ADAMIS PHARMACEUTICALS CORPORATION 10-Q
Exhibit
4.1
THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 1(a) OF THIS WARRANT.
Adamis
Pharmaceuticals Corporation
Warrant
to Purchase Common Stock
Warrant
No.: 1
Date
of Issuance: March 16, 2023 (“Issuance Date”)
Adamis
Pharmaceuticals Corporation, a Delaware corporation (the “Company”), hereby certifies that, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Armistice Capital Master Fund Ltd., 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, upon exercise of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “Warrant”), at any time or times on or after the six month and one day anniversary of the
Issuance Date (the “Initial Exercisability Date”), but not after 11:59 p.m., New York time, on the
Expiration Date (as defined below), 48,000,000 (subject to adjustment as provided herein) fully paid and non-assessable shares
of Common Stock (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the
“Warrant Number”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Stock (the “Registered
Warrants”) issued pursuant to (i) that certain Securities Purchase Agreement, dated as of March 14, 2023 (the
“Subscription Date”), by and among the Company and the investors (the “Buyers”)
referred to therein, as amended from time to time (the “Securities Purchase Agreement”) and (ii) the
Company’s Registration Statement on Form S-3 (File number 333-267365) (together with such other registration statement
as may cover the issuance or resale of the Warrant Shares issuable hereunder, 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 on any day on or after the Initial Exercisability Date (an “Exercise
Date”), in whole or in part, by delivery (whether via 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 an exercise of this Warrant as aforesaid, the Holder shall deliver 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 was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless Exercise (as defined in Section 1(d)) or qualify for a Cashless Exercise pursuant to Section 1(d). The Holder shall
not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution
and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of
the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first
(1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit
by electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit
B, to the Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation
shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On
or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant
Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent is participating in
The Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock 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 Program, upon the request of the Holder, issue and deliver
(via reputable 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 shares of Common Stock to which the Holder shall be entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date 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 submitted 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 and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall
as soon as practicable and in no event later than two (2) Business 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 purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay
a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 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) that may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made
pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the later
of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the
1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable
Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice
of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach of this
Warrant. From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates
in FAST.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.138, subject to adjustment as provided herein.
(c) Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or
prior to the applicable Share Delivery Date, if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder
(or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares
on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the
Holder or the Holder’s designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s
exercise of this Warrant (as the case may be) (a “Delivery Failure”), and if on or after such Share Delivery
Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all
or any portion of the number of Warrant Shares issuable upon such exercise that the Holder is entitled to receive from the Company
and has not received from the Company in connection with such Delivery Failure (a “Buy-In”), then, in addition
to all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of 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, stock loan costs and other reasonable out-of-pocket expenses, if any) for the
shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder)
(the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such Warrant Shares) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case
may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the
Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s
designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) 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 Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment
under this clause (ii) (the “Buy-In Payment Amount”). 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 FAST. In addition to the foregoing,
if the Company fails for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the second Trading
Day following the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty,
for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable
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 the second Trading Day following such Share Delivery Date until such Warrant Shares
are delivered or Holder rescinds such exercise.
(d)
Cashless Exercise. Notwithstanding anything contained
herein to the contrary (other than Section 1(f) below), if at the time of exercise hereof the Registration Statement is not effective
(or the prospectus contained therein is not available for use) for the issuance of all of the Warrant Shares, then the Holder
may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise required
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 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 this Warrant is then being exercised.
B
= as elected by the Holder: (i) the VWAP of the shares of 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 VWAP on the Trading Day immediately preceding the
date of the applicable Exercise Notice or (z) the Bid Price of the shares of 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 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
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the 1933 Act, 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 Subscription Date, it is intended that the Warrant Shares issued in
a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement. For the
avoidance of doubt, (i) at any time that a Registration Statement is effective (and the prospectus contained therein is available
for use) for the issuance of the Warrant Shares, this Warrant may only be exercised for cash and (ii) under no circumstances shall
the Company be required to settle any Cashless Exercise of this Warrant by cash payment or to otherwise “net cash settle”
this Warrant.
(e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number
of Warrant Shares to be issued pursuant to the terms hereof, 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 15.
(f) Limitations
on Exercises. 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 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 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 other Registered 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)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes
of 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, Current Report on Form 8-K or other
public filing with 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, if any, 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 acquired 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 shares 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
(with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% 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 Registered 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)(i) 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)(i) 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) | Reservation
of Shares. |
(i) Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times from and after the
effective time of the initial reverse stock split after the date hereof reserve at least 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 Registered
Warrants then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”).
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 Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered
Warrants held by each holder on the Closing Date (without regard to any limitations on exercise) or increase in the number of
reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell
or otherwise transfer any of such holder’s Registered 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 Registered Warrants shall be allocated to the remaining holders of Registered Warrants, pro rata based on the number
of shares of Common Stock issuable upon exercise of the Registered Warrants then held by such holders (without regard to any limitations
on exercise).
(ii) Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while
any of the Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall, as soon as practicable, 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 all the Registered
Warrants then outstanding (and/or effect a reverse stock split to allow the Company to reserve the Required Reserve Amount for
the Registered 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 and/or a reverse stock split. 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/or reverse stock split 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 and/or reverse stock split, the Company may satisfy
this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. At
any time after the fifth (5th) Trading Day after the Stockholder Meeting Deadline (as defined in the Securities Purchase
Agreement), in the event that the Holder submits an Exercise Notice pursuant to Section 1, and the Company is prohibited from
issuing all shares of Common Stock subject to such Exercise Notice due to the failure by the Company to have sufficient shares
of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common
Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the
Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization
Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y)
the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers
the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such
issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment
Amount, brokerage commissions and other reasonable out-of-pocket expenses, if any, of the Holder incurred in connection therewith.
Nothing contained in this Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase
Agreement.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on or after the
Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding
shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise
Price shall be adjusted appropriately to reflect such event.
(b) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same
as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).
(c) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company
shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other
securities, property, 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 the extent of the Maximum Percentage (and shall not be entitled to
beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent
of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time
or times, if ever, 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 Sections 2 or 3 above, if at any time 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 shares 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess)
and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever,
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 held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)
Fundamental Transactions. The Company shall
not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations
of the Company under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) in accordance
with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved
by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for 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) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose
common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction,
the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the
Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein. 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 publicly traded common stock (or its equivalent) of the Successor Entity
(including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had 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) 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). Provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(c) Change
of Control Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder
delivered at any time commencing on the earliest to occur of (x) the public disclosure of the consummation of any Change of Control,
(y) the consummation of any Change of Control and (z) the Holder first becoming aware of the consummation of any Change of Control
through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control by the Company
pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase
this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes
Value. Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to
the later of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such
Change of Control. For the avoidance of doubt, the Holder’s redemption right contemplated by this Section 4(c) is contingent
upon the actual closing of the Change of Control.
(d) Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined
in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) 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 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 (a) 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, and (b) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the exercise of this Warrant.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity
as a holder of this 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 be construed to confer upon the Holder, solely in its
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 it 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 (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form 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; provided, however, no warrants for fractional
shares of Common Stock shall be given.
(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, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the
terms hereof), 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 each adjustment of the Exercise Price
and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (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, or (B) 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, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities
Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public
information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive
such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood
and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company.
9. DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) 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, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior
to 9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly disclose such material,
non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder
explicitly in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence
of any such written indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder),
the Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public information
relating to the Company or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company,
or any rights of the Holder, under Section 4.4 of the Securities Purchase Agreement.
10. ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary
or agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided
by the Company or (b) refrain from trading any securities while in possession of such information in the absence of a written
non-disclosure agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions.
In the absence of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade
in any securities issued by the Company, may possess and use any information provided by the Company in connection with such trading
activity, and may disclose any such information to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may
be amended 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. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.
12. SEVERABILITY. 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).
13. GOVERNING LAW. 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 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 9(f) of the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. 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. 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. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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.
14. CONSTRUCTION;
HEADINGS. 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. Terms used in this Warrant but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction
Documents unless otherwise consented to in writing by the Holder.
| (a) | Submission
to Dispute Resolution. |
(i) In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic
calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination
of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic
mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute
or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder
and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid
Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time
after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent,
reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each
deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence
of this Section 15 and (B) written documentation supporting its position with respect to such dispute, in each case,
no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the
immediately preceding clauses (A) and (B) are collectively referred to herein
as the “Required Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company
fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to
so submit all of the Required Dispute Documentation shall no longer be entitled
to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with
respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation
that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled
to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank
to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business
Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely
by the Company, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent
manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501,
et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for
an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) he terms
of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s
resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all
findings, determinations and the like that such investment bank determines are required to be made by such investment bank in
connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations
and the like to the terms of this Warrant and any other applicable Transaction Documents, (iii) the Holder (and only the Holder),
in its sole discretion, shall have the right to submit any dispute described in this Section 15 to any state or federal court
sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 15 and (iv)
nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including,
without limitation, with respect to any matters described in this Section 15).
16.
REMEDIES, CHARACTERIZATION, 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 the 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 and consequential damages for any failure by the Company to comply with the terms of this Warrant.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). 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 specific performance and/or temporary, preliminary and permanent injunctive or
other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages
and without posting a bond or other security. The Company shall provide all information and documentation to the Holder that is
requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant
(including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated
hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other
costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
17. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts due under this
Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company
or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company shall
pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
18. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except
as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.
19. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c) “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.
(d) “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.
(e) “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 Open
Market (or a similar organization or agency succeeding to its functions of reporting prices) 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 15. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during such period.
(f) “Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest
Closing Sale Price of the Ordinary Shares during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Change of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading
Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered in cash in the
applicable Change of Control (if any) plus the value of the non-cash consideration being offered in the applicable Change of Control
(if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section
4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining
term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this
Warrant as of the date of consummation of the applicable Change of Control or as of the date of the Holder’s request pursuant
to Section 4(c) if such request is prior to the date of the consummation of the applicable Change of Control, (iv) a zero cost
of borrow, (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT”
function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest
to occur of (A) the public disclosure of the applicable Change of Control, (B) the consummation of the applicable Change of Control
and (C) the date on which the Holder first became aware of the applicable Change of Control and (vi) a remaining option time equal
to the time between the date of the public announcement of the applicable Change of Control and the Termination Date.
| (g) | “Bloomberg”
means Bloomberg, L.P. |
(h) “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; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers)
of commercial banks in The City of New York generally are open for use by customers on such day.
(i) “Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of a majority of the Company’s voting power immediately
prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification
to hold a majority 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, (iii) a migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company or any of its Subsidiaries, (iv) with respect to all Strategic Transactions in any
given six month rolling period, the holders of the voting power of the Company (or 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)) prior to any such Strategic Transaction in such six month period are, in all material respects, the
holders of at least 50.1% of the voting power of the Company (or 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 all Strategic Transactions in such six month period, or (v) the Company’s merger with DMK Pharmaceuticals, Corp. Notwithstanding
the foregoing, any Strategic Transaction that results in the Common Stock (or other security) into which this Warrant is then
exercisable to both fail to be (x) registered under the 1934 Act and (y) listed on an Eligible Market shall be a Change
of Control hereunder.
(j) “Closing Sale Price” means, for any security as of any date, the last closing trade price 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 trade price, then the last trade price 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 trade price 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 does not apply, the last trade price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for
such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in The Pink Open
Market (or a similar organization or agency succeeding to its functions of reporting prices). If the Closing Sale Price cannot
be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale 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 in accordance with the procedures in
Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.
(k) “Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.
(l) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances,
directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire,
any shares of Common Stock.
(m) “Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(n) “Expiration Date” means the date that is the five (5) year and six (6) month anniversary of the Issuance Date
or, if such date falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date 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 another Subject Entity, following which
consolidation or merger, the Company is not the surviving 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 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 or share 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 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 Common Stock, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant 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 shareholders of the Company
to surrender their shares of Common Stock without approval of the shareholders 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. Notwithstanding the foregoing, the Company’s merger with DMK Pharmaceuticals,
Corp. shall not be a “Fundamental Transaction,” nor shall it be included in combination with other future transaction
to be counted in contemplation of a Fundamental Transaction as defined herein.
(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) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(s) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(t)
“Principal Market” means
the Nasdaq Capital Market.
(u) “SEC” means the United States Securities and Exchange Commission or the successor thereto.
(v) “Strategic Transaction” means a bona fide strategic or commercial acquisition, merger, licensing arrangement,
or strategic partnership.
(w) “Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(x) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.
(y) “Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, 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, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price or trading volume
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.
(z) “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30
start time and 16:00 end time) 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 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing
bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
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 15. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction during such 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.
| |
|
ADAMIS
PHARMACEUTICALS CORPORATION |
| |
|
| |
By: |
 |
| |
|
Name: David J. Marguglio |
| |
|
Title: Chief Executive
Officer |
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
ADAMIS
PHARMACEUTICALS CORPORATION
The
undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”)
of Adamis Pharmaceuticals Corporation, a Delaware corporation (the “Company”) as specified below. 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 Aggregate Exercise Price shall be made as:
| ☐ | a
“Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a
“Cashless Exercise” with respect to _______________ Warrant Shares (which shall only be available to the Holder
to the extent that a Registration Statement is not then effective for the issuance of the Warrant Shares). |
In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.]
on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
For
the avoidance of doubt, at any time that a Registration Statement is effective (and the prospectus contained therein is available
for use) for the issuance of the Warrant Shares, this Warrant may only be exercised for cash.
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 (or the Holder is not eligible for a Cashless Exercise pursuant to the terms of the
Warrant), the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with
the terms of the Warrant.
3.
Maximum Percentage Representation. Notwithstanding anything to the contrary contained herein, this Exercise Notice shall
constitute a representation by the Holder of the Warrant submitting this Exercise Notice that after giving effect to the exercise
provided for in this Exercise Notice, such Holder (together with its affiliates) will not have beneficial ownership (together
with the beneficial ownership of such Person’s affiliates) of a number of shares of Common Stock which exceeds the Maximum
Percentage (as defined in the Warrant) of the total outstanding shares of Common Stock of the Company as determined pursuant to
the provisions of Section 1(f) of the Warrant.
4. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of
Common Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
☐
Check here if requesting delivery as a certificate
to the following name and to the following address:
☐ Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
| DTC Participant: | |
| | DTC Number: | |
| | Account Number: | |
Date:
_____________ __,
Name
of Registered Holder
Name:
Title:
Tax
ID:____________________________
E-mail
Address:_____________________
EXHIBIT
B
ACKNOWLEDGMENT
The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance
with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by_______________.
| | ADAMIS PHARMACEUTICALS CORPORATION |
| By: | _________________________________ |
ADAMIS PHARMACEUTICALS CORPORATION 10-Q
Exhibit 4.2
THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 1(a) OF THIS WARRANT.
Adamis
Pharmaceuticals Corporation
Prefunded
Warrant TO Purchase Common Stock
Warrant
No.: 1
Date
of Issuance: March 16, 2023 (“Issuance Date”)
Adamis
Pharmaceuticals Corporation, a Delaware corporation (the “Company”), hereby certifies that, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Armistice Capital Master Fund Ltd., 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, upon exercise of this Warrant to Purchase
Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date (the “Initial Exercisability Date”), but not after 11:59
p.m., New York time, on the Expiration Date (as defined below), 7,500,000 (subject to adjustment as provided herein) fully paid
and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”, and such number of Warrant
Shares, the “Warrant Number”). Except as otherwise defined herein, capitalized terms in this Warrant shall
have the meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Stock (the “Registered
Warrants”) issued pursuant to (i) that certain Securities Purchase Agreement, dated as of March 14, 2023 (the “Subscription
Date”), by and among the Company and the investors (the “Buyers”) referred to therein, as amended
from time to time (the “Securities Purchase Agreement”) and (ii) the Company’s Registration Statement
on Form S-3 (File number 333-267365) (together with such other registration statement as may cover the issuance or resale of the
Warrant Shares issuable hereunder, 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 on any day on or after the Initial Exercisability Date (an “Exercise
Date”), in whole or in part, by delivery (whether via 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 an exercise of this Warrant as aforesaid, the Holder shall deliver 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 was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless Exercise (as defined in Section 1(d)) or qualify for a Cashless Exercise pursuant to Section 1(d). The Holder shall
not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution
and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of
the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first
(1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit
by electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit
B, to the Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation
shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On
or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant
Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent is participating in
The Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock 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 Program, upon the request of the Holder, issue and deliver
(via reputable 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 shares of Common Stock to which the Holder shall be entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date 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 submitted 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 and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall
as soon as practicable and in no event later than two (2) Business 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 purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay
a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 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) that may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made
pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the later
of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the
1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable
Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice
of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach of
this Warrant. From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that
participates in FAST.
(b) Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant
Share, was pre-funded to the Company on or prior to the Initial Exercisability Date and, consequently, no additional consideration
(other than the nominal exercise price of $0.0001 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 Warrant Share under this Warrant
shall be $0.0001, subject to adjustment hereunder (the “Exercise Price”).
(c) Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or
prior to the applicable Share Delivery Date, if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder
(or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares
on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the
Holder or the Holder’s designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s
exercise of this Warrant (as the case may be) (a “Delivery Failure”), and if on or after such Share Delivery
Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all
or any portion of the number of Warrant Shares issuable upon such exercise that the Holder is entitled to receive from the Company
and has not received from the Company in connection with such Delivery Failure (a “Buy-In”), then, in addition
to all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of 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, stock loan costs and other reasonable out-of-pocket expenses, if any) for the
shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder)
(the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such Warrant Shares) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case
may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the
Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s
designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) 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 Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment
under this clause (ii) (the “Buy-In Payment Amount”). 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 FAST. In addition to the foregoing, if the Company fails for any reason to deliver to the Holder the Warrant
Shares subject to an Exercise Notice by the second Trading Day following the Share Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based
on the VWAP of the Common Stock on the date of the applicable 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 the second Trading Day
following such Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the
time of exercise hereof the Registration Statement is not effective (or the prospectus contained therein is not available for
use) for the issuance of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise required 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 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 this Warrant is then being exercised.
B
= as elected by the Holder: (i) the VWAP of the shares of 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 VWAP on the Trading Day immediately preceding the
date of the applicable Exercise Notice or (z) the Bid Price of the shares of 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 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
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the 1933 Act, 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 Subscription Date, it is intended that the Warrant Shares issued in
a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement. For the
avoidance of doubt, (i) at any time that a Registration Statement is effective (and the prospectus contained therein is available
for use) for the issuance of the Warrant Shares, this Warrant may only be exercised for cash and (ii) under no circumstances shall
the Company be required to settle any Cashless Exercise of this Warrant by cash payment or to otherwise “net cash settle”
this Warrant.
(e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number
of Warrant Shares to be issued pursuant to the terms hereof, 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 15.
(f) Limitations
on Exercises. 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 9.99% (the “Maximum Percentage”)
of the 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 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 other Registered 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)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes
of 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, Current Report on Form 8-K or other
public filing with 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, if any, 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 acquired 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 shares 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
(with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% 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 Registered 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)(i) 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)(i) 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) | Reservation
of Shares. |
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times from and after the effective time
of the initial reverse stock split after the date hereof reserve at least 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 Registered Warrants
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”). 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 Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered Warrants
held by each holder on the Closing Date (without regard to any limitations on exercise) or increase in the number of reserved
shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise
transfer any of such holder’s Registered 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 Registered
Warrants shall be allocated to the remaining holders of Registered Warrants, pro rata based on the number of shares of Common
Stock issuable upon exercise of the Registered Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while
any of the Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall, as soon as practicable, 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 all the Registered
Warrants then outstanding (and/or effect a reverse stock split to allow the Company to reserve the Required Reserve Amount for
the Registered 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 and/or a reverse stock split. 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/or reverse stock split 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 and/or reverse stock split, the Company may satisfy
this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. At
any time after the fifth (5th) Trading Day after the Stockholder Meeting Deadline (as defined in the Securities Purchase
Agreement), in the event that the Holder submits an Exercise Notice pursuant to Section 1, and the Company is prohibited from
issuing all shares of Common Stock subject to such Exercise Notice due to the failure by the Company to have sufficient shares
of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common
Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the
Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization
Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure
Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending
on the date of such issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares,
any Buy-In Payment Amount, brokerage commissions and other reasonable out-of-pocket expenses, if any, of the Holder incurred in
connection therewith. Nothing contained in this Section 1(g) shall limit any obligations of the Company under any provision of
the Securities Purchase Agreement.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of
this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on or after the
Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding
shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise
Price shall be adjusted appropriately to reflect such event.
(b) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same
as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).
(c) Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned
or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of
Common Stock.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if
the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders
of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash,
stock or other securities, property, 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 the extent of the Maximum Percentage (and shall not be entitled to
beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent
of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time
or times, if ever, 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 Sections 2 or 3 above, if at any time 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 shares 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess)
and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever,
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 held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined
in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in
form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements
to deliver to the Holder in exchange for 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) and (ii) the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. 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 publicly traded common
stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had 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) 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). Provision made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Holder.
(c) Change
of Control Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder
delivered at any time commencing on the earliest to occur of (x) the public disclosure of the consummation of any Change of Control,
(y) the consummation of any Change of Control and (z) the Holder first becoming aware of the consummation of any Change of Control
through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control by the Company
pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase
this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes
Value. Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to
the later of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such
Change of Control. For the avoidance of doubt, the Holder’s redemption right contemplated by this Section 4(c) is contingent
upon the actual closing of the Change of Control.
(d) Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) 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 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 (a) 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, and (b) shall take
all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant.
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this 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 be construed to confer upon the Holder, solely in its 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 it 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 (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form 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; provided, however, no warrants
for fractional shares of Common Stock shall be given.
(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, unless otherwise provided herein, such notice shall
be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise
in accordance with the terms hereof), 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 each adjustment
of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of
such adjustment(s), (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, or (B) 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, and (iii) at least ten (10) Trading Days
prior to the consummation of any Fundamental Transaction. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such
notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company
or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously filed in a Current
Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby covenants
and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade
on the basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified
by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) 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, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior
to 9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly disclose such material,
non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder
explicitly in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence
of any such written indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder),
the Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public information
relating to the Company or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company,
or any rights of the Holder, under Section 4.4 of the Securities Purchase Agreement.
10. ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary
or agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided
by the Company or (b) refrain from trading any securities while in possession of such information in the absence of a written
non-disclosure agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions.
In the absence of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade
in any securities issued by the Company, may possess and use any information provided by the Company in connection with such trading
activity, and may disclose any such information to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may
be amended 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. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.
12. SEVERABILITY. 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).
13. GOVERNING
LAW. 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
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 9(f) of the Securities Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. 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. 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.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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.
14. CONSTRUCTION; HEADINGS. 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. Terms used in this Warrant but defined in the other Transaction
Documents shall have the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement)
in such other Transaction Documents unless otherwise consented to in writing by the Holder.
| (a) | Submission
to Dispute Resolution. |
(i) In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic
calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination
of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic
mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute
or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder
and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid
Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time
after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent,
reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so
delivered in accordance with the first sentence of this Section 15 and (B) written documentation supporting its position with
respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day
immediately following the date on which the Holder selected such investment bank (the “Dispute Submission
Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to
herein as the “Required Dispute Documentation”) (it being understood and agreed that if either the Holder
or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the
party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its
right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute
and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and
the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or
submit any written documentation or other support to such investment bank in connection with such dispute (other than the
Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline.
The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution
of such dispute shall be final and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New
York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel
arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) he terms of this Warrant
and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of
the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations
and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution
of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the
terms of this Warrant and any other applicable Transaction Documents, (iii) the Holder (and only the Holder), in its sole discretion,
shall have the right to submit any dispute described in this Section 15 to any state or federal court sitting in The City of New
York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 15 and (iv) nothing in this Section 15
shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect
to any matters described in this Section 15).
16. REMEDIES, CHARACTERIZATION, 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 the 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 and consequential damages for any failure by the Company to comply with the terms of this Warrant.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). 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 specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and
without posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby
upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs
in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
17. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts due under this
Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company
or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company shall
pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
18. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except
as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.
19. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c) “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.
(d) “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.
(e) “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 Open
Market (or a similar organization or agency succeeding to its functions of reporting prices) 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 15. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during such period.
(f) “Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest
Closing Sale Price of the Ordinary Shares during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Change of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading
Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered in cash in the
applicable Change of Control (if any) plus the value of the non-cash consideration being offered in the applicable Change of Control
(if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section
4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining
term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this
Warrant as of the date of consummation of the applicable Change of Control or as of the date of the Holder’s request pursuant
to Section 4(c) if such request is prior to the date of the consummation of the applicable Change of Control, (iv) a zero cost
of borrow, (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT”
function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest
to occur of (A) the public disclosure of the applicable Change of Control, (B) the consummation of the applicable Change of Control
and (C) the date on which the Holder first became aware of the applicable Change of Control and (vi) a remaining option time equal
to the time between the date of the public announcement of the applicable Change of Control and the Termination Date.
| (g) | “Bloomberg”
means Bloomberg, L.P. |
(h) “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; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers)
of commercial banks in The City of New York generally are open for use by customers on such day.
(i) “Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of a majority of the Company’s voting power immediately
prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification
to hold a majority 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, (iii) a migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company or any of its Subsidiaries, (iv) with respect to all Strategic Transactions in any
given six month rolling period, the holders of the voting power of the Company (or 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)) prior to any such Strategic Transaction in such six month period are, in all material respects, the
holders of at least 50.1% of the voting power of the Company (or 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 all Strategic Transactions in such six month period, or (v) the Company’s merger with DMK Pharmaceuticals, Corp. Notwithstanding
the foregoing, any Strategic Transaction that results in the Common Stock (or other security) into which this Warrant is then
exercisable to both fail to be (x) registered under the 1934 Act and (y) listed on an Eligible Market shall be a Change
of Control hereunder.
(j) “Closing Sale Price” means, for any security as of any date, the last closing trade price 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 trade price, then the last trade price 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 trade price 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 does not apply, the last trade price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for
such security by Bloomberg, the average of the ask prices of any market makers for such security as
reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the
Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale 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 in accordance
with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.
(k) “Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.
(l) “Convertible Securities” means any stock or other security (other than Options) that is at any time and under
any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the
holder thereof to acquire, any shares of Common Stock.
(m) “Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(n) “Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if
such date falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date 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 another Subject Entity, following
which consolidation or merger, the Company is not the surviving 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 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 or share 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 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 Common Stock, (y) at least
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities
as of the date of this Warrant 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 shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders 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. Notwithstanding the foregoing,
the Company’s merger with DMK Pharmaceuticals, Corp. shall not be a “Fundamental Transaction,” nor shall it
be included in combination with other future transaction to be counted in contemplation of a Fundamental Transaction as defined
herein.
(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) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(s) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
|
(t) | “Principal
Market” means the Nasdaq Capital Market. |
(u) “SEC” means the United States Securities and Exchange Commission or the successor thereto.
(v) “Strategic Transaction” means a bona fide strategic or commercial acquisition, merger, licensing arrangement,
or strategic partnership.
(w) “Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(x) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.
(y) “Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, 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, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price or trading volume
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.
(z) “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30
start time and 16:00 end time) 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 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing
bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
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 15. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction during such 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.
| |
ADAMIS PHARMACEUTICALS CORPORATION |
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By: |
|
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Name: David J. Marguglio |
| |
|
Title: Chief Executive Officer |
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
ADAMIS
PHARMACEUTICALS CORPORATION
The
undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”)
of Adamis Pharmaceuticals Corporation, a Delaware corporation (the “Company”) as specified below. 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 Aggregate Exercise Price shall be made as:
| ☐ | “Cash
Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | “Cashless
Exercise” with respect to _______________ Warrant Shares (which shall only be available to the Holder to the extent
that a Registration Statement is not then effective for the issuance of the Warrant Shares). |
In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at
__________ [a.m.][p.m.] on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of
this Exercise Notice was $________. For the avoidance of doubt, at any time that a Registration Statement is effective (and
the prospectus contained therein is available for use) for the issuance of the Warrant Shares, this Warrant may only be
exercised for cash.
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 (or the Holder is not eligible for a Cashless Exercise pursuant to the terms of the
Warrant), the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with
the terms of the Warrant.
3. Maximum
Percentage Representation. Notwithstanding anything to the contrary contained herein, this Exercise Notice shall constitute
a representation by the Holder of the Warrant submitting this Exercise Notice that after giving effect to the exercise provided
for in this Exercise Notice, such Holder (together with its affiliates) will not have beneficial ownership (together with the
beneficial ownership of such Person’s affiliates) of a number of shares of Common Stock which exceeds the Maximum Percentage
(as defined in the Warrant) of the total outstanding shares of Common Stock of the Company as determined pursuant to the provisions
of Section 1(f) of the Warrant.
4.
Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________
shares of Common Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
☐
Check here if requesting delivery as a certificate to the following name and to the following address:
☐ Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
|
DTC Participant: |
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DTC Number: |
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Account Number: |
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Date:
_____________ __,
__________________________
Name
of Registered Holder
Tax
ID:____________________________
E-mail
Address:_____________________
EXHIBIT
B
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and
acknowledged and agreed to by_______________.
| |
ADAMIS PHARMACEUTICALS CORPORATION |
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By: |
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Name: |
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Title: |
ADAMIS PHARMACEUTICALS CORPORATION 10-Q
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of March 14, 2023, between Adamis Pharmaceuticals
Corporation, a Delaware corporation (the “Company”), and the purchaser identified on the signature pages hereto
(including its successors and assigns, the “Purchaser”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to the Registration Statement, the Company desires
to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“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; provided, however, for clarification, commercial banks shall not be deemed
to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of
any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks
in The City of New York are generally open for use by customers on such day.
“Closing”
means the closing of the purchase of the Shares and the Warrants by the Purchaser.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchaser’s obligation to pay the Subscription Amount and (ii)
the Company’s obligation to deliver the Shares and the Warrants, in each case, have been satisfied or waived, but in no
event later than the second (2nd) Trading Day following the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.
“Common
Stock Warrants” means, collectively, the Common Stock purchase warrants delivered to the Purchaser at the Closing in
accordance with Section 2.2(a) hereof, which Common Stock Warrants shall be exercisable at any time or times on or after the six
month and one day anniversary of the Issuance Date (as defined in the Common Stock Warrants) and have a term of exercise equal
to five (5) years and six (6) months, in the form of Exhibit A attached hereto.
“Company
Counsel” means Latham & Watkins LLP, with offices located at 12670 High Bluff Dr., San Diego, California 92130.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following
the date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time)
on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or equity awards to employees, officers or directors of the
Company pursuant to any inducement award or stock or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose
for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder,
and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the
date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such 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 during the prohibition period in Section 4.11(a) herein, and
provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall
provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which
the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Prefunded
Warrants” means, collectively, the prefunded Common Stock purchase warrants delivered to the Purchaser at the Closing
in accordance with Section 2.2(a) hereof, which Prefunded Warrants shall be immediately exercisable and have a term of exercise
equal to five (5) years, in the form of Exhibit B attached hereto.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Prospectus”
means the base prospectus filed with the Registration Statement, including all information, documents and exhibits filed with
or incorporated by reference into such prospectus.
“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to the Purchaser at the Closing.
“Registration
Statement” means the currently effective registration statement on Form S-3 (Registration Number 333-267365).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“Securities”
means the Shares, the Warrants and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock (excluding the Warrant Shares) issued or issuable to the Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means $2,999,250.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market
or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants, the Voting Agreements, all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means American Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing
address of 6201 North 15th Ave., Brooklyn, New York 11219 and an email address of admin12@astfinancial.com, and any successor
transfer agent of the Company.
“Voting
Agreements” means the voting agreements delivered to the Company at the Closing in accordance with Section 2.2(b) hereof.
“Warrants”
means, collectively, the Common Stock Warrants and the Prefunded Warrants.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. On
the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the
Purchaser agrees to purchase, (i) an aggregate of 16,500,000 Shares, (ii) Common Stock Warrants to acquire an aggregate of
48,000,000 Warrant Shares and (iii) Prefunded Warrants to acquire an aggregate of 7,500,000 Warrant Shares. The
Purchaser’s Subscription Amount shall be made available for “Delivery Versus Payment” settlement with the
Company or its designee. The Company shall deliver to the Purchaser its Shares and Warrants, and the Company and the
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at such location as the parties shall
mutually agree or take place remotely by electronic transfer of the Closing documentation. Settlement of the Shares shall
occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shall
issue the Shares registered in the Purchaser’s name and address and released by the Transfer Agent directly to the
account(s) identified by the Purchaser; upon receipt of such Shares, the Transfer Agent shall promptly electronically deliver
such Shares to the Purchaser, and payment therefor shall be made by the Purchaser (or its clearing firm) by wire transfer to
the Company). Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of this
Agreement by the Company and the Purchaser, through, and including the time immediately prior to the Closing (the
“Pre-Settlement Period”), the Purchaser sells to any Person all, or any portion, of the Shares to be
issued hereunder to the Purchaser at the Closing (collectively, the “Pre-Settlement Shares”), the
Purchaser shall, automatically hereunder (without any additional required actions by the Purchaser or the Company), be deemed
to be unconditionally bound to purchase, such Pre-Settlement Shares from the Company at the Closing; provided, that the
Company shall not be required to deliver any Pre-Settlement Shares to the Purchaser prior to the Company’s receipt of
the purchase price of such Pre-Settlement Shares hereunder; and provided further that the Company hereby acknowledges and
agrees that the forgoing shall not constitute a representation or covenant by the Purchaser as to whether or not during the
Pre-Settlement Period the Purchaser shall sell any shares of Common Stock to any Person and that any such decision to sell
any shares of Common Stock by the Purchaser shall solely be made at the time the Purchaser elects to effect any such sale, if
any. Notwithstanding anything to the contrary herein, the number of Shares purchased by the Purchaser (and its Affiliates)
hereunder shall not, when aggregated with all other shares of Common Stock owned by the Purchaser (and its Affiliates) at
such time, result in the Purchaser beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act)
in excess of 9.99% of the then issued and outstanding Common Stock outstanding at the Closing (the “Beneficial
Ownership Maximum”). To the extent that a Purchaser’s beneficial ownership of the Shares would otherwise be
deemed to exceed the Beneficial Ownership Maximum, the Purchaser’s Subscription Amount shall automatically be reduced
as necessary in order to comply with this paragraph.
(a) On or prior to the Closing Date (except as indicated below), the Company shall deliver or cause to be delivered to the Purchaser
the following:
(i)
this Agreement duly executed by the Company;
(ii) a legal opinion of Company Counsel, substantially in the form of Exhibit C attached hereto;
(iii) subject to the last sentence of Section 2.1, the Company shall have provided the Purchaser with the Company’s wire instructions;
(iv) subject
to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver 16,500,000 Shares on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system
(“DWAC”), registered in the name of the Purchaser;
(v) a Common Stock Warrant registered in the name of the Purchaser to purchase up to 48,000,000 shares of Common Stock, with an exercise
price per share equal to $0.138, subject to adjustment as set forth therein;
(vi) a Prefunded Warrant registered in the name of the Purchaser to purchase up to 7,500,000 shares of Common Stock, with an exercise
price per share equal to $0.125 (with $0.1249 per share pre-funded to the Company pursuant to this Agreement and the remaining
$0.0001 per share due upon exercise), subject to adjustment as set forth therein; and
(vii) the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, the following:
(i)
this Agreement duly executed by the Purchaser;
(ii)
the Voting Agreement duly executed by the Purchaser; and
(iii) the Subscription Amount, which shall be made available for DVP settlement with the Company or its designee.
(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects)
on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific date therein
in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by
materiality, in all respects) as of such date);
(ii) all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have
been performed; and
(iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b)
The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing
Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case
they shall be accurate in all material respects or, to the extent representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) as of such date);
(ii) all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement;
(iv) there shall have been no Material Adverse Effect with respect
to the Company; and
(v) from the date hereof to the Closing Date, trading in the
Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time
prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited,
or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have
occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its
effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. The Company represents and warrants to the Purchaser that, as of the date
hereof and as of the Closing Date, except as otherwise disclosed in the SEC Documents:
(a) Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
respective properties and to carry on their respective business as now being conducted and as presently proposed to be conducted.
Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing
in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to
have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions contemplated hereby or in any of the
other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii)
the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations under any of
the Transaction Documents. Other than as disclosed in the SEC Documents, the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (i) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person and (ii) controls or operates all or any part of the business, operations or administration
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”
(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Warrants and the reservation
for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants, in each case, in accordance with the terms
thereof) have been duly authorized by the Board of Directors or other governing body, as applicable, and (other than (i) the filing
with the Commission of (A) a Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents,
(B) the Prospectus Supplement supplementing the Prospectus, and (C) preliminary and definitive proxy materials for the solicitation
of proxies with respect to the Company’s stockholders’ affirmative vote for the approval of resolutions providing
for a reverse stock split of the Common Stock (the “Stockholder Approval”), (ii) the Stockholder Approval,
(iii) the filing of a supplemental listing application with Nasdaq, and (iv) any other filings as may be required by any state
securities agencies (collectively, the “Required Approvals”)) no further filing, consent or authorization is
required by the Company, its Subsidiaries, their respective boards of directors or their stockholders or other governing body.
This Agreement has been, and the other Transaction Documents to which it is a party will be prior to the Closing, duly executed
and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law.
| (d) | Issuance
of Securities; Registration Statement. |
(i) The issuance of the Shares and the Warrants are duly authorized and upon issuance in accordance with the terms of the Transaction
Documents shall be validly issued, fully paid and non-assessable and free from all Liens with respect to the issuance thereof.
Upon exercise of the Warrants in accordance with the terms thereof (as the case may be), the Warrant Shares, when issued, will
be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.
(ii)
The issuance by the Company of the Securities has been registered under
the Securities Act, the Securities are being issued pursuant to the Registration Statement and all of the Securities, upon
issuance, will be freely transferable and freely tradable by the Purchaser without restriction imposed by the Company,
whether by way of registration or some exemption therefrom. The Registration Statement is effective and available for the
issuance of the Securities thereunder and the Company has not received any notice that the Commission has issued or intends
to issue a stop-order with respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing
to do so. The “Plan of Distribution” section under the Registration Statement (including the Prospectus
Supplement) permits the issuance and sale of the Securities hereunder and as contemplated by the other Transaction Documents.
Upon receipt of the Securities, the Purchaser will have acquired ownership of the Securities free of any adverse
claim imposed by the Company. The Registration Statement and any prospectus included therein, including the Prospectus and
the Prospectus Supplement, complied in all material respects with the requirements of the Securities Act, and the documents
incorporated by reference into the Registration Statement when filed, complied in all material respects with the requirements
of the Exchange Act and, in each case, with the rules and regulations of the Commission promulgated under the Securities Act
or the Exchange Act, as the case may be. At the time the Registration Statement and any amendments thereto became effective,
the Registration Statement and any amendments thereto complied and, upon the filing of the Prospectus Supplement after the
date of this Agreement the Registration Statement will comply in all material respects with the requirements of the
Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendments
or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and the Prospectus
Supplement at the Closing Date, complied and will comply, as the case may be, in all material respects with the requirements
of the Securities Act and did not, and will not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading. The Company meets all of the requirements of General Instruction I.B.6 for the use of Form S-3 under the
Securities Act for the offering and sale of the Securities contemplated by this Agreement and the other Transaction
Documents, and the Commission has not notified the Company of any objection to the use of the form of the Registration
Statement pursuant to Rule 401(g)(1) under the Securities Act. The Registration Statement meets the requirements set forth in
Rule 415(a)(1)(x) under the Securities Act. At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the
Securities Act) relating to any of the Securities, the Company was not and is not an “Ineligible Issuer” (as
defined in Rule 405 under the Securities Act). The Company has not distributed any offering material in connection with the
offer or sale of any of the Securities other than the Registration Statement, the Prospectus or the Prospectus Supplement. In
accordance with Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority Manual, the offering of the Securities
has been registered with
the Commission on Form S-3 under the Securities Act pursuant to the standards for Form S-3 in effect prior to October 21, 1992,
and the Securities are being offered pursuant to Rule 415 promulgated under the Securities Act.
(e) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares
and the Warrants pursuant to the terms thereof, and the reservation for issuance and issuance of the Warrant Shares issuable upon
exercise of the Warrants in accordance with the terms thereof) will not (i) result in a violation of the Company’s Restated
Certificate of Incorporation (“Certificate of Incorporation”) (including, without limitation, any certificate
of designation contained therein), the Company’s Amended and Restated Bylaws (“Bylaws”), or any certificate
of formation, memorandum of association, articles of association, bylaws or other organizational documents of any of the Company’s
Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii)
assuming that the Required Approvals are obtained, result in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of Nasdaq
Capital Market (the “Principal Market”) and including all applicable foreign, federal and state laws, rules
and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries is bound or affected, except in the case of (ii) and (iii)
above, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(f)
Consents. Except as otherwise disclosed in the SEC Documents, neither the Company nor any Subsidiary is required to obtain
any consent from, authorization or order of, or make any filing or registration with (other than the Required Approvals), any
Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute,
deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing
Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company
or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction
Documents. “Governmental Entity” means any nation, state, county, city, town, village, district, or other political
jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal),
multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity
or enterprise owned or controlled by a government or a public international organization or any of the foregoing.
(g)
Acknowledgment Regarding the Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that the Purchaser is not (i) an officer or director of the Company or any of its Subsidiaries,
(ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge,
a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
Exchange Act). The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Company
or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by the Purchaser or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to the Purchaser’s purchase of the Securities.
The Company further represents to the Purchaser that the Company’s decision to enter into the Transaction Documents to which
it is a party has been based solely on the independent evaluation by the Company and its respective representatives.
(h)
No General Solicitation; Financial Advisor’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates,
nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities. The Company has engaged a financial advisor (the
“Financial Advisor”) in connection with the sale of the Securities. The Company shall be responsible for the
payment of the Financial Advisor’s fees relating to or arising out of the transactions contemplated hereby in connection
with the sale of the Securities. The Company shall pay, and hold the Purchaser harmless against, any liability, loss or expense
(including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. Other
than the Financial Advisor, neither the Company nor any of its Subsidiaries has engaged any financial advisor, placement agent
or other agent in connection with the offer or sale of the Securities.No Integrated Offering. Other than with respect to
the Securities, none of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would require registration of the issuance of any of the Securities under the Securities Act, whether through integration with
prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for
purposes of the Securities Act or under any applicable stockholder approval provisions, including, without limitation, under the
rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or
designated for quotation. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take
any action or steps that would require registration of the issuance of any of the Securities under the Securities Act or cause
the offering of any of the Securities to be integrated with other offerings of securities of the Company.
(j)
Application of Takeover Protections; Rights Agreement. The Company and the Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison
pill (including, without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover
provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of
its incorporation or otherwise which is or could become applicable to the Purchaser as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Purchaser’s ownership
of the Securities. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock
or a change in control of the Company or any of its Subsidiaries.
(k) SEC
Documents; Financial Statements. Except as disclosed in the SEC Documents, during the two (2) years prior to the
date hereof, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents
required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act (all of the
foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”); reports filed in compliance with the time periods specified in Rule 12b-25 promulgated under the
Exchange Act shall be considered timely for this purpose. When requested, the Company has delivered or has made available to
the Purchaser or its representatives true, correct and complete copies of each of the SEC Documents not available on the
EDGAR system. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to the SEC Documents, and none
of the SEC Documents, at the time they were filed with the Commission, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and
the published rules and regulations of the Commission with respect thereto as in effect as of the time of filing. Such
financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of
the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or
in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable
based upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are
required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board
which are not provided for by the Company in its financial statements or otherwise. The Company is not currently
contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of
the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial
Statements”), nor is the Company currently aware of facts or circumstances which would require the Company to amend
or restate any of the Financial Statements, in each case, in order for any of the Financial Statements to be in compliance
with GAAP and the rules and regulations of the Commission. The Company has not been informed by its independent accountants
that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the
Company to amend or restate any of the Financial Statements.
(l) Absence
of Certain Changes. Except as otherwise disclosed in the SEC Documents, since the date of the Company’s most recent
audited financial statements contained in a Form 10-K, there has been no material adverse effect on the business, assets, liabilities,
properties, operations (including results thereof), condition (financial or otherwise) or prospects of the Company and its Subsidiaries,
taken as a whole. Except as otherwise disclosed in the SEC Documents, since the date of the Company’s most recent audited
financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends,
(ii) sold any material assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any
material capital expenditures, individually or in the aggregate, outside of the ordinary course of business.
(m) No
Undisclosed Events, Liabilities, Developments or Circumstances. Except as otherwise disclosed in the SEC Documents, no event,
liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the
Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including
results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by the Company under applicable
securities laws in a registration statement on Form S-1 filed with the Commission relating to an issuance and sale by the Company
of its Common Stock and which has not been publicly announced or (ii) would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(n) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in
default under the Certificate of Incorporation, the Bylaws, any organizational charter, certificate of formation,
memorandum of association, articles of association, certificate of incorporation or bylaws of any of the Company’s
Subsidiaries, or any certificate of designation, preferences or rights of any outstanding series of preferred stock of the
Company or any of its Subsidiaries, except in all cases for possible violations which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of
its Subsidiaries, except in all cases for possible violations which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. During the two years prior to the date hereof, (i) the Common Stock has been
listed or designated for quotation on the Principal Market, and (ii) trading in the Common Stock has not been suspended by
the Commission or the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material
Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment,
injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its
Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company
or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than
such effects which, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse
Effect.
(p)
Foreign Corrupt Practices. None of the Company, any Subsidiary of the Company or any director, officer, agent, employee,
or, to the knowledge of the Company, any other person acting for or on behalf of the foregoing (individually and collectively,
a “Company Affiliate”) have violated the FCPA or any other applicable anti-bribery or anti-corruption laws,
nor, to the knowledge of the Company, has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any
money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any other
person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate
for political office (individually and collectively, a “Government Official”) or to any person under circumstances
where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would
be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:
(i) (A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official
to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government
Official to influence or affect any act or decision of any Governmental Entity, or
(ii) assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company
or its Subsidiaries.
(q) Sarbanes-Oxley Act. Except as set forth in the SEC Documents, the Company and each Subsidiary is in compliance with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations
promulgated by the Commission thereunder except as would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(r) Transactions
With Affiliates. The Company has disclosed in the SEC Documents all transactions with any “related person” (as
defined in Item 404 of Regulation S-K promulgated pursuant to the Exchange Act) which are required to be disclosed in such SEC
Documents.Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, except as disclosed to the
Purchaser or in the SEC Documents, (i) has any outstanding debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company
or any of its Subsidiaries is bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default
under which, by the other party(ies) to such contract, agreement or instrument would reasonably be expected to result in a Material
Adverse Effect, (iii) has any financing statements securing obligations in any amounts filed in connection with the Company or
any of its Subsidiaries; (iv) is in violation of any term of, or in default under, any contract, agreement or instrument relating
to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (v) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. Neither the Company nor
any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed
in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective
businesses and which, individually or in the aggregate, do not or would not reasonably be expected to have a Material Adverse
Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all
indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property
or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered
into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing,
in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for
the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above
secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations
(as defined below) in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above;
and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise,
of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose
or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that
the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
(t) Litigation. No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C.
§1519 or engaged in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not
been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving
the Company, any of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries. The
Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the
Company under the Securities Act or the Exchange Act, including, without limitation, the Registration Statement. After reasonable
inquiry of its employees, the Company is not aware of any fact which might result in or form the basis for any such investigation.
Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or
award of any Governmental Entity.
(u) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance
coverage sought or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable
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.
(v) Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No
executive officer (as defined in Rule 501(f) promulgated under the Securities Act) or other key employee of the Company or any
of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such
Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. No current (or former)
executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive
officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability which
would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
(w) Title.
(i) Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property,
facilities or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for
(a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or
anticipated use of the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries
are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.
(ii) Fixtures
and Equipment. Except as would not reasonably be expected to have a Material Adverse Effect, each of the Company and its
Subsidiaries (as applicable) has good title to, or a valid leasehold interest in, the tangible personal property,
equipment, improvements, fixtures, and other personal property and appurtenances that are used by the Company or its
Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). Except as would
not reasonably be expected to have a Material Adverse Effect, the Fixtures and Equipment are structurally sound, are in good
operating condition and repair, are adequate for the uses to which they are being put, are not in need of maintenance or
repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of the Company’s and/or
its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Except as would not
reasonably be expected to have a Material Adverse Effect, each of the Company and its Subsidiaries owns all of its Fixtures
and Equipment free and clear of all Liens except for (a) Liens for current taxes not yet due and (b) zoning laws and other
land use restrictions that do not impair the present or anticipated use of the property subject thereto.
(x) Intellectual Property Rights. Except as disclosed in the SEC Documents, the Company and its Subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, original
works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets
and other intellectual property rights and all applications and registrations therefor (“Intellectual Property Rights”)
necessary to conduct their respective businesses as now conducted and presently proposed to be conducted. The Company does not
have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others which infringement
would reasonably be expected to result in a Material Adverse Effect. There is no claim, action or proceeding being made or brought,
or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights, which claim, action or proceeding would reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which could form a reasonably
basis for any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.
(y) Environmental
Laws.
(i) The
Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), (B) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each of
the foregoing clauses (A), (B) and (C), the failure to so comply would be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or
foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous
substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous
Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, no Hazardous
Materials: (A) have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in
violation of any Environmental Laws; or (B) are present on, over, beneath, in or upon any Real Property or any portion thereof
in quantities that would constitute a violation of any Environmental Laws. No prior use by the Company or any of its Subsidiaries
of any Real Property has occurred that violates any Environmental Laws, which violation would reasonably be expected to have a
Material Adverse Effect.
(iii) Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos
and polychlorinated biphenyls.
(iv) None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related
Liens.
(z) Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations
imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.
(aa)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, except as would not reasonably
be expected to have a Material Adverse Effect, (ii) has timely paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested
in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for
any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined
in Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”). The net operating loss carryforwards
(“NOLs”) for United States federal income tax purposes of the consolidated group of which the Company is the
common parent, if any, shall not be adversely effected by the transactions contemplated hereby. The transactions contemplated
hereby do not constitute an “ownership change” within the meaning of Section 382 of the Code, thereby preserving the
Company’s ability to utilize such NOLs.
(cc) Internal Accounting and Disclosure Controls. Except as otherwise disclosed in the SEC Documents, the Company and each of
its Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange
Act) that is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles, including that (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. Except as otherwise disclosed in the SEC Documents,
the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that
are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of
the Commission, including, without limitation, controls and procedures designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate,
to allow timely decisions regarding required disclosure. Except as otherwise disclosed in the SEC Documents, neither the Company
nor any of its Subsidiaries has received any notice or correspondence from any accountant, Governmental Entity or other Person
relating to any potential material weakness or significant deficiency in any part of the internal controls over financial reporting
of the Company or any of its Subsidiaries.
(dd) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in
its Exchange Act filings and is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect.
(ee) Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.
(ff) Acknowledgement
Regarding Purchaser’s Trading Activity. It is understood and acknowledged by the Company that (i) following the
public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, the
Purchaser has not been asked by the Company or any of its Subsidiaries to agree, nor has the Purchaser agreed with the
Company or any of its Subsidiaries, to desist from effecting any transactions in or with respect to (including, without
limitation, purchasing or selling, long and/or short) any securities of the Company, or “derivative” securities
based on securities issued by the Company or to hold any of the Securities for any specified term; (ii) the Purchaser, and
counterparties in “derivative” transactions to which the Purchaser is a party, directly or indirectly,
presently may have a “short” position in the Common Stock which was established prior to the Purchaser’s
knowledge of the transactions contemplated by the Transaction Documents; (iii) the Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iv)
the Purchaser may rely on the Company’s obligation to timely deliver shares of Common Stock upon conversion, exercise
or exchange, as applicable, of the Securities as and when required pursuant to the Transaction Documents for purposes of
effecting trading in the Common Stock of the Company. The Company further understands and acknowledges that following the
public disclosure of the transactions contemplated by the Transaction Documents pursuant to the press release disclosing all
the material terms of the transactions contemplated by the Transaction Documents the Purchaser may engage in hedging and/or
trading activities (including, without limitation, the location and/or reservation of borrowable shares of Common Stock) at
various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value and/or number of the Warrant Shares deliverable with respect to the Securities are being determined and such
hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable shares of
Common Stock), if any, can reduce the value of the existing stockholders’ equity interest in the Company both at
and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Warrants or any other
Transaction Document or any of the documents executed in connection herewith or therewith.
(gg) Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person
acting on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other
than the Financial Advisor), (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any
other securities of the Company or any of its Subsidiaries or (iv) paid or agreed to pay any Person for research services with
respect to any securities of the Company or any of its Subsidiaries.
(hh) U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, a U.S. real
property holding corporation within the meaning of Section 897 of the Code.
(ii) Registration Eligibility. The Company is eligible to register the issuance of the Securities by the Company using Form
S-3 promulgated under the Securities Act.
(jj) Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to the Purchaser hereunder will be,
or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied
with.
(kk) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over the
management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ll) Shell Company Status. The Company is not an issuer identified in, or subject to, Rule 144(i)(1). The Company has ceased
to be an issuer described in paragraph Rule 144 (i)(1), is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act; has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable,
during the preceding 12 months, other than Form 8-K reports; and has filed current “Form 10 information” with the
Commission reflecting its status as an entity that is no longer an issuer described in Rule 144(i)(1).
(mm)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the
best of the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors,
employees, agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise
with which the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized
any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a
kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive
public office except for personal political contributions not involving the direct or indirect use of funds of the Company or
any of its Subsidiaries.
(nn) Money Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot
Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited
to, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control,
including, without limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any
regulations contained in 31 CFR, Subtitle B, Chapter V.
(oo) Stock Option Plans. Except as otherwise disclosed in the SEC Documents, each stock option granted by the Company was granted
(i) in accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal
to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable
law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted,
and there is no and has been no policy or practice of the Company to knowingly grant, stock options prior to, or otherwise knowingly
coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company
or its Subsidiaries or their financial results or prospects.
(pp)
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof,
the Company had discussions with its accountants about its financial statements previously filed with the Commission. Based on
those discussions, the Company has no reason to believe that it will need to restate any such financial statements or any part
thereof.
(rr) No Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under
the Securities Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor
any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the
time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Purchaser a copy of any disclosures provided thereunder.
(ss) Other Covered Persons. The Company is not aware of any Person (other than the Financial Advisor) that has been or will
be paid (directly or indirectly) remuneration for solicitation of potential purchasers in connection with the sale of any Securities.
(tt) No Additional Agreements. The Company does not have any agreement or understanding with the Purchaser with respect to the
transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(uu) Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(vv) Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.
(ww) Registration
Rights. Except as otherwise disclosed in the SEC Documents, no holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration Statement or the issuance of the Securities hereunder
that could expose the Company to material liability or the Purchaser to any liability or that could impair the Company’s
ability to consummate the issuance and sale of the Securities in the manner, and at the times, contemplated hereby, which rights
have not been waived by the holder thereof as of the date hereof.
(xx)
Potential Products; FDA; EMEA.
(i) The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business as currently conducted, including without limitation all such certificates, authorizations
and permits required by the United States Food and Drug Administration (the “FDA”) or any other federal, state
or foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous materials, except where the failure
to so possess such certificates, authorizations and permits, individually or in the aggregate, would not result in a Material
Adverse Effect. The Company has not received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, individually or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a Material Adverse Effect.
(ii) Except as otherwise disclosed in the SEC Documents, the Company has not received any written notices or statements from the FDA,
the European Medicines Agency (the “EMEA”) or any other governmental agency, and otherwise has no knowledge
or reason to believe, that (i) any drug or other product candidate of the Company (each a “Potential Product”)
may or will be rejected or determined to be non-approvable; (ii) a delay in time for review and/or approval of a marketing authorization
application or marketing approval application in any jurisdiction for any Potential Product is or may be required, requested or
being implemented; (iii) one or more clinical studies for any Potential Product shall or may be requested or required in addition
to the clinical studies submitted to the FDA prior to the date hereof as a precondition to or condition of issuance or maintenance
of a marketing approval for any Potential Product; (iv) any license, approval, permit or authorization to conduct any clinical
trial of or market any product or Potential Product of the Company has been, will be or may be suspended, revoked, modified or
limited, except in the cases of clauses (i), (ii), (iii) and (iv) where such rejections, determinations, delays, requests, suspensions,
revocations, modifications or limitations might not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(iii) To
the Company’s knowledge, the preclinical and clinical testing, application for marketing approval of, manufacture,
distribution, promotion and sale of the products and Potential Products of the Company is in compliance, in all material
respects, with all laws, rules and regulations applicable to such activities, including without limitation applicable good
laboratory practices, good clinical practices and good manufacturing practices, except for such non-compliance as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is not aware of any
studies, tests or trial the results of which reasonably call into question the results of the tests and trials conducted by
or on behalf of the Company. The Company has not received notice of adverse finding, warning letter or clinical hold notice
from the FDA or any non-U.S. counterpart of any of the foregoing, or any untitled letter or other correspondence or notice
from the FDA or any other governmental authority or agency or any institutional or ethical review board alleging or
asserting noncompliance with any law, rule or regulation applicable in any jurisdiction, except notices, letters, and
correspondences and non-U.S. counterparts thereof alleging or asserting such noncompliance as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the SEC Documents, the
Company has not, either voluntarily or involuntarily, initiated, conducted or issued, or caused to be initiated, conducted or
issued, any recall, field correction, market withdrawal or replacement, safety alert, warning, “dear doctor”
letter, investigator notice, or other notice or action relating to an alleged or potential lack of safety or efficacy of any
product or Potential Product of the Company, any alleged product defect of any product or Potential Product of the Company,
or any violation of any material applicable law, rule, regulation or any clinical trial or marketing license, approval,
permit or authorization for any product or potential product of the Company, and the Company is not aware of any facts or
information that would cause it to initiate any such notice or action and has no knowledge or reason to believe that the
FDA, the EMEA or any other governmental agency or authority or any institutional or ethical review board or other
non-governmental authority intends to impose, require, request or suggest such notice or action except, in each case, as
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(yy) Cybersecurity.
To the Company’s knowledge, the Company and its Subsidiaries’ information technology assets and equipment,
computers, systems, networks, hardware, software, websites, applications, and databases (collectively,
“IT Systems”) are adequate for, and operate and perform in all material respects as required in connection
with the operation of the business of the Company and its subsidiaries as currently conducted, free and clear of all material
bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that would reasonably be expected to have a
Material Adverse Effect on the Company’s business. The Company and its Subsidiaries have implemented and maintained
commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and
protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT
Systems and data, including “Personal Data,” used in connection with their businesses. “Personal
Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social
security number or tax identification number, driver’s license number, passport number, credit card number, bank
information, or customer or account number; (ii) any information which would qualify as “personally identifying
information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by the
European Union General Data Protection Regulation (“GDPR”) (EU 2016/679); (iv) any information which would
qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996,
as amended by the Health Information Technology for Economic and Clinical Health Act (collectively,
“HIPAA”); and (v) any other piece of information that allows the identification of such natural person, or
his or her family, or permits the collection or analysis of any data related to an identified person’s health or sexual
orientation. There have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those
that have been remedied without material cost or liability or the duty to notify any other person or such, nor any incidents
under internal review or investigations relating to the same except in each case, where such would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company and its Subsidiaries are
presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and
security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use,
access, misappropriation or modification except in each case, where such would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(zz)
Compliance with Data Privacy Laws. To the Company’s knowledge, the Company and its Subsidiaries are, and at all prior
times were, in compliance with all applicable state and federal data privacy and security laws and regulations, including without
limitation HIPAA, and the Company and its Subsidiaries have taken commercially reasonable actions to prepare to comply with, and
since May 25, 2018, have been and currently are in compliance with, the GDPR (EU 2016/679) (collectively, the “Privacy
Laws”) except in each case, where such would not, either individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect. To ensure compliance with the Privacy Laws, the Company and its Subsidiaries have in place,
comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies
and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal
Data (the “Policies”). The Company and its Subsidiaries have at all times made all disclosures to users or
customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in
any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules
or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice
of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has
no knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting
or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or
(iii) is a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(aaa) Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or its agents or
counsel with any information that constitutes or would reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by
this Agreement and the other Transaction Documents. The Company understands and confirms that the Purchaser will rely on the
foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Purchaser
regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the
schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct as of
the date furnished and does not contain any untrue statement of a material fact or omit to state any material fact as of the
date furnished necessary in order to make the statements made therein, in the light of the circumstances under which they
were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company or
any of its Subsidiaries to the Purchaser pursuant to or in connection with this Agreement and the other Transaction
Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information is so
provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No event
or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise),
which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by
the Company but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared by
or on behalf of the Company or any of its Subsidiaries and made available to you have been prepared in good faith based upon
reasonable assumptions and represented, at the time each such financial projection or forecast was delivered to the
Purchaser, the Company’s best estimate of future financial performance (it being recognized that such financial
projections or forecasts are not to be viewed as facts and that the actual results during the period or periods covered by
any such financial projections or forecasts may differ from the projected or forecasted results). The Company acknowledges
and agrees that the Purchaser does not make and has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in Section 2.
(ccc) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(ccc). The Company has not issued any
capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock
Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any
right of first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(ccc) or otherwise contemplated by
the Transaction Documents, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable
for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any
Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance
and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other
securities to any Person (other than the Purchaser). Except as contemplated by the Transaction Documents, there are no
outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise,
conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any
Subsidiary. Except as may apply to the Company’s outstanding preferred stock, there are no outstanding securities or
instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a
security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board
of Directors or others is required for the issuance and sale of the Securities. Except as (i) may apply to the
Company’s outstanding preferred stock or (ii) contemplated by or entered into in connection with the Transaction
Documents, there are no stockholders agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders.
3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as
of such date):
(a) Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction
Documents and performance by the Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser.
Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser
in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against
it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(b) Understandings or Arrangements. The Purchaser is acquiring the Securities as principal for its own account and has no direct
or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting the Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.
(c) Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on
each date on which it exercises any Warrants, it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act.
(d) Experience
of the Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Documents and has been afforded, (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of
the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company
and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.
(f) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser
has not, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case that the Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of the Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to the Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement
to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares
issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration
Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or
is not otherwise available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the
Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when
the registration statement is effective again and available for the sale or resale of the Warrant Shares (it being understood
and agreed that the foregoing shall not limit the ability of the Company to issue, or the Purchaser to sell, any of the Warrant
Shares in compliance with applicable federal and state securities laws).
4.2 Furnishing of Information. Until the earliest of the time that (i) the Purchaser does not own any of the Securities or
(ii) the Warrants have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange Act.
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing
of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such
press release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public
information delivered to the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees, Affiliates or agents, in connection with the transactions contemplated by the Transaction Documents. In
addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement entered into in connection with the transaction contemplated
hereby, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees, Affiliates or agents, on the one hand, and the Purchaser or any of its Affiliates on the other hand, shall
terminate and be of no further force or effect. The Company understands and confirms that the Purchaser shall be relying on
the foregoing covenant in effecting transactions in securities of the Company. The Company and the Purchaser shall consult
with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the
Company nor the Purchaser shall issue any such press release nor otherwise make any such public statement without the
prior consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of the
Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of the Purchaser, or include the name of the Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of the Purchaser, except (a) as required by federal
securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchaser with prior
notice of such disclosure permitted under this clause (b) and reasonably cooperate with the Purchaser regarding such
disclosure.
4.5 Stockholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that the Purchaser is an “Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.
4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf will provide the Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto the Purchaser shall have
consented in writing to the receipt of such information and agreed in writing with the Company to keep such information confidential.
The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in
securities of the Company. To the extent that the Company, any of its Subsidiaries, or any of their respective officers, directors,
agents, employees or Affiliates delivers any material, non-public information to the Purchaser without the Purchaser’s consent,
the Company hereby covenants and agrees that the Purchaser shall not have any duty of confidentiality to the Company, any of its
Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents, or a duty to the Company, any of
its Subsidiaries or any of their respective officers, directors, employees, Affiliates or agents, not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that
any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously with the delivery of such notice file such notice with the Commission
pursuant to a Current Report on Form 8-K. The Company understands and confirms that the Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.
4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for the purposes set
forth in the Prospectus Supplement.
4.8 Indemnification of Purchaser. Subject to the provisions of this Section 4.8, the Company will indemnify and hold the Purchaser
and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation
that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action
instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties
or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is
finally judicially determined to constitute fraud, gross negligence or willful misconduct. If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and, the Company shall have the right to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there
is, in the reasonable opinion of counsel a material conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement
by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed;
or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
any of the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.
4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this Agreement. From and after the effective time of the initial
reverse stock split after the date hereof, the Company shall reserve and keep available at all times, free of preemptive rights,
a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Warrant Shares pursuant to any
exercise of the Warrants.
4.10 Listing of Common Stock. The Company hereby agrees to use reasonable best efforts to maintain the listing or quotation
of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall
apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the
Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock
traded on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take
such other commercially reasonable action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted
on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of
the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including,
without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in
connection with such electronic transfer.
4.11 Subsequent Equity Sales.
(a) From
the date hereof until the ninety (90) day anniversary of the Closing Date, neither the Company nor any Subsidiary shall (i) issue,
enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock
Equivalents or (ii) file any registration statement or amendment or supplement thereto, other than the Prospectus Supplement,
a resale registration statement filed in connection with the Company’s merger with DMK Pharmaceuticals, Corp. or filing
a registration statement on Form S-8 in connection with (A) any employee benefit plan or (B) inducement awards.
(b) From the date hereof until the six (6) month anniversary of the Closing Date, the Company shall be prohibited from effecting
or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common
Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading
prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity
securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or
indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a
transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market
offering”, whereby the Company may issue securities at a future determined price regardless of whether shares pursuant
to such agreement have actually been issued and regardless of whether such agreement is subsequently canceled; provided,
however, that “Variable Rate Transaction” shall not include any transaction contemplated by this Agreement. The
Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall
be in addition to any right to collect damages. Notwithstanding the foregoing, the Company’s merger with DMK
Pharmaceuticals, Corp. shall not be a “Variable Rate Transaction.”
(c)
Notwithstanding the foregoing, this Section 4.11 shall not apply (i) in respect of an Exempt Issuance, except that no Variable
Rate Transaction shall be an Exempt Issuance, and (ii) to the Company’s merger with DMK Pharmaceuticals, Corp.
4.12 Certain Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate acting on its behalf
or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s
securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated
by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. The Purchaser
covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant
to the initial press release as described in Section 4.4, the Purchaser will maintain the confidentiality of the existence and
terms of this transaction (other than as disclosed to its legal and other representatives). Notwithstanding the foregoing and
notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) the
Purchaser does not make any representation, warranty or covenant hereby that it will not engage in effecting transactions in any
securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant
to the initial press release as described in Section 4.4, (ii) the Purchaser shall not be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) the Purchaser shall not have any duty of confidentiality or duty not to trade in the securities of the Company
to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates, or agent, after
the issuance of the initial press release as described in Section 4.4. Notwithstanding the foregoing, in the case that the Purchaser
is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s assets
and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of the Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
4.13 Capital
Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock
split or reclassification of the Common Stock without the prior written consent of the Purchaser, other than a reverse stock
split that is required, in the good faith determination of the Board of Directors, to maintain the listing of the
Common Stock on the Trading Market.
4.14 Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures
required of the Purchaser in order to exercise the Warrants. No additional legal opinion, other information or instructions shall
be required of the Purchaser to exercise its Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form
be required in order to exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares
in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
ARTICLE
V.
MISCELLANEOUS
5.1 Termination. This Agreement may be terminated by the Purchaser, as to the Purchaser’s obligations hereunder, by written
notice to the Company, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the
date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach
by any other party (or parties).
5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the
Company and any exercise notice delivered by the Purchaser), stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchaser.
5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus
Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is
delivered via email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or
communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or
a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right. Any amendment effected in accordance with this Section 5.5
shall be binding upon the Purchaser and holder of Securities and the Company.
5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed
to limit or affect any of the provisions hereof.
5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any
Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchaser.”
5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.8 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees
or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of
Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the
prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such Action or Proceeding.
5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
e-mail delivery of a “.pdf” format data file (including any electronic signature covered by the U.S. federal ESIGN
Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com),
such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such “.pdf” signature page were an original thereof.
5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights; provided, however, that, in
the case of a rescission of an exercise of a Warrant, the Purchaser shall be required to return any shares of Common Stock subject
to any such rescinded exercise notice concurrently with the return to the Purchaser of the aggregate exercise price paid to the
Company for such shares and the restoration of the Purchaser’s right to acquire such shares pursuant to the Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.
5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained
in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation
the defense that a remedy at law would be adequate.
5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction
Document or the Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other
Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent Nature of Purchaser’s Obligations and Rights. The Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents.
5.18 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under
the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled.
5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.
5.20 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
5.21 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER
PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
| ADAMIS PHARMACEUTICALS CORPORATION |
|
Address for Notice: |
| |
|
|
|
| By: |
 |
|
|
| |
Name: David J. Marguglio |
|
E-Mail: dmarguglio@adamispharma.com |
| |
Title: Chief Executive Officer |
|
|
| With a copy to (which shall not
constitute notice): |
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO ADMP SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name
of Purchaser: Armistice Capital Master Fund Ltd.
| Signature of Authorized Signatory of Purchaser: |
 |
|
Name
of Authorized Signatory: Steven Boyd
Title
of Authorized Signatory: CIO of Armistice Capital, LLC, the Investment Manager
Email
Address of Authorized Signatory:
sboyd@armisticecapital.com
(w/copy to smiller@armisticecapital.com,
legal@armisticecapital.com)
Address
for Notice to Purchaser:
c/o
Armistice Capital, LLC
510 Madison Avenue, 7th Floor
New York, NY 10022
Address
for Delivery of Warrants to Purchaser (if not same as address for notice):
Armistice
Capital, LLC
Attention:
Andrew Tuminello
510
Madison Avenue, 7th Floor
New
York, NY 10022
Subscription
Amount: $3,000,000
| Shares:
16,500,000 |
|
| |
|
| Pre-Funded
Warrant Shares: 7,500,000 |
|
| |
Beneficial
Ownership Blocker ☐ 4.99% or ☒ 9.99% |
| Warrant
Shares: 48,000,000 |
|
| |
Beneficial
Ownership Blocker ☒ 4.99% or ☐ 9.99% |
| EIN
Number: 98-1058273 |
|
[SIGNATURE
PAGES CONTINUE]
Schedule
3.1(ccc)
(See
attached)
Statement
of Preferred Outstanding and Common Outstanding and Reserved
| | |
Preferred | | |
Common | | |
Common | | |
Exercise Price | | |
Expiry Date |
| | |
Shares | | |
Shares | | |
Shares | | |
or Weighted | | |
or Weighted |
| | |
Outstanding | | |
Outstanding | | |
Reserved | | |
Avg Price | | |
Avg Expiry |
| Preferred Shares | |
| | |
| | |
| | |
| | |
|
| Series C Convertible Preferred | |
| 3,000 | | |
| | | |
| 697,674 | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
| | | |
|
| Common Shares | |
| | | |
| | | |
| | | |
| | | |
|
| Total Outstanding Common Shares | |
| | | |
| 149,983,265 | | |
| | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
| | | |
|
| Employee Options and RSUs | |
| | | |
| | | |
| | | |
| | | |
|
| Equity Incentive Plan Options | |
| | | |
| | | |
| 4,306,362 | | |
$ | 4.21 | | |
8/16/2025 |
| Non-Plan Options | |
| | | |
| | | |
| 130,000 | | |
$ | 0.62 | | |
2/13/2032 |
| RSUs | |
| | | |
| | | |
| 650,000 | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
| | | |
|
| Warrant Shares | |
| | | |
| | | |
| | | |
| | | |
|
| Old Adamis Warrants | |
| | | |
| | | |
| 58,824 | | |
$ | 8.50 | | |
11/15/2023 |
| 2019 Warrants | |
| | | |
| | | |
| 13,794,000 | | |
$ | 1.15 | | |
8/5/2024 |
| 2020 Warrants | |
| | | |
| | | |
| 350,000 | | |
$ | 0.70 | | |
9/3/2025 |
| 2022 Warrants | |
| | | |
| | | |
| 750,000 | | |
$ | 0.47 | | |
1/5/2028 |
| | |
| | | |
| | | |
| | | |
| | | |
|
| Preferred Shares Outstanding | |
| 3,000 | | |
| | | |
| | | |
| | | |
|
| Common Shares Outstanding | |
| | | |
| 149,983,265 | | |
| | | |
| | | |
|
| Common Shares Reserved | |
| | | |
| | | |
| 20,736,860 | | |
| | | |
|
| Fully Diluted Shares | |
| | | |
| | | |
| 170,720,125 | | |
| | | |
|
EXHIBIT
A
Form
of Common Stock Warrant
(See
attached)
FORM
OF WARRANT
THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 1(a) OF THIS WARRANT.
Adamis
Pharmaceuticals Corporation
Warrant
To Purchase Common Stock
Warrant
No.:
Date
of Issuance: March [ ], 2023 (“Issuance Date”)
Adamis
Pharmaceuticals Corporation, a Delaware corporation (the “Company”), hereby certifies that, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, [BUYER], 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, upon exercise of this Warrant to Purchase Common Stock (including any Warrants
to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or
times on or after the six month and one day anniversary of the Issuance Date (the “Initial Exercisability Date”),
but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 48,000,000 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”, and
such number of Warrant Shares, the “Warrant Number”). Except as otherwise defined herein, capitalized terms
in this Warrant shall have the meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Stock
(the “Registered Warrants”) issued pursuant to (i) that certain Securities Purchase Agreement, dated as of
March 14, 2023 (the “Subscription Date”), by and among the Company and the investors (the “Buyers”)
referred to therein, as amended from time to time (the “Securities Purchase Agreement”) and (ii) the Company’s
Registration Statement on Form S-3 (File number 333-267365) (together with such other registration statement as may cover the
issuance or resale of the Warrant Shares issuable hereunder, 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 on any day on or after the Initial Exercisability Date (an “Exercise
Date”), in whole or in part, by delivery (whether via 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 an exercise of this Warrant as aforesaid, the Holder shall deliver 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 was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless Exercise (as defined in Section 1(d)) or qualify for a Cashless Exercise pursuant to Section 1(d). The Holder shall
not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution
and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of
the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first
(1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit
by electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit
B, to the Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation
shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On
or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant
Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent is participating in
The Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock 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 Program, upon the request of the Holder, issue and deliver
(via reputable 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 shares of Common Stock to which the Holder shall be entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date 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 submitted 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 and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall
as soon as practicable and in no event later than two (2) Business 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 purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay
a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 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) that may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made
pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the later
of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the
1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable
Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice
of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach of
this Warrant. From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that
participates in FAST.
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.138, subject to adjustment as
provided herein.
(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or
prior to the applicable Share Delivery Date, if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder
(or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares
on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the
Holder or the Holder’s designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s
exercise of this Warrant (as the case may be) (a “Delivery Failure”), and if on or after such Share Delivery
Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all
or any portion of the number of Warrant Shares issuable upon such exercise that the Holder is entitled to receive from the Company
and has not received from the Company in connection with such Delivery Failure (a “Buy-In”), then, in addition
to all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of 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, stock loan costs and other reasonable out-of-pocket expenses, if any) for the
shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder)
(the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such Warrant Shares) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case
may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the
Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s
designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) 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 Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment
under this clause (ii) (the “Buy-In Payment Amount”). 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 FAST. In addition to the foregoing,
if the Company fails for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the second Trading
Day following the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty,
for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable
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 the second Trading Day following such Share Delivery Date until such Warrant Shares
are delivered or Holder rescinds such exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the
time of exercise hereof the Registration Statement is not effective (or the prospectus contained therein is not available for
use) for the issuance of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise required 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 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 this Warrant is then being exercised.
B
= as elected by the Holder: (i) the VWAP of the shares of 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 VWAP on the Trading Day immediately preceding the
date of the applicable Exercise Notice or (z) the Bid Price of the shares of 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 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
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the 1933 Act, 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 Subscription Date, it is intended that the Warrant Shares issued in
a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement. For the
avoidance of doubt, (i) at any time that a Registration Statement is effective (and the prospectus contained therein is available
for use) for the issuance of the Warrant Shares, this Warrant may only be exercised for cash and (ii) under no circumstances shall
the Company be required to settle any Cashless Exercise of this Warrant by cash payment or to otherwise “net cash settle”
this Warrant.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number
of Warrant Shares to be issued pursuant to the terms hereof, 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 15.
(f)
Limitations on Exercises. 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 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 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 other Registered 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)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes
of 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, Current Report on Form 8-K or other
public filing with 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, if any, 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 acquired 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 shares 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
(with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% 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 Registered 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)(i) 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)(i) 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) | Reservation
of Shares. |
(i)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times from and after the
effective time of the initial reverse stock split after the date hereof reserve at least 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 Registered
Warrants then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”).
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 Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered
Warrants held by each holder on the Closing Date (without regard to any limitations on exercise) or increase in the number of
reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell
or otherwise transfer any of such holder’s Registered 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 Registered Warrants shall be allocated to the remaining holders of Registered Warrants, pro rata based on the number
of shares of Common Stock issuable upon exercise of the Registered Warrants then held by such holders (without regard to any limitations
on exercise).
(ii)
Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while
any of the Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall, as soon as practicable, 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 all the Registered
Warrants then outstanding (and/or effect a reverse stock split to allow the Company to reserve the Required Reserve Amount for
the Registered 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 and/or a reverse stock split. 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/or reverse stock split 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 and/or reverse stock split, the Company may satisfy
this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. At
any time after the fifth (5t h) Trading Day after the Stockholder Meeting Deadline (as defined in the Securities Purchase
Agreement), in the event that the Holder submits an Exercise Notice pursuant to Section 1, and the Company is prohibited from
issuing all shares of Common Stock subject to such Exercise Notice due to the failure by the Company to have sufficient shares
of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common
Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the
Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization
Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable
Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment
under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount,
brokerage commissions and other reasonable out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing
contained in this Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
| 2. | ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of
this Warrant are subject to adjustment from time to time as set forth in this Section 2. |
(a)
Stock Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on or
after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock
into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its
then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and
of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment
made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph
shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise
Price shall be adjusted appropriately to reflect such event.
(b)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same
as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).
(c)
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or
sale of Common Stock.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the
Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders
of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash,
stock or other securities, property, 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of
Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of
such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, 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 Sections 2 or 3 above, if at any time 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 shares 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess)
and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever,
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 held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined
in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in
form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements
to deliver to the Holder in exchange for 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) and (ii) the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. 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 publicly traded common
stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had 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) 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). Provision made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder.
(c)
Change of Control Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of
the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of the consummation of any Change
of Control, (y) the consummation of any Change of Control and (z) the Holder first becoming aware of the consummation of any Change
of Control through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control
by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may
be) shall purchase this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to
the Black Scholes Value. Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder
on or prior to the later of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation
of such Change of Control. For the avoidance of doubt, the Holder’s redemption right contemplated by this Section 4(c) is
contingent upon the actual closing of the Change of Control.
(d)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) 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 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 (a) 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, and (b) shall take
all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant.
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this 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 be construed to confer upon the Holder, solely in its 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 it 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 (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form 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; provided, however, no warrants
for fractional shares of Common Stock shall be given.
(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, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the
terms hereof), 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 each adjustment of the Exercise Price
and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (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, or (B) 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, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities
Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public
information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive
such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood
and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company.
9. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) 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,
non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public
information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing
in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written
indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall
be entitled to presume that information contained in the notice does not constitute material, non-public information relating
to the Company or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company, or
any rights of the Holder, under Section 4.4 of the Securities Purchase Agreement.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of
the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the
Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure
agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the
absence of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any
securities issued by the Company, may possess and use any information provided by the Company in connection with such trading
activity, and may disclose any such information to any third party.
11. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended 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. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.
12. SEVERABILITY.
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).
13. GOVERNING
LAW. 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
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 9(f) of the Securities Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. 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. 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.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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.
14. CONSTRUCTION;
HEADINGS. 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. Terms used in this Warrant but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction
Documents unless otherwise consented to in writing by the Holder.
| (a) | Submission
to Dispute Resolution. |
(i)
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic
calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination
of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic
mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute
or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder
and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid
Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time
after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent,
reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute
Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of
the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required
Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline.
The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution
of such dispute shall be final and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501,
et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for
an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) he terms
of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s
resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all
findings, determinations and the like that such investment bank determines are required to be made by such investment bank in
connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations
and the like to the terms of this Warrant and any other applicable Transaction Documents, (iii) the Holder (and only the Holder),
in its sole discretion, shall have the right to submit any dispute described in this Section 15 to any state or federal court
sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 15 and (iv)
nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including,
without limitation, with respect to any matters described in this Section 15).
16.
REMEDIES, CHARACTERIZATION, 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 the 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 and consequential damages for any failure by the Company to comply with the terms of this Warrant.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). 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 specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and
without posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby
upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs
in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
17. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts due under this
Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company
or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company shall
pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
18. TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise
be required by Section 2(g) of the Securities Purchase Agreement.
| 19. | CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following
meanings: |
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“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.
(d)
“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.
(e)
“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 Open
Market (or a similar organization or agency succeeding to its functions of reporting prices) 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 15. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during such period.
(f)
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest
Closing Sale Price of the Ordinary Shares during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Change of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading
Day of the Holder’s request pursuant to Section 4(c)(i) and (2) the sum of the price per share being offered in cash in
the applicable Change of Control (if any) plus the value of the non-cash consideration being offered in the applicable Change
of Control (if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant
to Section 4(c)(i), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater
of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c)(i) and (2) the
remaining term of this Warrant as of the date of consummation of the applicable Change of Control or as of the date of the Holder’s
request pursuant to Section 4(c)(i) if such request is prior to the date of the consummation of the applicable Change of Control,
(iv) a zero cost of borrow, (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the
“HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately
following the earliest to occur of (A) the public disclosure of the applicable Change of Control, (B) the consummation of the
applicable Change of Control and (C) the date on which the Holder first became aware of the applicable Change of Control and (vi)
a remaining option time equal to the time between the date of the public announcement of the applicable Change of Control and
the Termination Date.
(g)
“Bloomberg” means Bloomberg, L.P.
(h)
“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; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers)
of commercial banks in The City of New York generally are open for use by customers on such day.
(i)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of a majority of the Company’s voting power immediately
prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification
to hold a majority 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, (iii) a migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company or any of its Subsidiaries, (iv) with respect to all Strategic Transactions in any given six month
rolling period, the holders of the voting power of the Company (or 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))
prior to any such Strategic Transaction in such six month period are, in all material respects, the holders of at least 50.1%
of the voting power of the Company (or 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 all Strategic Transactions
in such six month period, or (v) the Company’s merger with DMK Pharmaceuticals, Corp. Notwithstanding the foregoing, any
Strategic Transaction that results in the Common Stock (or other security) into which this Warrant is then exercisable to both
fail to be (x) registered under the 1934 Act and (y) listed on an Eligible Market shall be a Change of Control hereunder.
(j)
“Closing Sale Price” means, for any security as of any date, the last closing trade price 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 trade price, then the last trade price 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 trade price 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 does not apply, the last trade price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for
such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in The Pink Open
Market (or a similar organization or agency succeeding to its functions of reporting prices). If the Closing Sale Price cannot
be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale 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 in accordance with the procedures in
Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.
(k)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.
(l)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under
any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the
holder thereof to acquire, any shares of Common Stock.
(m)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(n)
“Expiration Date” means the date that is the five (5) year and six (6) month anniversary of the Issuance Date
or, if such date falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date 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 another Subject Entity, following
which consolidation or merger, the Company is not the surviving 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 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 or share 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 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 Common Stock, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant 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 shareholders of the Company
to surrender their shares of Common Stock without approval of the shareholders 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. Notwithstanding the foregoing, the Company’s merger with DMK Pharmaceuticals,
Corp. shall not be a “Fundamental Transaction,” nor shall it be included in combination with other future transaction
to be counted in contemplation of a Fundamental Transaction as defined herein.
(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)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(s)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(t)
“Principal Market” means the Nasdaq Capital Market.
(u)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(v)
“Strategic Transaction” means a bona fide strategic or commercial acquisition, merger, licensing arrangement,
or strategic partnership.
(w)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(x)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.
(y)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, 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, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price or trading volume
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.
(z)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30
start time and 16:00 end time) 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 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing
bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
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 15. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction during such 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.
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ADAMIS PHARMACEUTICALS CORPORATION |
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By: |
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Name: |
David J. Marguglio |
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Title: |
Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS
WARRANT TO PURCHASE COMMON STOCK
ADAMIS PHARMACEUTICALS CORPORATION
The undersigned holder
hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Adamis Pharmaceuticals
Corporation, a Delaware corporation (the “Company”) as specified below. 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 Aggregate Exercise Price
shall be made as: |
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares (which
shall only be available to the Holder to the extent that a Registration Statement is not then effective for the issuance of the
Warrant Shares). |
In the event that
the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the
Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
For the avoidance of doubt, at any time that a Registration Statement is effective (and the prospectus contained therein is available
for use) for the issuance of the Warrant Shares, this Warrant may only be exercised for cash.
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 (or the Holder is not eligible for a Cashless Exercise pursuant to the terms of the Warrant), the Holder shall
pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
3. Maximum Percentage
Representation. Notwithstanding anything to the contrary contained herein, this Exercise Notice shall constitute a representation
by the Holder of the Warrant submitting this Exercise Notice that after giving effect to the exercise provided for in this Exercise
Notice, such Holder (together with its affiliates) will not have beneficial ownership (together with the beneficial ownership of
such Person’s affiliates) of a number of shares of Common Stock which exceeds the Maximum Percentage (as defined in the Warrant)
of the total outstanding shares of Common Stock of the Company as determined pursuant to the provisions of Section 1(f) of the
Warrant.
4. Delivery of
Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common
Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate
to the following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
| DTC Participant: | |
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| | DTC Number: | |
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| | Account Number: | |
Date:
_____________
__,
Name of Registered Holder
| By: | | |
| | Name: | |
| | Title: | |
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| | Tax ID:____________________________ |
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| | E-mail Address:_____________________ |
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EXHIBIT B
ACKNOWLEDGMENT
The Company hereby
acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
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ADAMIS PHARMACEUTICALS CORPORATION |
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By: |
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Name: |
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Title: |
EXHIBIT B
Form of Prefunded Warrant
(See attached)
FORM OF PREFUNDED WARRANT
THE NUMBER OF SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF THIS
WARRANT.
Adamis Pharmaceuticals
Corporation
Prefunded Warrant
To Purchase Common Stock
Warrant No.:
Date of Issuance: March [ ], 2023 (“Issuance Date”)
Adamis Pharmaceuticals
Corporation, a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, [BUYER], 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, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or
after the Issuance Date (the “Initial Exercisability Date”), but not after 11:59 p.m., New York time, on the
Expiration Date (as defined below), 7,500,000 (subject to adjustment as provided herein) fully paid and non-assessable shares of
Common Stock (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant
Number”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 19. This Warrant is one of the Warrants to Purchase Common Stock (the “Registered Warrants”) issued
pursuant to (i) that certain Securities Purchase Agreement, dated as of March 14, 2023 (the “Subscription Date”),
by and among the Company and the investors (the “Buyers”) referred to therein, as amended from time to time
(the “Securities Purchase Agreement”) and (ii) the Company’s Registration Statement on Form S-3 (File
number 333-267365) (together with such other registration statement as may cover the issuance or resale of the Warrant Shares issuable
hereunder, 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 on any day on or after the Initial Exercisability Date (an “Exercise
Date”), in whole or in part, by delivery (whether via 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 an exercise of this Warrant as aforesaid, the Holder shall deliver 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 was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless Exercise (as defined in Section 1(d)) or qualify for a Cashless Exercise pursuant to Section 1(d). The Holder shall
not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution
and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of
the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first
(1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit
by electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit
B, to the Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation
shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On
or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant
Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent is participating in
The Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock 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 Program, upon the request of the Holder, issue and deliver
(via reputable 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 shares of Common Stock to which the Holder shall be entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date 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 submitted 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 and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall
as soon as practicable and in no event later than two (2) Business 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 purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay
a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 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) that may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made
pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the later
of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the
1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable
Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice
of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach of
this Warrant. From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that
participates in FAST.
(b) Exercise Price.
The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded
to the Company on or prior to the Initial Exercisability Date and, consequently, no additional consideration (other than the nominal
exercise price of $0.0001 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 Warrant Share under this Warrant shall be $0.0001, subject to
adjustment hereunder (the “Exercise Price”).
(c) Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or prior to the applicable
Share Delivery Date, if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a
certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company’s
share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s
designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant
(as the case may be) (a “Delivery Failure”), and if on or after such Share Delivery Date the Holder acquires
(in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion of the number
of Warrant Shares issuable upon such exercise that the Holder is entitled to receive from the Company and has not received from
the Company in connection with such Delivery Failure (a “Buy-In”), then, in addition to all other remedies available
to the Holder, the Company shall, within two (2) Business Days after receipt of 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, stock loan costs and other reasonable out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including,
without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which
point the Company’s obligation to so issue and deliver such certificate (and to issue such Warrant Shares) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which
the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall
terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing
such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the
number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) 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 Warrant
Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In
Payment Amount”). 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 FAST. In addition to the foregoing, if the Company fails for any reason to deliver to
the Holder the Warrant Shares subject to an Exercise Notice by the second Trading Day following the Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable 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 the second
Trading Day following such Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
(d) Cashless Exercise.
Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of exercise hereof the
Registration Statement is not effective (or the prospectus contained therein is not available for use) for the issuance of all
of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise required 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 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
this Warrant is then being exercised.
B = as elected by the Holder:
(i) the VWAP of the shares of 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 VWAP on the Trading Day immediately preceding the date of the applicable Exercise
Notice or (z) the Bid Price of the shares of 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 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 the Warrant Shares
are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, 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 Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise
shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement. For the avoidance of doubt, (i) at
any time that a Registration Statement is effective (and the prospectus contained therein is available for use) for the issuance
of the Warrant Shares, this Warrant may only be exercised for cash and (ii) under no circumstances shall the Company be required
to settle any Cashless Exercise of this Warrant by cash payment or to otherwise “net cash settle” this Warrant.
(e) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof, 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 15.
(f) Limitations
on Exercises. 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 9.99% (the “Maximum Percentage”)
of the 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 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 other Registered 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)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes
of 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, Current Report on Form 8-K or other
public filing with 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, if any, 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 acquired 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 shares 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
(with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% 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 Registered 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)(i) 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)(i) 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) Reservation of Shares.
(i) Required Reserve
Amount. So long as this Warrant remains outstanding, the Company shall at all times from and after the effective time of the
initial reverse stock split after the date hereof reserve at least 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 Registered Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”). 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 Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered Warrants held by each
holder on the Closing Date (without regard to any limitations on exercise) or increase in the number of reserved shares, as the
case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise transfer
any of such holder’s Registered 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 Registered Warrants
shall be allocated to the remaining holders of Registered Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Registered Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any of the
Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common
Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then
the Company shall, as soon as practicable, 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 all the Registered Warrants
then outstanding (and/or effect a reverse stock split to allow the Company to reserve the Required Reserve Amount for the Registered
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 and/or a reverse stock split. 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/or reverse stock split 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 and/or reverse stock split, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. At any time after the
fifth (5th) Trading Day after the Stockholder Meeting Deadline (as defined in the Securities Purchase Agreement),
in the event that the Holder submits an Exercise Notice pursuant to Section 1, and the Company is prohibited from issuing all
shares of Common Stock subject to such Exercise Notice due to the failure by the Company to have sufficient shares of Common Stock
available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization
Failure Shares”), in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash
in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization Failure Shares at a price
equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price
of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Exercise Notice
with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment under this
Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage commissions
and other reasonable out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
2. ADJUSTMENT OF EXERCISE PRICE AND
NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject
to adjustment from time to time as set forth in this Section 2.
(a) Stock Dividends
and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on or after the Subscription
Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date
of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an
Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.
(b) Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(c) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property, 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of
such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, 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 Sections 2 or 3 above, if at any time 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 shares 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, 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 held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities
Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance
satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to
the Holder in exchange for 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) and (ii) the Successor Entity (including its Parent Entity) is a publicly
traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been
named as the Company herein. 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 publicly traded common stock (or its equivalent) of the
Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had 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) 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). Provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(c) Change of Control
Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder delivered
at any time commencing on the earliest to occur of (x) the public disclosure of the consummation of any Change of Control, (y)
the consummation of any Change of Control and (z) the Holder first becoming aware of the consummation of any Change of Control
through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control by the Company
pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase
this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes
Value. Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to
the later of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such
Change of Control. For the avoidance of doubt, the Holder’s redemption right contemplated by this Section 4(c) is contingent
upon the actual closing of the Change of Control.
(d) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage,
applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of
this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company
hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined in the Securities
Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) 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 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 (a) 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, and (b) shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon
the exercise of this Warrant.
6. WARRANT HOLDER
NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder
of this 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 be construed to confer upon the Holder, solely in its 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 it 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 (as to which a written certification and the indemnification contemplated below shall suffice as
such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form 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; provided, however, no warrants for fractional
shares of Common Stock shall be given.
(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, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the
terms hereof), 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 each adjustment of the Exercise Price
and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (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, or (B) 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, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities
Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public
information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive
such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood
and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company.
9. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) 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,
non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city
time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public
information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing
in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication
in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled
to presume that information contained in the notice does not constitute material, non-public information relating to the Company
or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company, or any rights of the
Holder, under Section 4.4 of the Securities Purchase Agreement.
10. ABSENCE OF
TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the
Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of
such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities
issued by the Company, may possess and use any information provided by the Company in connection with such trading activity, and
may disclose any such information to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may
be amended 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. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.
12. SEVERABILITY.
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).
13. GOVERNING
LAW. 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
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 9(f) of the Securities Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. 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. 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.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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.
14. CONSTRUCTION; HEADINGS. 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. Terms used in this Warrant but defined in the other Transaction Documents shall have the
meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other
Transaction Documents unless otherwise consented to in writing by the Holder.
15. DISPUTE
RESOLUTION.
(a)
Submission to Dispute Resolution.
(i) In the case of
a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic calculation
of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of
any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic
mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute
or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder
and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid
Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time
after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent,
reputable investment bank to resolve such dispute.
(ii) The Holder and
the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date
on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred
to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation
by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer
be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment
bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation
that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled
to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other
than the Required Dispute Documentation).
(iii) The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such
dispute shall be final and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New
York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel
arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) he terms of this Warrant and
each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the
applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations
and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution
of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the
terms of this Warrant and any other applicable Transaction Documents, (iii) the Holder (and only the Holder), in its sole discretion,
shall have the right to submit any dispute described in this Section 15 to any state or federal court sitting in The City of New
York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 15 and (iv) nothing in this Section 15
shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect
to any matters described in this Section 15).
16. REMEDIES, CHARACTERIZATION,
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 the 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
and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the
Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set
forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). 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 specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court
of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other
security. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the
Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation,
compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise
of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
17. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or
enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts
due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization,
receivership of the company or other proceedings affecting company creditors’ rights and involving a claim under this
Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in
connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation,
attorneys’ fees and disbursements.
18.
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except
as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.
19. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“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.
(d) “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.
(e) “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 Open Market (or a similar organization
or agency succeeding to its functions of reporting prices) 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 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.
(f) “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s
request pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of
the Ordinary Shares during the period beginning on the Trading Day immediately preceding the announcement of the applicable Change
of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading Day of the Holder’s
request pursuant to Section 4(c)(i) and (2) the sum of the price per share being offered in cash in the applicable Change of Control
(if any) plus the value of the non-cash consideration being offered in the applicable Change of Control (if any), (ii) a strike
price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c)(i), (iii) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant
as of the date of the Holder’s request pursuant to Section 4(c)(i) and (2) the remaining term of this Warrant as of the date
of consummation of the applicable Change of Control or as of the date of the Holder’s request pursuant to Section 4(c)(i)
if such request is prior to the date of the consummation of the applicable Change of Control, (iv) a zero cost of borrow, (v) an
expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg
(determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (A)
the public disclosure of the applicable Change of Control, (B) the consummation of the applicable Change of Control and (C) the
date on which the Holder first became aware of the applicable Change of Control and (vi) a remaining option time equal to the time
between the date of the public announcement of the applicable Change of Control and the Termination Date.
(g)
“Bloomberg” means Bloomberg, L.P.
(h) “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; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New
York generally are open for use by customers on such day.
(i) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect,
wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of a majority of the Company’s voting power immediately prior to such reorganization,
recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold a majority
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, (iii) a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of
the Company or any of its Subsidiaries, (iv) with respect to all Strategic Transactions in any given six month rolling period,
the holders of the voting power of the Company (or 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)) prior to any
such Strategic Transaction in such six month period are, in all material respects, the holders of at least 50.1% of the voting
power of the Company (or 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 all Strategic Transactions in
such six month period, or (v) the Company’s merger with DMK Pharmaceuticals, Corp. Notwithstanding the foregoing, any Strategic
Transaction that results in the Common Stock (or other security) into which this Warrant is then exercisable to both fail to be
(x) registered under the 1934 Act and (y) listed on an Eligible Market shall be a Change of Control hereunder.
(j) “Closing
Sale Price” means, for any security as of any date, the last closing trade price 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
trade price, then the last trade price 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 trade price 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 does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). If the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Sale 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 in accordance with the procedures in Section 15. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(k) “Common
Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(l) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.
(m) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market,
the Nasdaq Capital Market or the Principal Market.
(n) “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date 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 another Subject Entity, following which
consolidation or merger, the Company is not the surviving 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 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 or share 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 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 Common Stock, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant 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 shareholders of the Company
to surrender their shares of Common Stock without approval of the shareholders 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. Notwithstanding the foregoing, the Company’s merger with DMK Pharmaceuticals,
Corp. shall not be a “Fundamental Transaction,” nor shall it be included in combination with other future transaction
to be counted in contemplation of a Fundamental Transaction as defined herein.
(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)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(s) “Person” means an
individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(t)
“Principal Market” means the Nasdaq Capital Market.
(u)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(v)
“Strategic Transaction” means a bona fide strategic or commercial acquisition, merger, licensing arrangement,
or strategic partnership.
(w)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(x)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.
(y) “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock,
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,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on
such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day
in writing by the Holder or (y) with respect to all determinations other than price or trading volume determinations relating to
the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(z) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m.,
New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) 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 a.m., New York time, and ending at 4:00 p.m., New
York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg
for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such
security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices).
If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such
date shall be the fair market value as mutually determined by the Company and the Holder. 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 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such 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.
| |
ADAMIS PHARMACEUTICALS CORPORATION |
| |
|
|
| |
By: |
|
| |
|
Name: David J. Marguglio |
| |
|
Title: Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS
WARRANT TO PURCHASE COMMON STOCK
ADAMIS PHARMACEUTICALS CORPORATION
The undersigned holder
hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Adamis Pharmaceuticals
Corporation, a Delaware corporation (the “Company”) as specified below. 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 Aggregate Exercise Price shall be made as:
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares (which
shall only be available to the Holder to the extent that a Registration Statement is not then effective for the issuance of the
Warrant Shares). |
In the event that
the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the
Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
For the avoidance of doubt, at any time that a Registration Statement is effective (and the prospectus contained therein is available
for use) for the issuance of the Warrant Shares, this Warrant may only be exercised for cash.
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 (or the Holder is not eligible for a Cashless Exercise pursuant to the terms of the Warrant), the Holder shall
pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
3. Maximum Percentage
Representation. Notwithstanding anything to the contrary contained herein, this Exercise Notice shall constitute a representation
by the Holder of the Warrant submitting this Exercise Notice that after giving effect to the exercise provided for in this Exercise
Notice, such Holder (together with its affiliates) will not have beneficial ownership (together with the beneficial ownership of
such Person’s affiliates) of a number of shares of Common Stock which exceeds the Maximum Percentage (as defined in the Warrant)
of the total outstanding shares of Common Stock of the Company as determined pursuant to the provisions of Section 1(f) of the
Warrant.
4. Delivery of Warrant Shares. The
Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock in accordance with
the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate
to the following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
| DTC Participant: | |
| | | |
| | DTC Number: | |
| | | |
| | Account Number: | |
Date:
_____________ __, __________
Name of Registered Holder
| By: | | |
| | Name: | |
| | Title: | |
| | | |
| | Tax ID:____________________________ |
| | | |
| | E-mail Address:_____________________ |
| | | |
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby
acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
| |
ADAMIS PHARMACEUTICALS CORPORATION |
| |
|
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
EXHIBIT C
Company Counsel Legal Opinion
(See attached)
March [•], 2023
The Purchasers signatory to the Purchase Agreement
[•]
[•]
[•]
12670 High Bluff Drive
San Diego, California 92130
Tel: +1.858.523.5400 Fax: +1.858.523.5450
www.lw.com
| FIRM / AFFILIATE OFFICES |
| Austin |
Milan |
| Beijing |
Munich |
| Boston |
New York |
| Brussels |
Orange County |
| Century City |
Paris |
| Chicago |
Riyadh |
| Dubai |
San Diego |
| Düsseldorf |
San Francisco |
| Frankfurt |
Seoul |
| Hamburg |
Shanghai |
| Hong Kong |
Silicon Valley |
| Houston |
Singapore |
| London |
Tel Aviv |
| Los Angeles |
Tokyo |
| Madrid |
Washington, D.C. |
Re: Adamis Pharmaceuticals Corporation
To the addressees set forth above:
We have acted as
special counsel to Adamis Pharmaceuticals Corporation, a Delaware corporation (the “Company”), in connection
with the sale to the Purchasers (as defined below) by the Company of (i) 16,500,000 shares (the “Shares”)
of common stock of the Company, par value $0.0001 per share (“Common Stock”), (ii) warrants to purchase
up to 48,000,000 shares of Common Stock (the “Common Stock Warrants”), and (iii) prefunded warrants
to purchase up to 7,500,000 shares of Common Stock (the “Prefunded Warrants” and, collectively with
the Common Stock Warrants, the “Warrants”) pursuant to a securities purchase agreement dated March
14, 2023 (the “Purchase Agreement”), by and between the Company and the purchasers signatory thereto
(the “Purchasers”), a registration statement on Form S-3 under the Securities Act of 1933, as amended
(the “Act”), filed with the Securities and Exchange Commission (the “Commission”)
on September 9, 2022 (Registration No. 333-267365) (as so filed, the “Registration Statement”), a base
prospectus dated September 19, 2022 (the “Base Prospectus”) and a prospectus supplement dated March
14, 2023 filed with the Commission pursuant to Rule 424(b) under the Act (together with the Base Prospectus, the “Prospectus”).
The reports and proxy and registration statements filed by the Company with the Commission and, incorporated by reference in the
Registration Statement and the Prospectus, are herein called the “Incorporated Documents.” References
herein to the Registration Statement or the Prospectus exclude the Incorporated Documents. This letter is being delivered to you
pursuant to Section 2.2(a)(ii) of the Purchase Agreement.
As such counsel,
we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter, except
where a specified fact confirmation procedure is stated to have been performed (in which case we have with your consent performed
the stated procedure). We have examined, among other things, the following:
1. the Purchase
Agreement, the Registration Statement, the Prospectus and the Incorporated Documents;
March [•], 2023
Page 2
2.
the form of Warrant to be issued pursuant to the Purchase Agreement;
3. the agreements furnished and identified to us by an officer of the Company as material to the Company and listed in Exhibit
A hereto (the “Specified Agreements”); and
4. the Restated Certificate of Incorporation (the “Certificate of Incorporation”) and the Amended and Restated
Bylaws of the Company (together with the Certificate of Incorporation, the “Governing Documents”) and
certain resolutions of the Board of Directors of the Company.
Except as otherwise
stated herein, as to factual matters we have, with your consent, relied upon the foregoing and upon oral and written statements
and representations of officers and other representatives of the Company and others, including the representations and warranties
of the Company in the Purchase Agreement, and an officer’s certificate as to the Company’s investments in securities
and other matters related to our opinion in paragraph 10 of this letter. We have not independently verified such factual matters.
In our examination,
we have assumed the genuineness of all signatures, including any endorsements, the legal capacity and competency of all natural
persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents
submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies.
We have further assumed that there are no agreements or understandings among the parties, written or oral, and there is no usage
of trade or prior course of dealing among the parties that would, in either case, define, supplement, modify or qualify the terms
of the Purchase Agreement, the Warrants or the rights of the parties thereunder.
We are opining
as to the effect on the subject transaction only of the federal laws of the United States, the internal laws of the State of New
York, and in paragraphs 1, 2, 3, 4, 5, 6(i), 6(iii) and 6(iv) of this letter, the Delaware General Corporation Law (the “DGCL”),
and we express no opinion with respect to the applicability to the opinions expressed herein, or the effect thereon, of the laws
of any other jurisdiction or, in the case of Delaware, any other laws, or as to any matters of municipal law or the laws of any
local agencies within any state.
Except as
otherwise stated herein, our opinions herein are based upon our consideration of only those statutes, rules and regulations which,
in our experience, are normally applicable to registered offerings of common stock and warrants. We express no opinion as to any
state or federal laws or regulations applicable to the subject transactions because of the legal or regulatory status of any parties
to the Purchase Agreement or the legal or regulatory status of any of their affiliates.
Subject to the foregoing and the other matters set
forth herein, as of the date hereof:
1. The Company is a corporation
under the DGCL with corporate power and authority to own and lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus. With your consent, based solely on certificates from public officials, we confirm that the Company is validly
existing and in good standing under the laws of the State of Delaware.
March [•], 2023
Page 3
2. The Shares to be issued and sold by the Company pursuant to the Purchase Agreement have been duly authorized by all necessary corporate
action of the Company and, when the Shares have been duly registered on the books of the transfer agent and registrar on behalf
of the Purchasers and issued to and paid for by the Purchasers in accordance with the terms of the Purchase Agreement, will be
validly issued, fully paid and nonassessable and free of pre-emptive rights arising from the Governing Documents.
3. The execution, delivery and performance of the Warrants have been duly authorized by all necessary corporate action of the Company.
When the Warrants have been executed and issued by the Company and delivered and paid for by the Purchasers in accordance with
the terms of the Purchase Agreement, the Warrants will be the legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
4. The 7,500,000 shares of Common Stock issuable upon exercise of the Prefunded Warrants (the “Warrant Shares”)
pursuant to the Purchase Agreement have been duly authorized and validly reserved by all necessary corporate action of the Company.
Assuming issuance of the Warrant Shares upon the exercise of the Prefunded Warrants on the date hereof against payment therefor
(in an amount no less than par value) in accordance with the terms of the Prefunded Warrants and due registration of such Warrant
Shares on the books of the transfer agent and registrar therefor in the name of or on behalf of the applicable holder, the Warrant
Shares would be validly issued, fully paid and nonassessable and free of pre-emptive rights arising from the Governing Documents.
5. The execution, delivery and performance of the Purchase Agreement has been duly authorized by all necessary corporate action of
the Company, and the Purchase Agreement has been duly executed and delivered by the Company.
6. The execution and delivery of the Purchase Agreement and the issuance and sale of the Shares and the Warrants by the Company to
the Purchasers pursuant to the Purchase Agreement do not on the date hereof:
A.
violate the provisions of the Governing Documents;
B.
result in the breach of or a default under any of the Specified Agreements;
C. violate any federal or New York statute, rule or regulation applicable to the Company or violate the DGCL; or
D. require any consents, approvals, or authorizations to be obtained by the Company from, or any registrations, declarations or
filings to be made by the Company with, any governmental authority under any federal or New York statute, rule or regulation applicable
to the Company or the DGCL on or prior to the date hereof that have not been obtained or made.
March [•], 2023
Page 4
7. The Registration Statement has become effective under the Act. With your consent, based solely on a review of a list of stop orders
on the Commission’s website at http://www.sec.gov/litigation/stoporders.shtml, we confirm that no stop order suspending the
effectiveness of the Registration Statement has been issued under the Act and no proceedings therefor have been initiated by the
Commission. The Prospectus has been filed in accordance with Rule 424(b) and 430B under the Act.
8. The Registration Statement at [•], 2023, including the information deemed to be a part thereof pursuant to Rule 430B under
the Act, and the Prospectus, as of its date, each appeared on their face to be appropriately responsive in all material respects
to the applicable form requirements for registration statements on Form S-3 under the Act and the rules and regulations of the
Commission thereunder; it being understood, however, that we express no view with respect to Regulation S-T or the financial statements,
schedules, or other financial data, included in, incorporated by reference in, or omitted from, the Registration Statement or the
Prospectus. For purposes of this paragraph, we have assumed that the statements made in the Registration Statement and the Prospectus
are correct and complete.
9. The statements in the Prospectus under the caption “Description of Capital Stock,” insofar as they purport to constitute
a summary of the terms of the Common Stock or summarize certain provisions of the DGCL referred to therein, are accurate descriptions
or summaries in all material respects.
10. The Company is not, and immediately after giving effect to the sale of the Shares and Warrants in accordance with the Purchase
Agreement and the application of the proceeds as described in the Prospectus under the caption “Use of Proceeds,” will
not be, required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940,
as amended.
11. With your consent, based solely on a certificate of an officer of the Company as to factual matters and a review of the Specified
Agreements, the Company is not a party to any agreement that would require the inclusion in the Registration Statement of shares
owned by any person or entity other than the Company expect as otherwise disclosed in the Prospectus or as waived or satisfied.
In rendering the foregoing opinions
we have assumed that the Company will comply with all applicable notice requirements under the DGCL.
Our opinions are subject to:
(a) the effects
of bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar laws relating to or affecting
the rights or remedies of creditors;
(b) (1) the
effects of general principles of equity, whether considered in a proceeding in equity or at law (including the possible unavailability
of specific performance or injunctive relief), (2) concepts of materiality, reasonableness,
good faith and fair dealing, and (3) the discretion of the court before which a proceeding is brought;
March [•], 2023
Page 5
(c) the invalidity
under certain circumstances under law or court decisions of provisions for the indemnification or exculpation of, or contribution
to, a party with respect to a liability where such indemnification, exculpation or contribution is contrary to public policy; and
(d) we express no
opinion or confirmation as to: (1) any provision for liquidated damages, default interest, late charges, monetary penalties, make-whole
premiums or other economic remedies to the extent such provisions are deemed to constitute a penalty, (2) consents to, or restrictions
upon, governing law, jurisdiction, venue, service of process, arbitration, remedies, or judicial relief, (3) any provision requiring
the payment of attorneys’ fees where such payment is contrary to law or public policy, (4) advance waivers of claims, defenses,
rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of limitation, trial by jury or at
law, or other procedural rights, (5) waivers of broadly or vaguely stated rights, (6) covenants not to compete, (7) provisions
for exclusivity, election or cumulation of rights or remedies, (8) provisions authorizing or validating conclusive or discretionary
determinations, (9) grants of setoff rights, (10) provisions to the effect that a guarantor is liable as a primary obligor, and
not as a surety and provisions purporting to waive modifications of any guaranty obligation to the extent such modification constitutes
a novation, (11) proxies, powers and trusts, (12) provisions prohibiting, restricting, or requiring consent to assignment or transfer
of any agreement, right or property, and (13) the severability, if invalid, of provisions to the foregoing effect.
We express no opinion
or confirmation as to federal or state securities laws (except as expressly set forth in paragraphs 7, 8, and 10 as to federal
securities laws), tax laws (except as set forth in our letter to you of even date with respect to certain tax matters), antitrust
or trade regulation laws, insolvency or fraudulent transfer laws, antifraud laws, compliance with fiduciary duty requirements,
pension or employee benefit laws, usury laws, environmental laws, margin regulations, laws and regulations relating to commodities
trading, futures and swaps; Financial Industry Regulatory Authority rules; National Futures Association rules; or the rules of
any stock exchange, clearing organization, designated contract market or other regulated entity for trading, processing, clearing
or reporting transactions in securities, commodities, futures or swaps, export control, anti-money laundering, and anti-terrorism
laws, and laws governing foreign investments in the United States or laws relating to intellectual property, food and drug laws
and regulations or any other federal or New York laws pertaining to the research, development or commercialization of drugs (without
limiting other laws or rules excluded by customary practice).
Insofar as our opinions
require interpretation of the Warrants and the Specified Agreements, with your consent, (i) we have assumed that all courts of
competent jurisdiction would enforce such agreements in accordance with their plain meaning, (ii) we express no opinion with respect
to a breach or default under the Warrants or any Specified Agreement that would occur only upon the happening of a contingency
(except as set forth in paragraphs 4 and 6 with respect to the execution and delivery of the Warrants and the issuance and sale
of the Shares and the Warrants by the Company to the Purchasers pursuant to the Purchase Agreement), and (iii) we express no opinion with
respect to any matters which require the performance of a mathematical calculation or the making of a financial or accounting determination.
March [•], 2023
Page 6
With your consent,
we have assumed that the status of the Warrants as legally valid and binding obligations of the parties is not affected by any
(i) breaches of, or defaults under, agreements or instruments, (ii) violations of statutes, rules, regulations or court or governmental
orders, or (iii) failures to obtain required consents, approvals or authorizations from, or make required registrations, declarations
or filings with, governmental authorities, provided that we make no such assumption to the extent we have specifically opined as
to such matters with respect to the Company herein.
This letter is furnished
only to you in your capacity as Purchasers and is solely for your benefit in connection with the transactions referred to in the
first paragraph of this letter. This letter may not be relied upon by you for any other purpose, or furnished to, assigned to,
quoted to, or relied upon by any other person, firm or other entity for any purpose (including any person, firm or other entity
that acquires Shares, Warrants, or any interest therein from you) without our prior written consent, which may be granted or withheld
in our sole discretion.
Sincerely,
March [•], 2023
Page 7
Exhibit A
Specified Agreements
| 1. | Exclusive License and Asset Purchase Agreement, dated as of August 1, 2013,
by and among the Company, 3M Corp. and 3M Innovative Properties Company |
| 2. | Lease Agreement, dated April 1, 2014, between the Company and Pacific North
Court Holdings, L.P. |
| 3. | First Amendment to Lease, dated December 29, 2017, between the Company and
Pacific North Court Holdings, L.P. |
| 4. | License Agreement, dated June 12, 2020, between the Company and Matrix Biomed, Inc. |
| 5. | First Amendment to Exclusive License Agreement, dated November 9, 2021, between
the Company and Matrix Biomed, Inc. |
| 6. | Distribution and Commercialization Agreement between the Company and USWM, LLC |
| 7. | Lease Agreement, dated November 22, 2017, between the Company and Oil States
Energy Services, L.L.C., as amended |
| 8. | Asset Purchase Agreement, dated as of July 30, 2021, by and among the Company,
US Compounding, Inc. and Fagron Compounding Services, LLC |
| 9. | Supply Agreement Addendum, dated as of July 30, 2021, by and among the Company, US Compounding,
Inc. and Fagron Compounding Services, LLC |