Exhibit 1.1
Execution Copy
SELLAS Life Sciences Group, Inc.
26,367,200 Shares
Common Stock
($0.0001 par value per share)
and
Pre-Funded Warrants to Purchase up to
73,632,800 Shares of Common Stock and
Warrants to Purchase up to 100,000,000
Shares of Common Stock
Underwriting Agreement
New York, New York
June 14, 2019
A.G.P./Alliance Global Partners
As Representative of the several Underwriters,
590 Madison Avenue, 36th Floor
New York, New York 10022
Ladies and Gentlemen:
SELLAS Life Sciences Group, Inc., a corporation
organized under the laws of Delaware (including any predecessor entities, the “
Company
”), proposes to sell
to the several underwriters named in Schedule I hereto (the “
Underwriters
”), for whom you (the “
Representative
”)
are acting as Representative, (i) an aggregate of 26,367,200 shares of common stock, $0.0001 par value per share (“
Common
Stock
”) of the Company (said shares to be issued and sold by the Company being hereinafter called the “
Firm
Shares
”), (ii) pre-funded warrants to purchase up to an aggregate of 73,632,800 shares of Common Stock (the “
Pre-Funded
Warrants
”) at an exercise price of $0.0001 per share and (iii) warrants of the Company to purchase up to an aggregate
of 100,000,000 shares of Common Stock (the “
Firm Common Warrants
”) at an exercise price equal to $0.50 per share.
The Firm Shares, Pre-Funded Warrants, and the Firm Common Warrants to be sold by the Company are collectively referred to as the
“
Firm Securities
.” The Company also proposes to grant to the Underwriters an option to purchase up to (i) 15,000,000
additional shares of Common Stock (the “
Option Shares,
” and together with the Firm Shares, the “
Shares
”)
and/or (at the option of the Underwriters) (ii) additional warrants to purchase up to an aggregate of 15,000,000 shares of Common
Stock (the “
Option Common Warrants
,” and together with the Firm Common Warrants, the “
Common Warrants
”).
The Option Shares and the Option Common Warrants to be sold by the Company are collectively referred to as the “
Option
Securities
,” and the Firm Securities and the Option Securities are collectively referred to as the “
Securities
.”
The Shares and Pre-Funded Warrants are being sold to investors with the Common Warrants as a fixed combination (but will be issued
separately, and will be immediately separable upon issuance), with each Share and each Pre-Funded Warrant, as the case may be,
being accompanied by a Common Warrant to purchase one (1) share of Common Stock.
To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representative as used herein shall mean you, as Underwriters, and the terms Representative
and Underwriters shall mean either the singular or plural as the context requires. Certain terms used herein are defined in Section
20 hereof. Any reference herein to the Registration Statement, any Preliminary Prospectus or the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to refer to and include the documents incorporated by reference therein pursuant
to General Instruction VII of Form S-1. As used herein, “Warrant Shares” means the shares of Common Stock issuable
upon exercise of the Common Warrants or the Pre-Funded Warrants. The terms of the Common Warrants are set forth in the Form of
Warrant Agreement (the “
Warrant Agreement
”) attached hereto as Exhibit B and to be entered into between the
Company and Computershare Trust Company, N.A., as Warrant Agent. The terms of the Pre-Funded Warrants are set forth in the form
of Pre-Funded Warrant attached hereto as Exhibit C.
1.
Representations
and Warranties.
The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section
1.
(a) The
Company has prepared and filed with the Commission a registration statement (file number 333-231723 ) on Form S-1, including
a related preliminary prospectus, for registration under the Act of the offering and sale of the Securities. Such Registration
Statement, including any amendments thereto filed prior to the Execution Time, has become effective. The Company may have filed
one or more amendments thereto, including a related preliminary prospectus, each of which has previously been furnished to you.
The Company will file with the Commission a final prospectus in accordance with Rule 424(b). As filed, such final prospectus shall
contain all information required by the Act and the rules thereunder and, except to the extent the Representative shall agree in
writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to
the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included
or made therein.
(b) On
the Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b)
and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing
Date (a “
Settlement Date
”), the Prospectus (and any supplement thereto as of the date of such supplement) will,
comply in all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date and
at the Execution Time, the Registration Statement 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 in order to make the statements therein not misleading; and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any Settlement Date, the Prospectus (together
with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided
,
however
, that the Company makes no representations or warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through the Representative specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in Section 8 hereof. The Company has complied to the Commission’s
satisfaction with all requests of the Commission for additional or supplemental information, if any. No stop order suspending the
effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceeding for that purpose
has been instituted or threatened by the Commission or by the state securities authority of any jurisdiction. No order preventing
or suspending the use of the Prospectus has been issued and, to the knowledge of the Company, no proceeding for that purpose has
been instituted by the Commission or by the state securities authority of any jurisdiction.
(c) The
Disclosure Package, when taken together as a whole, does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and
in conformity with written information furnished to the Company by any Underwriter through the Representative specifically for
use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists
of the information described as such in Section 8 hereof.
(d) The
Company has not prepared or used or referred to any Free Writing Prospectus, including any electronic roadshow, or otherwise engaged
in any activities which an Ineligible Issuer would be prohibited from taking.
(e) All
documents filed by the Company pursuant to Sections 12, 13, 14 or 15 of the Exchange Act and incorporated or deemed to be incorporated
by reference into the Registration Statement, any Preliminary Prospectus, the Disclosure Package or the Prospectus, when they became
effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the
Act or the Exchange Act, as applicable and were filed on a timely basis with the Commission, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. There are no contracts or other documents required to be described
in the Disclosure Package or the Prospectus or to be filed as an exhibit to the Registration Statement which have not been described
or filed as required.
(f) Each
of the Company and its subsidiaries (i) has been duly incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is chartered or organized with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as described in the Registration Statement, the Disclosure
Package and the Prospectus, and (ii) is duly qualified to do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification, except where the failure to be so qualified or be in good standing
or have such power or authority would not, individually or in the aggregate, have a material adverse effect or would not reasonably
be expected to have a material adverse effect on or affect the assets, business, operations, earnings, properties, condition (financial
or otherwise), prospects, stockholders’ equity or results of operations of the Company and the Subsidiaries taken as a whole
or prevent or materially interfere with the consummation of the transactions contemplated hereby (a “
Material Adverse
Effect
”).
(g) All
the outstanding shares of capital stock of each subsidiary have been duly and validly authorized and issued and are fully paid
and non-assessable, and, except as otherwise set forth in the Registration Statement, the Disclosure Package and the Prospectus,
all outstanding shares of capital stock of the subsidiaries are owned by the Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances. Except as set
forth in the Registration Statement, the Disclosure Package and the Prospectus, there are no outstanding options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities
or interests for capital stock or other ownership interests of any subsidiary of the Company.
(h) The
Company’s authorized equity capitalization is as set forth in the Registration Statement, the Disclosure Package and the
Prospectus; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration
Statement, the Disclosure Package and the Prospectus; other than as disclosed in the Registration Statement, the Disclosure Package
and the Prospectus, the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable; except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus
with respect to the exchange rights of the holders of the Company’s Series A Preferred Stock, the issuance of the Securities
is not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase the capital
stock or other securities of the Company; and except as set forth in the Registration Statement, the Disclosure Package and the
Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding;
and, other than as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, and except as would not,
individually or in the aggregate, have Material Adverse Effect, all offers and sales by the Company of the Company’s shares
of Common Stock prior to the date hereof were at all relevant times duly registered under the Act or were exempt from the registration
requirements of the Act and were duly registered or the subject of an available exemption from the registration requirements of
the applicable state securities or blue sky laws. No holder of the Securities will be subject to personal liability for obligations
of the Company solely by reason of being such a holder.
(i) The
Shares have been duly and validly authorized, and, when issued and delivered to and paid for by the Underwriters pursuant to the
terms of this Underwriting Agreement (this “
Agreement
”), will be fully paid and non-assessable. The Warrant
Agreement, the Pre-Funded Warrants and the Common Warrants have been duly authorized by the Company and, when executed and delivered
by the Company, will be valid and binding agreements of the Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general equitable principles. The Warrant Shares have been duly authorized
and validly reserved for issuance upon exercise of the Pre-Funded Warrants and the Common Warrants. The Warrant Shares, when issued
and delivered upon exercise of the Common Warrants or the Pre-Funded Warrants and in accordance therewith, will be validly issued,
fully paid and nonassessable and the issuance of the Warrant Shares is not subject to any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase the capital stock or other securities of the Company. The Securities, when
issued, will conform to the description thereof set forth in or incorporated into the Registration Statement, the Disclosure Package
and the Prospectus. The Shares and the Warrant Shares are duly listed, and admitted and authorized for trading, subject to official
notice of issuance and evidence of satisfactory distribution, on The Nasdaq Capital Market.
(j) The
Company does not have any outstanding debt or preferred equity securities that are rated by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 3(a)(62) under the Exchange Act).
(k) The
statements in the Preliminary Prospectus, the Prospectus and any documents incorporated by reference therein, as applicable, under
the headings “Risk Factors,” “Business – Strategic Collaborations and License Agreements,” “Business
– Intellectual Property,” “Business – Government Regulation,” “Business – Legal Proceedings,”
“Certain Relationships and Related Party Transactions,” “Description of Capital Stock,” “Description
of the Securities We Are Offering,” “Material U.S. Federal Income Tax Consequences to Holders of Common Stock and Warrants”
Non-U.S. Holders” “Executive Compensation – Narrative Disclosure to Summary Compensation Table” and “Executive
Compensation – Potential Payments Upon Termination or Change of Control” insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries in all material respects of such
legal matters, agreements, documents or proceedings.
(l) This
Agreement has been duly authorized, executed and delivered by the Company. The Company has the requisite power and authority to
execute and deliver the Warrant Agreement, the Pre-Funded Warrants, the Common Warrants and the Warrant Shares and to perform its
obligations thereunder. The Company has duly and validly taken all action required to be taken for the due and proper authorization,
execution and delivery by it of the Warrant Agreement, the Pre-Funded Warrants, the Common Warrants and the Warrant Shares.
(m) The
Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof
as described in the Registration Statement, the Disclosure Package and the Prospectus, will not be an “investment company”
as defined in the Investment Company Act of 1940, as amended.
(n) No
consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with
the transactions contemplated herein, except such as have been obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Registration Statement, the Disclosure Package and the Prospectus.
(o) Neither
the issue and sale of the Securities nor the consummation of any other of the transactions herein contemplated nor the fulfillment
of the terms of the Securities or hereof will conflict with, result in a breach or violation of, or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or by-laws
of the Company or any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its
or their properties, except in the case of clauses (ii) and (iii) for such conflicts, breaches or violations and impositions of
any lien, charge or encumbrance that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(p) No
holders of securities of the Company have rights to the registration of such securities under the Registration Statement except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus and no person has any registration rights
in connection with the filing of the Registration Statement and the consummation of the offering (including the offering of the
Securities contemplated under this Agreement) except for any such rights as have been validly waived.
(q) The
consolidated historical financial statements, including the notes thereto, and schedules of the Company and its consolidated subsidiaries
(including, for the avoidance of doubt, SELLAS Life Sciences Group Ltd) included or incorporated by reference in the Registration
Statement, the Preliminary Prospectus and the Prospectus present fairly the financial condition, results of operations and cash
flows of the Company as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements
of the Act and the Exchange Act and have been prepared in conformity with U.S. generally accepted accounting principles (“
GAAP
”)
applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The selected financial data
set forth under the caption “Selected Financial Information” in the Registration Statement, the Preliminary Prospectus
and the Prospectus fairly present, on the basis stated in the Registration Statement, the Preliminary Prospectus and the Prospectus,
the information included therein. All non-GAAP financial information, if any, included or incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus complies with the requirements of Regulation G and Item 10 of Regulation S-K
under the Act; and, except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, there are no
material off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K under the Act) or any other relationships
with unconsolidated entities or other persons, that may have a material current or, to the Company’s knowledge, material
future effect on the Company’s consolidated financial condition, results of operations, liquidity, capital expenditures,
capital resources or significant components of revenue or expenses that are required to be disclosed therein that are not disclosed.
No other financial statements or notes, historical or pro forma, are required to be included or incorporated by reference in the
Registration Statement, the Disclosure Package or the Prospectus other than those that have been included or incorporated by reference
therein in compliance with the requirements of the Act and the Exchange Act.
(r) No
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that could
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, except as set forth in or contemplated
in the Registration Statement, the Disclosure Package and the Prospectus.
(s) Each
of the Company and each of its subsidiaries owns or leases all such properties as are necessary to the conduct of its operations
as presently conducted.
(t) Neither
the Company nor any subsidiary is in violation or default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any applicable statute,
law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except in the
case of clauses (ii) and (iii), such violations or defaults as would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.
(u) [Reserved].
(v) Moss
Adams LLP, who certified certain financial statements of the Company and its consolidated subsidiaries and delivered its report
with respect to the audited consolidated financial statements and schedules included or incorporated by reference in the Registration
Statement, Disclosure Package and the Prospectus, is independent registered public accountant with respect to the Company within
the meaning of the Act and the applicable published rules and regulations thereunder.
(w) The
Company and each of its subsidiaries have filed all tax returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a Material Adverse Effect and except as set forth in or contemplated
in the Registration Statement, the Disclosure Package and the Prospectus) and has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested in good faith and for which adequate reserves have been
provided in accordance with GAAP or as would not have a Material Adverse Effect, except as set forth in or contemplated in the
Registration Statement, the Disclosure Package and the Prospectus.
(x) No
labor problem or dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company,
is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries’ principal suppliers, contractors or customers, which could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(y) The
Company and its subsidiaries, taken as a whole, are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are in the Company’s reasonable judgment prudent and customary in the businesses in which
it is engaged; the Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material
respects; and there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of rights clause; and neither the Company nor any such
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 at a cost that would not
have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the Disclosure Package and
the Prospectus.
(z) No
subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary
of the Company, except as described in or contemplated by the Registration Statement, the Disclosure Package and the Prospectus.
(aa) The
Company and its subsidiaries, taken as a whole, possess all licenses, certificates, permits and other authorizations issued by
all applicable authorities necessary to conduct their respective businesses, except where such failure would not reasonably be
expected to have a Material Adverse Effect, and neither the Company nor any such subsidiary has received any written notice of
proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, that would reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Prospectus.
(bb) The
Company and its subsidiaries, taken as a whole, 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 generally accepted accounting principles
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. Except as set forth in or contemplated in the Registration
Statement, the Disclosure Package and the Prospectus the Company’s internal controls over financial reporting are effective
and the Company is not aware of any material weakness in its internal control over financial reporting.
(cc) The
Company and its subsidiaries maintain “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e)
under the Exchange Act); such disclosure controls and procedures are effective.
(dd) The
Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or the Warrant Shares.
(ee) (i)
The Company and its subsidiaries (x) are in compliance with any and all applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the protection of human health or safety, the environment, natural
resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”),
(y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required
of them under applicable Environmental Laws to conduct their respective businesses, and (z) have not received notice of any actual
or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition
that would reasonably be expected to result in any such notice, and (ii) there are no costs or liabilities associated with Environmental
Laws of or relating to the Company or its subsidiaries, except in the case of each of (i) and (ii) above, for any such failure
to comply, or failure to receive required permits, licenses or approvals, or cost or liability, as would not, individually or in
the aggregate, have a Material Adverse Effect.
(ff) To
the knowledge of the Company, none of the following events has occurred or exists: (i) a failure to fulfill the obligations, if
any, under the minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974, as
amended (“
ERISA
”), and the regulations and published interpretations thereunder with respect to a Plan, determined
without regard to any waiver of such obligations or extension of any amortization period; (ii) an audit or investigation by the
Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the employment or compensation of employees by any of the
Company or any of its subsidiaries that could have a Material Adverse Effect; (iii) any breach of any contractual obligation, or
any violation of law or applicable qualification standards, with respect to the employment or compensation of employees by the
Company or any of its subsidiaries that could have a Material Adverse Effect. To the knowledge of the Company, none of the following
events has occurred or, is reasonably likely to occur: (i) a material increase in the aggregate amount of contributions required
to be made to all Plans in the current fiscal year of the Company and its subsidiaries compared to the amount of such contributions
made in the most recently completed fiscal year of the Company and its subsidiaries; (ii) a material increase in the “accumulated
post-retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of the Company
and its subsidiaries compared to the amount of such obligations in the most recently completed fiscal year of the Company and its
subsidiaries; (iii) any event or condition giving rise to a liability under Title IV of ERISA that could have a Material Adverse
Effect; or (iv) the filing of a claim by one or more employees or former employees of the Company or any of its subsidiaries related
to their employment that could have a Material Adverse Effect. For purposes of this paragraph, the term “
Plan
”
means a material employee benefit plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect
to which the Company or any of its subsidiaries may have any liability.
(gg) There
is and has been no failure on the part of the Company and any of the Company’s directors or officers, in their capacities
as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection
therewith (the “
Sarbanes-Oxley Act
”), including Section 402 relating to loans and Sections 302 and 906 relating
to certifications.
(hh) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate
of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation
by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “
FCPA
”),
including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or
any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and
the Company, its subsidiaries and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance
with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
(ii) The
operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial
recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder, including
but not limited to the Bank Secrecy Act, as amended by the USA PATRIOT Act, and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively, the “
Money Laundering Laws
”) and
no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
(jj) None
of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate
of the Company or any of its subsidiaries is currently the subject or the target of any applicable sanctions administered or enforced
by the U.S. Government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury
(“
OFAC
”)), the United Nations Security Council (“
UNSC
”), the European Union, Her Majesty’s
Treasury (“
HMT
”), or other relevant sanctions authority (collectively, “
Sanctions
”), nor
is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or target
of Sanctions; and the Company will not directly or indirectly use the proceeds of the offering hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund any activities
of or business with any person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions
or (ii) in any other manner that will result in a violation by any person (including any person participating in the transaction,
whether as underwriter, advisor, investor or otherwise) of Sanctions.
(kk) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate
of the Company or any of its subsidiaries, is a person that is, or is 50% or more owned or otherwise controlled by a person that
is: (i) the subject of any Sanctions (a “
Sanctioned Person
”); or (ii) located, organized or resident in a country
or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory
(currently, Cuba, Iran, North Korea, Syria, and the Crimea Region of the Ukraine) (collectively, “
Sanctioned Countries
”
and each, a “
Sanctioned Country
”).
(ll) Except
as has been disclosed to the Underwriters or is not material to the analysis under any Sanctions, neither the Company nor any of
its subsidiaries has engaged in any dealings or transactions with or for the benefit of a Sanctioned Person, or with or in a Sanctioned
Country, in the preceding 5 years, nor does the Company or any of its subsidiaries have any plans to increase its dealings or transactions
with Sanctioned Persons, or with or in Sanctioned Countries.
(mm) The
interactive data in the eXtensible Business Reporting Language (“
XBRL
”) included as an exhibit to the Registration
Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto.
(nn) Except
as set forth in the Registration Statement, the Disclosure Package and the Prospectus, the Company and its subsidiaries have good
and marketable title to all personal property owned by them, free and clear of all encumbrances and defects; and all personal property
held under lease by the Company or any subsidiary is held by it under valid, subsisting and enforceable leases, in each case, with
such exceptions as are not material and do not interfere with the use made and proposed to be made of such property by the Company
or the subsidiary.
(oo) No
relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, or shareholders
of the Company on the other hand, which is required to be described in the Registration Statement, the Disclosure Package or the
Prospectus and which is not so described. To the knowledge of the Company, no officer, director or significant shareholder of the
Company is a person associated with a broker-dealer or controls, is controlled by or is under common control with a broker-dealer.
(pp) Exhibit
21.1 to the Registration Statement sets forth the only significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X.
(qq) The
statistical and market-related data included in the Registration Statement, the Disclosure Package and the Prospectus are based
on or derived from sources that the Company believes to be reliable and accurate.
(rr) Neither
the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in each
of the Registration Statement, the Disclosure Package and the Prospectus will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(ss) Except
as set forth in the Registration Statement, the Disclosure Package and the Prospectus, since the date of the most recent financial
statements of the Company included or incorporated by reference in each of the Registration Statement, the Disclosure Package and
the Prospectus (i) there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries,
or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital
stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the
business, properties, prospects, earnings, rights, assets, management, financial position, or results of operations of the Company
and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or
agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct
or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any
of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority, except in each case as otherwise disclosed in each of the Registration Statement, the
Disclosure Package and the Prospectus.
(tt) No
forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) included in any of
the Registration Statement, the Disclosure Package and the Prospectus has been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.
(uu) Except
as disclosed in the Registration Statement, the Preliminary Prospectus and the Prospectus, to the Company’s knowledge, the
Company and its subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the “
Intellectual Property
”) necessary for the
conduct of the Company’s business as now conducted or as proposed in the Prospectus to be conducted and as described in the
Registration Statement, the Preliminary Prospectus and the Prospectus, except to the extent that the failure to own, possess, license
or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a Material
Adverse Effect. The Company’s Intellectual Property has not been adjudged by a court of competent jurisdiction invalid or
unenforceable in whole or in part. To the company’s knowledge, there are no material defects in any of the patents or patent
applications within the Intellectual Property. Except as set forth in the Registration Statement, the Preliminary Prospectus and
the Prospectus, to the knowledge of the Company (a) there are no rights of third parties to any such Intellectual Property;
(b) there is no material infringement by third parties of any such Intellectual Property; (c) there is no pending or
threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable basis for any such claim; (d) there is no pending or
threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any such claim; (e) there is no pending or threatened
action, suit, proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable
basis for any such claim; (f) there is no U.S. patent that contains claims that dominate or may dominate any Intellectual
Property described in the Disclosure Package and the Prospectus as being owned by or licensed to the Company or that interferes
with the issued or pending claims of any such Intellectual Property that is necessary for the conduct of the Company’s business
as now conducted or as proposed in the Prospectus to be conducted and as described in the Registration Statement, the Preliminary
Prospectus and the Prospectus; (g) there is no prior art of which the Company is aware that may render any U.S. patent held
by the Company invalid; and (h) no employee of the Company is or has been in violation of any term of any employment contract,
patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s
employment with the Company; and (i) the Company has complied with the terms of each agreement pursuant to which Intellectual Property
has been licensed to the Company, and all such agreements are in full force and effect.
(vv) Except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company (i) does not have any material
lending or other relationship with any bank or lending affiliate of the Representative and (ii) does not intend to use any
of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of the Representative.
(ww) Except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company and its Subsidiaries have made
all filings, applications and submissions required by, possesses and is operating in compliance with, all approvals, licenses,
certificates, certifications, clearances, consents, grants, exemptions, marks, notifications, orders, permits and other authorizations
issued by, the appropriate federal, state or foreign governmental authority (collectively, “
Governmental Authority
”),
including the United States Food and Drug Administration (the “
FDA
”), the United States Drug Enforcement Administration
or any other foreign, federal, state, provincial or local Government Authorities engaged in the regulation of clinical trials,
pharmaceuticals, biologics or biohazardous substances or materials, necessary for the ownership or lease of their respective properties
or to conduct its businesses as described in the Registration Statement, the Disclosure Package and the Prospectus (collectively,
“
Permits
”), except for such Permits the failure of which to possess, obtain or make the same would not have
a Material Adverse Effect; the Company and its Subsidiaries are in compliance with the terms and conditions of all such Permits,
except where the failure to be in compliance would not have a Material Adverse Effect; all of the Permits are valid and in full
force and effect, except where any invalidity, individually or in the aggregate, would not be reasonably expected to have a Material
Adverse Effect; and neither the Company nor any of its Subsidiaries has received any written notice relating to the limitation,
revocation, cancellation, suspension, modification or non-renewal of any such Permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling, finding or non-renewal, would have a Material Adverse Effect, or has any reason to
believe that any such Permit will not be renewed in the ordinary course. To the extent required by applicable Laws of the FDA,
the Company or the applicable subsidiary has submitted to the FDA an Investigational New Drug Application or amendment or supplement
thereto for each clinical trial it has conducted or sponsored or is conducting or sponsoring; all such submissions were in material
compliance with applicable Laws when submitted and no material deficiencies have been asserted by the FDA with respect to any such
submissions. Neither the Company nor any subsidiary has received, or has any reason to believe that it will receive, any notice
of proceedings relating to the revocation or modification of, or non-compliance with, any such Permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Effect.
(xx) Except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, neither the Company nor any of its Subsidiaries
has failed to file with the applicable Governmental Authority (including the FDA, or any foreign, federal, state, provincial or
local Governmental Authority performing functions similar to those performed by the FDA) any required filing, declaration, listing,
registration, report or submission, except for such failures that, individually or in the aggregate, would not have a Material
Adverse Effect; except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, all such filings,
declarations, listings, registrations, reports or submissions were in compliance with applicable Laws when filed and no deficiencies
have been asserted by any applicable regulatory authority with respect to any such filings, declarations, listings, registrations,
reports or submissions, except for any deficiencies that, individually or in the aggregate, would not have a Material Adverse Effect.
The Company has no knowledge of any studies, tests or trials not described in the Registration Statement, the Disclosure Package
and the Prospectus the results of which reasonably call into question in any material respect the results of the studies, tests
and trials described in the Registration Statement, the Disclosure Package and the Prospectus.
(yy) The
preclinical studies, tests and preclinical or clinical trials conducted by or on behalf of the Company that are described in the
Registration Statement, the Disclosure Package and the Prospectus (the “
Company Studies and Trials
”) were, and,
if still pending, are being conducted in all material respects with the United States Federal Food, Drug, and Cosmetic Act (“
FDCA
”),
all applicable rules and regulations of the FDA, all requirements of any applicable Governmental Authority engaged in the regulation
of pre-clinical or clinical studies or tests, and in accordance with the experimental protocols, procedures and controls pursuant
to, where applicable, accepted professional and scientific standards for products or product candidates comparable to those being
developed by the Company; the descriptions of the Company Studies and Trials, and the results thereof, contained in the Registration
Statement, the Disclosure Package and the Prospectus are accurate and complete in all material respects; the Company is not aware
of any tests, studies or trials not described in the Registration Statement, the Disclosure Package and the Prospectus, the results
of which reasonably call into question the results of the Company Studies and Trials described in the Registration Statement, the
Disclosure Package and the Prospectus; and the Company has not received any notice or correspondence from the FDA or any foreign,
state or local Governmental Authority exercising comparable authority or any institutional review board or comparable authority
requiring or threatening the termination, suspension, clinical hold or material modification of any of the Company Studies and
Trials. To the Company’s knowledge, none of the Company Studies and Trials involve or has involved any investigator who has
been disqualified or restricted as a clinical investigator or been the subject of disqualification proceedings by FDA, or has been
found by the FDA (or any foreign, federal, state or local governmental or regulatory authority performing functions similar to
those performed by the FDA) to have engaged in scientific misconduct.
(zz) Except
as otherwise disclosed in the Registration Statement, the Disclosure Package and the Prospectus, each of the Company and its subsidiaries,
to the extent applicable, (i) are in compliance with, all health care laws applicable to the Company, any of its subsidiaries or
any of its or their products or activities, including, but not limited to, the federal Anti-Kickback Statute (42 U.S.C. Section
1320a-7b(b)), the Civil Monetary Penalties Law (42 U.S.C. Section 1320a-7a), the civil False Claims Act (31 U.S.C. Section 3729
et seq.), the Criminal False Statements Law (42 U.S.C. Section 1320a-7b(a)), the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. Section 1320d et seq.) as amended by the Health Information Technology for Economic and Clinical Health
Act (42 U.S.C. Section 17921 et seq.), the exclusion law (42 U.S.C. Section 1320a-7), the FDCA (21 U.S.C. Section 301 et seq.),
the Public Health Service Act (42 U.S.C. Section 201 et seq.), and the Physician Payments Sunshine Act (42 U.S.C. Section 1320a-7h),
the regulations promulgated pursuant to such laws, and any other applicable state, federal or foreign law (collectively, “
Health
Care Laws
”), except for such non-compliance as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; (ii) have not received any written notice from any court or arbitrator or Governmental Authority
or third party asserting non-compliance with any Permits required by any such Health Care Laws, except for such non-compliance
as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (iii) have not received
written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any
court or arbitrator or Governmental Authority or third party alleging that any product operation of the Company or any of its subsidiaries
is in violation of any Health Care Laws or Permits nor, to the Company's knowledge, is any such claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action threatened, except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (iv) are not a party to any corporate integrity agreements, monitoring
agreements, consent decrees, settlement orders, or similar agreements with or imposed by any Governmental Authority. In addition,
none of the Company or its subsidiaries or, to the knowledge of the Company or its subsidiaries, any of their respective directors,
officers, employees or agents is debarred, suspended or excluded, or has been convicted of any crime or, to the knowledge of the
Company or its subsidiaries, engaged in any conduct that could result in a debarment, suspension or exclusion from any federal
or state government health care program or human clinical research, or to the knowledge of the Company or its subsidiaries, is
subject to any inquiry, investigation, proceeding, or other similar action by a Governmental Authority that could reasonably be
expected to result in any such debarment, suspension or exclusion.
(aaa) The Company has complied
with, and is currently in compliance with, the cease and desist order issued by the SEC on April 10, 2017 and the Company’s
related settlement with the SEC. The Company maintains policies and procedures and supervisory policies and procedures reasonably
designed to cause the Company and its officers, directors and employees to be and remain in compliance with all material laws,
regulations and rules applicable to it and its businesses as currently conducted.
Any certificate signed by any officer of
the Company and delivered to the Representative or counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2.
Purchase
and Sale.
(a) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, (i) the Firm Shares
at a purchase price of $0.139407 per share, (ii) the Pre-Funded Warrants at a purchase price of $0.139314 per warrant and (iii)
the Firm Common Warrants at a purchase price of $0.000093 per warrant, the respective amounts of the Firm Shares, the Pre-Funded
Warrants and the Firm Common Warrants set forth opposite such Underwriter’s name in Schedule I hereto. The aggregate
purchase price to be paid by the several Underwriters in respect of the Firm Securities shall be $13,943,152.15.
(b) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up to 15,000,000 Option Shares and/or (at the option
of the Underwriters) (ii) up to 15,000,000 Option Common Warrants, at the same purchase price as the Underwriters shall pay for
the Firm Securities. Said option may be exercised only to cover over-allotments in the sale of the Firm Securities by the Underwriters.
Said option may be exercised in whole or in part at any time on or before the 45th day after the date of the Prospectus upon written
or telegraphic notice by the Representative to the Company setting forth the number of shares of the Option Shares and/or Option
Common Warrants as to which the several Underwriters are exercising the option and the settlement date. The number of Option Shares
and/or Option Common Warrants to be purchased by each Underwriter shall be the same percentage of the total number of shares of
the Option Shares and Option Common Warrants to be purchased by the several Underwriters as such Underwriter is purchasing of the
Firm Securities, subject to such adjustments as needed to eliminate any fractional shares.
3.
Delivery
and Payment.
Delivery of and payment for the Firm Securities and the Option Securities (if the option provided for in Section
2(b) hereof shall have been exercised on or before the second Business Day immediately preceding the Closing Date) shall be made
at 10:00 AM, New York City time, on June 18, 2019, or at such time on such later date as shall be agreed upon by the Company
and the Representative, which date and time may be postponed by agreement between the Representative and the Company or as provided
in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “
Closing
Date
”). Delivery of the Securities shall be made to the Representative for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representative of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Securities shall be
made through the facilities of The Depository Trust Company unless the Representative shall otherwise instruct.
If the option provided for in Section 2(b)
hereof is exercised after the second Business Day immediately preceding the Closing Date, the Company will deliver the Option Securities
(at the expense of the Company) to the Representative, at 590 Madison Avenue, 36th Floor, New York, New York 10022, on the date
specified by the Representative (which shall be within two Business Days after exercise of said option) for the respective accounts
of the several Underwriters, against payment by the several Underwriters through the Representative of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement
for the Option Securities occurs after the Closing Date, the Company will deliver to the Representative on the settlement date
for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered
on the Closing Date pursuant to Section 6 hereof.
4.
Offering
by Underwriters.
It is understood that the several Underwriters propose to offer the Securities for sale to the public as set
forth in the Prospectus.
5.
Agreements.
The Company agrees with the several Underwriters that:
(a) Prior
to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or supplement to which you reasonably object. The Company
will cause the Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representative
with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Representative of such timely filing. The Company will promptly advise the Representative (i) when
the Prospectus, any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been filed with the Commission, (ii) when, prior to termination
of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of
any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus, (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company
will use its reasonable best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or
objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon
as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an
amendment to the Registration Statement or a new registration statement and using its reasonable best efforts to have such amendment
or new registration statement declared effective as soon as practicable.
(b) If,
at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event or development occurs as a result of which
the Disclosure Package would include an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made at such time not misleading, the Company
will (i) notify promptly the Representative so that any use of the Disclosure Package may cease until it is amended or supplemented;
(ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any amendment or supplement
to you in such quantities as you may reasonably request.
(c) If,
at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances
where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented
would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules thereunder, the
Company promptly will (i) notify the Representative of any such event; (ii) prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably
request.
(d) As
soon as practicable, the Company will make generally available to its security holders and to the Representative an earnings statement
or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The
Company will furnish to the Representative and counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representative may reasonably request. The Company will pay the expenses of printing or other production
of all documents relating to the offering.
(f) The
Company will arrange, if necessary, for the qualification of the Securities for sale under the laws of such jurisdictions as the
Representative may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
(g) The
Company will not, without the prior written consent of the Representative, offer, sell, contract to sell, pledge, or otherwise
dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any affiliate of the Company) directly or indirectly, including
the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange
Act, any other shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common
Stock or shares of any class of capital stock of the Company or any securities convertible into, or exercisable, or exchangeable
for, any of the foregoing; or publicly announce an intention to effect any such transaction, for a period of 90 days after the
date of this Agreement (the “
Restricted Period
”),
provided
,
however
, that the Company may (i)
issue and sell the Securities pursuant to this Agreement, (ii) issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company in effect at the Execution Time, (iii) issue Common Stock
or other securities convertible into, or exercisable or exchangeable for, shares of Common Stock upon conversion, exercise, redemption
or as payment pursuant to the terms of the Pre-Funded Warrants, the Common Warrants, or other securities outstanding at the Execution
Time; (iv) issue Common Stock in settlement of or pursuant to contractual obligations outstanding at the Execution Time; (v) enter
into an agreement providing for the issuance of Common Stock or securities convertible into, exercisable, or exchangeable for shares
of Common Stock in connection with any acquisition, joint venture, collaboration, licensing, commercial relationship or other similar
strategic transaction or any debt financing transaction, and the issuance of any such securities pursuant to any such agreement,
provided that that the securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration
rights that require or permit the filing of any registration statement in connection therewith within 90 days following the Closing
Date and the aggregate number of shares of Common Stock, or any securities convertible into or exercisable or exchangeable for
Common Stock, that the Company may issue or agree to issue pursuant to this clause (v) shall not exceed 33% of the total outstanding
shares of Common Stock immediately following the completion of the transactions contemplated by this Agreement, and provided further,
that the recipient of any such shares of Common Stock or securities issued pursuant to this clause (v) during the 90-day restricted
period described above shall enter into an agreement substantially in the form of
Exhibit A
hereto (unless the
Representative otherwise waives the requirement in writing).
(h) [Reserved]
(i) The
Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or the Warrant Shares.
(j) The
Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary
Prospectus and the Prospectus and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus and the Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares and Warrant Shares, including any stamp or transfer taxes in connection with
the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement, the
Warrant Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Securities; (v) the registration of the Securities under the Exchange Act and the listing of the
Shares and the Warrant Shares on The Nasdaq Capital Market; (vi) any registration or qualification of the Securities for offer
and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters relating to such registration and qualification); (vii) any filings required to be made with
the Financial Industry Regulatory Authority, Inc. (“
FINRA
”) (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such filings, with such fee and expenses of counsel), (viii) the fees and
expenses of counsel for the Underwriters incurred in connection with the offering of the Securities (together with fees and expenses
of counsel incurred pursuant to subsection (vi) and (vii)), not to exceed $90,000); (ix) the transportation and other expenses
incurred by or on behalf of the Company representatives (other than the Underwriters) in connection with presentations to prospective
purchasers of the Securities; (x) the fees and expenses of the Company’s accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (xi) all other costs and expenses incident to the performance by
the Company of its obligations hereunder. We have also agreed to pay a non-accountable expense allowance to the underwriter equal
to $25,000. Except as provided in this Section 5(j) and in Sections 7 and 8 below, the Underwriters will pay all of their own costs
and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Securities
by them and the transportation and other expenses incurred by them in connection with any road show.
(k) The
Company agrees that it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free
Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405).
(l) The
Company will use the net proceeds received by the Company from the sale of the Securities in the manner specified in the Preliminary
Prospectus and Prospectus under the caption “Use of Proceeds.”
(m) The
Company will, at all times while any Pre-Funded Warrants or Common Warrants are outstanding, use its best efforts to maintain a
registration statement covering the issue and sale of the Warrant Shares upon exercise of the Pre-Funded Warrants and Common Warrants
such that the Warrant Shares, when issued, will not be subject to resale restrictions under the Securities Act except to the extent
that the Warrant Shares are owned by affiliates.
(n) The
Company will, at all times while any Pre-Funded Warrants or Common Warrants are outstanding, reserve and keep available out of
the aggregate of its authorized but unissued and otherwise unreserved Common Stock, for the purpose of enabling it to issue Warrant
Shares upon exercise of such Pre-Funded Warrants and Common Warrants, the number of Warrant Shares that are issuable and deliverable
upon the exercise of the then-outstanding Pre-Funded Warrants and Common Warrants.
(o) (i)
With respect to any exercise notice(s) related to the Pre-Funded Warrants delivered on or prior to 11:59 p.m. (New York City time)
on the day immediately preceding the Issuance Date (as defined in the Pre-Funded Warrant), which may be delivered at any time after
the time of execution of this Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m.
(New York City time) on the Issuance Date, and (ii) with respect to any exercise notice(s) delivered at any time on the Issuance
Date, which may be delivered prior to or following the issuance of the Pre-Funded Warrants, the Company agrees to deliver the Warrant
Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Trading Day (as defined in the Pre-Funded Warrant) immediately
following the Issuance Date.
6.
Conditions
to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Firm Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, the Closing Date and any Settlement Date pursuant to Section 3 hereof, to the accuracy
of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder and to the following additional conditions:
(a) The
Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been
issued and no proceedings for that purpose shall have been instituted or threatened.
(b) The
Company shall have requested and caused Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the Company, to have furnished
to the Representative its opinion, dated the Closing Date and any Settlement Date, and addressed to the Representative, in form
and substance reasonably satisfactory to the Representative.
(c) The
Company shall have requested and caused each of Saliwanchik Lloyd & Eisenschenk, IP counsel for the Company, and Nelson Mullins
Riley & Scarborough LLP, IP counsel for the Company, to have furnished to the Representative its opinion, dated the Closing
Date and any Settlement Date, and addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
(d) The
Company shall have requested and caused Conyers Dill & Pearman Limited, special Bermuda counsel for the Company, to have furnished
to the Representative its opinion, dated the Closing Date and any Settlement Date, and addressed to the Representative, in form
and substance reasonably satisfactory to the Representative.
(e) The
Representative shall have received from Cooley LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date
and any Settlement Date, and addressed to the Representative, with respect to the issuance and sale of the Securities, the Registration
Statement, the Disclosure Package, the Prospectus (together with any supplement thereto) and other related matters as the Representative
may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) The
Company shall have furnished to the Representative a certificate of the Company, signed by the principal executive officer and
the principal financial or accounting officer of the Company, in each case on behalf of the Company, dated the Closing Date and
any Settlement Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the
Disclosure Package, the Prospectus and any amendment or supplement thereto, and this Agreement and that:
(i) the
representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date and any Settlement
Date with the same effect as if made on such date and the Company has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such date;
(ii) the
Registration Statement has become effective under the Act and no stop order suspending the effectiveness of the Registration Statement
or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Company’s
knowledge, threatened; and
(iii) since
the date of the most recent financial statements included or incorporated by reference in the Disclosure Package and the Prospectus,
there has been no Material Adverse Effect, whether or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Disclosure Package and the Prospectus.
(g) The
Company shall have requested and caused Moss Adams LLP to have furnished to the Representative, at the Execution Time and
at the Closing Date and any Settlement Date, letters, dated respectively as of the Execution Time and as of the Closing Date and
any Settlement Date, in form and substance satisfactory to the Representative.
(h) Subsequent
to the Execution Time, there shall not have been (i) any change or decrease specified in the letter or letters referred to
in paragraph (f) of this Section 6 or (ii) any material change, or any development involving a prospective change,
in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken
as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated
in the Disclosure Package and the Prospectus the effect of which, in any case referred to in clause (i) or (ii) above, is,
in the sole reasonable judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the Registration Statement, the Disclosure Package and the Prospectus.
(i) On
the date hereof and on the Closing Date (and any Settlement Date), the Company shall have furnished to the Representative a certificate,
signed by the Company’s Chief Financial Officer, with respect to certain financial information contained in the Registration
Statement, the Preliminary Prospectus, Disclosure Package, and the Prospectus, in form and substance reasonably satisfactory to
the Representative.
(j) On
the Closing Date and any Settlement Date, the Company shall have furnished to the Representative a certificate, signed by the Company’s
Secretary certifying as to certain corporate matters, in form and substance reasonably satisfactory to the Representative.
(k) Prior
to the Closing Date and any Settlement Date, the Company shall have furnished to the Representative such further information, certificates
and documents as the Representative may reasonably request.
(l) The
Shares and the Warrant Shares shall have been listed and admitted and authorized for trading on The Nasdaq Capital Market,
subject to official notice of issuance, and satisfactory evidence of such actions shall have been provided to the Representative.
(m) FINRA,
upon review, if any, of the terms of the public offering of the Securities, shall not have objected to such offering, such terms
or the Underwriters’ participation in same.
(n) The
Company shall have taken such appropriate steps as necessary to reduce the exercise price of the warrants outstanding, issued pursuant
to the Warrant Agreement, dated July 16, 2018, to $0.15, including the filing of a Current Report on Form 8-K.
(o) Prior
to the Execution Time, the Company shall have furnished to the Representative a letter substantially in the form of Exhibit A hereto
(the “
Lock-Up Agreement
”) from each executive officer and director of the Company and each stockholder of the
Company listed on Schedule II hereto addressed to the Representative. The Company will use its reasonable best efforts to enforce
the terms of each Lock-Up Agreement and will issue stop-transfer instructions to the transfer agent for the Common Stock with respect
to any transaction or contemplated transaction that would constitute a breach of or default under the applicable Lock-Up Agreement.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory
in form and substance to the Representative and counsel for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the Representative. Notice of such cancellation shall
be given to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by
this Section 6 shall be delivered at the office of Cooley LLP, counsel for the Underwriters, at 55 Hudson Yards, New York,
New York 10001, on the Closing Date and any Settlement Date.
7.
Reimbursement
of Underwriters’ Expenses.
If the sale of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant
to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through the Representative on demand for all expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase and sale of the Securities, up to a maximum of $75,000
(provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions in Section
8 below).
8.
Indemnification
and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (x) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (y) any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus or the Prospectus, any roadshow or in any amendment thereof or supplement thereto or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein, in the case of this clause (y), in the light of the circumstances under which they were made, not
misleading, and in each case agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action;
provided
,
however
, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein
in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through
the Representative specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each
Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with respect to written information
relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representative specifically
for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The Company acknowledges that the following statements set forth in the Preliminary Prospectus
and the Prospectus under the heading “Underwriting”: (i) the 8
th
paragraph thereof related to selling
concessions and dealer reallowances and (ii) the 14
th
and 15
th
paragraphs thereof related to stabilization,
market making, discretionary authority, syndicate covering transactions and penalty bids, constitute the only information furnished
in writing by or on behalf of the several Underwriters for inclusion in the Preliminary Prospectus or the Prospectus.
(c) Promptly
after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that
it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture
of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall
not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In
the case of parties indemnified pursuant to Sections 8(a) above, counsel to the indemnified parties shall be selected by the Representative,
and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by
the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any
relevant local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on
any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an indemnified party.
(d) If
at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 8(a)
hereof effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least
30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
(e) In
the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient
to hold harmless an indemnified party for any reason, the Company and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating
or defending the same) (collectively “
Losses
”) to which the Company and one or more of the Underwriters may
be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by
the Underwriters on the other from the offering of the Securities;
provided
,
however
, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder.
If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the
cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or by the Underwriters on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d),
no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls
an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter
shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director
of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions
of this paragraph (d).
9.
Default
by an Underwriter.
If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its
or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Shares and Common Warrants set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Shares and Common Warrants set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided
,
however
, that
in the event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate amount of Shares and Common Warrants set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter
or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in
the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10.
Termination.
This Agreement shall be subject to termination in the absolute discretion of the Representative, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to such delivery and payment (i) trading in the
Company’s Common Stock shall have been suspended by the Commission or The Nasdaq Capital Market or trading in securities
generally on Nasdaq shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or
crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representative, impractical
or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Preliminary Prospectus or the
Prospectus.
11.
Representations
and Indemnities to Survive.
The respective agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
Notices.
All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representative, will be mailed, delivered or emailed to A.G.P./Alliance Global
Partners, 590 Madison Avenue, 36th Floor, New York, New York 10022, email address: db@allianceg.com, Attention: David Bocchi, Head
of Investment Banking; or, if sent to the Company, will be mailed or delivered to SELLAS Life Sciences Group, Inc., 315 Madison
Avenue, 4
th
Floor, New York, New York 10017, and confirmed to it at (917) 438-4353, attention of the Legal Department.
12.
Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right
or obligation hereunder.
13.
No
Fiduciary Duty
. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement
is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through
which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company
and (c) the Company’s engagement of the Underwriters in connection with the offering and the process leading up to the offering
is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for
making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently
advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered
advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such
transaction or the process leading thereto.
14.
Integration
.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters,
or any of them, with respect to the subject matter hereof.
15.
Applicable
Law.
This Agreement and any claim, controversy or dispute arising under or related to this Agreement or the transactions contemplated
hereby (including without limitation, any claims sounding in equity, statutory law, contract law or tort law arising out of the
subject matter hereof) shall be governed by and construed in accordance with the laws of the State of New York, without giving
effect to its conflicts of laws doctrine.
16.
Waiver
of Jury Trial
. The Company 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 Agreement or the transactions contemplated hereby.
17.
Counterparts
.
This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together
shall constitute one and the same agreement.
18.
Headings.
The section headings used herein are for convenience only and shall not affect the construction hereof.
19.
Definitions.
The terms that follow, when used in this Agreement, shall have the meanings indicated.
“Act” shall mean the Securities
Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Business Day” shall mean any
day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.
“Commission” shall mean the Securities
and Exchange Commission.
“Disclosure Package” shall mean
(i) the Preliminary Prospectus used most recently prior to the execution of this Agreement and that is generally distributed to
investors and used to offer the Securities, including any document that is incorporated by reference therein and (ii) the number
of Shares and Pre-Funded Warrants and Common Warrants and the price per Share to the public and the exercise price per Warrant.
“Effective Date” shall mean each
date and time that the Registration Statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration
Statement became or becomes effective.
“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the
date and time that this Agreement is executed and delivered by the parties hereto.
“Free Writing Prospectus”
shall mean a free writing prospectus, as defined in Rule 405.
“Preliminary Prospectus” shall
mean any preliminary prospectus referred to in paragraph 1(a) above and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information, in each case including any document that is incorporated
by reference therein.
“Prospectus” shall mean the prospectus
relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time, including any document that
is incorporated by reference therein.
“Registration Statement” shall
mean the registration statement referred to in paragraph 1(a) above, including exhibits and financial statements and any prospectus
supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration
statement pursuant to Rule 430A, as amended at the Execution Time and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as
so amended or such Rule 462(b) Registration Statement, as the case may be, including any document that is incorporated by reference
therein or deemed incorporated by reference therein.
“Rule 158”, “Rule 163”,
“Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”,
“Rule 430A” and “Rule 433” refer to such rules under the Act.
“Rule 430A Information” shall
mean information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A.
“Rule 462(b) Registration Statement”
shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the offering covered
by the registration statement referred to in Section 1(a) hereof.
“subsidiary” shall mean each direct
and indirect subsidiary of the Company.
[Remainder of page intentionally blank.
Signature page follows].
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent
a binding agreement among the Company and the several Underwriters.
|
|
Very truly yours,
|
|
|
|
|
|
SELLAS Life Sciences Group, Inc.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
The foregoing Agreement is hereby
|
|
|
confirmed and accepted as of the
|
|
|
date first above written.
|
|
|
|
|
|
A.G.P./Alliance Global Partners
|
|
|
|
|
|
By:
|
A.G.P./Alliance Global Partners
|
|
|
For itself and the other
|
|
|
several Underwriters named in
|
|
|
Schedule I to the foregoing
|
|
|
Agreement.
|
|
Schedule I
|
Underwriters
|
|
Number of
Shares
to be Purchased
|
|
|
Number of
Pre-funded
Warrants
to be
Purchased
|
|
|
Number of
Common
Warrants
to be
Purchased
|
|
|
Total Purchase
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.G.P./Alliance Global Partners
|
|
|
22,412,120
|
|
|
|
62,587,880
|
|
|
|
85,000,000
|
|
|
$
|
11,851,679.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maxim Group, LLC
|
|
|
3,955,080
|
|
|
|
11,044,920
|
|
|
|
15,000,000
|
|
|
$
|
2,091,472.82
|
|
Schedule II
Schedule of Directors and Officers Subject to Lock-Up:
Executive Officers
Angelos M. Stergiou, M.D., Sc.D. h.c.
Barbara A. Wood
John T. Burns
Non-Employee Directors
Jane Wasman
Stephen F. Ghiglieri
David A. Scheinberg, M.D., Ph.D.
Robert L. Van Nostrand
John Varian
EXHIBIT A – Form of Lock-Up
Agreement
EXHIBIT B – Form of Warrant Agreement
EXHIBIT C – Form of Pre-Funded Warrant
Exhibit 10.1
EXECUTION COPY
WARRANT
AGREEMENT
This
Warrant Agreement
made as of June 18, 2019 (the “
Issuance Date
”), between
SELLAS
Life Sciences Group, Inc.
, a Delaware corporation (the “
Company
”),
Computershare
Inc.
, a Delaware corporation (“
Computershare
”), and its wholly-owned subsidiary,
Computershare
Trust Company, N.A.
, a federally chartered trust company (and together with Computershare, the “
Warrant Agent
”).
Whereas
,
the Company has sold (i) 26,367,200 shares of common stock, par value $0.0001 per share (the “
Common Stock
”
and includes any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification
of such Common Stock), of the Company (or in lieu of shares of Common Stock, pre-funded warrants exercisable for 73,632,820 shares
of Common Stock) and (ii) warrants to purchase 100,000,000 shares of Common Stock (each, a “
Warrant Share
”
and, collectively, the “
Warrant Shares
”), subject to adjustment as described herein (each, a “
Warrant
”
and, collectively, the “
Warrants
”), pursuant to an Underwriting Agreement, dated June 14, 2019, between
the Company and A.G.P./Alliance Global Partners (“
A.G.P.
”), as representative of the several underwriters named
therein (the “
Underwriting Agreement
”);
Whereas
,
the Company has filed with the Securities and Exchange Commission a Registration Statement, No. 333-231723 on Form S-1 (as the
same may be amended from time to time, the “
Registration Statement
”) for the registration, under the Securities
Act of 1933, as amended (the “
1933 Act
”) of the Common Stock, the Warrants and the Warrant Shares, and such
Registration Statement was declared effective on June 13, 2019;
Whereas
,
the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection
with the issuance, registration, transfer, exchange and exercise of the Warrants;
Whereas
,
the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised,
and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants;
and
Whereas
,
all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company
and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company,
and to authorize the execution and delivery of this Warrant Agreement.
Now,
Therefore
, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1.
Appointment
of Warrant Agent
. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions set forth
in this Warrant Agreement.
2.
Warrants
.
2.1
Form
of Warrant
. The Warrants shall be registered securities and shall be initially evidenced by a global Warrant certificate (“
Global
Certificate
”) in the form of
Exhibit A
to this Warrant Agreement, which shall be deposited on behalf
of the Company with a custodian for The Depository Trust Company (“
DTC
”) and registered in the name of Cede
& Co., a nominee of DTC. If DTC subsequently ceases to make its settlement system available for the Warrants, the Company
may instruct the Warrant Agent regarding making arrangements for book-entry settlement. In the event that the Warrants are not
eligible for, or it is no longer necessary to have the Warrants available in, registration in the name of Cede & Co., a nominee
of DTC, the Company may instruct the Warrant Agent to provide written instructions to DTC to deliver to the Warrant Agent for
cancellation the Global Certificate, and the Company shall instruct the Warrant Agent to deliver to each Holder (as defined below)
separate certificates evidencing Warrants (“
Definitive Certificates
” and, together with the Global Certificate,
“
Warrant Certificates
”), in the form of
Exhibit B
to this Warrant Agreement. The Warrants
represented by the Global Certificate are referred to as “
Global Warrants
”.
2.2 Registration.
2.2.1
Warrant
Register
. The Warrant Agent shall maintain books (“
Warrant Register
”) for the registration of original issuance
and the registration of transfer of the Warrants. Any Person in whose name ownership of a beneficial interest in the Warrants evidenced
by a Global Certificate is recorded in the records maintained by DTC or its nominee shall be deemed the “beneficial owner”
thereof, provided that all such beneficial interests shall be held through a Participant (as defined below), which shall be the
registered holder of such Warrants.
2.2.2
Issuance
of Warrants
. Upon the initial issuance of the Warrants, the Warrant Agent shall issue the Global Certificate and deliver the
Warrants in the DTC settlement system in accordance with written instructions delivered to the Warrant Agent by the Company. Ownership
of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records
maintained (i) by DTC and (ii) by institutions that have accounts with DTC (each, a “
Participant
”), subject
to a Holder’s right to elect to receive a Warrant in certificated form in the form of
Exhibit B
to this Warrant Agreement.
Any Holder desiring to elect to receive a Warrant in certificated form shall make such request in writing delivered to the Warrant
Agent pursuant to Section 2.2.6, and shall surrender to the Warrant Agent the interest of the Holder on the books of the Participant
evidencing the Warrants which are to be represented by a Definitive Certificate through the DTC settlement system. Thereupon, the
Warrant Agent shall countersign and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates, as the
case may be, as so requested.
2.2.3
Beneficial
Owner; Holder
. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name that Warrant shall be registered on the Warrant Register (the “
Holder
”)
as the absolute owner of such Warrant for purposes of any exercise thereof, and for all other purposes, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any
Warrant. The rights of beneficial owners in a Warrant evidenced by the Global Certificate shall be exercised by the Holder or a
Participant through the DTC system, except to the extent set forth herein or in the Global Certificate.
2.2.4
Execution
.
The Warrant Certificates shall be executed on behalf of the Company by any authorized officer of the Company (an “
Authorized
Officer
”), which need not be the same authorized signatory for all of the Warrant Certificates, either manually or by
facsimile signature. The Warrant Certificates shall be countersigned by an authorized signatory of the Warrant Agent, which need
not be the same signatory for all of the Warrant Certificates, and no Warrant Certificate shall be valid for any purpose unless
so countersigned. In case any Authorized Officer of the Company that signed any of the Warrant Certificates ceases to be an Authorized
Officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person
who signed such Warrant Certificates had not ceased to be such officer of the Company; and any Warrant Certificate may be signed
on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be an Authorized
Officer of the Company authorized to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement
any such person was not such an Authorized Officer.
2.2.5
Proxies
.
The Holder of a Warrant may grant proxies or otherwise authorize any person, including the Participants and beneficial holders
that may own interests through the Participants, to take any action that a Holder is entitled to take under this Warrant Agreement
or the Warrants;
provided
,
however
, that at all times that Warrants are evidenced by Book Entry Warrant
Certificate, exercise of those Warrants shall be effected on their behalf by Participants through DTC in accordance the procedures
administered by DTC.
2.2.6
Warrant
Certificate Request
. A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below)
pursuant to a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the
exchange of some or all of such Holder’s Warrants for a Definitive Certificate evidencing the same number of Warrants, which
request shall be in the form attached hereto as
Exhibit C
(a “
Warrant Certificate Request Notice
”
and the date of delivery of such Warrant Certificate Request Notice by the Holder, the “
Warrant Certificate Request Notice
Date
” and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants
evidenced by a Definitive Certificate, a “
Warrant Exchange
”), the Warrant Agent shall, as soon as practicable,
effect the Warrant Exchange and shall, as soon as practicable, issue and deliver to the Holder a Definitive Certificate for such
number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Definitive Certificate shall be dated
the original issue date of the Warrants, shall be manually executed by an authorized signatory of the Company, shall be in the
form attached hereto as
Exhibit B
, and shall be reasonably acceptable in all respects to such Holder. In connection with
a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Definitive Certificate to the
Holder within three (3) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant
Certificate Request Notice (“
Warrant Certificate Delivery Date
”). If the Company or the Warrant Agent fails
for any reason to deliver to the Holder the Definitive Certificate subject to the Warrant Certificate Request Notice by the Warrant
Certificate 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 evidenced by such Definitive Certificate (based on the Weighted Average Price (as defined in the Warrants) of
the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day for each Business Day after such Warrant
Certificate Delivery Date until such Definitive Certificate is delivered or, prior to delivery of such Warrant Certificate, the
Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate
Request Notice, the Holder shall be deemed to be the holder of the Definitive Certificate and, notwithstanding anything to the
contrary set forth herein, the Definitive Certificate shall be deemed for all purposes to contain all of the terms and conditions
of the Warrants evidenced by such Warrant Certificate and the terms of this Warrant Agreement, shall not apply to the Warrants
evidenced by the Definitive Certificate. The Warrant Agent shall have no responsibility for any liquidated damages that may be
payable or paid to any Person under this paragraph for any failure by the Warrant Agent to deliver to the Holder the Definitive
Certificate, on the Company’s behalf. In addition, the Company shall indemnify and hold harmless the Warrant Agent against
all claims made against the Warrant Agent for any such failure except that the Company shall not be obligated to provide any such
indemnification if it is determined by a final, non-appealable judgment of a court of competent jurisdiction that such failure
is due to the Warrant Agent’s gross negligence, bad faith or willful misconduct.
2.2.7 For
purposes of clarity, without limiting the rights and immunities of the Warrant Agent, if there is a conflict between the express
terms of this Warrant Agreement and any Definitive Certificate in the form of Exhibit B hereto with respect to the terms of the
Warrants, the terms of such Definitive Certificate shall govern and control.
2.3
Detachability
of Warrants
. The Common Stock and the Warrants will be issued separately and will be separately transferable immediately upon
issuance.
3.
Terms
and Exercise of Warrants
.
3.1
Exercise
Price
. The exercise price per whole share of the Common Stock under each Warrant shall be $0.50, subject to adjustment hereunder
(the “
Exercise Price
”).
3.2
Duration
of Warrants
. A Warrant may be exercised only during the period (the “
Exercise Period
”) commencing on the
Issuance Date and terminating at 5:00 P.M., Eastern time on the date sixty (60) months after the Issuance Date or, if such date
falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “
Holiday
”),
the next day that is not a Holiday (the “
Expiration Date
”). Each Warrant not exercised on or before the Expiration
Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant Agreement shall cease at
the close of business on the Expiration Date.
3.3
Exercise
of Warrants
.
3.3.1
Exercise
and Payment
. A registered holder may exercise a Warrant by delivering, not later than 5:00 P.M., Eastern time, on any Business
Day during the Exercise Period (the “
Exercise Date
”) to the Warrant Agent at its offices designated for such
purpose (i) the Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate,
the Warrants to be exercised (the “
Book-Entry Warrants
”) free on the records of the Depository to an account
of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository from time
to time, and (ii) an election to purchase the Warrant Shares underlying the Warrants to be exercised (the “
Election to
Purchase
” and together with the Warrant Certificates and the Book-Entry Warrants, the “
Warrant Exercise Documents
”),
properly completed and duly executed by the registered holder on the reverse of the Warrant Certificate, accompanied by a signature
guarantee and such other documentation as the Warrant Agent may reasonably request, or, in the case of a Book-Entry Warrant Certificate,
properly delivered by the Participant in accordance with the Depository’s procedures. Within one Trading Day after the Exercise
Date, such holder must pay the Warrant Price for each Warrant to be exercised in lawful money of the United States of America by
wire, certified or official bank check, or wire transfer, in immediately available funds unless such holder has elected to make
a cashless exercise pursuant to Section 3.3.8. The term “
Warrant Price
” as used in this Warrant Agreement
refers to price per share of Common Stock at which shares may be purchased at the time the Warrant is exercised.
If any of (A) the Warrant
Certificate or the Book-Entry Warrants, (B) the Election to Purchase, or (C) the Warrant Price therefor, is received by the Warrant
Agent after 5:00 P.M., Eastern time, on the specified Exercise Date, the Warrants will be deemed to be received on the Business
Day next succeeding the Exercise Date. If the date specified as the Exercise Date is not a Business Day, the Warrants will be deemed
to be received on the next succeeding day that is a Business Day. If the Warrants are received or deemed to be received after the
Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the
registered holder or Participant, as the case may be, as soon as practicable. In no event will a registered holder or Participant
be entitled to interest accrued on funds deposited with the Warrant Agent in respect of an exercise or attempted exercise of Warrants.
The Warrant Agent shall not have any responsibility or liability relating to the determination as to the validity of any exercise
of Warrants which determination will be made by the Company and the applicable registered holder, and the Warrant Agent may rely
upon the instructions of the Company regarding the validity of any exercise of Warrants. The Warrant Agent shall not have any obligation
to inform a registered holder of the invalidity of any exercise of Warrants. If the Company believes that an exercise by a registered
holder is invalid the Company will promptly notify such registered holder of the such fact and the reasons why it believes the
exercise was invalid and will provide a copy of such notice to the Warrant Agent as soon as practicable.
The Warrant Agent shall
forward funds received for warrant exercises in a given month by the 5th Business Day of the following month by wire transfer to
an account designated by the Company in writing.
All funds received
by Computershare under this Warrant Agreement that are to be distributed or applied by Computershare in the performance of services
(the “
Funds
”) shall be held by Computershare as agent for the Company and deposited in one or more bank accounts
to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to the terms of this Warrant Agreement,
Computershare will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding
$1 billion or with an average rating above investment grade by Standard and Poor’s Corporation (LT Local Issuer Credit Rating),
Moody’s Investors Service, Inc. (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by
Bloomberg Finance L.P.). Computershare shall have no responsibility or liability for any diminution of the Funds that may result
from any deposit made by Computershare in accordance with this paragraph, including any losses resulting from a default by any
bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings
in connection with such deposits. Computershare shall not be obligated to pay such interest, dividends or earnings to the Company,
any holder or any other Person.
3.3.2
Issuance
of Certificates
. The Warrant Agent shall, within a reasonable time, advise the Company and the Company’s transfer agent
and registrar (the “
Transfer Agent
”) in respect of (a) the Warrant Shares issuable upon such exercise as to
the number of Warrants exercised in accordance with the terms and conditions of this Warrant Agreement, (b) the instructions of
each registered holder or Participant, as the case may be, with respect to delivery of the Warrant Shares issuable upon such exercise,
and the delivery of definitive Warrant Certificates, as appropriate, evidencing the balance, if any, of the Warrants remaining
after such exercise, (c) in case of a Book-Entry Warrant Certificate, the notation that shall be made to the records maintained
by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance,
if any, of the Warrants remaining after such exercise and (d) such other information as the Company, the Warrant Agent or such
transfer agent and registrar shall reasonably require. So long as the Holder delivers the Warrant Price (or notice of a Cashless
Exercise) on or prior to the first (1st) Trading Day following the date on which the Warrant Exercise Documents have been delivered
to the Warrant Agent, then on or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the number of Trading Days comprising
the Standard Settlement Period, in each case following the date on which the Warrant Exercise Documents have been delivered to
the Company, or, if the Holder does not deliver the Warrant Price (or notice of a Cashless Exercise) on or prior to the first (1st)
Trading Day following the date on which the Warrant Exercise Documents have been delivered to the Warrant Agent, then on or prior
to the first (1st) Trading Day following the date on which the Warrant Price (or notice of a Cashless Exercise) is delivered (such
earlier date, the “
Share Delivery Date
”), the Company shall cause the Warrant Agent to (X) provided that the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account
with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Warrant Exercise
Documents, a certificate, registered 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.. If the Warrant Agent fails for any reason to deliver to such registered holder or Participant,
as the case may be, the Warrant Shares subject to an exercise notice by the Share Delivery Date, the Company shall pay to the registered
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 Weighted Average Price of the Common Stock on the date of the applicable exercise notice), $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
Share Delivery Date until such Warrant Shares are delivered or the registered holder rescinds such exercise. The Warrant Agent
shall have no responsibility for any liquidated damages that may be payable or paid to any registered holder or Participant under
this paragraph for any failure by the Warrant Agent to execute, issue and deliver, on the Company’s behalf, the Warrant Shares
as required by this paragraph. In addition, the Company shall indemnify and hold harmless the Warrant Agent against all claims
made against the Warrant Agent for any such failure except that the Company shall not be obligated to provide any such indemnification
if it is determined by a final, non-appealable judgment of a court of competent jurisdiction that such failure is due to the Warrant
Agent’s gross negligence, bad faith or willful misconduct.
If the Warrant Agent fails to comply with
the preceding paragraphs in this Section 3.3.2 by the Share Delivery Date, then, without limiting the rights and immunities of
the Warrant Agent hereunder, in addition to other rights it may have hereunder, the registered holder or Participant will have
the right to rescind its exercise.
3.3.3
Valid
Issuance
. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement
shall be validly issued, fully paid and nonassessable.
3.3.4
Dividends
.
The accrual of dividends, if any, on the Warrant Shares issued hereunder will be governed by the terms generally applicable to
the Common Stock. From and after the issuance of such Warrant Shares, the former holder of the Warrants exercised will be entitled
to the benefits generally available to other holders of Common Stock, including the accrual of dividends, if any, on such Warrant
Shares even prior to exercise of such Warrant Shares, and such former holder’s right to receive payments of dividends and
any other amounts payable in respect of the Warrant Shares shall be governed by, and shall be subject to, the terms and provisions
generally applicable to the Common Stock.
3.3.5
No
Fractional Exercise
. A registered holder may exercise a Warrant from time to time only for whole shares of Common Stock. No
fractional shares or scrip representing fractional shares shall be issued upon the exercise of a 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. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a new Warrant
Certificate for the number of unexercised Warrants remaining shall be executed by the Company and countersigned by the Warrant
Agent as provided in Section 2 of this Warrant Agreement, and delivered to the holder of the Warrant Certificate at the address
specified on the books of the Warrant Agent or as otherwise specified in writing by such registered holder. If fewer than all the
Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the
Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the
Warrants remaining after such exercise. Whenever a payment for fractional shares is to be made by the Warrant Agent under this
Warrant Agreement, the Company shall promptly prepare and deliver to the Warrant Agent a certificate setting forth in reasonable
detail the facts related to such payments and the prices and formulas utilized in calculating such payments. The Warrant Agent
shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to
have knowledge of, any payment for fractional shares under this Warrant Agreement relating to the payment of fractional shares
unless and until the Warrant Agent shall have received such a certificate and sufficient monies. The Company shall provide an initial
funding of one thousand dollars ($1,000) for the purpose of issuing cash in lieu of fractional shares. From time to time thereafter,
the Warrant Agent may request additional funding to cover payments for fractional Warrant Shares. The Warrant Agent shall have
no obligation to make such payments for fractional Warrant Shares unless the Company shall have provided the necessary funds to
pay in full all amounts due and payable with respect thereto. Upon expiration of the term of all Warrants or the earlier exercise
of all Warrants any balance remaining of such funds shall be paid to the Company.
3.3.6
No
Transfer Taxes
. Issuance of Warrant Shares shall be made without charge to a registered holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by
the Company, and such Warrant Shares shall be issued in the name of the registered holder or in such name or names as may be directed
by the registered holder; provided, however, that in the event Warrant Shares are to be issued in a name other than the name of
the registered holder, a Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the registered 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
exercise notice. The Warrant Agent shall not have any duty or obligation to take any action under any section of this Warrant Agreement
that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made.
3.3.7
Date
of Issuance
. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant
Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment
is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such
shares at the close of business on the next succeeding date on which the stock transfer books are open. Upon receipt by the Company
of a duly executed Notice of Exercise (which may be by facsimile or email), a registered holder shall be deemed to have exercised
its Warrant as specified in the Notice of Exercise for purposes of Regulation SHO promulgated under the Securities Exchange Act
of 1934, as amended (the “
1934 Act
”). A holder whose interest in a Warrant is a beneficial interest in certificate(s)
representing a Warrant held in book-entry form through DTC shall be deemed to have exercised its interest in a Warrant upon instructing
its broker that is a DTC participant to exercise its interest in a Warrant, for purposes of Regulation SHO promulgated under the
1934 Act.
3.3.8
Optional
Cashless Exercise
. A Cashless Exercise (as defined below) may occur (i) in whole or in part for a whole number of Warrant Shares,
if, between June 18, 2019 and the fifteen (15) month anniversary thereof, the Weighted Average Price of the Common Stock on the
Trading Day immediately prior to the Exercise Date fails to exceed the initial Exercise Price (subject to adjustment for any stock
splits, stock dividends, stock combinations, recapitalizations and similar events) in which event, in lieu of the formula below,
the aggregate number of Warrant Shares issuable in such cashless exercise pursuant to any given Exercise Notice electing to effect
a Cashless Exercise shall equal the product of (x) the aggregate number of Warrant Shares for which the Warrants are exercised
as if such exercise were by means of a cash exercise rather than a Cashless Exercise and (y) one (1); and (ii) if at any time during
the term of this Warrant Agreement there is no effective registration statement registering, or no current prospectus available
for, the issuance or resale of the Warrant Shares by the registered holder, 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 determined according to the following
formula (a “
Cashless Exercise
”):
Net Number =
(A
x B) - (A x C)
B
For purposes of the
foregoing formula:
A= the total number
of shares with respect to which the Warrants are then being exercised.
B= as applicable: (i)
the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice
if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or
(2) both executed and delivered pursuant to Section 1(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 Weighted Average Price on the Trading Day immediately preceding the date of the
applicable Notice of Exercise or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable
Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading
Day) pursuant to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise
Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to
Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
C= the Exercise Price
then in effect for the applicable Warrant Shares at the time of such exercise.
If Warrant Shares are
issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the 1933 Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the
Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position
contrary to this Section 3.3.8.
3.3.9
Disputes
.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the registered holder the number of Warrant Shares that are not disputed.
3.3.10
Limitations
on Exercise
. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion
of a Warrant, and the Holder shall not have the right to exercise any portion of a Warrant, pursuant to the terms and conditions
of the Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect
to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of [4.99][9.99]%
(the “
Maximum Percentage
”) of the number of shares of Common Stock outstanding immediately after giving effect
to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by
the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other
Attribution Parties plus the number of shares of Common Stock issuable upon exercise of the Warrants with respect to which the
determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon
(A) exercise of the remaining, unexercised portion of the Warrants beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants, including the other Warrants) beneficially
owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 3.3.10. For purposes of this Section 3.3.10, beneficial ownership shall be calculated in accordance with
Section 13(d) of the 1934 Act. For purposes of the Warrants, in determining the number of outstanding shares of Common Stock the
Holder may acquire upon the exercise of the Warrants without exceeding the Maximum Percentage, the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly
Report on Form 10-Q and Current Reports on Form 8-K or other public filing with the Securities and Exchange Commission (the “
SEC
”),
as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding (the “
Reported Outstanding Share Number
”).
If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock
is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares
of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial
ownership, as determined pursuant to this Section 3.3.10, to exceed the Maximum Percentage, the Holder must notify the Company
of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase
is reduced, the “
Reduction Shares
”) and (ii) as soon as reasonably practicable, the Company shall return to
the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail 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 the Warrants, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that
the issuance of Common Stock to the Holder upon exercise of the Warrants results in the Holder and the other Attribution Parties
being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common
Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other
Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “
Excess Shares
”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer
the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the
Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice
to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% or such higher percentage as specified in such notice; provided that (i) any such increase in the Maximum Percentage will
not be effective until the sixty-first (61
st
) day after such notice is delivered to the Company and (ii) any such increase
or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Warrants that is not
an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of the Warrants
in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes
of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise the Warrants pursuant to this paragraph shall
have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 3.3.10 to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 3.3.10 or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived
and shall apply to a successor holder of the Warrants.
3.4
Company’s
Failure to Timely Deliver Securities
. If either (I) the Company shall fail for any reason or for no reason on or prior to
the applicable Share Delivery Date, (x) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program, to issue to the Holder a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such Common Stock on the Company’s share register or (y) if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock
to which the Holder is entitled upon the Holder’s exercise of the Warrants or (II) a registration statement (which may be
the Registration Statement) covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice
(the “
Exercise Notice Warrant Shares
”) is not available for the issuance or resale, as applicable, of such
Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one (1) Business Day after such
registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver the Exercise Notice
Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice Warrant Shares
to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred to as a “
Notice Failure
” and,
together with the event described in clause (I) above, an “
Exercise Failure
”), then, in addition to all other
remedies available to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate
to the Holder and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, credit the Holder’s balance account with DTC for the number of shares
of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s
obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day the Holder purchases
(in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common
Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “
Buy-In
”), then
the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “
Buy-In Price
”), at
which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such
Holder’s balance account with DTC for such shares of Common Stock shall terminate, or (ii) promptly honor its obligation
to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s
balance account with DTC, as applicable, and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times (B) any trading price of the Common Stock selected by the
Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable
Share Delivery Date. Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Warrant Shares (or to electronically deliver such Warrant Shares) upon the
exercise of the Warrants as required pursuant to the terms hereof. While the Warrants are outstanding, the Company shall cause
its transfer agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights,
(i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable
Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have
the Company return, as the case may be, any portion of the Warrants that has not been exercised pursuant to such Exercise Notice;
provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued
prior to the date of such notice pursuant to this Section 3.4 or otherwise, and (ii) if a registration statement (which may be
the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not
available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise
Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered
the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number
of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance
account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice
to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion
of the Warrants that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice
shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant
to this Section 3.4 or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
3.5
Cost
Basis Information
. (1) In the event of a cash exercise, the Company hereby instructs the Warrant Agent to record cost basis
for newly issued shares in a manner to be subsequently communicated by the Company in writing to the Warrant Agent.
(a) In
the event of a cashless exercise, the Company shall provide cost basis for shares issued pursuant to a cashless exercise at the
time the Company confirms the number of Warrant Shares issuable in connection with the cashless exercise to the Warrant Agent pursuant
to Section 3.3.3 hereof.
3.6
Rule
144
. (2) If the Warrant Shares are issued in a cashless exercise, the Company and the registered holder undertaking such cashless
exercise acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, other than a change in law, the Warrant
Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the
1933 Act, as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a cashless exercise shall be deemed
to have been acquired by the holder of the Warrant Shares, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date the Warrants being exercised were originally issued pursuant to the Underwriting Agreement.
(a) The
Company shall, at all times prior to the earlier to occur of (i) the date of sale or other disposition by the holders of a Warrant
of or all shares of Common Stock issued on exercise of such Warrant or (ii) the expiration or earlier termination of a Warrant
if a Warrant has not been exercised in full or in part on such date, use commercially reasonable efforts to timely file all reports
required under the 1934 Act and otherwise timely take all actions necessary to permit the holder of such Warrant and/or the shares
of Common Stock issued on exercise thereof to sell or otherwise dispose of such Warrant and shares pursuant to Rule 144 promulgated
under the 1933 Act, provided that the foregoing shall not apply in the event of a Merger Event following which the successor or
surviving entity is not subject to the reporting requirements of the 1934 Act. If the holder of a Warrant proposes to sell Common
Stock issuable upon the exercise of such Warrant in compliance with Rule 144, then, upon the holder of the Warrant’s written
request to the Company, the Company shall furnish to the holder of the Warrant, within five (5) Business Days after receipt of
such request, a written statement confirming the Company’s compliance with the filing and other requirements of such Rule
144.
4.
Adjustments
.
4.1
Adjustment
Upon Issuance of Common Stock
. If and whenever on or after June 18, 2019 (the “
Subscription Date
”), the
Company issues or sells, or in accordance with this Section 4.1 is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common
Stock deemed to have been issued or sold by the Company in connection with any Excluded Securities) for a consideration per share
(the “
New Issuance Price
”) less than a price (the “
Applicable Price
”) equal to the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance or sale (the foregoing a “
Dilutive Issuance
”),
then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New
Issuance Price. For purposes of determining the adjusted Exercise Price under this Section 4.1, the following shall be applicable:
(i)
Issuance
of Options
. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Options is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Options for such price
per share. For purposes of this Section 4.1(i), the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Options” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the granting or sale of the Options, upon exercise of the Options
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Options less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Options, upon exercise
of such Options and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Options. No
further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities.
(ii)
Issuance
of Convertible Securities
. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 4.1(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock
upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities, and if any such issuance or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this
Section 4.1, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii)
Change
in Option Price or Rate of Conversion
. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time pursuant
to the terms of such Options or Convertible Securities, the Exercise Price in effect at the time of such increase or decrease shall
be adjusted to the Exercise Price that would have been in effect at such time had such Options or Convertible Securities provided
for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this Section 4.1(iii), if the terms of any Option or Convertible
Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to
this Section 4.1(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect. For the
avoidance of doubt, no adjustment in the Exercise Price shall be made pursuant to this Section 4.1(iii) as a result of any modification
of the terms of any Options or Convertible Securities after their date of issuance.
(iv)
Calculation
of Consideration Received
. In case any Option is issued in connection with the issuance or sale of other securities of the
Company, together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value
of such Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued
or sold for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by
the Company pursuant to the terms of such other securities of the Company, less (II) the Option Value of such Options; provided,
that if the value determined pursuant to clause (y) above would result in a value less than the par value of the Common Stock,
then the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the par
value of the Common Stock. If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor.
If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists
of publicly traded securities, in which case the amount of consideration received by the Company will be the Closing Sale Price
of such publicly traded securities on the date of receipt of such publicly traded securities. If any shares of Common Stock, Options
or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company
is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.
(vi)
No
Modification
. So long as any of the Warrants are outstanding, the Company shall not amend, modify or change the terms of any
Options or Convertible Securities (whether issued on, prior or after the Subscription Date) to lower the exercise price or conversion
price thereof.
Notwithstanding the
foregoing, and for the avoidance of doubt, no adjustment shall be made under this section 4.1 in respect of any Exempt Issuance.
4.2
Adjustment
Upon Subdivision or Combination of Common Stock
. If the Company at any time on or after the Issuance Date subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 4.2 shall become effective at
the close of business on the date the subdivision or combination becomes effective.
4.3
Purchase
Rights
. In addition to any adjustments pursuant to Section 4.1 above, if at any time on or after the Issuance Date and on or
prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class 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
the Warrants (without regard to any limitations or restrictions on exercise of the Warrants, including without limitation, the
Maximum Percentage) 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 Common Stock are to be determined for the grant, issuance
or sale of such Purchase Rights (
provided
,
however
, that to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then
the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial
ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).
4.4
Rights
Upon Distribution of Assets
. In addition to any adjustments pursuant to Section 4.1 above, if, on or after the Issuance Date
and on or prior to the Expiration Date, 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, options, evidence of indebtedness or any other assets
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 the Warrants, 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 the Warrants (without regard to any limitations
or restrictions on exercise of the Warrants, including without limitation, the Maximum Percentage) immediately before the date
on 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
, that to the
extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial
ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such
initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no
such limitation).
4.5
Fundamental
Transaction
. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under the Warrants in accordance with the provisions of this Section 4.5, including
agreements to deliver to the Holder in exchange for the Warrants a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to the Warrants, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of the Warrants
(without regard to any limitations on the exercise of the Warrants) prior to such Fundamental Transaction, and with an exercise
price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments
to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of the
Warrants immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of the applicable Fundamental
Transaction, the provisions of the Warrants and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under the Warrants with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of the Warrants at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 4.3 and 4.4
above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrants prior to the applicable Fundamental
Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had the Warrants been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of the Warrants),
as adjusted in accordance with the provisions of the Warrants. Notwithstanding the foregoing, and without limiting Section 3.3.10
hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4.4 to permit
the Fundamental Transaction without the assumption of the Warrants. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise
of the Warrants at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 4.3 and 4.4 above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant
prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had the Warrants been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of the Warrants).
The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The
provisions of this Section 4.5 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events. Notwithstanding
the foregoing, in the event of a Change of Control, that is approved by the Company’s Board of Directors (and not, for avoidance
of doubt, if the Change of Control is not within the Company’s control), the Holder shall be entitled to receive from the
Company or any Successor Entity, as of the date of consummation of such Change of Control, the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of the Warrants, that is being offered and
paid to the holders of Common Stock of the Company in connection with the Change of Control, whether that consideration be in the
form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among
alternative forms of consideration in connection with the Change of Control.
4.6
Voluntary
Adjustment By the Company
. The Company may at any time during the term of the Warrants reduce the then current Exercise Price
to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
4.7
Notices
.
4.7.1
Adjustment
to Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall give
prompt written notice thereof to the Warrant Agent, which notice shall set forth the Exercise Price after such adjustment and set
forth a brief statement of the facts requiring such adjustment. The Company agrees that it will provide the Warrant Agent with
any new or amended exercise terms. The Warrant Agent shall have no obligation under any Section of this Warrant Agreement to determine
whether an adjustment made hereunder has occurred or are scheduled or contemplated to occur or to calculate any of the adjustments
set forth in this Warrant Agreement.
4.7.2
Notices
of Certain Events to Allow Exercise
. 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 mailed to each registered
holder at its last 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 mail such notice or any defect therein or in the mailing
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 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 registered
holder shall remain entitled to exercise a 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.
4.8
Form
of Warrant
. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued
pursuant to this Warrant Agreement.
4.9
Calculations
.
All calculations under this Section 4 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 4, 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.
5.
Transfer
and Exchange of Warrants
.
5.1
Registration
of Transfer
. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, duly endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued
and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent
to the Company from time to time upon the request and at the expense of the Company.
5.2
Procedure
for Surrender of Warrants
. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or
transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered
holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise
provided herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole
and only to the Depository, to another nominee of the Depository, to a successor depository, or to a nominee of a successor depository;
provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent
shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel
for the Company stating that such transfer may be made and indicating whether the new Warrants or Warrant Shares must also bear
a restrictive legend. Upon any such registration of transfer, the Company shall execute, and the Warrant Agent shall countersign
and deliver, in the name of the designated transferee a new Warrant Certificate or Warrant Certificates of any authorized denomination
evidencing in the aggregate a like number of unexercised Warrants.
A party requesting
transfer of Warrants must provide any evidence of authority that may be required by the Warrant Agent, including but not limited
to, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the
Securities Transfer Association.
5.3
Fractional
Warrants
. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant.
5.4
Service
Charges
. A registered holder shall not incur any service charge for any exchange or registration of transfer of Warrants.
5.5
Warrant
Execution and Countersignature
. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the
terms of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for
such purpose.
6.
Other
Provisions Relating to Rights of Registered Holders of Warrants
.
6.1
No
Rights as Stockholder
. Except as otherwise specifically provided herein, a registered holder, solely in its capacity as a holder
of a Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant Agreement be construed to confer upon a registered holder, solely in its
capacity as the registered holder of a Warrant, any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the registered holder of the Warrant Shares which it is then entitled to receive upon the due exercise of a Warrant.
In addition, nothing contained in this Warrant Agreement shall be construed as imposing any liabilities on a registered holder
to purchase any securities (upon exercise of a Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. A Warrant does not entitle the registered holder thereof to any of
the rights of a stockholder.
6.2
Lost,
Stolen or Destroyed Warrants
. The Warrant Agent shall issue replacement Warrants in a form mutually agreed to by Warrant Agent
and the Company for those certificates alleged to have been lost, stolen or destroyed, upon receipt by Warrant Agent of an open
penalty surety bond satisfactory to it and holding it and Company harmless and, at the Company’s or the Rights Agent’s
request, reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, absent notice to Warrant
Agent that such certificates have been acquired by a bona fide purchaser. Warrant Agent may, at its option, issue replacement Warrants
for mutilated certificates upon presentation thereof without such indemnity.
6.3
Authorized
Shares
. The Company covenants that, during the period the Warrants are outstanding, the Company shall at all times keep reserved
for issuance under the Warrants a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding
(without regard to any limitations on exercise) (the “
Required Reserve Amount
”);
provided
that at no
time shall the number of shares of Common Stock reserved pursuant to this Section 6.3 be reduced other than in connection with
any exercise of Warrants or such other event covered by Section 4.2. The Required Reserve Amount (including, without limitation,
each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number
of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to
any limitations on exercise) (the “
Authorized Share Allocation
”). In the event that a holder shall sell or otherwise
transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized
Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants shall be allocated
to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the Warrants
then held by such holders thereof (without regard to any limitations on exercise). If at any time while the Warrants remains outstanding
the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance the Required Reserve Amount (an “
Authorized Share Failure
”), then the Company shall promptly
take all action reasonably necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for the Warrants then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is
able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C.
6.4
Noncircumvention
.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale
of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, and will at all times in good faith carry out all of the provisions of the Warrants and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase
the par value of any shares of Common Stock receivable upon the exercise of the Warrants above the Exercise Price then in effect,
(ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of the Warrants, and (iii) shall, so long as any of the
Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
7.
Concerning
the Warrant Agent and Other Matters
.
7.1
Payment
of Taxes
. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the
Warrant Agent in respect of the issuance, transfer or delivery of shares of Common Stock upon the exercise of Warrants, but the
Company or the Warrant Agent shall not be obligated to pay any transfer taxes or charges in respect of the Warrants or such shares
in connection with a transfer to a different holder. The Warrant Agent shall not register any transfer or issue or deliver any
Warrant Certificate(s) unless or until the persons requesting the registration or issuance shall have paid to the Warrant Agent
for the account of the Company the amount of such transfer tax and charges, if any, or shall have established to the reasonable
satisfaction of the Company and the Warrant Agent that such transfer tax and charges, if any, have been paid.
7.2
Resignation,
Consolidation, or Merger of Warrant Agent
.
7.2.1
Appointment
of Successor Warrant Agent
. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving thirty (30) days’ notice in writing to the Company pursuant
to the notice provisions in Section 8.2 hereof. In the event the transfer agency relationship, if any, in effect between the Company
and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned automatically and be discharged from its duties
under this Warrant Agreement as of the effective date of such termination. If the office of the Warrant Agent becomes vacant by
resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant
Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such
resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant
for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the
County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be authorized under applicable laws to exercise the powers of a transfer agent
and subject to supervision or examination by federal or state authorities. After appointment, any successor Warrant Agent shall
be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like
effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary
or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring
to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request
of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities,
duties, and obligations.
7.2.2
Notice
of Successor Warrant Agent
. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
7.2.3
Merger
or Consolidation of Warrant Agent
. Any Person into which the Warrant Agent may be merged or converted or with which it may
be consolidated or any Person resulting from any merger, conversion, or consolidation to which the Warrant Agent shall be a party,
or any Person succeeding to the business of the Warrant Agent, shall be the successor Warrant Agent under this Warrant Agreement
without any further act by the parties.
7.3
Fees
and Expenses of Warrant Agent
.
7.3.1
Remuneration
.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder in accordance
with a fee schedule to be mutually agreed upon and will reimburse the Warrant Agent upon demand for all expenditures (including
the reasonable expenses and fees of counsel) and disbursements that the Warrant Agent may reasonably incur in the incurred in the
preparation, delivery, negotiation, amendment, administration and execution of this Warrant Agreement and the exercise and performance
of its duties hereunder.
7.3.2
Further
Assurances
. The Company shall perform, acknowledge and deliver or cause to be performed, acknowledged and delivered all such
further and other acts, documents, instruments and assurances as may be reasonably required by the Warrant Agent for the carrying
out or performing by the Warrant Agent of the provisions of this Warrant Agreement.
7.4
Liability
of Warrant Agent
.
7.4.1
Reliance
on Company Statement
. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President or
Chairman of the Board of Directors of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon, and be held
harmless for such reliance, such statement for any action taken or suffered by it pursuant to the provisions of this Warrant Agreement,
and shall not be held liable in connection with any delay in receiving such statement.
7.4.2
Indemnification
.
The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against any costs, expenses (including reasonable
fees of its legal counsel), losses or damages, which may be paid, incurred or suffered by or to which it may become subject, arising
from or out of, directly or indirectly, any claims or liability resulting from its actions or omissions as Warrant Agent pursuant
hereto; provided, that such covenant and agreement does not extend to, and the Warrant Agent shall not be indemnified with respect
to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a result of, or arising out of, its gross
negligence, bad faith, or willful misconduct (each as determined in a final, non-appealable judgment of a court of competent jurisdiction).
7.4.3
Instructions
.
From time to time, the Company may provide the Warrant Agent with instructions concerning the services performed by the Warrant
Agent hereunder. In addition, at any time the Warrant Agent may apply to any officer of the Company for instruction, and may consult
with legal counsel for Warrant Agent or the Company with respect to any matter arising in connection with the services to be performed
by the Warrant Agent under this Warrant Agreement. The Warrant Agent and its agents and subcontractors shall not be liable and
shall be indemnified by the Company for any action taken or omitted by the Warrant Agent in reliance upon any Company instructions
or upon the advice or opinion of such counsel. The Warrant Agent shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Company.
7.4.4
Exclusions
.
The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity
or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make calculations
under Section 3.3.8 or any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method,
or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall
it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of
Common Stock to be issued pursuant to this Warrant Agreement or any Warrant or as to whether any shares of Common Stock will when
issued be valid and fully paid and nonassessable.
7.4.5
Rights
and Duties of Warrant Agent.
The Warrant Agent may consult with legal counsel (who may be legal counsel for the Company), and
the opinion or advice of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action
taken or omitted by it in accordance with such opinion or advice.
(a) The
Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Warrant Agreement
or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, and all such statements
and recitals are and shall be deemed to have been made by the Company only.
(b) The
Warrant Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Warrants
with respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
(c) The
Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this
Warrant Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
(d) The
Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct,
absent gross negligence, bad faith or willful misconduct (each as determined by a final judgment of a court of competent jurisdiction)
in the selection and continued employment thereof.
(e) The
Warrant Agent may rely on and shall be held harmless and protected and shall incur no liability for or in respect of any action
taken, suffered or omitted to be taken by it in reliance upon any certificate, statement, instrument, opinion, notice, letter,
facsimile transmission, telegram or other document, or any security delivered to it, and believed by it to be genuine and to have
been made or signed by the proper party or parties, or upon any written or oral instructions or statements from the Company with
respect to any matter relating to its acting as Warrant Agent hereunder.
(f) The
Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would expose or subject
it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with assurances of repayment
or indemnity satisfactory to it.
(g) The
Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating
to any registration statement filed with the Commission or this Warrant Agreement, including without limitation obligations under
applicable regulation or law.
(h) The
Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any Warrants authenticated
by the Warrant Agent and delivered by it to the Company pursuant to this Warrant Agreement or for the application by the Company
of the proceeds of the issue and sale, or exercise, of the Warrants.
(i) The
Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the express provisions
hereof (and no duties or obligations shall be inferred or implied). The Warrant Agent shall not assume any obligations or relationship
of agency or trust with any of the owners or holders of the Warrants.
(j) The
Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature
by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion
Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for,
the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter
have been altered, changed, amended or repealed.
(k) In
the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request
or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in its sole discretion,
refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Warrant
Certificate or Book-Entry Warrant Certificate or any other person or entity for refraining from taking such action, unless the
Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction
of Warrant Agent. The foregoing shall not eliminate any liability that the Company may have to any registered holder or holder
of any Warrant Certificate or Book-Entry Warrant Certificate.
7.5
Limitation
on Liability of Warrant Agent
. Notwithstanding anything contained herein to the contrary, the Warrant Agent’s aggregate
liability during any term of this Warrant Agreement with respect to, arising from, or arising in connection with this Warrant Agreement,
or from all services provided or omitted to be provided under this Warrant Agreement, whether in contract, or in tort, or otherwise,
is limited to, and shall not exceed, the amounts paid hereunder by the Company to Warrant Agent as fees and charges, but not including
reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from Warrant Agent is being
sought. Sections 7.1, 7.3, 7.4, 7.5 and 8.15 shall survive the expiration of the Warrants, the termination of this Warrant Agreement
and the resignation, replacement or removal of the Warrant Agent. The costs and expenses incurred in enforcing this right of indemnification
shall be paid by the Company.
7.6
Acceptance
of Agency
. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same
upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares
of Common Stock through the exercise of Warrants.
7.7
Opinion
of Counsel
. The Company shall provide an opinion of counsel prior to the Issuance Date to set up a reserve of Warrants and
related Common Stock. The opinion shall state that all Warrants or Common Stock, as applicable, are:
(1) registered
under the 1933 Act, or are exempt from such registration, and all appropriate state securities law filings have been made with
respect to the warrants or shares; and
(2) validly
issued, fully paid and non-assessable.
8.
Miscellaneous
Provisions
.
8.1
Successors
.
Subject to applicable securities laws, this Warrant Agreement and the Warrants 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 each registered holder. The provisions of this Warrant Agreement are intended to be for the benefit of any holder from
time to time of this Warrant Agreement and shall be enforceable by the holder or holder of Warrant Shares.
8.2
Notices
.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder
of any Warrant to or on the Company shall be in writing and delivered by hand or sent by registered or certified mail or overnight
courier service addressed (until another address is filed in writing by the Company with the Warrant Agent), or by facsimile transmission
(as long as the sender maintains a fax delivery report confirming receipt by the recipient and is considered delivered when sent
or if after normal business hours the next Business Day) or by email (as long as no bounce back is received by the sender), as
follows:
SELLAS Life Sciences Group, Inc.
15 W. 38
th
Street, 10th Floor
New York, NY 10018
Attn: John Burns
Any notice, statement or demand authorized
by this Warrant Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be
in writing and delivered by hand or overnight courier service addressed (until another address is filed in writing by the Warrant
Agent with the Company) as follows:
Computershare Inc.
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
Attn: Client Services
8.3
Jurisdiction
.
The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by
the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Warrant Agreement shall be brought and enforced in the courts of the State of New York or
the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience
forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
8.4
Persons
Having Rights under this Warrant Agreement
. Nothing in this Warrant Agreement expressed and nothing that may be implied from
any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than
the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Warrant Agreement
or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and
agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the registered holders of the Warrants.
8.5
Examination
of the Warrant Agreement
. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the
Warrant Agent, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit
his Warrant for inspection by it.
8.6
Counterparts
.
This Warrant Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
A signature to this Warrant Agreement transmitted electronically shall have the same authority, effect, and enforceability as an
original signature.
8.7
Effect
of Headings
. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not
affect the interpretation thereof.
8.8
Amendments
.
All modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require
the written consent of the registered holders of Warrants equal to at least 67% of the Warrant Shares issuable upon exercise of
all then outstanding Warrants. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall
deliver to the Warrant Agent a certificate from an Authorized Officer that states that the proposed amendment is in compliance
with the terms of this Section 8.8. No consideration shall be offered or paid to any person to amend or consent to a waiver or
modification of any provision of this Warrant Agreement unless the same consideration is also offered to all holders of the Warrants.
Notwithstanding anything in this Warrant Agreement to the contrary, the Warrant Agent shall not be required to execute any supplement
or amendment to this Warrant Agreement that it has determined would adversely affect its own rights, duties, obligations or immunities
under this Warrant Agreement. No supplement or amendment to this Warrant Agreement shall be effective unless duly executed by the
Warrant Agent.
8.9
Severability
.
Wherever possible, each provision of this Warrant Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant Agreement 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 Agreement; provided, however, that if such prohibited and invalid provision shall adversely
affect the rights, immunities, liabilities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled to
resign immediately upon written notice to the Company.
8.10
Restrictions
.
Each registered holder acknowledges that the Warrant Shares acquired upon the exercise of a Warrant, if not registered, and the
registered holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities
laws.
8.11
Nonwaiver
and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder on the part of a registered holder
shall operate as a waiver of such right or otherwise prejudice such a registered holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant Agreement or the Underwriting Agreement, if the Company willfully and knowingly fails
to comply with any provision of this Warrant Agreement or the Warrants, which results in any material damages to a registered holder,
the Company shall pay such registered 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 registered holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
8.12
Limitation
of Liability
. No provision hereof, in the absence of any affirmative action by the registered holder to exercise a Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of a registered holder, shall give rise to any
liability of each registered 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.
8.13
Remedies
.
The registered holders, 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 Agreement. 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 Agreement 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.
Notwithstanding the foregoing or anything else herein to the contrary, other than as expressly provided in Section 3.3.2, Section 3.4
or Section 4.5 hereof, if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of this Warrant
as required pursuant to the terms hereof, the Company shall have no obligation to pay to the holder any cash or other consideration
or otherwise “net cash settle” this Warrant; provided that the foregoing shall not limit or supersede the applicability
of Section 4.5 hereof.
8.14
Confidentiality
.
The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party,
including inter alia, personal, non-public warrant holder information, which are exchanged or received pursuant to the negotiation
or the carrying out of this Warrant Agreement including the fees for services set forth in a mutually agreed upon schedule shall
remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without
limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions).
8.15
Consequential
Damages
. Neither party to this Warrant Agreement shall be liable to the other party for any consequential, indirect, special
or incidental damages under any provisions of this Warrant Agreement or for any consequential, indirect, punitive, special or incidental
damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen the possibility
of such damages.
8.16
Force
Majeure
. Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or
failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist
acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due
to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
9.
Certain
Definitions
. For purposes of this Warrant Agreement, the following terms shall have the following meanings:
9.1 “
Affiliate
”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
9.2 “
Approved
Stock Plan
” means any employee benefit plan that has been approved by a majority of the disinterested members of the
Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director
for services provided to the Company.
9.3 “
Attribution
Parties
” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any
of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
9.4 “
Bid
Price
” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 11.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.
9.5 “
Black
Scholes Value
” means the value of the Warrants based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day immediately following the first public announcement of the applicable Change of
Control, or, if the Change of Control is not publicly announced, the date the Change of Control is consummated, for pricing purposes
and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of
the Warrants as of such date of request, (ii) an expected volatility equal to 100% , (iii) the underlying price per share used
in such calculation shall be the greater of (a) the highest Weighted Average Price during the five (5) Trading Days prior to the
closing of the Change of Control and (b) 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 Change of Control, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
9.6 “
Bloomberg
”
means Bloomberg Financial Markets.
9.7 “
Business
Day
” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law or executive order to remain closed.
9.8 “
Change
of Control
” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification
of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities
and, directly or indirectly, are, in all material respect, the holders of the voting power of the surviving entity (or entities
with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation)
of such entity or entities) after such reorganization, recapitalization or reclassification, (ii) pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (iii) a merger in connection with
a bona fide acquisition by the Company of any Person in which (x) the gross consideration paid, directly or indirectly, by the
Company in such acquisition is not greater than 20% of the Company’s market capitalization as calculated on the date of the
consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority of the board of directors
of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transaction that, directly or indirectly,
results in the Company or the Successor Entity not having Common Stock or common stock, as applicable, registered under the 1934
Act and listed on an Eligible Market shall be deemed a Change of Control.
9.9 “
Closing
Bid Price
” and “
Closing Sale Price
” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
9.10 “
Common
Stock
” means (i) the Company’s shares of Common Stock and (ii) any share capital into which such Common Stock shall
have been changed or any share capital resulting from a reclassification of such Common Stock.
9.11 “
Control
”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
9.12 “
Convertible
Securities
” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.
9.13 “
Eligible
Market
” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market
or The New York Stock Exchange, Inc.
9.14 “
Excluded
Securities
” means any shares of Common Stock issued or issuable, or deemed issued or issuable pursuant to Section 4.1:
(i) in connection with any Approved Stock Plan, including, for the avoidance of doubt, the issuance of equity awards (including
Options or Convertible Securities) pursuant to any such Approved Stock Plan after the Subscription Date, (ii) in connection with
the issuance of equity awards (including Options, Convertible Securities or restricted stock units) to employees or consultants,
as compensation, (iii) upon exercise of the Warrants, (iv) upon conversion, exercise, exchange or settlement of any Options or
Convertible Securities that are outstanding on the day immediately preceding the Subscription Date, or (v) pursuant to acquisitions,
divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Board of Directors or a majority
of the members of a committee of directors established for such purposes; provided that any such issuance shall only be to a Person
(or to the equity holders of a Person) that is, itself or through its subsidiaries, an operating company or 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, or (vi) securities issued to third party vendors, collaborators,
partners or the like as payment for goods or services rendered or upon the satisfaction of certain milestones, provided that, for
the avoidance of doubt, any such issuance shall not include any 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.
9.15 “
Expiration
Date
” means the date that is sixty (60) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday,
as the same may be extended pursuant to Section 3.3.7.
9.16 “
Fundamental
Transaction
” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender
or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50%
of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that
the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not
held by all such Subject Entities as of the Issuance Date calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
9.17 “
Group
”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
9.18 “
Merger
Event
” means any of the following: (i) a sale, lease or other transfer of all or substantially all assets of the Company,
(ii) any merger or consolidation involving the Company in which the Company is not the surviving entity or in which the outstanding
shares of the Company’s capital stock are otherwise converted into or exchanged for shares of capital stock or other securities
or property of another entity, or (iii) any sale by holders of the outstanding voting equity securities of the Company in a single
transaction or series of related transactions of shares constituting a majority of the outstanding combined voting power of the
Company.
9.19 “
Options
”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
9.20 “
Option
Value
” means the value of an Option based on the Black-Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of the day of the most recent Closing Sale Price of the Common Stock prior to the public announcement
of the pricing of the applicable Option (or, if the pricing is not publicly announced, on the most recent Closing Sale Price of
the Common Stock prior to the pricing of the applicable Option) and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to 50%, (iii) an underlying price per share equal to the most recent Closing Sale Price of the
Common Stock prior to the public announcement of the pricing of the applicable Option (or, if the pricing is not publicly announced,
on the most recent Closing Sale Price of the Common Stock prior to the pricing of the applicable Option), (iv) a zero cost of borrow
and (v) a 360-day annualization factor.
9.21 “
Parent
Entity
” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.
9.22 “
Person
”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
9.23 “
Principal
Market
” means the principal securities exchange or securities market on which the Common Shares are then traded.
9.24 “
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.
9.25 “
Subject
Entity
” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
9.26 “
Successor
Entity
” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
9.27 “
Trading
Day
” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.
9.28 “
Transaction
Documents
” means any agreement entered into by and between the Company and the Holder, as applicable.
9.29 “
Weighted
Average Price
” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
[Remainder of page intentionally left
blank. Signature page follows.]
IN WITNESS WHEREOF,
this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.
|
|
SELLAS LIFE SCIENCES GROUP, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
COMPUTERSHARE INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
COMPUTERSHARE TRUST COMPANY, N.A.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
[Signature Page to Warrant Agreement]
EXHIBIT A
[FORM OF GLOBAL CERTIFICATE]
SELLAS
LIFE SCIENCES GROUP, INC.
WARRANT
CERTIFICATE
THIS CERTIFIES THAT,
for value received is the registered holder of a Warrant or Warrants (the “
Warrant
”) expiring the date sixty
(60) months after the Initial Exercisability Date or, if such date falls on a day other than a Business Day or on which trading
does not take place on the Principal Market (a “
Holiday
”), the next day that is not a Holiday, subject to extension
in certain events (“
Expiration Date
”), to purchase
fully paid and non-assessable shares (“
Shares
”) of Common Stock, par value $0.0001 per share (“
Common
Stock
”), of SELLAS Life Science Group, Inc., a Delaware corporation (the “
Company
”). The Warrant entitles
the holder thereof to purchase from the Company such number of shares of Common Stock at the price of $ per share (subject to adjustment),
upon surrender of this Warrant Certificate and payment of the Warrant Price to Computershare Inc. and Computershare Trust Company,
N.A. (collectively, the “
Warrant Agent
”), at its offices designated for such purpose, but only subject to the
conditions set forth herein and in the Warrant Agreement between the Company and the Warrant Agent (as may be amended from time
to time, the “
Warrant Agreement
”). The Warrant Agreement provides that upon the occurrence of certain events,
the Warrant Price and the number of Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions,
be adjusted. The term “
Warrant Price
” as used in this Warrant Certificate refers to the price per share of Common
Stock at which Shares may be purchased at the time the Warrant is exercised. Capitalized terms used and not defined herein shall
have the meanings set forth in the Warrant Agreement.
No fraction of a Share
will be issued upon any exercise of a Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon
any exercise of a Warrant, the Company shall, at its election, either pay a cash adjustment in respect of such fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up such fraction to the next whole share.
Upon any exercise of
the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof
or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not
been exercised, provided that such holder has previously surrendered this Warrant to the Warrant Agent.
Upon surrender of the
Warrant Certificate for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions
for transfer, the Warrant Agent shall register the transfer. A new Warrant Certificate or Warrant Certificates evidencing in the
aggregate a like number of Warrants shall be issued and the old Warrant Certificate shall be canceled.
Warrant Certificates,
when surrendered to the Warrant Agent, may be transferred or exchanged in the manner and subject to the limitations provided in
the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates evidencing
in the aggregate a like number of Warrants.
The Company and the
Warrant Agent may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and for all other purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice to the contrary.
This Warrant Certificate
does not entitle the registered holder to any of the rights of a stockholder of the Company.
|
|
SELLAS LIFE SCIENCES GROUP, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
COUNTERSIGNED:
|
|
|
|
|
|
COMPUTERSHARE INC.
|
|
|
as Warrant Agent
|
|
|
|
|
|
|
By:
|
|
|
|
|
Authorized Officer
|
|
|
|
|
|
|
COMPUTERSHARE TRUST COMPANY, N.A.
|
|
|
as Warrant Agent
|
|
|
|
|
|
|
By:
|
|
|
|
|
Authorized Officer
|
[Signature page to Warrant Certificate]
ELECTION TO PURCHASE FORM
(to be executed by the registered holder
in order to exercise Warrants)
The undersigned registered
holder irrevocably elects to exercise Warrants to purchase shares
of Common Stock represented by this Warrant Certificate and to purchase such shares of Common Stock issuable upon the exercise
of such Warrants, and requests that such shares shall be issued in the name of
|
|
|
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
|
|
and be delivered to:
|
|
|
|
|
(PLEASE PRINT OR TYPE
NAME AND ADDRESS)
and, at the sole election
of the registered holder, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that
a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the registered holder
at the address stated below:
Dated: __________________________________
|
|
|
|
(SIGNATURE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(ADDRESS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(TAX IDENTIFICATION NUMBER)
|
|
ASSIGNMENT
(to be executed by the registered holder
in order to assign Warrants)
For Value Received,
hereby sells, assigns, and transfers unto
|
|
|
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
|
|
and be delivered to:
|
|
|
|
|
(PLEASE PRINT OR TYPE
NAME AND ADDRESS)
Warrants to purchase
shares
of Common Stock represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints
Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
Dated: ___________________
|
_________________________
|
|
|
(SIGNATURE)
|
|
The signature to the
assignment of the Subscription Form must correspond to the name written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever, and must be guaranteed by a commercial bank or trust company or a member
firm of the American Stock Exchange, New York Stock Exchange, Pacific Stock Exchange or Chicago Stock Exchange.
Exhibit B
[FORM OF CERTIFICATED WARRANT]
SELLAS
LIFE SCIENCES GROUP, INC
Warrant
To Purchase Common Stock
Warrant No.:
Number of Shares of Common Stock:_____________
Date of Issuance: June 18,
2019 (“
Issuance Date
”)
SELLAS Life Sciences
Group, a company organized under the laws of Delaware (the “
Company
”), hereby certifies that, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
, [HOLDER]
,
the registered holder hereof or its permitted assigns (the “
Holder
”), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or
after June 18, 2019 (the “
Initial Exercisability Date
”), but not after 11:59 p.m., New York time, on the
Expiration Date, (as defined below), ______________ (_____________) fully paid non-assessable shares of Common Stock (as defined
below), subject to adjustment as provided herein (the “
Warrant Shares
”). Except as otherwise defined herein,
capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange,
transfer or replacement hereof, this “
Warrant
”), shall have the meanings set forth in Section 16. This Warrant
is one of the Warrants to Purchase Common Stock (the “
Warrants
”) issued pursuant to (i) that certain Underwriting
Agreement, dated as of June 14, 2019 (the “
Subscription Date
”) by and between the Company and A.G.P., (ii)
the Company’s Registration Statement on Form S-1 (File number 333-231723) (the “
Registration Statement
”).
This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust
Company or its nominee (“
DTC
”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agent Agreement, in which case this
sentence shall not apply.
1.
EXERCISE
OF WARRANT
.
(a)
Mechanics
of Exercise
. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole or
in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as
Exhibit A
(the “
Exercise Notice
”), of the Holder’s election to exercise this Warrant. Within one
(1) Trading Day following the delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal
to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant
is being exercised (the “
Aggregate Exercise Price
”) in cash by wire transfer of immediately available funds
or, if the provisions of Section 1(d) are applicable, by notifying the Company that this Warrant is being exercised pursuant to
a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to
effect an exercise hereunder, nor shall any ink-original signature or medallion guarantee (or other type of guarantee or notarization)
with respect to any Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares and 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 on which the final Exercise Notice is delivered to the Company. On or before the first (1
st
) Trading Day following
the date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile or electronic
mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder
and the Company’s transfer agent (the “
Transfer Agent
”). So long as the Holder delivers the Aggregate
Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1
st
) Trading Day following the date on which
the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2
nd
) Trading
Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the
Exercise Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of
a Cashless Exercise) on or prior to the first (1
st
) Trading Day following the date on which the Exercise Notice has
been delivered to the Company, then on or prior to the first (1
st
) Trading Day following the date on which the Aggregate
Exercise Price (or notice of a Cashless Exercise) is delivered (such earlier date, the “
Share Delivery Date
”),
the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“
DTC
”)
Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch
by overnight courier to the address as specified in the Exercise Notice, a certificate, registered 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. If the Company fails
for any reason to deliver to such registered holder or Participant, as the case may be, the Warrant Shares subject to an exercise
notice by the Share Delivery Date, the Company shall pay to the registered 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 Weighted Average Price of the Common Stock on
the date of the applicable exercise notice), $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 Share Delivery Date until such Warrant Shares are delivered
or the registered holder rescinds such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent
and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same
day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the
holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised, irrespective
of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later
than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately
prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No
fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather 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. . The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses
(including, without limitation, fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in
accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction
by the 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;
provided
,
however
, that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s
delivery of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.
(b)
Exercise
Price
. For purposes of this Warrant, “
Exercise Price
” means $0.50 per share, subject to adjustment as provided
herein.
(c)
Company’s
Failure to Timely Deliver Securities
. If either (I) the Company shall fail for any reason or for no reason on or prior to the
applicable Share Delivery Date, (x) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
to issue to the Holder a certificate for the number of shares of Common Stock to which the Holder is entitled and register such
Common Stock on the Company’s share register or (y) if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of this Warrant or (II) a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice (the “
Exercise
Notice Warrant Shares
”) is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares
and (x) the Company fails to promptly, but in no event later than one (1) Business Day after such registration statement becomes
unavailable, to so notify the Holder and (y) the Company is unable to deliver the Exercise Notice Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Exercise Notice Warrant Shares to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred to as a “
Notice Failure
” and, together with the event described
in clause (I) above, an “
Exercise Failure
”), then, in addition to all other remedies available to the Holder,
if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of
Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below
or (II) a Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the
Holder anticipated receiving from the Company (a “
Buy-In
”), then the Company shall, within three (3) Trading
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (the “
Buy-In Price
”), at which point the Company’s obligation to deliver
such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for such shares
of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder in
an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times
(B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning
on the applicable Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Warrant
Shares (or to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof.
While this Warrant is outstanding, the Company shall cause its transfer agent to participate in the DTC Fast Automated Securities
Transfer Program. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares
upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such
exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that has
not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s
obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise,
and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares
that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant
Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement
and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the
option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the
rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to
the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from
a cash exercise to a Cashless Exercise.
(d)
Cashless
Exercise
. Notwithstanding anything contained herein to the contrary, a Cashless Exercise (as defined below) may occur (i) in
whole or in part for a whole number of Warrant Shares, if, between June 18, 2019 and the fifteen (15) month anniversary thereof,
the Weighted Average Price of the Common Stock on the Trading Day immediately prior to the Exercise Date fails to exceed the initial
Exercise Price (subject to adjustment for any stock splits, stock dividends, stock combinations, recapitalizations and similar
events) in which event, in lieu of the formula below, the aggregate number of Warrant Shares issuable in such cashless exercise
pursuant to any given Exercise Notice electing to effect a Cashless Exercise shall equal the product of (x) the aggregate number
of Warrant Shares for which the Warrants are exercised as if such exercise were by means of a cash exercise rather than a Cashless
Exercise and (y) one (1); and (ii) if a registration statement (which may be the Registration Statement) covering the issuance
or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable, of such Exercise Notice
Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula
(a “
Cashless Exercise
”):
Net Number =
(A x B) - (A
x C)
B
For purposes of the foregoing
formula:
A= the
total number of shares with respect to which this Warrant is then being exercised.
B= as
applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not
a Trading Day or (2) both executed and delivered pursuant to Section 1(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 Weighted Average Price on the Trading Day immediately preceding the date
of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of
the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day
and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours”
on a Trading Day) pursuant to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable
Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant
to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
C=
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
If
Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9)
of the Securities Act of 1933, as amended, the Warrant Shares shall take on the registered characteristics of the Warrants being
exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares.
The Company agrees not to take any position contrary to this Section 1(d).
(e)
Disputes
.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 11.
(f)
Beneficial
Ownership
. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion
of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions
of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect
to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of [4.99][9.99]%
(the “
Maximum Percentage
”) of the number of shares of Common Stock outstanding immediately after giving effect
to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by
the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other
Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon
(A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants, including the other Warrants) beneficially
owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “
1934 Act
”). For purposes of this Warrant,
in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without
exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K or other
public filing with the Securities and Exchange Commission (the “
SEC
”), as the case may be, (y) a more recent
public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent setting forth the number
of shares of Common Stock outstanding (the “
Reported Outstanding Share Number
”). If the Company receives an
Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported
Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding
and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant
to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares
to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “
Reduction
Shares
”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by
the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall
within one (1) Business Day confirm orally and in writing or by electronic mail 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 and any other Attribution Party since
the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common Stock to the
Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own,
in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section
13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “
Excess Shares
”) shall be deemed null and void and
shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably
practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise
price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time
increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% or such higher percentage as specified
in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61
st
)
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the
other Attribution Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes
of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall
not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent
necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial
ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this
Warrant.
(g)
Required
Reserve Amount
. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as
shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding
(without regard to any limitations on exercise) (the “
Required Reserve Amount
”);
provided
that at no
time shall the number of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with
any exercise of Warrants or such other event covered by Section 2(c) below. The Required Reserve Amount (including, without
limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based
on the number of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without
regard to any limitations on exercise) (the “
Authorized Share Allocation
”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants
shall be allocated to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise
of the Warrants then held by such holders thereof (without regard to any limitations on exercise).
(h)
Insufficient
Authorized Shares
. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an “
Authorized
Share Failure
”), then the Company shall promptly take all action reasonably necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this
Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized
shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and
shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the
foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of
the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common
Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.
2.
ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:
(a)
Adjustment
Upon Issuance of Common Stock
. If and whenever on or after the Subscription Date, the Company issues or sells, or in accordance
with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have been issued or sold
by the Company in connection with any Excluded Securities) for a consideration per share (the “
New Issuance Price
”)
less than a price (the “
Applicable Price
”) equal to the Exercise Price in effect immediately prior to such issuance
or sale or deemed issuance or sale (the foregoing a “
Dilutive Issuance
”), then immediately after such Dilutive
Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For purposes of determining
the adjusted Exercise Price under this Section 2(a), the following shall be applicable:
(i)
Issuance
of Options
. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Options is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Options for such price
per share. For purposes of this Section 2(a)(i), the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Options” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the granting or sale of the Options, upon exercise of the Options
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Options less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Options, upon exercise
of such Options and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Options. No
further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities.
(ii)
Issuance
of Convertible Securities
. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock
upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities, and if any such issuance or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this
Section 2(a), no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii)
Change
in Option Price or Rate of Conversion
. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time pursuant
to the terms of such Options or Convertible Securities, the Exercise Price in effect at the time of such increase or decrease shall
be adjusted to the Exercise Price, that would have been in effect at such time had such Options or Convertible Securities provided
for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option or Convertible
Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to
this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect. For the avoidance
of doubt, no adjustment in the Exercise Price shall be made pursuant to this Section 2(a)(iii) as a result of any modification
of the terms of any Options or Convertible Securities after their date of issuance.
(iv)
Calculation
of Consideration Received
. In case any Option is issued in connection with the issuance or sale of other securities of the
Company, together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value
of such Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued
or sold for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by
the Company pursuant to the terms of such other securities of the Company, less (II) the Option Value of such Options; provided,
that if the value determined pursuant to clause (y) above would result in a value less than the par value of the Common Stock,
then the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the par
value of the Common Stock. If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor.
If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists
of publicly traded securities, in which case the amount of consideration received by the Company will be the Closing Sale Price
of such publicly traded securities on the date of receipt of such publicly traded securities. If any shares of Common Stock, Options
or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company
is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v)
Record
Date
. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.
(vi)
No
Modification
. So long as any of the Warrants are outstanding, the Company shall not amend, modify or change the terms of any
Options or Convertible Securities (whether issued on, prior or after the Subscription Date) to lower the exercise price or conversion
price thereof
Notwithstanding the
foregoing, and for the avoidance of doubt, no adjustment shall be made under this Section 2(a) in respect of any Exempt Issuance.
(b)
Voluntary
Adjustment By Company
. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
(c)
Adjustment
Upon Subdivision or Combination of Common Stock
. If the Company at any time on or after the Subscription Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date
combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective
at the close of business on the date the subdivision or combination becomes effective.
(d)
Other
Events
. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and
the number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Required Holders, so as
to protect the rights of the Holder;
provided
that no such adjustment pursuant to this Section 2(d) will increase the Exercise
Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.
3.
RIGHTS
UPON DISTRIBUTION OF ASSETS
. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription Date
and on or prior to the Expiration Date, 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, options, evidence of indebtedness or any other assets
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “
Distribution
”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date
on 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
, that to the extent
that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and
shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership)
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or
times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at
which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4.
PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS
.
(a)
Purchase
Rights
. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date and on
or prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class 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 or restrictions on exercise of this Warrant, including without limitation, the
Maximum Percentage) 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 Common Stock are to be determined for the grant, issuance
or sale of such Purchase Rights (
provided
,
however
, that to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then
the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial
ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)
Fundamental
Transaction
. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise
price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments
to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this
Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental
Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant),
as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f)
hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit
the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise
of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior
to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder would
have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions
of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events. Notwithstanding
the foregoing, in the event of a Change of Control, that is approved by the Company’s Board of Directors (and not, for avoidance
of doubt, if the Change of Control is not within the Company’s control), the Holder shall be entitled to receive from the
Company or any Successor Entity, as of the date of consummation of such Change of Control, the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and
paid to the holders of Common Stock of the Company in connection with the Change of Control, whether that consideration be in the
form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among
alternative forms of consideration in connection with the Change of Control.
5.
NONCIRCUMVENTION
.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance 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, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase
the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect,
(ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the
Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
6.
WARRANT
HOLDER NOT DEEMED A STOCKHOLDER
. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE
OF WARRANTS
.
(a)
Transfer
of Warrant
. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost,
Stolen or Mutilated Warrant
. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section
7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable
for Multiple Warrants
. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender.
(d)
Issuance
of New Warrants
. If this Warrant is not held in global form through DTC (or any successor depository), whenever the Company
is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this
Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated
by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection
with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date,
as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions
as this Warrant.
(e)
Warrant
Register
. If this Warrant is held in global form through DTC (or any successor depository), the Warrant Agent shall register
this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “
Warrant Register
”),
in the name of the record Holder hereof from time to time. If this Warrant is not held in global form through DTC (or any successor
depository), the Company and the Warrant Agent 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.
8.
NOTICES
.
Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless otherwise
provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class
registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile
or (b) from outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed
given (A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered
by nationally recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express,
two (2) Business Days after so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email
addresses specified in this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date
of transmission, if delivered by electronic mail to each of the email addresses specified in this Section 8 on a day that is not
a Trading Day or later than 5:00 p.m. (New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation
of receipt of such facsimile, and will be delivered and addressed as follows:
(i) if
to the Company, to:
SELLAS Life Sciences Group, Inc.
15 W. 38
th
Street, 10th Floor
New York, NY 10018
Attn: John Burns
(ii) if
to the Holder, at such address or other contact information delivered by the Holder to Company or as is on the books and records
of the Company.
The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i)
immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such
adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of
any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of
Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation;
provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided
to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice
shall be definitive and may not be disputed or challenged by the Company.
9.
AMENDMENT
AND WAIVER
. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.
10.
GOVERNING
LAW; JURISDICTION; JURY TRIAL
. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or 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 brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to the Company at the address set forth in Section 8(i) above or such other address as the Company subsequently delivers to the
Holder and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court ruling in favor of the Holder. 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.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT
OR ANY TRANSACTION CONTEMPLATED HEREBY.
11.
DISPUTE
RESOLUTION
. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the
Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant
Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then
the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise
Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense
the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company
and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations.
Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.
12.
REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF
. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required. Notwithstanding the foregoing or anything else herein to the contrary,
other than as expressly provided in Section 1(a), Section 1(c) or Section 2(d) hereof, if the Company is for any reason unable
to issue and deliver Warrant Shares upon exercise of this Warrant as required pursuant to the terms hereof, the Company shall have
no obligation to pay to the holder any cash or other consideration or otherwise “net cash settle” this Warrant; provided
that the foregoing shall not limit or supersede the applicability of Section 4(b) hereof.
13.
TRANSFER
. This
Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company.
14.
SEVERABILITY;
CONSTRUCTION; HEADINGS
. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person
as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.
15.
DISCLOSURE
.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material,
nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16.
WARRANT
AGENT AGREEMENT
. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject
to the Warrant Agent Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant
Agent Agreement, the provisions of this Warrant shall govern and be controlling.
17.
CERTAIN
DEFINITIONS
. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “
Affiliate
”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b) “
Approved
Stock Plan
” means any employee benefit plan that has been approved by a majority of the disinterested members of the
Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director
for services provided to the Company
(c) “
Attribution
Parties
” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Subscription Date, directly or indirectly managed or advised
by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the
Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could
be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity,
the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(d) “
Bid
Price
” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 11.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.
(e) “
Black
Scholes Value
” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day immediately following the first public announcement of the applicable Change of
Control, or, if the Change of Control is not publicly announced, the date the Change of Control is consummated, for pricing purposes
and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of
this Warrant as of such date of request, (ii) an expected volatility equal to 100%, (iii) the underlying price per share used in
such calculation shall be the greater of (a) the highest Weighted Average Price during the five (5) Trading Days prior to the closing
of the Change of Control and (b) 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 Change of Control, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(f) “
Bloomberg
”
means Bloomberg Financial Markets.
(g) “
Business
Day
” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
(h) “
Change
of Control
” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification
of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities
and, directly or indirectly, are, in all material respect, the holders of the voting power of the surviving entity (or entities
with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation)
of such entity or entities) after such reorganization, recapitalization or reclassification, (ii) pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (iii) a merger in connection with
a bona fide acquisition by the Company of any Person in which (x) the gross consideration paid, directly or indirectly, by the
Company in such acquisition is not greater than 20% of the Company’s market capitalization as calculated on the date of the
consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority of the board of directors
of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transaction that, directly or indirectly,
results in the Company or the Successor Entity not having Common Stock or common stock, as applicable, registered under the 1934
Act and listed on an Eligible Market shall be deemed a Change of Control.
(i) “
Closing
Bid Price
” and “
Closing Sale Price
” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
(j) “
Common
Stock
” means (i) the Company’s Common Stock, par value $0.0001 per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(k) “
Convertible
Securities
” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.
(l) “
Eligible
Market
” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market
or The New York Stock Exchange, Inc.
(m) “
Excluded
Securities
” means any shares of Common Stock issued or issuable, or deemed issued or issuable pursuant to Section 4.1:
(i) in connection with any Approved Stock Plan, including, for the avoidance of doubt, the issuance of equity awards (including
Options or Convertible Securities) pursuant to any such Approved Stock Plan after the Subscription Date, (ii) in connection with
the issuance of equity awards (including Options, Convertible Securities or restricted stock units) to employees or consultants,
as compensation, (iii) upon exercise of the Warrants, (iv) upon conversion, exercise, exchange or settlement of any Options or
Convertible Securities that are outstanding on the day immediately preceding the Subscription Date, or (v) pursuant to acquisitions,
divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Board of Directors or a majority
of the members of a committee of directors established for such purposes; provided that any such issuance shall only be to a Person
(or to the equity holders of a Person) that is, itself or through its subsidiaries, an operating company or 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, or (vi) securities issued to third party vendors, collaborators,
partners, or the like as payment for goods or services rendered or upon the satisfaction of certain milestones, provided that,
for the avoidance of doubt, any such issuance shall not include any 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.
(n) “
Expiration
Date
” means the date sixty (60) months after the Initial Exercisability Date or, if such date falls on a day other than
a Business Day or on which trading does not take place on the Principal Market (a “
Holiday
”), the next day that
is not a Holiday.
(o) “
Fundamental
Transaction
” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender
or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50%
of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that
the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not
held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(p) “
Group
”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(q) “
Options
”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(r) “
Option
Value
” means the value of an Option based on the Black-Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of the day of the most recent Closing Sale Price of the Common Stock prior to the public announcement
of the pricing of the applicable Option (or, if the pricing is not publicly announced, on the most recent Closing Sale Price of
the Common Stock prior to the pricing of the applicable Option) and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to 50%, (iii) an underlying price per share equal to the most recent Closing Sale Price of the
Common Stock prior to the public announcement of the pricing of the applicable Option (or, if the pricing is not publicly announced,
on the most recent Closing Sale Price of the Common Stock prior to the pricing of the applicable Option), (iv) a zero cost of borrow
and (v) a 360-day annualization factor.
(s) “
Parent
Entity
” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.
(t) “
Person
”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
(u) “
Principal
Market
” means the principal securities exchange or securities market on which the Common Shares are then traded.
(v) “
Required
Holders
” means the holders of the Warrants representing at least a majority of the shares of Common Stock underlying
the Warrants then outstanding.
(w)
“Standard
Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, for the Company’s
primary trading market or quotation system with respect to the Common Stock that is in effect on the date of receipt of an applicable
Exercise Notice.
(x) “
Subject
Entity
” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(y) “
Successor
Entity
” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(z) “
Trading
Day
” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.
(aa) “
Transaction
Documents
” means any agreement entered into by and between the Company and the Holder, as applicable.
(bb) “
Warrant
Agent Agreement
” means that certain Warrant Agent Agreement, dated as of the Initial Exercise Date, between the Company
and the Warrant Agent.
(cc) “
Warrant
Agent
” means Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company,
N.A., a federally chartered trust company.
(dd) “
Weighted
Average Price
” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
|
SELLAS LIFE SCIENCES GROUP, INC.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SELLAS
LIFE SCIENCES GROUP, INC.
The undersigned holder
hereby exercises the right to purchase _________________ shares of Common Stock (“
Warrant Shares
”) of SELLAS
Life Sciences Group, Inc., a company organized under the laws of Delaware (the “
Company
”), evidenced by the
attached Warrant to Purchase Common Stock (the “
Warrant
”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.
1. Form of
Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
____________
a “
Cash Exercise”
with respect to _________________ Warrant Shares; and/or
____________
a
“Cashless Exercise”
with respect to _______________ Warrant Shares.
2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
|
|
|
|
Name of Registered Holder
|
|
ACKNOWLEDGMENT
The Company hereby
acknowledges this Exercise Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of Common Stock
on or prior to the applicable Share Delivery Date.
|
|
SELLAS LIFE SCIENCES GROUP, INC.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
Exhibit C
Form of
Warrant Certificate Request Notice
WARRANT
CERTIFICATE REQUEST NOTICE
To: Computer Share Inc. as Warrant Agent
for SELLAS Life Sciences Group, Inc. (the “Company”)
The undersigned Holder of Common Stock
Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Definitive
Certificate evidencing the Warrants held by the Holder as specified below:
|
1.
|
Name of Holder of Warrants in form of Global Warrants: _____________________________
|
|
2.
|
Name of Holder in Definitive Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________
|
|
3.
|
Number of Warrants in name of Holder in form of Global Warrants: ___________________
|
|
4.
|
Number of Warrants for which Definitive Certificate shall be issued: __________________
|
|
5.
|
Number of Warrants in name of Holder in form of Global Warrants after issuance of Definitive Certificate, if any: ___________
|
|
6.
|
Definitive Certificate shall be delivered to the following address:
|
The undersigned hereby acknowledges and
agrees that, in connection with this Warrant Exchange and the issuance of the Definitive Certificate, the Holder is deemed to have
surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced
by the Definitive Certificate.
|
|
[SIGNATURE OF HOLDER]
|
|
|
|
|
|
|
|
Name of Investing Entity:
|
|
|
|
|
|
|
|
Signature of Authorized Signatory of Investing Entity
:
|
|
|
|
|
|
|
|
Name of Authorized Signatory:
|
|
|
|
|
|
|
|
Title of Authorized Signatory:
|
|
|
|
|
|
|
|
Date:
|
|
Exhibit 10.2
FORM OF PRE-FUNDED WARRANT
SELLAS LIFE SCIENCES GROUP, INC
P
RE
-F
UNDED
W
ARRANT
T
O
P
URCHASE
C
OMMON
S
TOCK
Warrant No.:
Number of Shares of Common Stock:
Date of Issuance: [ ], 2019 (“
Issuance
Date
”)
SELLAS Life Sciences Group, a company organized under the laws
of [Delaware] (the “
Company
”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [HOLDER], the registered holder hereof or its permitted assigns (the “
Holder
”),
is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then
in effect, at any time or times on or after [ , 2019] (the “
Initial Exercisability Date
”),
but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below),
( ) fully paid non-assessable shares of Common Stock (as
defined below), subject to adjustment as provided herein(the “
Warrant Shares
”). Except as otherwise defined
herein, capitalized terms in this Pre-Funded Warrant to Purchase Common Stock (including any Pre-Funded Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, this “
Warrant
”), shall have the meanings set forth
in Section 16. This Warrant is one of the Warrants to Purchase Common Stock (the “
Warrants
”) issued pursuant
to (i) that certain Underwriting Agreement, dated as of [ ],
2019 (the “
Subscription Date
”) by and between the Company and A.G.P./Alliance Global Partners, (ii) the Company’s
Registration Statement on Form S-1 (File number 333-231723) (the “
Registration Statement
”).
(a)
Mechanics of Exercise
. Subject
to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant
may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole or in part, by delivery
(whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as
Exhibit A
(the
“
Exercise Notice
”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following the delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised
(the “
Aggregate Exercise Price
”) in cash by wire transfer of immediately available funds or, if the provisions
of Section 1(d) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise
(as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise
hereunder, nor shall any ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect
to any Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to
purchase the remaining number of Warrant Shares and 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 on which the final Notice of Exercise is delivered to the Company. On or before the first (1st) Trading Day following the
date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile or electronic mail
an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder
and the Company’s transfer agent (the “
Transfer Agent
”). So long as the Holder delivers the Aggregate
Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1st) Trading Day following the date on which the Exercise
Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the
number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise Notice
has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise)
on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then
on or prior to the first (1st) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise)
is delivered (such earlier date, the “
Share Delivery Date
”), the Company shall (X) provided that the Transfer
Agent is participating in The Depository Trust Company (“
DTC
”) Fast Automated Securities Transfer Program, credit
such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered 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. The Company shall be responsible for all fees and expenses of
the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without
limitation for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes
to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates
evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any
exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and
in no event later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or
its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. If the Company fails for any reason to deliver to such registered holder or Participant, as the case may be, the
Warrant Shares subject to an exercise notice by the Warrant Share Delivery Date, the Company shall pay to the registered 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 Weighted
Average Price of the Common Stock on the date of the applicable exercise notice), $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 the registered holder rescinds such exercise. No fractional Warrant Shares are
to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded to the nearest
whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without
limitation, fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the 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;
provided
,
however
,
that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery
of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.
(b)
Exercise Price
. The aggregate
exercise price of this Warrant, except for a nominal exercise price of $0.01 per Warrant Share, was pre-funded to the
Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.01 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate Exercise
Price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior
to the Termination Date. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.01, subject
to adjustment hereunder (the “
Exercise Price
”).
(c)
Company’s Failure to Timely
Deliver Securities
. If either (I) the Company shall fail for any reason or for no reason on or prior to the applicable
Share Delivery Date, (x) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
to issue to the Holder a certificate for the number of shares of Common Stock to which the Holder is entitled and register such
Common Stock on the Company’s share register or (y) if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to
which the Holder is entitled upon the Holder’s exercise of this Warrant or (II) a registration statement (which may
be the Registration Statement) covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice
(the “
Exercise Notice Warrant Shares
”) is not available for the issuance or resale, as applicable, of such Exercise
Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one (1) Business Day after such
registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver the Exercise
Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice Warrant
Shares to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system
(the event described in the immediately foregoing clause (II) is hereinafter referred to as a “
Notice Failure
”
and, together with the event described in clause (I) above, an “
Exercise Failure
”), then, in addition to
all other remedies available to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a
certificate to the Holder and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent
is participating in the DTC Fast Automated Securities Transfer Program, credit the Holder’s balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to
the Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such
Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale
by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “
Buy-In
”),
then the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion,
either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “
Buy-In Price
”),
at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) or credit
such Holder’s balance account with DTC for such shares of Common Stock shall terminate, or (ii) promptly honor its obligation
to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s balance
account with DTC, as applicable, and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Common Stock, times (B) any trading price of the Common Stock selected by
the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable
Share Delivery Date. Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Warrant Shares (or to electronically deliver such Warrant Shares) upon the
exercise of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause its
transfer agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights, (i) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable
Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the
Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided
that the rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior
to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may
be the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is
not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an
Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already
delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of
notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may
be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an
Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such
notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash
exercise to a Cashless Exercise.
(d)
Cashless Exercise
. Notwithstanding
anything contained herein to the contrary, if a registration statement (which may be the Registration Statement) covering the issuance
or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable, of such Exercise Notice
Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula
(a “
Cashless Exercise
”):
Net Number =
(A x B) - (A x C)
B
For purposes of the foregoing formula:
|
|
A=
|
the total number of shares with respect to which this Warrant is then being exercised.
|
|
|
B=
|
as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(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 Weighted Average Price on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
|
|
|
C=
|
$0.01, as adjusted hereunder.
|
If Warrant Shares are issued in such a cashless exercise, the
Company acknowledges and agrees that in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended, the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being
exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to
this Section 1(d).
(e)
Disputes
. In the case of a
dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 11.
(f)
Beneficial Ownership
. Notwithstanding
anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant, and the Holder
shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any
such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the
Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “
Maximum
Percentage
”) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other
Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus
the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation,
any convertible notes or convertible preferred stock or warrants, including the other Warrants) beneficially owned by the Holder
or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “
1934 Act
”). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the
Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K or other public filing with
the Securities and Exchange Commission (the “
SEC
”), as the case may be, (y) a more recent public announcement
by the Company or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of
Common Stock outstanding (the “
Reported Outstanding Share Number
”). If the Company receives an Exercise Notice
from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share
Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to
the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this
Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to
be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “
Reduction
Shares
”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid
by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing or by electronic mail 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 and any other Attribution Party
since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common Stock to
the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own,
in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d)
of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “
Excess Shares
”) shall be deemed null and void and
shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably
practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise
price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time
increase or decrease the Maximum Percentage to any other percentage not in excess of 4.99% as specified in such notice; provided
that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice
is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution
Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares
of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially
owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior
inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this
paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to
correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership
limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this
Warrant.
(g)
Required Reserve Amount
. So
long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this Warrant a number
of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be necessary to satisfy
the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding (without regard to any limitations
on exercise) (the “
Required Reserve Amount
”);
provided
that at no time shall the number of shares of
Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with any exercise of Warrants or such
other event covered by Section 2(c) below. The Required Reserve Amount (including, without limitation, each increase
in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number of shares
of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to any limitations
on exercise) (the “
Authorized Share Allocation
”). In the event that a holder shall sell or otherwise transfer
any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized Share
Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants shall be allocated
to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the Warrants
then held by such holders thereof (without regard to any limitations on exercise).
(h)
Insufficient Authorized Shares
.
If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an “
Authorized Share
Failure
”), then the Company shall promptly take all action reasonably necessary to increase the Company’s authorized
shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then
outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use
its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares
of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock,
the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement
on Schedule 14C.
2.
ADJUSTMENT OF EXERCISE PRICE AND
NUMBER OF WARRANT SHARES
. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(a)
Intentionally omitted
.
(b)
Intentionally omitted
.
(c)
Adjustment Upon Subdivision or
Combination of Common Stock
. If the Company at any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares,
the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant
Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business
on the date the subdivision or combination becomes effective.
(d)
Other Events
. If any event
occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then
the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares,
as mutually determined by the Company’s Board of Directors and the Required Holders, so as to protect the rights of the Holder;
provided
that no such adjustment pursuant to this Section 2(d) will increase the Exercise Price or decrease the number
of Warrant Shares as otherwise determined pursuant to this Section 2.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS
.
In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription Date and on or prior to the Expiration
Date, 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, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “
Distribution
”), at any time
after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including
without limitation, the Maximum Percentage) immediately before the date on 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
, that to the extent that the Holder’s right to participate in any such
Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall
not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution
(and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance)
to the same extent as if there had been no such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS
.
(a)
Purchase Rights
. In addition
to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date and on or prior to the Expiration
Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property pro rata to the record holders of any class 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 or restrictions on exercise of this Warrant, including without limitation, the
Maximum Percentage) 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 Common Stock are to be determined for the grant, issuance
or sale of such Purchase Rights (
provided
,
however
, that to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then
the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial
ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)
Fundamental Transaction
. The
Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the
obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including agreements
to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental
Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant),
as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f)
hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b)
to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the
Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of
the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) (collectively, the “Corporate Event Consideration”) which
the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been
exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this
Warrant). The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder. The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events.
5.
NONCIRCUMVENTION
. The Company
hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through any
reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance 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, and will
at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time
be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER
.
Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as a holder of this Warrant,
shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the
Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS
.
(a)
Transfer of Warrant
. If this
Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number
of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the
Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant
.
Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing
the right to purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable for Multiple Warrants
.
This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant
or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares
as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Warrants
.
Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall
be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.
8.
NOTICES
. Whenever notice is
required to be given under this Warrant, including, without limitation, an Exercise Notice, unless otherwise provided herein, such
notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class registered
or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from
outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if
delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered
by nationally recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal
Express, two (2) Business Days after so mailed and (D) on the date of transmission, if delivered by electronic mail to
each of the email addresses specified in this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the
next Trading Day after the date of transmission, if delivered by electronic mail to each of the email addresses specified in this
Section 8 on a day that is not a Trading Day or later than 5:00 p.m. (New York time) on any Trading Day and (F) if delivered
by facsimile, upon electronic confirmation of receipt of such facsimile, and will be delivered and addressed as follows:
(i) if to the Company, to:
SELLAS Life Sciences Group, Inc.
315 Madison Avenue, 4th Floor
New York, NY 10017
Attn: John Burns
(ii) if to the Holder, at such address or other contact information
delivered by the Holder to Company or as is on the books and records of the Company.
The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor.
Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon
any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales
of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation;
provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice
being provided to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise
Notice shall be definitive and may not be disputed or challenged by the Company.
9.
AMENDMENT AND WAIVER
. Except
as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the Holder.
10.
GOVERNING LAW; JURISDICTION; JURY TRIAL
.
This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or 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 brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address
set forth in Section 8(i) above or such other address as the Company subsequently delivers to the Holder and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate
to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or
to enforce a judgment or other court ruling in favor of the Holder. 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.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
11.
DISPUTE RESOLUTION
. In the case
of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall
submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days
of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within
three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the
Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of
the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall
cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error.
12.
REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF
. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant and any other Transaction Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure
by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to
all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without
any bond or other security being required. Notwithstanding the foregoing or anything else herein to the contrary, other than as
expressly provided in Section 1(a) or Section 1(c) hereof, if the Company is for any reason unable to issue and deliver
Warrant Shares upon exercise of this Warrant as required pursuant to the terms hereof, the Company shall have no obligation to
pay to the holder any cash or other consideration or otherwise “net cash settle” this Warrant.
13.
TRANSFER
. This Warrant and
the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company.
14.
SEVERABILITY; CONSTRUCTION; HEADINGS
.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). This Warrant shall be deemed to be
jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings
of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
15.
DISCLOSURE
. Upon receipt or delivery
by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that
the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries,
the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic information on
a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information
relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such
notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice
do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16.
CERTAIN DEFINITIONS
. For
purposes of this Warrant, the following terms shall have the following meanings:
(a) ”
Affiliate
” means,
with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person
or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b) ”
Attribution Parties
”
means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or
managed accounts, currently, or from time to time after the Subscription Date, directly or indirectly managed or advised by the
Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could
be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For
clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(c) “
Bid Price
” means,
for any security as of the particular time of determination, the bid price for such security on the Principal Market as reported
by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the bid price of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as
of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 11.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.
(d) ”
Bloomberg
” means
Bloomberg Financial Markets.
(e) ”
Business Day
”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required
by law to remain closed.
(f) ”
Closing Bid Price
”
and “
Closing Sale Price
” means, for any security as of any date, the last closing bid price and last closing
trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins
to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may
be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last
closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg,
the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link
or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by
the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
(g) ”
Common Stock
”
means (i) the Company’s Common Stock, par value $0.0001 per share, and (ii) any capital stock into which such Common
Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(h) ”
Convertible Securities
”
means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares
of Common Stock.
(i) ”
Eligible Market
”
means The NASDAQ Capital Market, the NYSE American LLC, The NASDAQ Global Select Market, The NASDAQ Global Market or The New York
Stock Exchange, Inc.
(j) ”
Expiration Date
”
means the date sixty (60) months after the Initial Exercisability Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a “
Holiday
”), the next day that is not
a Holiday.
(k) ”
Fundamental Transaction
”
means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange
offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated
with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number
of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934
Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50%
of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common
Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of
at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock not held by all such Subject Entities as of the Subscription Date calculated as if any shares
of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow
such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company
to surrender their Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including
through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other
instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition
to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with
the intended treatment of such instrument or transaction.
(l) ”
Group
” means
a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(m) ”
Options
” means
any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(n) ”
Parent Entity
”
of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose common stock
or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any other market, exchange
or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated by the Holder
or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(o) ”
Person
” means
an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
(p) ”
Principal Market
”
means the principal securities exchange or securities market on which the Common Shares are then traded.
(q)
“Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, for the Company’s primary trading market or
quotation system with respect to the Common Stock that is in effect on the date of receipt of an applicable Exercise Notice.
(r) ”
Subject Entity
”
means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s) ”
Successor Entity
”
means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting from or
surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent
Entity) with which such Fundamental Transaction shall have been entered into.
(t) ”
Trading Day
”
means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded.
(u) “
Transaction Documents
”
means any agreement entered into by and between the Company and the Holder, as applicable.
(v) ”
Weighted Average Price
”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during
the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly announces is the official
open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly
announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported
for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest closing ask price of
any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly
Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved pursuant to Section 11 with the term “Weighted Average Price” being substituted for the term
“Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or other similar transaction during the applicable calculation period.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Pre-Funded
Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
|
SELLAS LIFE SCIENCES GROUP, INC.
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS
PRE-FUNDED WARRANT TO PURCHASE COMMON
STOCK
SELLAS LIFE SCIENCES GROUP, INC.
The undersigned holder hereby exercises the right to purchase shares
of Common Stock (“
Warrant Shares
”) of SELLAS Life Sciences Group, Inc., a company organized under the laws of
Delaware (the “
Company
”), evidenced by the attached Pre-Funded Warrant to Purchase Common Stock (the “
Warrant
”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of
the Exercise Price shall be made as:
a
“
Cash Exercise”
with respect to Warrant Shares; and/or
a
“Cashless Exercise”
with respect to Warrant Shares.
2. Payment of Exercise Price. In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the
Aggregate Exercise Price in the sum of $
to the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to
the holder Warrant Shares in accordance with the terms of the Warrant.
Date: ,
|
|
|
|
Name of Registered Holder
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby
directs [TRANSFER AGENT] to issue the above indicated number of shares of Common Stock on or prior to the applicable Share Delivery
Date.
|
|
SELLAS LIFE SCIENCES GROUP, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
