation and pain for subjects
that have undergone cataract surgery and in mid-2016 a Phase 1b/2a proof-of-concept macular edema trial, which demonstrated the
ability of the EyeGate® II Delivery System to deliver a drug non-invasively to the back of the eye.
EGP-437: Cataract Surgery
We have completed two trials (Phase 2 prophylactic
and Phase 1b/2a dose-ranging) and in December 2016 reported positive data for our Phase 1b/2a dose-ranging clinical trial for the
treatment of ocular inflammation and pain in post-surgical cataract patients. The design of this trial is based on treating the
patients post-operatively and not prophylactically. The Phase 1b/2a clinical trial was a multi-center, open-label trial enrolling
80 subjects who had undergone unilateral cataract extraction and implantation of a monofocal intra-ocular lens. The primary objective
of this trial was to assess the safety and efficacy of iontophoretic EGP-437 in these patients following surgery. A positive response
was achieved and the 4.5 mA-min iontophoretic dose has been determined as the optimal dose to take forward into a Phase 2 trial,
to be initiated in the second quarter of 2017, with the top-line data expected by year-end.
EGP-437: Anterior Uveitis
We have completed two trials (Phase 1/2
and Phase 3) for anterior uveitis and have demonstrated in the completed Phase 3 non-inferiority study that two iontophoretic treatments
with EGP-437 achieved the same response rate as the positive control for the primary efficacy endpoint, a complete clearing of
anterior chamber cells, by Day 14. This was achieved with a lower incidence of increased IOP, which is characterized as an increase
of 6 mm Hg or more from baseline. We are currently enrolling patients in an ongoing confirmatory Phase 3 trial and expect to report
top-line data in the first quarter of 2018. The FDA has provided guidance that the ongoing confirmatory Phase 3 trial of EGP-437
in anterior uveitis meets non-inferiority criteria, and that data from this trial along with data from our previously completed
Phase 3 trial in anterior uveitis will be sufficient to support a NDA filing. The FDA also communicated that the design of the
ongoing confirmatory Phase 3 anterior uveitis trial is acceptable and that the nonclinical work completed to date is sufficient
to support a NDA filing.
EGP-437: Other Indications
Although we have completed two trials (Phase
2 and Phase 3) for dry eye, at this time we are not anticipating any further development for this indication. We have completed
a Phase 1/2 for macular edema and at this time we are assessing the next steps for this indication.
Our Strategy
Our goal is to become a leading specialty
pharmaceutical company focused on developing and commercializing products for treating diseases and disorders of the eye. The key
elements of this strategy are to:
|
|
•
|
Continue clinical
development of our EyeGate OBG device for the treatment of corneal epithelial defects
. We have just completed our
first-in-human trial enrolling subjects with a 9mm corneal wound, a large corneal epithelial defect, post PRK surgery and released
positive top-line data in the first quarter of 2017. We anticipate initiating a double-masked controlled trial in the second quarter
of 2017 and expect to report top-line data in late third quarter or early fourth quarter of 2017.
|
|
|
•
|
Continue clinical
development of our EGP-437 Combination Product for the treatment of inflammation and pain post cataract surgery
. We
have completed an 80 subject open-label dose ranging trial and plan on initiating a randomized controlled Phase 2b trial in the
second quarter of 2017. We expect to report top-line data for this trial by year-end 2017.
|
|
|
•
|
Continue clinical
development of EGP-437 for the treatment of noninfectious anterior uveitis
. We have begun enrolling patients for
the confirmatory Phase 3 trial evaluating the safety and efficacy of EGP-437 for the treatment of noninfectious anterior uveitis.
Based on our estimates regarding subject enrollment, we expect to report top-line data for this trial in the first quarter of
2018.
|
|
|
•
|
Utilize the EyeGate
iontophoresis expertise to expand our drug delivery platform for the treatment of eye diseases
. Our initial platform,
the EyeGate® II Drug Delivery System, is an in-office treatment performed by an eye care provider. We plan to develop a system
based on iontophoresis that could be applied at home by the patient. This would be ideal for the treatment of certain chronic
ocular diseases, as it could reduce the required frequency of visits to the eye care provider’s office.
|
|
|
•
|
Utilize
the EyeGate CMHA-S polymer platform to expand our drug delivery capabilities for the treatment of anterior segment eye diseases.
This
unique biodegradable polymer platform offers the potential to deliver drugs and molecules to the ocular surface as a delivery
vehicle. OBG stays on the ocular surface for upwards of 90 minutes, which potentially enables this CMHA to enhance drug bioavailability.
Furthermore, the crosslinking enables a sustained release platform. We are undertaking research to explore expanding the utility
of this polymer in ophthalmology.
|
|
|
•
|
Pursue other strategic
collaborations.
We plan to evaluate opportunities to enter into collaborations that may contribute to our ability
to advance our drug delivery platforms and product candidates and to progress concurrently a range of discovery and development
programs. We also plan to evaluate opportunities to in-license or acquire the rights to other products, product candidates or
technologies for the treatment of eye diseases.
|
Corporate Information
Our principal executive offices are located
at 271 Waverley Oaks Road, Suite 108, Waltham, MA 02452, and our telephone number is (781) 788-9043. Our website address is
www.eyegatepharma.com.
Our website and the information contained in, or accessible through, our website will not be deemed to be incorporated by reference
into this prospectus and does not constitute part of this prospectus. You should not rely on any such information in making your
decision whether to purchase our securities.
Implications of Being an Emerging Growth
Company
As a company with less than $1.07 billion
in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our
Business Startups Act, or JOBS Act, enacted in April 2012. An “emerging growth company” may take advantage of reduced
reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
|
|
•
|
not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act;
|
|
|
•
|
reduced disclosure obligations regarding executive
compensation in our periodic reports, proxy statements and registration statements; and
|
|
|
•
|
exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
We may take advantage of these provisions
until December 31, 2020. However, if certain events occur prior to December 31, 2020, including if we become a “large accelerated
filer,” our annual gross revenues exceed $1.07 billion or we issue more than $1.0 billion of non-convertible debt in any
three-year period, we will cease to be an emerging growth company before such date.
We have elected to take advantage of certain
of the reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings.
As a result, the information that we provide to our stockholders may be different than the information you might receive from other
public reporting companies in which you hold equity interests.
THE OFFERING
|
Securities offered by us
|
|
Up to 2,929,688 shares of our
common stock
Warrants to purchase up to
3,906,251 shares of our common stock
Up to 1,875 shares of Series
B Preferred Stock that are convertible into an aggregate of up to 976,563 shares of common stock, subject to certain adjustments.
|
|
|
|
|
|
Warrants
|
|
The warrants will be exercisable at an initial exercise price
of $ per share. The warrants are exercisable at any
time for a period of five years from the date on which such warrants were issued. This prospectus also relates to the offering
of the shares of common stock issuable upon exercise of the warrants.
|
|
|
|
|
|
Series B Preferred Stock
|
|
Each share of Series B Preferred Stock is convertible at
any time at the holder’s option into a number of shares of common stock equal to $1,000 divided by the Conversion Price.
Notwithstanding the foregoing, we shall not effect any conversion of Series B Preferred Stock, to the extent that, after giving
effect to an attempted conversion, the holder of shares of Series B Preferred Stock (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
a number of shares of our common stock in excess of 4.99% of the shares of our common stock then outstanding after giving
effect to such exercise. For additional information, see “Description of Our Capital Stock—Series B Convertible
Preferred Stock” on page 22 of this prospectus.
|
|
|
|
|
|
Common Stock outstanding after this offering
|
|
14,844,362 shares, assuming that we sell all securities offered
pursuant to this prospectus and assuming conversion of all shares of Series B Preferred Stock but no exercise of the warrants
issued in the offering.
|
|
|
|
|
|
Price per share of common stock and warrant
|
|
$
|
|
|
|
|
|
Price per share of Series B Preferred
Stock and _____ warrants
|
|
$1,000
|
|
|
|
|
|
Use of proceeds
|
|
We intend to use the net proceeds from this offering to support
our operations, including for clinical trials, for working capital and for other general corporate purposes, which will include
the pursuit of our other research and development efforts and could also include the acquisition or in-license of other products,
product candidates or technologies candidates or technologies. See “Use of Proceeds” on page 18.
|
|
|
|
|
|
Risk factors
|
|
Investing in our securities involves a high degree of risk.
See “Risk Factors” beginning on page 11 of this prospectus, and under similar headings in the other documents
that are incorporated by reference into this prospectus, for a discussion of information that should be considered in connection
with an investment in our securities.
|
|
|
|
|
|
NASDAQ Capital Market symbol
|
|
EYEG. We do not plan on applying to list the warrants
or the Series B Preferred Stock on NASDAQ, any national securities exchange or any other nationally recognized trading system.
Without an active trading market, the liquidity of the warrants and Series B Preferred Stock will be limited.
|
|
Insider Participation
|
|
Stephen From, our President and Chief Executive
Officer, has indicated an interest in purchasing up to 55,000 of the shares of our common stock to be sold in this offering
at the public offering price and on the same terms as the other purchasers in this offering. However, because indications
of interest are not binding agreements or commitments to purchase, the placement agent could determine to sell more, fewer
or no shares to Mr. From in this offering, or Mr. From could determine to purchase more, fewer or no shares in this offering.
|
The number of shares of our common
stock to be outstanding after this offering is based on 10,938,111 shares of our common stock outstanding as of June 2, 2017 and
assumes that the shares of Series B Preferred Stock sold in the offering have been converted, but does not include, as of such
date:
|
|
·
|
1,490,755
shares of common stock issuable upon exercise of options outstanding under our 2005 Equity
Incentive Plan and 2014 Equity Incentive Plan, at a weighted-average exercise price of
approximately $2.92 per share;
|
|
|
·
|
2,852,736 shares of
our common stock issuable upon the exercise of outstanding warrants to purchase shares of our common stock with a weighted-average
exercise price of $7.45 per share;
|
|
|
·
|
287,961
shares of common stock reserved for future issuance under our 2014 Equity Incentive Plan;
|
|
|
·
|
70,567
shares of common stock reserved under our 2014 Employee Stock Purchase Plan; and
|
|
|
·
|
3,906,251
shares of common stock issuable upon the exercise of warrants to be issued to investors
in this offering at an exercise price of $
per share.
|
RISK FACTORS
Investing in our securities involves a
high degree of risk. You should carefully consider the risks and uncertainties and all other information contained in or incorporated
by reference in this prospectus, including the risks and uncertainties discussed under “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2016. All of these risk factors are incorporated by reference herein in their
entirety. Our business, financial condition or results of operations could be materially adversely affected by the materialization
of any of these risks. The trading price of our securities could decline due to the materialization of any of these risks, and
you may lose all or part of your investment. This prospectus and the documents incorporated herein by reference also contain forward-looking
statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks described herein and in the documents incorporated herein by reference.
We have broad discretion to determine
how to use the proceeds raised in this offering, and we may not use the proceeds effectively.
Our management will have broad discretion
over the use of proceeds from this offering, and we could spend the proceeds from this offering in ways with which you may not
agree or that do not yield a favorable return. We intend to use the net proceeds from this offering for clinical trials, for working
capital and for other general corporate purposes, which will include the pursuit of our other research and development efforts
and could also include the acquisition or in-license of other products, product candidates or technologies. If we do not invest
or apply the proceeds of this offering in ways that improve our operating results, we may fail to achieve expected financial results,
which could cause our stock price to decline.
You will experience immediate and
substantial dilution when you purchase shares in this offering.
You
will incur immediate and substantial dilution as a result of this offering. After giving effect to the assumed sale by us
of 2,929,688 shares of our common stock in this offering at an assumed public offering price of $1.92 per share of common
stock and warrant, the last reported sale price of our common stock on The NASDAQ Capital Market on June 2, 2017, assuming
conversion of all 1,875 shares of Series B Preferred Stock into 976,563 shares of common stock, and after deducting
the placement agent fees and estimated offering expenses payable by us, investors in this offering will suffer an
immediate dilution of $1.27 per share.
If we issue additional
common stock, or securities convertible into or exchangeable or exercisable for common stock, our stockholders, including investors
who purchase shares of common stock in this offering, may experience additional dilution, and any such issuances may result in
downward pressure on the price of our common stock. We may not be able to sell shares or other securities in any other offering
at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing
shares or other securities in the future could have rights superior to existing stockholders. See “Dilution” on page 19
of this prospectus for a more detailed discussion of the dilution you will incur in connection with this offering.
You will
experience immediate and substantial dilution in the net tangible book value per share of the Series B Preferred Stock you purchase.
Since the price
per share of our Series B Preferred Stock being offered is substantially higher than the net tangible book per share of our underlying
common stock, you will suffer substantial dilution in the net tangible book value of the shares that you purchase in this offering.
Based on an assumed combined public offering price of $1.92 per share of common stock and warrant (the last reported sale price
of our common stock on The NASDAQ Capital Market on June 2, 2017), if you purchase Series B Preferred Stock in this offering,
you will suffer immediate and substantial dilution of $1.27 per share in the net tangible book value of the shares of common stock
underlying the Series B Preferred Stock. See the section entitled “Dilution” below for a more detailed discussion
of the dilution you will incur if you purchase Series B Preferred Stock in this offering.
The issuance of additional equity
securities may negatively impact the trading price of our common stock.
We have issued equity securities in the
past, will issue equity securities in this offering and expect to continue to issue equity securities to finance our activities
in the future. In addition, outstanding options and warrants to purchase our common stock may be exercised and additional options
and warrants may be issued, resulting in the issuance of additional shares of common stock. The issuance by us of additional equity
securities, including the shares of common stock issuable upon exercise of the warrants issued by us in this offering, would result
in dilution to our stockholders, and even the perception that such an issuance may occur could have a negative impact on the trading
price of our common stock.
There is
no public market for the Series B preferred stock or the warrants to purchase shares of our common stock being offered by us in
this offering.
There is no established
public trading market for the Series B preferred stock or the warrants being offered in this offering, and we do not expect a
market to develop. In addition, we do not intend to apply to list the Series B preferred stock or the warrants on any national
securities exchange or other nationally recognized trading system, including The NASDAQ Capital Market. Without an active market,
the liquidity of the Series B preferred stock and the warrants will be limited.
The
warrants are speculative in nature.
The
warrants do not confer any rights of common stock ownership on its holders, such as voting rights or the right to receive dividends,
but rather merely represent the right to acquire shares of common stock at a fixed price for a limited period of time. Specifically,
commencing on the date of issuance, holders of the warrants may exercise their right to acquire the common stock and pay an exercise
price of $ per share, subject to certain adjustments, prior to five years from the date on which
such warrants were issued, after which date any unexercised warrants will expire and have no further value. Moreover, following
this offering, the market value of the warrants, if any, is uncertain and there can be no assurance that the market value of the
warrants will equal or exceed their imputed offering price. The warrants will not be listed or quoted for trading on any market
or exchange. There can be no assurance that the market price of the common stock will ever equal or exceed the exercise price
of the warrants, and consequently, whether it will ever be profitable for holders of the warrants to exercise the warrants.
A substantial
number of shares of our common stock may be sold in this offering, which could cause the price of our common stock to decline.
In this offering,
we will sell up to 2,929,688 shares of common stock and shares of Series B Preferred Stock convertible into up to 976,563 shares
of common stock, collectively representing approximately 35.7% of our outstanding common stock as of June 2, 2017. This sale and
any future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales
may occur, could adversely affect the price of our common stock. We cannot predict the effect, if any, that market sales of those
shares of common stock or the availability of those shares of common stock for sale will have on the market price of our common
stock.
A significant
number of additional shares of our common stock may be issued upon the conversion of existing securities, including the Series
B Preferred Stock, which issuances would substantially dilute existing stockholders and may depress the market price of our common
stock.
As of June 2,
2017, there were 10,938,111 shares of common stock outstanding. In addition, 976,563 shares of common stock will be issuable upon
conversion of our Series B Preferred Stock. The issuance of any such shares of common stock would substantially dilute the proportionate
ownership and voting power of existing security holders, and their issuance, or the possibility of their issuance, may depress
the market price of our common stock.
Upon conversion
of the Series B Preferred Stock, holders may receive less valuable consideration than expected because the value of our common
stock may decline after such holders exercise their conversion right but before we settle our conversion obligation.
Under the Series
B Preferred Stock, a converting holder will be exposed to fluctuations in the value of our common stock during the period from
the date such holder surrenders shares of Series B Preferred Stock for conversion until the date we settle our conversion obligation.
Upon conversion, we will be required to deliver the shares of our common stock, together with a cash payment for any fractional
share (if so elected by the Company), on the third business day following the relevant conversion date. Accordingly, if the price
of our common stock decreases during this period, the value of the shares of common stock that you receive will be adversely affected
and would be less than the conversion value of the Series B Preferred Stock on the conversion date.
We may
issue additional series of preferred stock that rank senior or equally to the Series B Preferred Stock as to dividend payments
and liquidation preference.
Neither our restated
certificate of incorporation nor the Certificate of Designation for the Series B Preferred Stock prohibits us from issuing additional
series of preferred stock that would rank senior or equally to the Series B Preferred Stock as to dividend payments and liquidation
preference. Our restated certificate of incorporation provides that we have the authority to issue up to 10,000,000 shares of
preferred stock. The issuances of other series of preferred stock could have the effect of reducing the amounts available to the
Series B Preferred Stock in the event of our liquidation, winding-up or dissolution. It may also reduce cash dividend payments
on the Series B Preferred Stock if we do not have sufficient funds to pay dividends on all Series B Preferred Stock outstanding
and outstanding parity preferred stock.
Our Series
B Preferred Stock will rank junior to all our liabilities to third party creditors in the event of a bankruptcy, liquidation or
winding up of our assets.
In the event
of bankruptcy, liquidation or winding up, our assets will be available to pay obligations on our Series B Preferred Stock only
after all our liabilities have been paid. Our Series B Preferred Stock will effectively rank junior to all existing and future
liabilities held by third party creditors. The terms of our Series B Preferred Stock do not restrict our ability to raise additional
capital in the future through the issuance of debt. In the event of bankruptcy, liquidation or winding up, there may not be sufficient
assets remaining, after paying our liabilities, to pay amounts due on any or all of our Series B Preferred Stock then outstanding.
Future
issuances of preferred stock may adversely affect the market price for our common stock.
Additional issuances
and sales of preferred stock, or the perception that such issuances and sales could occur, may cause prevailing market prices
for our common stock to decline and may adversely affect our ability to raise additional capital in the financial markets at times
and prices favorable to us.
We are not in compliance with NASDAQ’s continued
listing requirements. If we are unable to comply with those listing requirements, our common stock could be delisted which would
have a materially adverse effect on the marketability of our comment stock.
On April 12, 2017, we received a notice
from NASDAQ that we were not in compliance with its continued listing requirements set forth in NASDAQ’s Marketplace Rule
5550(b) because (i) we did not have a minimum required stockholders’ equity of $2.5 million, (ii) the market value of our
listed securities (“MVLS”) was less than $35 million, and (iii) we did not have net income from continuing operations
in the latest fiscal year or in two of the last three fiscal years. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have
a period of 180 calendar days, or until October 2, 2017, to regain compliance. To regain compliance, at any time during the 180
calendar day-compliance period, our MVLS must be $35 million or more for a minimum of 10 consecutive business days or we must have
stockholders' equity of at least $2.5 million.
In the event that we do not regain compliance
with these listing requirements prior to the expiration of the compliance period, we will receive written notification that our
securities are subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to NASDAQ’s
appeal procedures. We believe that the receipt of the net proceeds of this offering will bring us back into compliance with these
listing requirements.
A delisting of our common stock would have
a materially adverse effect on the market liquidity of our common stock and, as a result, the market price for our common stock
could become more volatile. Further, a delisting also could make it more difficult for us to raise additional capital.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains, and the documents
incorporated herein by reference contain, forward-looking statements that involve risks and uncertainties. The forward-looking
statements are contained principally in the sections of this prospectus and the documents incorporated herein by reference under
the captions “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and “Business.” In some cases, you can identify forward-looking
statements by terms such as “may,” “might,” “will,” “objective,” “intend,”
“should,” “seek,” “aim,” “think,” “optimistic,” “strategy,”
“goals,” “sees,” “new,” “guidance,” “future,” “continue,”
“drive,” “growth,” “long-term,” “develop,” “possible,” “emerging,”
“opportunity,” “pursue,” “could,” “can,” “would,” “expect,”
“believe,” “anticipate,” “project,” “target,” “design,” “estimate,”
“predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended
to identify forward-looking statements. These statements reflect our current views with respect to future events and are based
on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
|
|
•
|
the timing and success
of preclinical studies and clinical trials conducted by us and our development partners;
|
|
|
•
|
the ability to obtain
and maintain regulatory approval of our product candidates, and the labeling for any approved products;
|
|
|
•
|
the scope, progress,
expansion, and costs of developing and commercializing our product candidates;
|
|
|
•
|
the size and growth
of the potential markets for our product candidates and the ability to serve those markets;
|
|
|
•
|
our expectations regarding
our expenses and revenue, the sufficiency of our cash resources and needs for additional financing;
|
|
|
•
|
the rate and degree
of market acceptance of any of our product candidates;
|
|
|
•
|
our expectations regarding
competition;
|
|
|
•
|
our anticipated growth
strategies;
|
|
|
•
|
our ability to attract
or retain key personnel;
|
|
|
•
|
our ability to establish
and maintain development partnerships;
|
|
|
•
|
our expectations regarding
federal, state and foreign regulatory requirements;
|
|
|
•
|
regulatory developments
in the U.S. and foreign countries;
|
|
|
•
|
our ability to obtain
and maintain intellectual property protection for our product candidates;
|
|
|
•
|
the anticipated trends
and challenges in our business and the market in which we operate; and
|
|
|
•
|
our use of proceeds
from this offering.
|
Any forward-looking statement made by us
in this prospectus speaks only as of the date on which it is made. Because forward-looking statements are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not
rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking
statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking
statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and
it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not
plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information,
future events, changed circumstances or otherwise.
You should read this prospectus and the
documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus
is a part, completely and with the understanding that our actual future results may be materially different from what we expect.
We qualify all of our forward-looking statements by these cautionary statements.
PRICE RANGE OF COMMON STOCK
Our common stock is listed and has traded
on The NASDAQ Capital Market under the symbol “EYEG” since July 31, 2015. From February 19, 2015, the date our initial
public offering closed, to July 30, 2015, our common stock was quoted on the OTCQB Venture Marketplace (the “OTCQB”)
under the symbol “EYEG”.
The following table sets forth, for the
periods indicated, the range of high and low sales prices of our common stock as reported by The NASDAQ Capital Market since July
31, 2015 and the high and low bid prices of our common stock quoted on the OTCQB prior to such date. OTCQB quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.
|
|
|
High
|
|
|
Low
|
|
|
Fiscal Year Ending December 31, 2017
|
|
|
|
|
|
|
|
|
|
Second quarter (through June 2, 2017)
|
|
$
|
2.53
|
|
|
$
|
1.75
|
|
|
First quarter
|
|
$
|
3.90
|
|
|
$
|
1.42
|
|
|
Fiscal Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
Fourth quarter
|
|
$
|
2.10
|
|
|
$
|
1.11
|
|
|
Third quarter
|
|
$
|
3.00
|
|
|
$
|
1.31
|
|
|
Second quarter
|
|
$
|
4.00
|
|
|
$
|
2.42
|
|
|
First quarter
|
|
$
|
5.10
|
|
|
$
|
1.38
|
|
|
Fiscal Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
5.00
|
|
|
$
|
2.39
|
|
|
Third quarter
|
|
$
|
22.68
|
|
|
$
|
2.78
|
|
|
Second quarter
|
|
$
|
5.09
|
|
|
$
|
3.22
|
|
|
First quarter (from February 19, 2015)
|
|
$
|
6.10
|
|
|
$
|
3.10
|
|
On June 2, 2017, the last reported
sale price of our common stock as reported by The NASDAQ Capital Market was $1.92 per share. As of such date, we had approximately
87 stockholders of record.
DIVIDEND POLICY
We have never declared or paid any cash
dividends on our capital stock. We currently intend to retain future earnings, if any, and all currently available funds for use
in the operation of our business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination
related to our dividend policy will be made at the discretion of our Board of Directors after considering our financial condition,
results of operations, capital requirements, business prospects and other factors the Board of Directors deems relevant, and subject
to the restrictions contained in our current or future financing instruments.
USE OF PROCEEDS
We estimate the
net proceeds from this offering will be approximately $6.5 million, after deducting placement agent fees and expenses and our
estimated offering expenses, and based on the assumed combined public offering price of $1.92 per share of common stock and
warrant (the last reported sale price of our common stock on the NASDAQ Capital Market on June 2, 2017) and excluding the proceeds,
if any, from the exercise of the warrants issued pursuant to this offering.
A $0.25 increase
(decrease) in the assumed combined public offering price of $1.92 per share of common stock and warrant would increase (decrease)
the net proceeds to us from this offering by approximately $0.9 million, assuming that the number of shares offered by us, as
set forth on the cover page of this prospectus, remains the same and after deducting the estimated placement agent fees and expenses
and estimated offering expenses payable by us.
Similarly, a
one million share increase (decrease) in the number of shares of common stock and in the number of warrants offered by us, as
set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us by $1.8 million, assuming the
assumed combined public offering price of $1.92 per share of common stock and warrant remains the same, and after deducting estimated
placement agent fees and expenses and estimated offering expenses payable by us.
We intend to use
the net proceeds from this offering, together with other available funds, to support our operations, including for clinical trials,
for working capital and for other general corporate purposes, which will include the pursuit of our other research and development
efforts and could also include the acquisition or in-license of other products, product candidates or technologies, though no
such acquisition or in-license is current contemplated.
We have not yet determined the amount
of net proceeds to be used specifically for any of the foregoing purposes
.
Pending use of the proceeds as described
above, we intend to invest the net proceeds of this offering in short-term, interest-bearing, investment-grade securities or certificates
of deposit.
The amounts and timing of our actual expenditures
will depend on numerous factors, including the progress of our clinical trials, as well as the amount of cash used in our operations.
We may find it necessary or advisable to use the net proceeds for other purposes, and we will have broad discretion in the application
of the net proceeds and investors will be relying on the judgment of our management regarding the application of the net proceeds
from this offering.
Based upon our historical and anticipated
future growth and our financial needs, we may engage in additional financings of a character and amount that we determine as the
need arises. We may raise additional capital through additional public or private financings, the incurrence of debt and other
available sources.
DILUTION
If you purchase our common stock, Series
B Preferred Stock, or both, in this offering, assuming the conversion of the Series B Preferred Stock into shares of our common
stock, you will experience dilution to the extent of the difference between the public offering price per share in this offering
and our as adjusted net tangible book value per share immediately after this offering. Net tangible book value (deficit) per share
is equal to the amount of our total tangible assets, less total liabilities, divided by the number of outstanding shares of our
common stock. As of March 31, 2017, our net tangible book value was $3,166,351, or approximately $0.29 per share.
After giving effect to the sale of
2,929,688 shares of common stock by us at an assumed combined public offering price of $1.92 per share of common stock and warrant
(the last reported sale price of our common stock on the NASDAQ Capital Market on June 2, 2017), assuming that all 1,875 shares
of Series B Preferred Stock are converted into shares of common stock and after deducting estimated placement agent fees and expenses
and estimated offering expenses, our as adjusted net tangible book value as of March 31, 2017 would have been approximately $9.7
million, or $0.65 per share of common stock, which excludes the warrants to purchase 3,906,251 shares of our common stock to be
issued to investors in this offering. This represents an immediate increase in net tangible book value of $0.36 per share of common
stock to existing stockholders and immediate dilution of $1.27 per share of common stock to investors purchasing our common stock
in this offering at the assumed public offering price. The following table illustrates this dilution on a per share basis:
|
Assumed public offering price per
share of common stock and warrant
|
|
|
|
|
|
$
|
1.92
|
|
|
Net tangible book value per share as of March 31, 2017
|
|
$
|
0.29
|
|
|
|
|
|
|
Increase in net tangible book value per share after
giving effect to this offering
|
|
$
|
0.36
|
|
|
|
|
|
|
As adjusted net tangible book value per share
after giving effect to this offering
|
|
|
|
|
|
$
|
0.65
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
$
|
1.27
|
|
Each $0.25 increase
(decrease) in the assumed public offering price of $1.92 per share of common stock and warrant would increase (decrease) the as
adjusted net tangible book value by $0.06 per share of common stock and the dilution to new investors by $0.19 per share, assuming
that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting
the estimated placement agent fees and expenses and estimated offering expenses payable by us.
We may also increase
or decrease the number of shares we are offering. An increase of 1,000,000 shares in the number of shares of common stock
and the number of warrants offered by us, as set forth on the cover page of this prospectus, would increase our as adjusted
net tangible book value by approximately $1.8 million, or approximately $0.07 per share of common stock, and decrease the dilution
per share to investors in this offering by approximately $0.07 per share, assuming that the assumed public offering price per
share of common stock and warrant remains the same, and after deducting the estimated placement agent fees and expenses and estimated
offering expenses payable by us. Similarly, a decrease of 1,000,000 shares in the number of shares of common stock and warrants offered
by us, as set forth on the cover page of this prospectus, would decrease our as adjusted net tangible book value by approximately
$1.8 million, or approximately $0.08 per share, and increase the dilution per share to investors in this offering by approximately
$0.08 per share, assuming that the assumed public offering price per share of common stock and warrant remains the same, and after
deducting the estimated placement agent fees and expenses and estimated offering expenses payable by us. The information discussed
above is illustrative only and will adjust based on the actual public offering price, the actual number of shares of common stock,
Series B Preferred Stock and warrants that we offer in this offering, and other terms of this offering determined at pricing.
The above discussion and table do not take
into account further dilution to investors purchasing our common stock in this offering that could occur upon the exercise of outstanding
options and warrants having a per share exercise price less than the public offering price per share in this offering. To the extent
that outstanding options or warrants outstanding as of March 31, 2017, are exercised or other shares are issued, investors purchasing
our common stock in this offering will experience further dilution. In addition, we may choose to raise additional capital due
to market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating
plans. To the extent that additional capital is raised through the sale of our common stock, including through the sale of securities
convertible into or exchangeable or exercisable for common stock, the issuance of these securities could result in further dilution
to our stockholders, including investors purchasing our common stock in this offering.
The table and discussion above are
based on 10,878,116 shares of our common stock outstanding as of March 31, 2017, and assumes that the shares of Series B Preferred
Stock sold in the offering have been converted, but does not include, as of such date:
|
|
·
|
1,489,934 shares of
common stock issuable upon exercise of options outstanding under our 2005 Equity Incentive Plan and 2014 Equity Incentive Plan,
at a weighted-average exercise price of approximately $2.87 per share;
|
|
|
·
|
2,852,736 shares of
our common stock issuable upon the exercise of outstanding warrants to purchase shares of our common stock with a weighted-average
exercise price of $7.45 per share;
|
|
|
·
|
350,961
shares of common stock reserved for future issuance under our 2014 Equity Incentive Plan;
|
|
|
·
|
70,567
shares of common stock reserved under our 2014 Employee Stock Purchase Plan; and
|
|
|
·
|
3,906,251
shares of common stock issuable upon the exercise of warrants to be issued to investors
in this offering at an exercise price of $ per
share.
|
DESCRIPTION OF OUR CAPITAL STOCK
General
Our authorized capital stock consists of
100,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share.
The following description summarizes some of the terms of our restated certificate of incorporation and amended and restated bylaws,
but does not purport to be complete and is qualified in its entirety by the provisions of our restated certificate of incorporation
and amended and restated bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus
is a part.
Common Stock
Outstanding Shares.
There
were 10,938,111 shares of our common stock outstanding as of June 2, 2017. As of June 2, 2017, there were 1,490,755 shares of
common stock subject to outstanding options and 2,852,736 shares of common stock subject to outstanding warrants.
Voting Rights.
Each holder
of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders,
including the election of directors. Except as otherwise provided by law or our restated certificate of incorporation or bylaws,
all matters other than the election of directors submitted to the stockholders at any meeting shall be decided by the affirmative
vote of a majority of the outstanding shares of common stock present in person or represented by proxy at the meeting and entitled
to vote thereon. Directors are elected by a plurality of the votes cast at the meeting. Our restated certificate of incorporation
and amended and restated bylaws do not provide for cumulative voting rights. Because of this, the holders of a majority of the
shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they
should so choose.
Dividends.
Subject to
preferences that may be applicable to any then outstanding preferred stock, the holders of our outstanding shares of common stock
are entitled to receive dividends, if any, as may be declared from time to time by our Board of Directors out of legally available
funds. At present, we have no plans to issue dividends. See the section titled “Dividend Policy”.
Liquidation.
In the event
of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally
available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction
of any liquidation preference granted to the holders of any outstanding shares of preferred stock.
Other Rights and Preferences.
Holders
of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be
adversely affected by, the rights of the holders of shares of our Series A Preferred Stock and any series of our preferred stock
that we may designate and issue in the future.
Fully Paid and Nonassessable.
All
of our outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid
and nonassessable.
Provisions in our restated certificate
of incorporation provide that our Board of Directors is authorized to issue preferred stock in one or more series, to establish
the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of such shares
and any qualifications, limitations or restrictions thereof. The issuance of preferred stock may have the effect of delaying, deferring
or preventing a change in control of our Company without further action by the stockholders and may adversely affect the voting
and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely
affect the voting power of the holders of common stock, including the loss of voting control to others.
Series B Convertible Preferred Stock
General
. Our Board of Directors
is authorized to issue up to 10,000,000 shares of preferred stock in one or more series without shareholder approval. Our Board
of Directors may determine the designations, powers, preferences and the relative, participating, optional or other special rights,
and any qualification, limitations and restrictions, of each series of preferred stock. Our Board of Directors has designated
3,750 shares of preferred stock as Series A Convertible Preferred Stock and shares of preferred stock as Series B Convertible
Preferred Stock, which we refer to herein as the Series B Preferred Stock. As of June 2, 2017, there were no shares of preferred
stock outstanding.
Rank.
The Series B Preferred
Stock ranks (1) on parity with our common stock on an “as converted” basis, (2) on parity with our Series A Convertible
Preferred Stock, (3) senior to any series of our capital stock hereafter created specifically ranking by its terms junior to the
Series B Preferred Stock, (4) on parity with any series of our capital stock hereafter created specifically ranking by its terms
on parity with the Series B Preferred Stock, and (5) junior to any series of our capital stock hereafter created specifically
ranking by its terms senior to the Series B Preferred Stock in each case, as to dividends or distributions of assets upon our
liquidation, dissolution or winding up whether voluntary or involuntary.
Conversion.
Each share of the
Series B Preferred Stock is convertible into shares
of common stock at any time at the option of the holder, provided that the holder will be prohibited from converting Series B
Preferred Stock into shares of our common stock if, as a result of such conversion, the holder would own more than 4.99% of the
number of shares of common stock outstanding immediately after giving effect to the issuance of the shares of common stock issuable
upon conversion of the Series B Preferred Stock, or, at the election of a holder, together with its affiliates, would own more
than 9.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of the shares of
common stock issuable upon conversion of the Series B Preferred Stock. The conversion rate of the Series B Preferred Stock is
subject to proportionate adjustments for stock splits, reverse stock splits and similar events, but is not subject to adjustment
based on price anti-dilution provisions.
Dividends.
In addition to stock
dividends or distributions for which proportionate adjustments will be made, holders of Series B Preferred Stock are entitled
to receive dividends on shares of Series B Preferred Stock equal, on an as-if-converted-to-common-stock basis, to 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. No other dividends are payable on shares of Series B Preferred Stock.
Voting Rights.
Except as provided
in the Certificate of Designation or as otherwise required by law, the holders of Series B Preferred Stock will have no voting
rights. However, we may not, without the consent of holders of a majority of the outstanding shares of Series B Preferred Stock,
alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, increase the number of authorized
shares of Series B Preferred Stock, or enter into any agreement with respect to the foregoing.
Liquidation Rights.
Upon any
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Series B Preferred Stock
are entitled to receive,
pari passu
with the holders of common stock, out of the assets available for distribution to stockholders
an amount equal to such amount per share as would have been payable had all shares of Series B Preferred Stock been converted
into common stock immediately before such liquidation, dissolution or winding up, without giving effect to any limitation on conversion
as a result of the Beneficial Ownership Limitation, as described below.
Beneficial Ownership Limitation.
We may not effect any conversion of the Series B Preferred Stock, and a holder does not have the right to convert any portion
of the Series B Preferred Stock to the extent that, after giving effect to the conversion set forth in a notice of conversion
such holder would beneficially own in excess of the Beneficial Ownership Limitation, or such holder, together with such holder’s
affiliates, and any persons acting as a group together with such holder or affiliates, would beneficially own in excess of the
Beneficial Ownership Limitation. The “Beneficial Ownership Limitation” is 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 Series
B Preferred Stock held by the applicable holder. A holder may, with 61 days prior notice to us, elect to increase or decrease
the Beneficial Ownership Limitation; provided, however, that in no event may either the holder Beneficial Ownership Limitation
or the affiliate Beneficial Ownership Limitation be 9.99% or greater.
Exchange Listing.
We do not
plan on making an application to list the shares of Series B Preferred Stock on the NASDAQ Capital Market, any national securities
exchange or other nationally recognized trading system. Our common stock issuable upon conversion of the Series B Preferred Stock
is listed on the NASDAQ Capital Market.
Failure to Deliver Conversion Shares.
If we fail to timely deliver shares of common stock upon conversion of the Series B Preferred Stock (the “Conversion
Shares”) within the time period specified in the Certificate of Designation (within three trading days after delivery of
the notice of conversion, or any shorter standard settlement period in effect with respect to trading market on the date notice
is delivered), and if the holder has not exercised its Buy-In rights as described below with respect to such shares, then we are
obligated to pay to the holder, as liquidated damages, an amount equal to $50 per business day (increasing to $100 per business
day after the third business day and $200 per business day after the tenth business day) for each $5,000 of Conversion Shares
for which the Series B Preferred Stock converted which are not timely delivered. If we make such liquidated damages payments,
we are not also obligated to make Buy-In payments with respect to the same Conversion Shares.
Compensation for Buy-In on Failure
to Timely Deliver Shares.
If we fail to timely deliver the Conversion Shares to the holder, and if after the required delivery
date the holder is required by its broker to purchase (in an open market transaction or otherwise) or the holder or its brokerage
firm otherwise purchases, shares of common stock to deliver in satisfaction of a sale by the holder of the Conversion Shares which
the holder anticipated receiving upon such conversion or exercise (a “Buy-In”), then we are obligated to (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, minus any amounts paid to the holder by us as liquidated damages for late
delivery of such shares, exceeds (y) the amount obtained by multiplying (1) the number of Conversion Shares that we were required
to deliver 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 Series B Preferred Stock and equivalent number of Conversion Shares for which
such conversion was not honored (in which case such conversion shall be deemed rescinded) or deliver to the holder the number
of shares of common stock that would have been issued had we timely complied with its conversion and delivery obligations.
Subsequent Rights Offerings; Pro
Rata Distributions.
If we grant, issue or sell any common stock equivalents pro rata to the record holders of any class of
shares of common stock (the “Purchase Rights”), then a holder of Series B Preferred Stock 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 conversion of the Series B Preferred Stock (without regard to any
limitations on conversion). If we declare or make any dividend or other distribution of its assets (or rights to acquire its assets)
to holders of common stock, then a holder of Series B Preferred Stock is entitled to participate in such distribution to the same
extent as if the holder had held the number of shares of common stock acquirable upon complete conversion of the Series B Preferred
Stock (without regard to any limitations on conversion).
Fundamental Transaction.
If,
at any time while the Series B 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 whereby such other person 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 the Series B Preferred Stock automatically converts
and the holder will receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to
the occurrence of such Fundamental Transaction (without regard to the Beneficial Ownership Limitation), 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 the Series B Preferred Stock is convertible immediately prior to such Fundamental
Transaction (without regard to the Beneficial Ownership Limitation). For purposes of any such conversion, the determination of
the conversion ratio will 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. 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 will be given
the same choice as to the Alternate Consideration it receives upon automatic conversion of the Series B Preferred Stock following
such Fundamental Transaction.
Warrants
The following is a brief summary of
the material terms of the warrants offered pursuant to this prospectus and is subject in all respects to the provisions contained
in the warrants, the form of which is filed as an exhibit to this prospectus. As of June 2, 2017, there were warrants to purchase
2,852,736 shares of our common stock outstanding. The previously issued warrants all have a weighted average exercise price of
$7.45 per warrant and have expiration dates between 2020 and 2025.
Exercisability.
Holders may
exercise warrants at any time up to 11:59 p.m., New York time, on the date that is five years after the date on which such
warrants were issued. The warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly
executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise
(except in the case of a cashless exercise discussed below). The holder of warrants does not have the right to exercise any portion
of the warrant if the holder would beneficially own in excess of 4.99% of the shares of our common stock outstanding immediately
after giving effect to such exercise. This percentage may, however, be raised or lowered to an amount not to exceed 9.99% at the
option of the holder upon at least 61 days’ prior notice from the holder to us.
Cashless Exercise.
At any time
when a registration statement covering the issuance of the shares of common stock issuable upon exercise of the warrants is not
effective, the holder may, at its option, exercise its warrants on a cashless basis. When exercised on a cashless basis, a portion
of the warrant is cancelled in payment of the purchase price payable in respect of the number of shares of our common stock purchasable
upon such exercise.
Exercise Price.
The exercise
price of common stock purchasable upon exercise of the warrants is $
per share. The exercise price and the number of shares issuable upon exercise of the warrants is subject to appropriate adjustment
in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications or similar events
affecting our common stock. Holders of the warrants are entitled to participate in any subsequent rights offering or distribution
of our assets on an as-if-exercised basis.
Transferability.
The warrants
may be transferred at the option of the holder upon surrender of the warrants with the appropriate instruments of transfer.
Exchange Listing.
We do not
plan on making an application to list the warrants on The NASDAQ Capital Market, any national securities exchange or other nationally
recognized trading system. Our common stock underlying the warrants is listed on The NASDAQ Capital Market.
Fundamental Transactions.
In
the event of a fundamental transaction, as described in the warrants and generally including any reorganization,
recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all
of our properties or assets, our consolidation or merger with or into another person, the holders of the warrants will be
entitled to receive upon exercise of the warrants the kind and amount of securities with cash or other property that the
holders would have received had they exercised the warrants immediately prior to such fundamental transaction. In addition,
in certain circumstances, upon a fundamental transaction, the holder will have the right to require us to repurchase their
warrants at their fair value using the Black Scholes option pricing formula; provided, however, such holder may not require
us or our successor entity to repurchase the warrants for the Black Scholes value solely in connection with a fundamental
transaction that is not approved by our board of directors, and therefore not within our control.
Rights as Stockholder.
Except
as otherwise provided in the warrants (such as the rights described above of a warrant holder upon our sale or grant of any rights
to purchase stock, warrants or securities or other property to our stockholders on a pro rata basis) or by virtue of such holder’s
ownership of shares of our common stock, the holders of the warrants do not have the rights or privileges of holders of our common
stock, including any voting rights, until they exercise their warrants.
Fractional Shares.
No fractional
shares of common stock will be issued upon the exercise of the warrants. Rather, the number of shares of common stock to be issued
will be rounded down to the nearest whole number.
Anti-Takeover Effects of Delaware Law
and Our Certificate of Incorporation and Bylaws
Some provisions of Delaware law, our restated
certificate of incorporation and our amended and restated bylaws contain provisions that could make the following transactions
more difficult: an acquisition of us by means of a tender offer; an acquisition of us by means of a proxy contest or otherwise;
or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish
or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including
transactions which provide for payment of a premium over the market price for our shares.
These provisions, summarized below, are
intended to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage
persons seeking to acquire control of us to first negotiate with our Board of Directors. We believe that the benefits of the increased
protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure
us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement
of their terms.
Undesignated Preferred Stock.
The
ability of our Board of Directors, without action by the stockholders, to issue up to 10,000,000 shares of undesignated preferred
stock with voting or other rights or preferences as designated by our Board of Directors could impede the success of any attempt
to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control
or management of our Company.
Stockholder Meetings.
Our
amended and restated bylaws provide that a special meeting of stockholders may be called only by our chairman of the board or chief
executive officer (or president, if there is no chief executive officer), or by a resolution adopted by a majority of our Board
of Directors.
Requirements for Advance Notification
of Stockholder Nominations and Proposals.
Our amended and restated bylaws establish advance notice procedures with respect
to stockholder proposals to be brought before a stockholder meeting and the nomination of candidates for election as directors,
other than nominations made by or at the direction of the Board of Directors or a committee of the Board of Directors.
Elimination of Stockholder Action by
Written Consent.
Our restated certificate of incorporation and amended and restated bylaws eliminate the right of stockholders
to act by written consent without a meeting.
Staggered Board.
Our Board
of Directors is divided into three classes. The directors in each class will serve for a three-year term, one class being elected
each year by our stockholders. This system of electing and removing directors may tend to discourage a third-party from making
a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to
replace a majority of the directors.
Removal of Directors.
Our
restated certificate of incorporation provides that no member of our Board of Directors may be removed from office by our stockholders
except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds (2/3) of the
total voting power of all of our outstanding voting stock then entitled to vote in the election of directors.
Stockholders Not Entitled to Cumulative
Voting.
Our restated certificate of incorporation does not permit stockholders to cumulate their votes in the election
of directors. Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election
of directors can elect all of the directors standing for election, if they choose, other than any directors that holders of our
preferred stock may be entitled to elect.
Delaware Anti-Takeover Statute.
We are subject to Section 203 of the Delaware General Corporation Law, which prohibits persons deemed to be “interested
stockholders” from engaging in a “business combination” with a publicly held Delaware corporation for three years
following the date these persons become interested stockholders unless the business combination is, or the transaction in which
the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies. Generally,
an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years prior
to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock. Generally, a
“business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit
to the interested stockholder. The existence of this provision may have an anti-takeover effect with respect to transactions not
approved in advance by the Board of Directors.
Amendment of Charter Provisions.
The amendment of any of the above provisions, except for the provision making it possible for our Board of Directors to issue
preferred stock, would require approval by holders of at least 66 2/3% of the total voting power of all of our outstanding
voting stock.
The provisions of Delaware law, our restated
certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile
takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often
result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the
composition of our board and management. It is possible that these provisions could make it more difficult to accomplish transactions
that stockholders may otherwise deem to be in their best interests.
Listing
Shares of our common stock are quoted
on The NASDAQ Capital Market under the symbol “EYEG.”
Registration Rights
In connection with our initial public
offering in February 2015, we issued warrants to the underwriters for that offering that provide for certain registration rights
to the holders thereof. Each of the warrants provide that the holder shall have certain rights to participate in registrations
of our common stock that we may decide to do, from time to time.
PLAN OF DISTRIBUTION
Pursuant to an engagement agreement,
we have engaged H.C. Wainwright & Co., LLC, or the placement agent, to act as our exclusive placement agent in connection
with this offering of our securities pursuant to this prospectus on a reasonable best efforts basis. The terms of this offering
were subject to market conditions and negotiations between us, the placement agent and prospective investors. The engagement agreement
does not give rise to any commitment by the placement agent to purchase any of our securities, and the placement agent will have
no authority to bind us by virtue of the engagement agreement. Further, the placement agent does not guarantee that it will be
able to raise new capital in any prospective offering. The placement agent may engage sub-agents or selected dealers to assist
with the offering.
Only certain institutional investors
purchasing the securities offered hereby will execute a securities purchase agreement with us, providing such investors with certain
representations, warranties and covenants from us, which representations, warranties and covenants will not be available to other
investors who will not execute a securities purchase agreement in connection with the purchase of the securities offered pursuant
to this prospectus. Therefore, those investors shall rely solely on this prospectus in connection with the purchase of securities
in the offering.
We will deliver the securities being
issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant to this prospectus.
We expect to deliver the securities being offered pursuant to this prospectus on or about ,
2017.
We have agreed to pay the placement
agent a total cash fee equal to 7% of the gross proceeds of this offering plus a management fee equal to 0.5% of the gross proceeds
raised in this offering. We will also pay the placement agent a non-accountable expense allowance of $25,000 and reimbursement
for the placement agent’s legal fees and expenses in the amount of up to $75,000. We estimate the total offering expenses
of this offering that will be payable by us, excluding the placement agent fees and expenses, will be approximately $330,000.
We have also agreed to give the placement
agent, subject to a successful completion of this offering, a right of first refusal to act as our lead underwriter or placement
agent for any further capital raising transactions undertaken by us until the twelve-month anniversary following the consummation
of the offering, subject to certain conditions.
We have agreed to indemnify the placement
agent and specified other persons against certain liabilities relating to or arising out of the placement agent’s activities
under the placement agency agreement and to contribute to payments that the placement agent may be required to make in respect
of such liabilities.
The placement agent may be deemed to
be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit
realized on the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or
commissions under the Securities Act. As an underwriter, the placement agent would be required to comply with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5
and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares of
common stock and warrants by the placement agent acting as principal. Under these rules and regulations, the placement agent:
|
|
•
|
may
not engage in any stabilization activity in connection with our securities; and
|
|
|
•
|
may
not bid for or purchase any of our securities or attempt to induce any person to purchase
any of our securities, other than as permitted under the Exchange Act, until it has completed
its participation in the distribution.
|
Stephen From, our President and Chief
Executive Officer, has indicated an interest in purchasing up to 55,000 of the shares of our common stock to be sold in this offering
at the public offering price and on the same terms as the other purchasers in this offering. However, because indications of interest
are not binding agreements or commitments to purchase, the placement agent could determine to sell more, fewer or no shares to
Mr. From in this offering, or Mr. From could determine to purchase more, fewer or no shares in this offering.
Determination of offering price
The public offering price of the securities
we are offering was negotiated between us and the investors, in consultation with the placement agent based on the trading of
our common stock prior to the offering, among other things. Other factors considered in determining the public offering price
of the shares of our common stock we are offering include the history and prospects of the Company, the stage of development of
our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management,
general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.
Listing
Our common stock is listed on The NASDAQ
Capital Market under the symbol “EYEG.”
Transfer Agent and Registrar
The transfer agent and registrar for
our common stock is VStock Transfer, LLC.
Other Relationships
From time to time, the placement agent
has provided, and may provide in the future, various advisory, investment and commercial banking and other services to us in the
ordinary course of business, for which they have received and may continue to receive customary fees and commissions. However,
except as disclosed in this prospectus, we have no present arrangements with the placement agent for any further services.
The placement agent in this offering
served as our exclusive placement agent in a securities offering we consummated in June 2016, pursuant to which it received compensation,
including warrants to purchase shares of our common stock. Additionally, the placement agent in this offering serves as the sales
agent for an at-the-market equity offering that we commenced in May 2016, for which it has received cash compensation.
LEGAL MATTERS
Certain legal matters with respect
to the validity of the securities offered by this prospectus will be passed upon for us by Burns & Levinson LLP, Boston, MA.
Lowenstein Sandler LLP, New York, New York, is acting as counsel to the placement agent in connection with this offering.
EXPERTS
The consolidated balance sheets of
EyeGate Pharmaceuticals, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations
and comprehensive loss, convertible preferred stock non-controlling interests, and stockholders’ (deficit) equity, and cash
flows for each of the years then ended, have been audited by EisnerAmper LLP, independent registered public accounting firm, as
stated in their report dated February 23, 2017, which is incorporated by reference herein, which report includes an explanatory
paragraph about the existence of substantial doubt concerning the Company’s ability to continue as a going concern. Such
financial statements have been incorporated herein by reference in reliance on the report of such firm given upon their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration
statement on Form S-1 under the Securities Act with respect to the securities being offered by this prospectus. This prospectus
does not contain all of the information in the registration statement and its exhibits. For further information with respect to
us and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained
in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each
instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of
these statements is qualified in all respects by this reference.
We are subject to the information requirements
of the Exchange Act and, in accordance therewith, file annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, Washington,
D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. These
documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system, or EDGAR, via
electronic means, including the SEC’s home page on the Internet (
www.sec.gov
).
We post on our public website (
www.eyegatepharma.com
)
our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the SEC. Our website and the information contained on that site,
or connected to that site, are not incorporated into and are not a part of this prospectus.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The SEC allows us to incorporate by reference
the information and reports we file with it under File No. 001-36672, which means that we can disclose important information to
you by referring you to those publicly available documents. The information incorporated by reference is an important part of this
prospectus, and information that we file later with the SEC will automatically update and supersede the information already incorporated
by reference. We are incorporating by reference the documents listed below, which we have already filed with the SEC, and all documents
subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except as to any portion of any future
report or document that is not deemed filed under such provisions, prior to the termination of the offering:
|
|
•
|
Our Annual Report on
Form 10-K for the year ended December 31, 2016 filed with the SEC on February 23, 2017;
|
|
|
•
|
Our Quarterly Report
on Form 10-Q for the three months ended March 31, 2017 filed with the SEC on May 5, 2017;
|
|
|
•
|
Our Definitive Proxy
Statement on Schedule 14A filed with the SEC on April 28, 2017
|
|
|
•
|
Our Current Reports
on Form 8-K filed with the SEC on January 30, 2017, February 6, 2017, February 21, 2017, April 13, 2017 and May 4, 2017 (in each
case, except for information contained therein which is furnished rather than filed); and
|
|
|
•
|
The description of our
common stock contained in our registration statement on Form 8-A12B filed with the SEC on July 28, 2015 and amended on July 30,
2015.
|
Any statement contained in a document incorporated
or deemed to be incorporated by reference in this prospectus is modified or superseded for purposes of the prospectus to the extent
that a statement contained in this prospectus or in any other subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
Upon request, we will provide, without
charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered a copy of the documents
incorporated by reference into this prospectus. You may request a copy of these filings, and any exhibits we have specifically
incorporated by reference as an exhibit in this prospectus, at no cost by writing or telephoning us at the following address:
EyeGate Pharmaceuticals,
Inc.
271 Waverley Oaks Road, Suite 108
Waltham, MA
02452
Telephone: (781) 788-8869
Up to 2,929,688 Shares of Common
Stock,
Warrants to Purchase up to 3,906,251 Shares of Common Stock and
Up to 1,875 Shares of Series B Convertible Preferred Stock
(976,563 shares of Common Stock underlying
the Series B
Convertible
Preferred Stock)
PROSPECTUS
Rodman& Renshaw
a unit of H.C. Wainwright & Co.
,
2017
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
|
Item 13.
|
Other Expenses of Issuance and Distribution.
|
The expenses payable by EyeGate Pharmaceuticals,
Inc. (the “Registrant” or the “Company”) in connection with the issuance and distribution of the securities
being registered (other than placement agent fees and expenses) are set forth below. Each item listed is estimated, except for
the Securities and Exchange Commission (the “SEC”) registration fee.
|
Securities and Exchange Commission registration fee
|
|
$
|
1,956
|
|
|
FINRA Filing Fee
|
|
|
2,225
|
|
|
Legal fees and expenses
|
|
|
150,000
|
|
|
Accounting fees and expenses
|
|
|
50,000
|
|
|
Transfer agent fees and expenses
|
|
|
1,000
|
|
|
Miscellaneous
|
|
|
125,000
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
330,181
|
|
|
Item 14.
|
Indemnification of Directors and Officers.
|
Our amended and restated certificate of
incorporation contains provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of
Delaware, the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors. Our amended
and restated bylaws provide that we must indemnify our directors and officers and may indemnify our employees and other agents
to the fullest extent permitted by the General Corporation Law of the State of Delaware.
Sections 145 and 102(b)(7) of the General
Corporation Law of the State of Delaware provide that a corporation may indemnify any person made a party to an action by reason
of the fact that he or she was a director, officer, employee or agent of the corporation or is or was serving at the request of
a corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of an action by or in right of the
corporation, no indemnification may generally be made in respect of any claim as to which such person is adjudged to be liable
to the corporation.
We have entered into indemnification agreements
with our directors and executive officers, in addition to the indemnification provided for in our amended and restated bylaws,
and intend to enter into indemnification agreements with any new directors and executive officers in the future. We have purchased
and intend to maintain insurance on behalf of any person who is or was a director or officer of us against any loss arising from
any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions. See also
“Undertakings” set out in response to Item 17 herein.
|
Item 15.
|
Recent Sales of Unregistered Securities.
|
Set forth below is information regarding
the shares of common stock and preferred stock and the warrants issued, and options granted, by us in the three years preceding
the filing of this registration statement that were not registered under the Securities Act.
|
|
(1)
|
In June, July and December 2014, we issued convertible
promissory notes in the principal amount of approximately $1.83 million, which converted into shares of our common stock in connection
with the IPO, and warrants to purchase 562,732 shares of our common stock, at an exercise price of $6.00 per share.
|
|
|
(2)
|
In July 2014, we issued 15,036 shares of our common
stock in connection with the amendment to our Amended and Restated License Agreement with the University of Miami.
|
|
|
(3)
|
In September 2014, we issued 2,277 shares of our common
stock in connection with the exercise of stock options.
|
|
|
(4)
|
In January 2015, we issued 23,072 shares of our common
stock in connection with the exercise of stock options.
|
|
|
(5)
|
On March 7, 2016, we entered into a Stock Purchase
Agreement whereby we acquired 100% of the outstanding equity interests of Jade Therapeutics, Inc. (“Jade”) and Jade
became a wholly-owned subsidiary of the Company (the “Acquisition”). The consideration payable by the Company to the
Sellers in connection with the Acquisition (subject to adjustment as provided in the Purchase Agreement) is 765,728 shares of
the Company’s common stock (the “EyeGate Shares”). The EyeGate Shares consist of (i) 689,157 shares of the Company’s
common stock issued at closing and (ii) 76,571 shares of the Company’s common stock held back for a period of 18 months
for potential post-closing working capital and/or indemnification claims relating to breaches of representations, warranties and
covenants contained in the Purchase Agreement.
|
|
|
(6)
|
On June 30, 2016, we completed a registered direct
offering of 441,000 shares of common stock and 2,776.5 shares of Series A Convertible Preferred Stock (convertible into 1,234,000
shares of common stock) (the “Series A Preferred Stock”), along with a concurrent private placement of warrants (collectively,
the “June 2016 Offering”). The total net proceeds to us from the June 2016 Offering, after deducting the placement
agent fees and offering expenses, were approximately $3.4 million. The investor received, for each share of common stock or for
each share of common stock issuable upon conversion of a share of Series A Preferred Stock purchased in the registered direct
offering, a warrant to purchase one-half of a share of common stock at an exercise price of $3.50 per share, totaling 837,500
common stock warrants. The warrant issued to the investor is initially exercisable six months following issuance and terminates
five years following the initial exercise date. In addition, we issued to H.C. Wainwright & Co., LLC, the exclusive placement
agent for the June 2016 Offering, warrants to purchase 33,500 shares of common stock. The warrants and the shares of common stock
underlying the warrants issued in the June 2016 Offering were not registered under the Securities Act of 1933, as amended (the
“Securities Act”), or applicable state securities laws.
|
|
|
(7)
|
In July 2016, we issued 22,674 shares of our common
stock in connection with entering into a License Agreement with the University of Utah.
|
The offers, sales, grants and issuances of
the securities described in paragraphs (3) and (4) were deemed to be exempt from registration under the Securities Act in reliance
on Rule 701. The recipients of such securities were our employees, directors, officers, consultants and advisors and received the
securities under our 2005 Equity Incentive Plan. Appropriate legends were affixed to the securities issued in these transactions.
Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships,
to information about us.
The offer, sale, and issuance of the securities described in
paragraphs (1), (2), (5), (6) and (7) were deemed to be exempt from registration under the Securities Act in reliance on Section
4(2) of the Securities Act in that the issuances of the securities to the accredited investors did not involve a public offering.
The recipients of the securities in these transactions acquired the securities for investment only and not with a view to or for
sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions.
|
Item 16.
|
Exhibits and Financial Statement Schedules.
|
A list of exhibits filed with this registration statement on
Form S-1 is set forth on the Exhibit Index and is incorporated herein by reference.
The undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective
registration statement; and
(iii) To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however
, that paragraphs
(a)(l)(i), (a)(l)(ii) and (a)(l)(iii) of this section do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof;
(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering;
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement
as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in
reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(l)(i), (vii), or (x) for the purpose
of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness
or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B,
for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof;
provided, however
, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such effective date;
(5) That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser;
(6) That:
|
|
(i)
|
For purposes of determining any liability under the Securities Act of 1933, the information omitted
from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this registration statement as of the time it was declared effective; and
|
|
|
(ii)
|
For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
|
(7) That,
for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof; and
(8) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, the registrant has duly caused this Amendment No. 2 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Waltham, Commonwealth of Massachusetts, on this 5th day of June,
2017.
|
|
EYEGATE PHARMACEUTICALS, INC.
|
|
|
|
|
|
|
By:
|
|
/s/ Stephen From
|
|
|
|
|
Stephen From
|
|
|
|
|
President and Chief Executive Officer
|
Pursuant to the
requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Stephen From
|
|
President, Chief Executive Officer and Director
|
|
June 5, 2017
|
|
Stephen From
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
|
|
/s/ Sarah Romano
|
|
Interim Chief Financial Officer
|
|
June 5, 2017
|
|
Sarah Romano
|
|
(principal financial and accounting officer)
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
June 5, 2017
|
|
Paul Chaney
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
June 5, 2017
|
|
Morton Goldberg
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
June 5, 2017
|
|
Praveen Tyle
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
June 5, 2017
|
|
Thomas Balland
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
June 5, 2017
|
|
Thomas E. Hancock
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
June 5, 2017
|
|
Bernard Malfroy-Camine
|
|
|
|
|
|
|
*By:
|
/s/ Stephen From
|
|
|
|
|
Stephen From
|
|
|
|
|
Attorney-in-Fact
|
|
EXHIBITS
Exhibit
Number
|
|
Description of Exhibit
|
|
2.1
|
(1)
|
|
Stock Purchase Agreement, dated as of March 7, 2016, by and among the Registrant and the Sellers named therein.
|
|
3.1
|
(2)
|
|
Restated Certificate of Incorporation of the Registrant.
|
|
3.2
|
(2)
|
|
Amended and Restated By-laws of the Registrant.
|
|
3.3
|
(8)
|
|
Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock.
|
|
3.4
|
*
|
|
Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible
Preferred Stock.
|
|
4.1
|
(3)
|
|
Specimen Stock Certificate evidencing the shares of common stock.
|
|
4.2
|
(8)
|
|
Form of Common Stock Purchase Warrant, dated June 30, 2016.
|
|
4.3
|
*
|
|
Form of Warrant.
|
|
5.1
|
*
|
|
Opinion of Burns & Levinson LLP.
|
|
10.1
|
(4)
|
|
2005 Equity Incentive Plan, as amended.
|
|
10.2
|
(5)
|
|
2014 Equity Incentive Plan.
|
|
10.3
|
(4)
|
|
Employee Stock Purchase Plan.
|
|
10.4
|
†
(4)
|
|
Transaction Protocol (License Agreement), by and between Optis B.V., Optis France SA, and Mrs. Francine Behar-Cohen, dated as of July 23, 1999.
|
|
10.5
|
†
(4)
|
|
Amended and Restated License Agreement, by and between University of Miami and EyeGate Pharma SA (f/k/a Optis France SA), dated as of December 16, 2005.
|
|
10.6
|
†
(4)
|
|
First Amendment to First Amended and Restated License Agreement of and between EyeGate Pharma SA and University of Miami, dated as of July 7, 2014.
|
|
10.7
|
†
(6)
|
|
License Agreement made as of July 9, 2015, by and among the Registrant, EyeGate Pharma S.A.S., a wholly owned subsidiary of the Registrant and Valeant Pharmaceuticals Luxembourg S.à r.l., a société à responsabilité limitée.
|
|
10.8
|
(7)
|
|
Form of Warrant Agency Agreement, dated August 5, 2015, by and between the Registrant and VStock Transfer, LLC.
|
|
10.9
|
(4)
|
|
Form of Indemnification Agreement.
|
|
10.10
|
(4)
|
|
Form of Notice of Stock Option Grant pertaining to the 2014 Equity Incentive Plan.
|
|
10.11
|
(4)
|
|
Form of Notice of Stock Unit Award pertaining to the 2014 Equity Incentive Plan.
|
|
10.12
|
#
(4)
|
|
Form of Amended and Restated Offer of Employment by and between the Registrant and Michael Manzo.
|
|
10.13
|
#
(13)
|
|
Second Amended and Restated Employment Agreement, dated February 25, 2016, by and between the Registrant and Stephen From.
|
|
10.14
|
(8)
|
|
Form of Securities Purchase Agreement, dated as of June 27, 2016, by and among the Registrant and the Purchasers named therein.
|
|
10.15
|
(8)
|
|
Engagement Letter, dated as of June 24, 2016, by and between the Registrant and Rodman & Renshaw, a unit of H.C. Wainwright & Co.
|
|
10.16
|
(9)
|
|
At the Market Offering Agreement, dated as of May 24, 2016, by and between the Registrant and H.C. Wainwright & Co., LLC.
|
|
10.17
|
(10)
|
|
Offer Letter, dated as of April 25, 2016, by and between the Registrant and Ryan Brenneman.
|
|
10.18
|
(11)
#
|
|
Separation Agreement, dated as of December 21, 2016, by and between the Registrant and Ryan Brenneman.
|
|
10.19
|
(12)
#
|
|
Offer Letter, dated as of February 1, 2017, by and between the Registrant and Sarah Romano.
|
|
10.20
|
†
(14)
|
|
License Agreement, dated February 21, 2017, by and among the Registrant, EyeGate Pharma S.A.S., a wholly owned subsidiary of the Registrant and Valeant Pharmaceuticals Ireland.
|
|
10.21
|
*
|
|
Engagement Letter, dated June 2, 2017, by and between the Registrant and Rodman &
Renshaw, a unit of H.C. Wainwright & Co., LLC.
|
|
10.22
|
*
|
|
Form of Securities Purchase Agreement.
|
|
21.1
|
(14)
|
|
Subsidiaries of the Registrant.
|
|
23.1
|
*
|
|
Consent of EisnerAmper LLP.
|
|
23.2
|
*
|
|
Consent of Burns & Levinson LLP (included in Exhibit 5.1).
|
|
24.1
|
**
|
|
Power of Attorney.
|
|
|
(1)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed March 7, 2016) and incorporated by reference thereto.
|
|
|
(2)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed February 20, 2015) and incorporated by reference thereto.
|
|
|
(3)
|
Previously filed as an exhibit
to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (filed August 29, 2014) and incorporated by reference
thereto.
|
|
|
(4)
|
Previously filed as an exhibit
to the Company’s Registration Statement on Form S-1 (filed July 30, 2014) and incorporated by reference thereto.
|
|
|
(5)
|
Previously filed as an exhibit
to Amendment No. 7 to the Company’s Registration Statement on Form S-1 (filed December 24, 2014) and incorporated by reference
thereto.
|
|
|
(6)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed July 10, 2015) and incorporated by reference thereto.
|
|
|
(7)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed August 5, 2015) and incorporated by reference thereto.
|
|
|
(8)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed June 27, 2016) and incorporated by reference thereto.
|
|
|
(9)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed May 25, 2016) and incorporated by reference thereto.
|
|
|
(10)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed April 29, 2016) and incorporated by reference thereto.
|
|
|
(11)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed December 22, 2016) and incorporated by reference thereto.
|
|
|
(12)
|
Previously filed as an exhibit
to the Company’s Current Report on Form 8-K (filed February 6, 2017) and incorporated by reference thereto.
|
|
|
(13)
|
Previously filed as an exhibit
to the Company’s Annual Report on Form 10-K (filed March 30, 2016) and incorporated by reference thereto.
|
|
|
(14)
|
Previously filed as an exhibit
to the Company’s Annual Report on Form 10-K (filed February 23, 2017) and incorporated by reference thereto.
|
|
|
†
|
Confidential treatment requested
as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
|
|
|
#
|
Management contract or compensatory
plan or arrangement.
|
Exhibit 3.4
EYEGATE PHARMACEUTICALS, INC.
FORM OF
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
The undersigned, Stephen
From, does hereby certify that:
1. He is the President,
Chief Executive Officer and Secretary of EyeGate Pharmaceuticals, Inc., a Delaware corporation (the “
Corporation
”).
2. The Corporation
is authorized to issue 10,000,000 shares of preferred stock, of which 3,750 is Series A Convertible Preferred Stock, 2,776.5 shares
of which have been issued but none of which are outstanding.
3. The following resolutions
were duly adopted by the board of directors of the Corporation (the “
Board of Directors
”):
WHEREAS, the certificate
of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 10,000,000
shares, $0.01 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 ______ 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).
“
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).
“
Closing
”
means the closing of the purchase and sale of the Securities pursuant to Section 1.1 of the Purchase Agreement.
“
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) 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
”
means the United States Securities and Exchange Commission.
“
Common Stock
”
means the Corporation’s common stock, par value $0.01 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.
“
Exchange
Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“
Fundamental
Transaction
” shall have the meaning set forth in Section 7(e)
“
Holder
”
shall have the meaning given such term in Section 2.
“
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.
“
Liquidation
”
shall have the meaning set forth in Section 5.
“
New York
Courts
” shall have the meaning set forth in Section 8(d).
“
Notice of
Conversion
” shall have the meaning set forth in Section 6(a).
“
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.
“
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 the Securities Purchase Agreement, dated as of the June ___, 2017, among the Corporation and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“
Securities
”
means the Shares, 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.
“
Shares
”
means the shares of Common Stock issued or issuable to each purchaser party to the Purchase Agreement on the Closing date.
“
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 Exhibit 21 to the Corporation’s Annual Report on Form 10-K most recently
filed with the Commission, 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 is listed or quoted for trading on the date in question:
the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
(or any successors to any of the foregoing).
“
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 Corporation, with a mailing address of 18 Lafayette
Place, Woodmere, NY 11598 and any successor transfer agent of the Corporation.
“
Underlying
Shares
” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock and upon exercise
of the Warrants.
“
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 exercisable immediately and have a term of exercise equal to five years from
the date of initial exercise, in the form of
Exhibit B
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 its Series B Convertible Preferred
Stock (the “
Preferred Stock
”) and the number of shares so designated shall be up to _____ (which shall not be
subject to increase without the written consent of holders of a majority in interest of the Preferred Stock then outstanding (each,
a “
Holder
” and collectively, the “
Holders
”)). Each share of Preferred Stock shall have a
par value of $0.01 per share and a stated value equal to $1,000 (the “
Stated Value
”).
Section 3
.
Dividends
. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7,
Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock
basis) to 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. No other dividends shall be paid on shares of Preferred Stock.
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, (a) alter or change adversely the powers,
preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) increase the number
of authorized shares of Preferred Stock, or (c) 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 the same amount that
a holder of Common Stock would receive if the Preferred Stock were fully converted (disregarding for such purpose any conversion
limitations hereunder) to Common Stock which amounts shall be paid
pari passu
with all holders of Common Stock. 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)) 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 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 $_____, subject to adjustment herein (the “
Conversion
Price
”).
c)
Mechanics
of Conversion
i)
Delivery
of Conversion Shares Upon Conversion
. Not later than the earlier of (i) three (3) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period (as defined below) 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. The Corporation shall deliver the Conversion Shares electronically
through the Depository Trust Company or another established clearing corporation performing similar functions. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.
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
. 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 anyone 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 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 the Share Delivery Date until such
Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue
actual damages 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 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 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 Corporation covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein
provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the
other holders of the Preferred Stock), 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) upon the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants that all shares
of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
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 effect 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 (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 such Holder and its Affiliates and Attribution Parties 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 or Attribution Parties 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 or Attribution Parties. 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, it being acknowledged by the Holder that the Corporation 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 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 Attribution Parties) 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 Attribution Parties) 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 (which
may be via email) 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 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 conversion of Preferred Stock held by the
applicable Holder. A Holder, upon 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 in the Beneficial Ownership Limitation will not be effective until the 61
st
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.
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 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, this 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) RESERVED.
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 declares or makes 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 conversion of this Preferred Stock (without regard to any limitations on conversion 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 Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the
Corporation, 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 Corporation 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 Corporation, 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 Corporation, 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 whereby such other Person 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 this 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 (without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares
of Common Stock of the successor or acquiring corporation or of the Corporation, 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 Preferred Stock is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 6(d) on the conversion of this 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 Corporation
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 Preferred Stock following such Fundamental Transaction. To the extent necessary
to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall
file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent
with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration.
The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the
“
Successor Entity
”) to assume in writing all of the obligations of the Corporation under this Certificate of
Designation and the other Transaction Documents (as defined in the Purchase Agreement) 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 of this Preferred
Stock, deliver to the Holder in exchange for this Preferred Stock a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Preferred Stock which is convertible 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 conversion of this Preferred Stock (without regard to any limitations on the conversion of this 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 this 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 Certificate of Designation and the other Transaction Documents referring to the “Corporation”
shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of
the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Corporation 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 by facsimile or email 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 or (E) the Corporation shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, 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 by facsimile or email to each Holder at its last facsimile or email 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, 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 herein.
Section 8
.
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, by facsimile or email, or sent by a nationally recognized
overnight courier service, addressed to the Corporation, at the address set forth above Attention: Chief Executive Officer, facsimile
number ___________, e-mail address: sfrom@eyegatepharma.com, or such other facsimile number, e-mail address or address as the Corporation
may specify for such purposes by notice to the Holders delivered in accordance with this Section 8. 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 email, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number,
email address or address of such Holder appearing on the books of the Corporation, or if no such facsimile number, email address
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 or via email at the email
address 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 or via email at the email
address 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 and accrued dividends, 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 Delaware, 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, shareholders, 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 the 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 B 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 ____ day of June, 2017.
|
|
|
|
Name:
|
Stephen From
|
|
|
Title:
|
President, Chief Executive Officer and Secretary
|
|
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 B Convertible Preferred Stock indicated below into shares of common stock, par value $0.01 per share
(the “
Common Stock
”), of EyeGate Pharmaceuticals, Inc., a Delaware 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:
|
|
|
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:__________
|
[HOLDER]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
Exhibit 4.3
COMMON STOCK PURCHASE WARRANT
EYEGATE PHARMACEUTICALS, INC.
|
Warrant Shares:
|
Issue Date: June ___, 2017
|
THIS COMMON STOCK
PURCHASE WARRANT (the “
Warrant
”) certifies that, for value received,
or its assigns (the “
Holder
”) is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the “
Initial Exercise Date
”) and
on or prior to the close of business on the five (5) year anniversary of the Initial Exercise Date (the “
Termination Date
”)
but not thereafter, to subscribe for and purchase from EyeGate Pharmaceuticals, Inc., a Delaware corporation (the “
Company
”),
up to shares (as subject to adjustment hereunder, the
“
Warrant Shares
”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall
be equal to the Exercise Price, as defined in Section 2(b).
Section 1
.
Definitions
. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1:
“
Affiliate
”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“
Business
Day
” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York or in the State of Israel are authorized or required by law or other
governmental action to close.
“
Commission
”
means the United States Securities and Exchange Commission.
“
Exchange
Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“
Common Stock
Equivalents
” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time shares of 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, shares
of Common Stock.
“
Person
”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“
Securities
Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“
Trading Day
”
means a day on which the principal Trading Market is open for Trading.
“
Trading Market
”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange
(or any successors to any of the foregoing).
“
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 any successor transfer agent of the Company.
Section 2
.
Exercise
.
(a)
Exercise
of Warrant
. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing
on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed
hereto (the “
Notice of Exercise
”). Within the earlier of (i) three (3) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid,
the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer
or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is
specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee
(or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder
shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of
receipt of such notice.
The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares
available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b)
Exercise
Price
. The exercise price per share of the Common Stock under this Warrant shall be
$
___, subject to adjustment hereunder
(the “
Exercise Price
”).
(c)
Cashless
Exercise
. If at the time of exercise hereof there is no effective Registration Statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
|
(A) =
|
|
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Exercise Notice if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day;
|
|
|
|
|
|
(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).
“
Bid
Price
” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
“
VWAP
”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets, 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 Holders 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, subject to the limitations set forth in Section 2(e), on the Termination Date, this Warrant
shall be automatically exercised via cashless exercise pursuant to this Section 2(c) if the applicable VWAP is greater than
the Exercise Price of this Warrant, as adjusted hereunder.
Without limiting
the rights of a Holder to receive Warrant Shares on a “cashless exercise” and without limiting the liquidated damages
provision in Section 2(d)(i) and the buy-in provision in Section 2(d)(iv), in no event will the Company be required to net cash
settle a Warrant exercise.
(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 the Holder (although for avoidance of any doubt, the Company is not obligated in any manner or circumstance
to file or maintain any such resale registration statement) or (B) this Warrant is being exercised via cashless exercise, and otherwise
by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee,
for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder
in the Notice of Exercise by the date that is the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share
Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is
received within the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period following delivery of the Notice of Exercise or the Holder has properly elected to effect a cashless exercise of this Warrant
in accordance with Section 2(c). If the Company fails 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 exercisable. As used herein, “Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect
on the date of delivery of the Notice of Exercise.
(ii)
Delivery
of New Warrants Upon Exercise
. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
(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 equitable 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 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 request of a Holder, the Company shall within one Trading Day 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 61
st
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.
If the Warrant is unexercisable as a result
of the holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the holder.
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, subject to the limitation on fractional shares in
Section 2(d)(v). 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) [Reserved]
(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) other than
a dividend or other distribution of the type described in Section 3(a) above (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 there is a Fundamental Transaction (as defined below), then
the Holder shall have the right to exercise the Warrant concurrent with the closing of the Fundamental Transaction and receive,
the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant (the "Alternate Consideration"). 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 (other than a Fundamental Transaction which was not approved by the Board
of Directors, as to which this right shall not apply), 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 (or,
if later, the date of the public announcement of the applicable 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 payment of the Black Scholes Value will be made by wire transfer of immediately available
funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).
At the Holder's option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue
to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing
the Holder's right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this paragraph (b) and insuring that the Warrant (or any such replacement security) will
be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. For the avoidance of doubt, except
as expressly set forth in this Section 3(e), in no event does this agreement result in the Company having an obligation to issue
cash or other assets to the holder.
“
Fundamental
Transaction
” means (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).
(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 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 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 original
Issue Date 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 issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).
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)
Governing
Law
. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors,
officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action,
suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or proceeding.
(f)
Restrictions
.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g)
Nonwaiver
and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all
rights hereunder terminate on the Termination Date. 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
.
a)
Notices
.
Any notices, consents, waivers or other document or communications required or permitted to be given or delivered under the terms
of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when
sent, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); (iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically
or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s
e-mail server that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1)
Trading Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed
to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to the Company:
EyeGate Pharmaceuticals, Inc.
271 Waverley Oaks Road
Suite 108
Waltham, MA 02452
E-mail: sfrom@eyegatepharma.com
Attention: Stephen From, President
and Chief Executive Officer
With a copy (for informational purposes only) to:
Burns & Levinson LLP
125 Summer Street
Boston, MA 02110
E-mail: rpetitt@burnslev.com
Attention: Robert A. Petitt, Esq.
Any notice to a Holder, to its
address, facsimile number or e-mail address set forth herein or on the books and records of the Company.
(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.
|
|
EYEGATE PHARMACEUTICALS, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name: Stephen From
|
|
|
|
Title: President and Chief Executive Officer
|
NOTICE OF EXERCISE
|
|
To:
|
EYEGATE PHARMACEUTICALS,
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 a certificate or certificates representing 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 or by physical delivery of a certificate to:
(4)
Accredited
Investor
. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
|
Name of Investing Entity:
|
|
|
Signature of Authorized Signatory of Investing Entity
:
|
|
|
Name of Authorized Signatory:
|
|
|
Title of Authorized Signatory:
|
|
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____]
all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
|
|
Dated: ______________, _______
|
|
|
Holder’s Signature:
|
|
|
|
|
|
|
|
|
|
Holder’s Address:
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Warrant.
Exhibit 5.1
[Letterhead
of Burns & Levinson LLP]
Board of Directors
EyeGate Pharmaceuticals, Inc.
271 Waverley Oaks Road, Suite 108
Waltham, MA 02452
Ladies and Gentlemen:
We have acted
as counsel to EyeGate Pharmaceuticals, Inc., a Delaware corporation (the “Company”), in connection with
the preparation of a Registration Statement on Form S-1 (Registration No. 333-217418) (the “Registration
Statement”) filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933, as amended (the “Securities Act”), on April 21, 2017, as amended on May 5, 2017 and
June 5, 2017, with respect to the offer and sale of (a) 2,929,688 shares (the “Common Shares”) of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), (b) 1,875 shares (the
“Preferred Shares”) of the Company’s Series B Convertible Preferred Stock, par value $0.01 per share (the
“Series B Preferred Stock”), which are convertible into an aggregate of 976,563 shares of the Company’s
Common Stock (the “Conversion Shares”) and (c) warrants (the “Warrants”) to purchase an aggregate of
3,906,251 shares of Common Stock (the “Warrant Shares”). The Common Shares, Preferred Shares, Conversion Shares,
Warrants and Warrant Shares are referred to herein collectively as the “Securities.”
The
Securities are to be sold by the Company pursuant to an engagement letter entered into by and between the Company and H.C. Wainwright&
Co., LLC, as placement agent (the “Placement Agent”), dated as of June 2, 2017 (the “Engagement Letter”),
which have been filed as Exhibit 10.21 to the Registration Statement.
In connection with this opinion, we have
examined and relied upon the Registration Statement and the Prospectus, the Company’s Restated Certificate of Incorporation,
the Company’s Amended and Restated By-Laws, the Engagement Letter, the Warrants, the
Certificate of Designation designating the Series B Preferred Stock, the securities purchase agreement pursuant to which certain
of the Securities are to be sold (together with the Engagement Letter, the “Agreements”), and such instruments, documents,
certificates and records that we have deemed relevant and necessary for the basis of our opinion hereinafter expressed. In such
examination, we have assumed: (i) the authenticity of original documents and the genuineness of all signatures; (ii) the conformity
to the originals of all documents submitted to us as copies; (iii) the truth, accuracy and completeness of the information, representations
and warranties contained in the records, documents, instruments and certificates we have reviewed; and (iv) the due execution and
delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof.
Based upon the foregoing,
we are of the opinion that:
1. The
Common Shares, when issued and sold in accordance with the terms set forth in the Agreements and the Registration Statement against
payment therefor, will be duly authorized, validly issued, fully paid and non-assessable.
2. The
Preferred Shares, when issued and sold in accordance with the terms set forth in the Agreements and the Registration Statement
against payment therefor, will be duly authorized, validly issued, fully paid and non-assessable.
EyeGate Pharmaceuticals, Inc.
June 5, 2017
Page 2
3. Provided
that the Warrants have been duly executed and delivered by the Company and duly delivered to the purchasers thereof against payment
therefor, then the Warrants, when issued and sold in accordance with the terms set forth in the Agreements and the Registration
Statement, will constitute the valid and legally binding obligations of the Company.
4. The
Conversion Shares have been duly authorized for issuance and, when issued upon the conversion of the Preferred Shares in accordance
with the terms thereof, will be validly issued, fully paid and non-assessable.
5. The
Warrant Shares have been duly authorized for issuance and, when issued and delivered against payment therefor in accordance with
the provisions of the Warrants, including the payment of the exercise price therefor, will be validly issued, fully paid and non-assessable.
This opinion is limited
to the General Corporate Laws of the State of Delaware, the laws of the State of New York and the United States federal laws, and
we express no opinion with respect to the laws of any other jurisdiction. No opinion is expressed herein with respect to the qualification
of the Shares under the securities or blue sky laws of any state or foreign jurisdiction.
We hereby consent to the filing of this
opinion as Exhibit 5.1 to the Registration Statement and to the reference to this firm under the caption “Legal Matters”
in the Registration Statement.
In giving this consent,
we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act or the
rules and regulations promulgated thereunder by the Commission.
|
|
Very truly yours,
|
|
|
|
|
|
/s/
Burns & Levinson LLP
|
|
|
|
|
|
Burns & Levinson LLP
|
Exhibit 10.21
June 2, 2017
STRICTLY CONFIDENTIAL
Stephen From
President and Chief Executive Officer
Eyegate Pharmaceuticals, Inc.
271 Waverly Oaks Road
Suite 108
Waltham, MA 02452
Dear Mr. From:
This letter agreement
(this “
Agreement
”) constitutes the agreement between Eyegate Pharmaceuticals, Inc. (the “
Company
”)
and Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (“
Rodman
”), that Rodman shall serve as the
exclusive agent, advisor or underwriter in any offering (each, an “
Offering
”) of securities of the Company (the
“
Securities
”) during the Term (as hereinafter defined) of this Agreement. The terms of each Offering and the
Securities issued in connection therewith shall be mutually agreed upon by the Company and Rodman and nothing herein implies that
Rodman would have the power or authority to bind the Company and nothing herein implies that the Company shall have an obligation
to issue any Securities. It is understood that Rodman’s assistance in an Offering will be subject to the satisfactory completion
of such investigation and inquiry into the affairs of the Company as Rodman deems appropriate under the circumstances and to the
receipt of all internal approvals of Rodman in connection with the transaction. The Company expressly acknowledges and agrees that
Rodman’s involvement in an Offering is strictly on a reasonable best efforts basis and that the consummation of an Offering
will be subject to, among other things, market conditions. The execution of this Agreement does not constitute a commitment by
Rodman to purchase the Securities and does not ensure a successful Offering of the Securities or the success of Rodman with respect
to securing any other financing on behalf of the Company. Rodman may retain other brokers, dealers, agents or underwriters on its
behalf in connection with an Offering.
A.
Compensation;
Reimbursement
. At the closing of each Offering (each, a “
Closing
”), the Company shall compensate Rodman
as follows:
1.
Cash
Fee
. The Company shall pay to Rodman a cash fee, or as to an underwritten Offering an underwriter discount, equal to 7.0% of
the aggregate gross proceeds raised in each Offering.
430 Park Avenue | New York, New York 10022
| 212.356.0500
Security services provided by H.C. Wainwright
& Co., LLC | Member: FINRA/SIPC
2.
Expense
Allowance
. Out of the proceeds of each Closing, the Company also agrees to pay Rodman (a) a management fee equal to 0.5% of
the gross proceeds raised in each Offering; (b) $25,000 for non-accountable expenses; (c) up to $75,000 for fees and expenses of
legal counsel; plus the additional reimbursable amount payable by the Company pursuant to Paragraph D.3 hereunder; provided, however,
that such reimbursement amount in no way limits or impairs the indemnification and contribution provisions of this Agreement.
3.
Tail
.
In the event an Offering does not close during the Term, Rodman shall be entitled to compensation under clauses (1) and (2) hereunder,
calculated in the manner set forth therein, with respect to any public or private offering or other financing or capital-raising
transaction of any kind (“
Tail Financing
”) to the extent that such financing or capital is provided to the Company
by investors whom Rodman had contacted during the Term or introduced to the Company during the Term, if such Tail Financing is
consummated at any time within the six-month period following the expiration or termination of this Agreement.
4.
Right
of First Refusal
. If, from the date hereof until the twelve-month anniversary following the consummation of an Offering of
more than $5.0 million (reduced to six-month in case of consummation of an Offering of $5.0 million or less), the Company or any
of its subsidiaries (a) decides to finance or refinance any indebtedness using a manager or agent, Rodman (or any affiliate designated
by Rodman) shall have the right to act as sole book-runner, sole manager, sole placement agent or sole agent with respect to such
financing or refinancing; or (b) decides to raise funds by means of a public offering or a private placement of equity or debt
securities using an underwriter or placement agent, Rodman (or any affiliate designated by Rodman) shall have the right to act
as sole book-running manager, sole underwriter or sole placement agent for such financing. If Rodman or one of its affiliates decides
to accept any such engagement, the agreement governing such engagement will contain, among other things, provisions for customary
fees for transactions of similar size and nature and the provisions of this Agreement, including indemnification, which are appropriate
to such a transaction. If Rodman should decline such retention or fails to respond within 7 business days’ notice of the
Company, the Company shall have no further obligations to Rodman under this Section 4 with respect to such financing.
B.
Term
and Termination of Engagement; Exclusivity
. The term of Rodman’s exclusive engagement will begin on the date hereof and
end thirty (30) days thereafter (the “
Term
”). Notwithstanding anything to the contrary contained herein, the
Company agrees that the provisions relating to the payment of fees, reimbursement of expenses, right of first refusal, tail, indemnification
and contribution, confidentiality, conflicts, independent contractor and waiver of the right to trial by jury will survive any
termination of this Agreement. Notwithstanding anything to the contrary contained in this Agreement, in the event that this Agreement
shall not be carried out for any reason whatsoever during the Term, the Company shall be obligated to pay to Rodman its actual
and accountable out-of-pocket expenses related to an Offering (including the fees and disbursements of Rodman’s legal counsel)
in an aggregate amount of up to $100,000. During Rodman’s engagement hereunder: (i) the Company will not, and will not permit
its representatives to, other than in coordination with Rodman, contact or solicit institutions, corporations or other entities
or individuals as potential purchasers of the Securities with respect to the Offering, provided that this clause (i) shall not
be construed to limit in any manner the Company from selling or issuing securities to employees, directors or consultants in the
ordinary course of business or pursuant to agreements currently in place prior to this engagement and (ii) the Company will not
pursue any financing transaction which would be in lieu of an Offering. Furthermore, the Company agrees that during Rodman’s
engagement hereunder, all inquiries, whether direct or indirect, from prospective investors will be referred to Rodman and will
be deemed to have been contacted by Rodman in connection with an Offering.
Additionally,
except as set forth hereunder, the Company represents, warrants and covenants that no brokerage or finder’s fees or commissions
are or will be payable by the Company or any subsidiary of the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other third-party with respect to any Offering.
C.
Information;
Reliance
. The Company shall furnish, or cause to be furnished, to Rodman all information requested by Rodman for the purpose
of rendering services hereunder and conducting due diligence (all such information being the “
Information
”).
In addition, the Company agrees to make available to Rodman upon request from time to time the officers, directors, accountants,
counsel and other advisors of the Company. The Company recognizes and confirms that Rodman (a) will use and rely on the Information,
including any documents provided to investors in each Offering (the “
Offering Documents
” which shall include
any Purchase Agreement (as defined hereunder), and on information available from generally recognized public sources in performing
the services contemplated by this Agreement without having independently verified the same; (b) does not assume responsibility
for the accuracy or completeness of the Offering Documents or the Information and such other information; and (c) will not make
an appraisal of any of the assets or liabilities of the Company. Upon reasonable request, the Company will meet with Rodman or
its representatives to discuss all information relevant for disclosure in the Offering Documents and will cooperate in any reasonable
investigation undertaken by Rodman thereof, including any document included or incorporated by reference therein. At each Offering,
at the request of Rodman, the Company shall deliver such legal letters (including, without limitation, negative assurance letters),
opinions, comfort letters, officers’ and secretary certificates and good standing certificates, all in form and substance
satisfactory to Rodman and its counsel as is customary for such Offering. Rodman shall be a third party beneficiary of any representations,
warranties, covenants and closing conditions made by the Company in any Offering Documents, including representations, warranties,
covenants and closing conditions made to any investor in an Offering.
D.
Related
Agreements
. At each Offering, the Company shall enter into the following additional agreements:
1.
Underwritten
Offering
. If an Offering is an underwritten Offering, the Company and Rodman shall enter into a customary underwriting agreement
in form and substance satisfactory to Rodman and its counsel.
2.
Best
Efforts Offering
. If an Offering is on a best efforts basis, the sale of Securities to the investors in the Offering will be
evidenced by a purchase agreement (“
Purchase Agreement
”) between the Company and such investors in a form reasonably
satisfactory to the Company and Rodman. Rodman shall be a third party beneficiary with respect to the representations and warranties
included in the Purchase Agreement. Prior to the signing of any Purchase Agreement, officers of the Company with responsibility
for financial affairs will be available to answer inquiries from prospective investors.
3.
Escrow
and Settlement
. In respect of each Offering, the Company and Rodman shall enter into an escrow agreement with a third party
escrow agent, which may also be Rodman’s clearing agent, pursuant to which Rodman’s compensation and expenses shall
be paid from the gross proceeds of the Securities sold. If the Offering is settled in whole or in part via delivery versus payment
(“
DVP
”), Rodman shall arrange for its clearing agent to provide the funds to facilitate such settlement. The
Company shall bear the cost of the escrow agent and shall reimburse Rodman for the actual out-of-pocket cost of such clearing agent
settlement and financing, if any, which cost shall not exceed $10,000.
4.
FINRA
Amendments
. Notwithstanding anything herein to the contrary, in the event that Rodman determines that any of the terms provided
for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to
amend this Agreement (or include such revisions in the final underwriting agreement) in writing upon the request of Rodman to comply
with any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company than
are reflected in this Agreement.
E.
Confidentiality
.
In the event of the consummation or public announcement of any Offering, Rodman shall have the right to disclose its participation
in such Offering, including, without limitation, the Offering at its cost of “tombstone” advertisements in financial
and other newspapers and journals.
F.
Indemnity
.
1.
In
connection with the Company’s engagement of Rodman as Offering agent, the Company hereby agrees to indemnify and hold harmless
Rodman and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees
of any of the foregoing (collectively the “
Indemnified Persons
”), from and against any and all claims, actions,
suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the
reasonable fees and expenses of counsel), as incurred, (collectively a “
Claim
”), that are (A) related to or
arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be
made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s
engagement of Rodman, or (B) otherwise relate to or arise out of Rodman’s activities on the Company’s behalf under
Rodman’s engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees
and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such
claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified
Person is a party. The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted
from the gross negligence or willful misconduct of any person seeking indemnification for such Claim. The Company further agrees
that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of
Rodman except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful
misconduct.
2.
The
Company further agrees that it will not, without the prior written consent of Rodman, settle, compromise or consent to the entry
of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not
any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an
unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.
3.
Promptly
upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which
indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of
such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have
hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses.
If the Company so elects or is requested by such Indemnified Person, the Company will assume the defense of such Claim, including
the employment of counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel.
In the event, however, that legal counsel to such Indemnified Person reasonably determines that having common counsel would present
such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and
the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it
or other Indemnified Persons different from or in addition to those available to the Company, then such Indemnified Person may
employ its own separate counsel to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable
fees and expenses of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to
defend, contest, or otherwise protect against any Claim, the relevant Indemnified Party shall have the right, but not the obligation,
to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be
fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and
all amounts paid as a result of such Claim or the compromise or settlement thereof. In addition, with respect to any Claim in which
the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her
or its own counsel therefor at his, her or its own expense. Notwithstanding anything to the contrary herein, in no event shall
the Company be required to pay fees and expenses under this indemnity of more than one firm of attorneys (in addition to local
counsel) in the same jurisdiction in any one legal action or group of related legal actions, other than to the extent the applicable
Indemnified Persons use separate counsel for conflict of interest reasons.
4.
The
Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason
then (whether or not Rodman is the Indemnified Person), the Company and Rodman shall contribute to the Claim for which such indemnity
is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and
Rodman on the other, in connection with Rodman’s engagement referred to above, subject to the limitation that in no event
shall the amount of Rodman’s contribution to such Claim exceed the amount of fees actually received by Rodman from the Company
pursuant to Rodman’s engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and
Rodman on the other, with respect to Rodman’s engagement shall be deemed to be in the same proportion as (a) the total value
paid or proposed to be paid or received by the Company pursuant to the applicable Offering (whether or not consummated) for which
Rodman is engaged to render services bears to (b) the fee paid or proposed to be paid to Rodman in connection with such engagement.
5.
The
Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall
in no way limit or otherwise adversely affect any rights that any Indemnified Party may have at law or at equity and (b) shall
be effective whether or not the Company is at fault in any way.
G.
Limitation
of Engagement to the Company
. The Company acknowledges that Rodman has been retained only by the Company, that Rodman is providing
services hereunder as an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement
of Rodman is not deemed to be on behalf of, and is not intended to confer rights upon, any shareholder, owner or partner of the
Company or any other person not a party hereto as against Rodman or any of its affiliates, or any of its or their respective officers,
directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange
Act of 1934, as amended (the “
Exchange Act
”)), employees or agents. Unless otherwise expressly agreed in writing
by Rodman, no one other than the Company is authorized to rely upon this Agreement or any other statements or conduct of Rodman,
and no one other than the Company is intended to be a beneficiary of this Agreement. The Company acknowledges that any recommendation
or advice, written or oral, given by Rodman to the Company in connection with Rodman’s engagement is intended solely for
the benefit and use of the Company’s management and directors in considering a possible Offering, and any such recommendation
or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used or relied upon for
any other purpose. Rodman shall not have the authority to make any commitment binding on the Company. The Company, in its sole
discretion, shall have the right to reject any investor introduced to it by Rodman.
H.
Limitation
of Rodman’s Liability to the Company
. Rodman and the Company further agree that neither Rodman nor any of its affiliates
or any of its their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), employees or agents shall have any liability to the Company, its security holders or creditors,
or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for
an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out
of or relating to this Agreement or the services rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses
that arise out of or are based on any action of or failure to act by Rodman and that are finally judicially determined to have
resulted solely from the gross negligence or willful misconduct of Rodman.
I.
Governing
Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements
made and to be fully performed therein. Any disputes that arise under this Agreement, even after the termination of this Agreement,
will be heard only in the state or federal courts located in the City of New York, State of New York. The parties hereto expressly
agree to submit themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties
hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City
and State of New York. In the event Rodman or any Indemnified Person is successful in any action, or suit against the Company,
arising out of or relating to this Agreement, the final judgment or award entered shall be entitled to have and recover from the
Company the costs and expenses incurred in connection therewith, including its reasonable attorneys’ fees. In the event the
Company is successful in any action, or suit against Rodman, arising out of or relating to this Agreement, the final judgment or
award entered shall be entitled to have and recover from Rodman the costs and expenses incurred in connection therewith, including
its reasonable attorneys’ fees. Any rights to trial by jury with respect to any such action, proceeding or suit are hereby
waived by Rodman and the Company.
J.
Notices
.
All notices hereunder will be in writing and sent by certified mail, hand delivery, overnight delivery or fax, if sent to Rodman,
at the address set forth on the first page hereof, e-mail: notices@rodm.com, Attention: Head of Investment Banking, and if sent
to the Company, to the address set forth on the first page hereof, e-mail
email:
sfrom@eyegatepharma.com
and rbrenneman@eyegatepharma.com Attention: Chief Executive Officer. Notices sent by certified mail
shall be deemed received five days thereafter, notices sent by hand delivery or overnight delivery shall be deemed received on
the date of the relevant written record of receipt, notices delivered by fax shall be deemed received as of the date and time printed
thereon by the fax machine and notices sent by e-mail shall be deemed received as of the date and time they were sent.
K.
Conflicts
.
The Company acknowledges that Rodman and its affiliates may have and may continue to have investment banking and other relationships
with parties other than the Company pursuant to which Rodman may acquire information of interest to the Company. Rodman shall have
no obligation to disclose such information to the Company or to use such information in connection with any contemplated transaction.
L.
Anti-Money
Laundering
. To help the United States government fight the funding of terrorism and money laundering, the federal laws of the
United States require all financial institutions to obtain, verify and record information that identifies each person with whom
they do business. This means we must ask you for certain identifying information, including a government-issued identification
number (e.g., a U.S. taxpayer identification number) and such other information or documents that we consider appropriate to verify
your identity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a
trust instrument.
M.
Miscellaneous
.
The Company represents and warrants that it has all requisite power and authority to enter into and carry out the terms and provisions
of this Agreement and the execution, delivery and performance of this Agreement does not breach or conflict with any agreement,
document or instrument to which it is a party or bound. This Agreement shall not be modified or amended except in writing signed
by Rodman and the Company. This Agreement shall be binding upon and inure to the benefit of both Rodman and the Company and their
respective assigns, successors, and legal representatives. This Agreement constitutes the entire agreement of Rodman and the Company
with respect to the subject matter hereof and supersedes any prior agreements with respect to the subject matter hereof. If any
provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of the Agreement shall remain in full force and effect. This Agreement may be
executed in counterparts (including facsimile or electronic counterparts), each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
*********************
In acknowledgment that the foregoing correctly
sets forth the understanding reached by Rodman and the Company, please sign in the space provided below, whereupon this letter
shall constitute a binding Agreement as of the date indicated above.
|
|
Very truly yours,
|
|
|
|
|
|
RODMAN & RENSHAW, A UNIT OF H.C. WAINWRIGHT & CO., LLC
|
|
|
|
|
|
|
|
By:
|
/s/ Mark W. Viklund
|
|
|
|
Name:
|
Mark W. Viklund
|
|
|
|
Title:
|
Chief Executive Officer
|
Accepted and Agreed:
Eyegate Pharmaceuticals,
Inc.
|
By:
|
/s/ Stephen From
|
|
|
|
Name:
|
Stephen From
|
|
|
|
Title:
|
President & CEO
|
|
Exhibit 10.22
SECURITIES PURCHASE AGREEMENT
This Securities Purchase
Agreement (this “
Agreement
”) is dated as of June ____, 2017, between EyeGate Pharmaceuticals, Inc., a Delaware
corporation (the “
Company
”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “
Purchaser
” and collectively the “
Purchasers
”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “
Securities Act
”), the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.
NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions
.
In addition to the terms defined elsewhere in this Agreement, (a) capitalized terms that are not otherwise defined herein
have the meanings given to such terms in the Certificate of Designation (as defined herein), and (b), the following terms have
the meanings set forth in this Section 1.1:
“
Acquiring
Person
” shall have the meaning ascribed to such term in Section 4.7.
“
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.
“
Board
of Directors
” means the board of directors of the Company.
“
Business
Day
” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.
“
Certificate
of Designation
” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary
of State of Delaware, in the form of
Exhibit A
attached hereto.
“
Closing
”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“
Closing
Date
” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event
later than the third Trading Day following the date hereof.
“
Commission
”
means the United States Securities and Exchange Commission.
“
Common
Stock
” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“
Common
Stock Equivalents
” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“
Company
Counsel
” means Burns & Levinson LLP, with offices located at 125 Summer Street, Boston, MA 02110.
“
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.
“
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, options or other equity awards to employees, officers,
directors or consultants (but as to consultants, not more than 200,000 shares of Common Stock) 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, including
without limitation any grants that may be made under the Company’s 2014 Equity Incentive Plan or any inducement grant, (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, including license
agreements with third parties, 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,
a service provider 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(jj).
“
FDCA
”
shall have the meaning ascribed to such term in Section 3.1(jj).
“
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(bb).
“
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.
“
Lowenstein
Sandler
” means Lowenstein Sandler LLP, with offices located at 1251 Avenue of the Americas, New York, New York 10020.
“
Material
Adverse Effect
” shall have the meaning assigned to such term in Section 3.1(b).
“
Material
Permits
” shall have the meaning ascribed to such term in Section 3.1(n).
“
Per
Share Purchase Price
” equals $_____, 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.
“
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(jj).
“
Placement
Agent
” means Rodman & Renshaw, a unit of H. C. Wainwright & Co., LLC.
“
Preferred
Stock
” means the up to ____ shares of the Company’s Series B Convertible Preferred Stock issued hereunder having
the rights, preferences and privileges set forth in the Certificate of Designation, in the form of
Exhibit A
hereto.
“
Preliminary
Prospectus
” means the preliminary prospectus or prospectus subject to completion included in the Registration Statement
or filed with the Commission pursuant to Rule 424 under the Securities Act.
“
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.
“
Purchaser
Party
” shall have the meaning ascribed to such term in Section 4.10.
“
Registration
Statement
” means the effective registration statement with Commission file No. 333-217418 which registers the sale
of the Shares, Preferred Stock, the Warrants and the Underlying Shares.
“
Required
Approvals
” shall have the meaning ascribed to such term in Section 3.1(e).
“
Required
Minimum
” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or then potentially
issuable assuming no further adjustments 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.
“
Rule
424
” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“
SEC
Reports
” shall have the meaning ascribed to such term in Section 3.1(h).
“
Securities
”
means the Shares, the Preferred Stock, the Warrants and the Underlying Shares.
“
Securities
Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“
Shares
”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“
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 Shares or Preferred Stock, as applicable
to such Purchaser, and the 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.
“
Subsidiary
”
means any subsidiary of the Company as set forth in the SEC Reports, 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 (or any successors to any of the foregoing).
“
Transaction
Documents
” means this Agreement, the Certificate of Designations, the Warrants, 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 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.
“
Variable
Rate Transaction
” shall have the meaning ascribed to such term in Section 4.13(b).
“
Warrants
”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable starting from the Closing Date and have a term of exercise equal to five years, in
the form of
Exhibit B
attached hereto.
“
Warrant
Shares
” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1
Closing
.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $_____ of Shares and/or shares of Preferred Stock with an aggregate Stated Value for each
Purchaser equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser,
and Warrants as determined pursuant to Section 2.2(a). Notwithstanding anything herein to the contrary, in the event that
a Purchaser’s Subscription Amount (together with such Purchaser’s Affiliates, and any Person acting as a group together
with such Purchaser or any of such Purchaser’s Affiliates) would cause such Purchaser’s beneficial ownership of the
Common Stock to exceed 4.99% of the issued and outstanding shares of Common Stock, in lieu of Shares in excess of such amount,
such Purchaser shall be issued shares of Preferred Stock as determined pursuant to Section 2.2(a)(iv). Each Purchaser shall deliver
to the clearing account designated by the Placement Agent, immediately available funds equal to such Purchaser’s Subscription
Amount as set forth on the signature page hereto executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares via DVP (as defined below) or shares of Preferred Stock, as applicable, 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
Lowenstein Sandler or such other location as the parties shall mutually agree. Unless otherwise agreed upon by the Company and
the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (“DVP”) (i.e.,
on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by
the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares,
the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be
made by the Placement Agent (or its clearing firm) by wire transfer to the Company). The Company covenants that, if the Purchaser
delivers a Notice of Conversion (as defined in the Certificate of Designation) at least one (1) Trading Day prior to the Closing
to convert any shares of Preferred Stock between the date hereof and the Closing Date, the Company shall deliver Conversion Shares
to the Purchaser on the Closing Date in connection with such Notice of Conversion..
2.2
Deliveries
.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
legal opinion of Company Counsel, substantially in the form reasonable acceptable to the Purchasers;
(iii) subject
to the last sentence of Section 2.1, as to a Purchaser purchasing Shares hereunder, a copy of the irrevocable instructions
to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit
or Withdrawal at Custodian system (DWAC) Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase
Price, registered in the name of such Purchaser;
(iv) to
each Purchaser that will receive any Preferred Stock in lieu of Shares pursuant to Section 2.1, (I) shares of Preferred Stock registered
in the name of such Purchaser convertible into a number of shares of Common Stock (keeping in mind that one share of Preferred
Stock has a stated value of $1,000) equal to the difference between (A) such Purchaser’s Subscription Amount divided by the
Per Share Purchase Price and (B) the number of Shares otherwise issuable to such Purchaser that would cause such Purchaser’s
beneficial ownership to equal 4.99% of the issued and outstanding shares of Common Stock, and evidence of the filing and acceptance
of the Certificate of Designation from the Secretary of State of Delaware;
(v) a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the aggregate
amount of such Purchaser’s Shares, and if applicable Conversion Shares, on the date hereof, with an exercise price equal
to $_____, subject to adjustment therein);
(vi) the
Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) Such
Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement with
the Company.
2.3
Closing
Conditions
.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(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 Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the
Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations
and Warranties of the Company
. The Company hereby makes the following representations and warranties to each Purchaser:
(a)
Subsidiaries
.
All of the direct and indirect subsidiaries of the Company are set forth on Exhibit 1 to the Company’s Annual Report on Form
10-K filed with the SEC on February 23, 2017. 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 or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “
Material Adverse Effect
”) 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, 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) 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 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus, (iii) the
filing of the Certificate of Designations with the Secretary of State of Delaware, (iv) application(s) to each applicable
Trading Market for the listing of the Shares and Underlying Shares for trading thereon in the time and manner required thereby,
and (iv) such filings as are required to be made under applicable state securities laws (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 the maximum number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required
Minimum as of 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 June ___, 2017 (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 in the SEC Reports as of the time of filing of such SEC Reports. The Company
has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than issuances of
the Company’s equity securities to the Company’s officers, directors, employees or consultants in the ordinary course
of business, pursuant to the grant of equity awards or the exercise of employee stock options or options held by members of the
Board of Directors under the Company’s stock option or equity incentive 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. 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 as a result of the purchase and sale of the Securities, outstanding warrants issued in June
2016 in connection with the Company’s prior engagement of the Placement Agent, equity securities of the Company issued to
officers, directors, employees or consultants in the ordinary course of business as described above or as set forth in the Company’s
definitive proxy statement filed with the SEC on April 28, 2017 or the Company’s Annual Report on Form 10-K filed with the
SEC on February 23, 2017, 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. 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 Preliminary Prospectus and the Prospectus, being collectively referred to herein as the “
SEC Reports
”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject
to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“
GAAP
”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
(i)
Material
Changes; Undisclosed Events, Liabilities or Developments
. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there
has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate,
except pursuant to existing Company stock option, equity incentive or stock purchase 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, 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
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.
(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 necessary or required for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have would reasonably be expected to 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 Property Rights, 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 any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “
Evaluation Date
”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries.
(t)
Certain
Fees
. Except as set forth in the Preliminary Prospectus and the Prospectus, 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. Except as set forth in the SEC Reports, 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 Preliminary Prospectus and the Prospectus. 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,
is true and correct in all material respects 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 (i) the Securities Act which would
require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.
(aa)
Solvency
.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, and (ii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the
cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The
Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead
it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.
The SEC Reports
set 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 provisions 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 EisnerAmper LLP. To the Company’s knowledge, 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, 2016.
(ee)
Acknowledgment
Regarding Purchasers’ Purchase of Securities
. The Company acknowledges and agrees that, to the knowledge of the Company,
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, to the knowledge of the Company, 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)
Acknowledgement
Regarding Purchaser’s Trading Activity
. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser,
and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently
may 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 Warrant 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)
Office
of Foreign Assets Control
. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“
OFAC
”).
(jj)
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.
(kk)
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.
(ll)
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.
(mm)
Stock
Option Plans
. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in
accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair
market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock
option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there
is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate
the grant of stock options with, the release or other public announcement of material information regarding the Company or its
Subsidiaries or their financial results or prospects.
(nn)
No
Disagreements with Accountants and Lawyers.
There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.
3.2
Representations
and Warranties of the Purchasers
. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they
shall be accurate as of such date):
(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, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined
in Rule 144A(a) under the Securities Act.
(d)
Experience
of Such Purchaser
. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e)
Access
to Information
. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of
the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the
Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to
the investment. Such Purchaser acknowledges and agrees that 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,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly 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 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 the 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 and 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 best efforts to keep a registration statement (including the Registration
Statement) registering the issuance (but for avoidance of any doubt, not the 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
. Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants
have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange Act.
4.4
Integration
.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities 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
. The terms and provisions expressly described in each Warrant and the Certificate of Designation, including
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, properly submitted in accordance with the respective terms
thereof, and in each such case 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. The Company shall file the Prospectus by 5:30 p.m. (New York City time) on the second Trading Day immediately following
the date hereof. 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 and filing of the Form 8-K and the Prospectus, 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 4.6, 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 the Company, any of its Subsidiaries,
or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.9
Use
of Proceeds
. Except as set forth in the Preliminary Prospectus and the Prospectus, the Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes as set forth in the Preliminary Prospectus and the Prospectus
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
of Common Stock
. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue shares of Common Stock upon conversion of the Preferred Stock and Warrant Shares pursuant to any exercise of the Warrants.
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 120% of the
number of Underlying Shares on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s
certificate of incorporation to increase the number of authorized but unissued shares of Common Stock to at least 120% of the number
of Underlying Shares at such time, as soon as possible and in any event not later than the 75th day after such date.
4.12
Listing
of Common Stock
. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Shares and Underlying Shares on such Trading Market and promptly secure the listing of all of the Shares and Underlying
Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other
Trading Market, it will then include in such application all of the Shares and Underlying Shares, and will take such other action
as is necessary to cause all of the Shares and Underlying Shares to be listed or quoted on such other Trading Market as promptly
as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock
on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer
through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment
of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.13
Subsequent
Equity Sales
.
(a) From
the date hereof until 90 days from the 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.
(b) From
the date hereof until the twenty-four (24) month anniversary of the Closing Date, 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, or effects a transaction under
,
any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined
price. Notwithstanding the foregoing, following the twelve (12) month anniversary of the Closing Date, the Company shall be entitled
to issue shares of Common Stock pursuant to any at-the-market continuous equity offering by the Company. 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) Notwithstanding
the foregoing, this Section 4.13(a) 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 Purchasers
. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate
right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect
to the purchase, disposition or voting of Securities or otherwise.
4.15
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. 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 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.
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 Closing has not
been consummated on or before June __, 2017;
provided
,
however
, that no such termination will affect the right of
any party to sue for any breach by any other party (or parties).
5.2
Fees
and Expenses
. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company
and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery
of any Securities to the Purchasers.
5.3
Entire
Agreement
. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus and the
Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
5.4
Notices
.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile or email attachment at the facsimile number or email address 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 or email attachment at the facsimile number or email address 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 (2
nd
) 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 holders of at least a majority of the aggregate amount of Shares issued hereunder
and shares issuable under the Warrants (without regard to any restriction or limitation on the exercise of the Warrants contained
therein) 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, in which case no consent shall be required). 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 conversion of the Preferred Stock or an exercise of a Warrant, such right may only be exercise in lieu
of, and not in addition to, any exercise of Buy-In rights under the Certificate of Designation or the Warrant, and 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 Preferred Stock or Warrant, as applicable (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
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 Lowenstein Sandler. Lowenstein Sandler
does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to
do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each
other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.
5.18
Liquidated
Damages
. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.
5.19
Saturdays,
Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
5.20
Construction
.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
5.21
WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
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.
|
EYEGATE PHARMACEUTICALS, INC.
|
|
Address for Notice:
|
|
|
|
|
|
By:
|
|
|
271 Waverley Oaks Road
|
|
|
Name: Stephen From
|
|
Suite 108
|
|
|
Title: President and Chief Executive Officer
|
|
Waltham, MA 02452
|
|
|
|
Email:
sfrom@eyegatepharma.com
|
|
|
|
Attention: Stephen From, President and Chief Executive Officer
|
|
With a copy to (which shall not constitute notice):
Burns & Levinson LLP
125 Summer Street
Boston, MA 02110
Email: rpetitt@burnslev.com
Attention: Robert A. Petitt, Esq.
|
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF,
the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.
Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of
Purchaser
: __________________________________
Name of Authorized Signatory: ____________________________________________________
Title of Authorized Signatory: _____________________________________________________
Email Address of Authorized Signatory:
_____________________________________________
Facsimile Number of Authorized Signatory: __________________________________________
Address for Notice of Purchaser:
Address for Delivery of Securities for Purchaser (if not same
as address for notice):
Subscription Amount: _____________
Shares: _____________
Shares of Preferred Stock: _____________
Warrant Shares: _________________
EIN Number:
[PROVIDE THIS UNDER SEPARATE COVER]
[SIGNATURE PAGES CONTINUE]
Exhibit 23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in this Amendment No. 2 to Registration Statement of EyeGate Pharmaceuticals, Inc. on
Form S-1 to be filed on or about June 5, 2017 of our report dated February 23, 2017, on our audits of the consolidated financial
statements as of December 31, 2016 and 2015 and for
each of the years then ended
,
which report was included in the Annual Report on Form 10-K filed on February 23, 2017. Our report includes an explanatory paragraph
about the existence of substantial doubt concerning the Company's ability to continue as a going concern.
We also consent
to the reference to our firm under the caption “Experts” in the Amendment No. 2 to Registration Statement on Form
S-1.
/s/ EISNERAMPER
LLP
New York, New
York
June 5, 2017