UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported): April 29, 2020
MARRONE
BIO INNOVATIONS, INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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001-36030
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20-5137161
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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1540
Drew Avenue, Davis, CA 95618
(Address
of Principal Executive Offices, and Zip Code)
(530)
750-2800
Registrant’s
Telephone Number, Including Area Code
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
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[ ]
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, $0.00001 par value
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MBII
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Nasdaq
Capital Market
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01. Entry into a Material Definitive Agreement.
On
April 29, 2020, Marrone Bio Innovations, Inc. (the “Company”) entered into a Warrant Exchange Agreement (the “Warrant
Exchange Agreement”) with Ospraie Ag Science LLC (“Ospraie”), Ardsley Partners Renewable Energy Fund, L.P. (“Ardsley”),
National Securities Corporation (“NSC”), Ivan Saval (“Mr. Saval, together with NSC, Ospraie and Ardsley, the
“OAI Investors”), Ivy Science & Technology Fund (“IS&T”) and Ivy VIP Science & Technology
(“Ivy VIP” and, together with IS&T, the “Waddell Investors,” and the Waddell Investors, together with
the OAI Investors, the “Investors”).
Pursuant
to the Warrant Exchange Agreement, the Investors have exchanged certain previously issued and outstanding warrants (the “Prior
Warrants”) to purchase an aggregate of up to 45,977,809 shares of the Company’s common stock, par value $0.00001
per share (“Common Stock”) for new warrants (the “New Warrants”) to purchase an aggregate of up to 29,881,855
shares of Common Stock (the “Warrant Shares”). All of the New Warrants were issued to the Investors upon execution
of the Warrant Exchange Agreement on April 29, 2020.
The
New Warrants all have an exercise price of $0.75 per share, and expire in five tranches, as follows: (i) May 1, 2020, with respect
to 3,392,581 Warrant Shares, (ii) September 15, 2020, with respect to 2,714,065 Warrant Shares, (iii) December 15,
2020, with respect to 13,027,512 Warrant Shares, (iv) March 15, 2021, with respect to 5,862,380 Warrant Shares,
and (v) and December 15, 2021 with respect to 4,885,317 Warrant Shares. In addition, the Investors have agreed to exercise
all the New Warrants subject to the first tranche, for an aggregate of approximately $2.5 million, on or before May 1, 2020. The
remaining four tranches of New Warrants reflect an aggregate exercise price of approximately $19.9 million.
The
Prior Warrants held by the OAI Investors and exchanged pursuant to the Warrant Exchange Agreement were originally issued pursuant
to private placement transactions on February 5, 2018 and pursuant to a warrant amendment and plan of reorganization agreement
entered into on August 6, 2019, and were exercisable for an aggregate of 37,977,809 shares of Common Stock, of which 1,377,809
were exercisable prior to December 31, 2020 at a purchase price of $1.00 per share, 14,600,000 were exercisable prior to December
31, 2021 at a purchase price of $1.00 per share and 22,000,000 were exercisable prior to January 1, 2023 at a purchase
price of $1.75 per share. The Prior Warrants held by the Waddell Investors and exchanged pursuant to the Warrant Exchange Agreement
were originally issued pursuant to private placement and debt exchange transactions on August 20, 2015 and on February
5, 2018, respectively, and were exercisable for an aggregate of 8,000,000 shares of Common Stock, of which 4,000,000 were
exercisable prior to December 31, 2020 at a purchase price of $1.25 per share and 4,000,000 were exercisable prior to August 23,
2023 at a purchase price of $1.91 per share.
The
New Warrants will be exercisable in cash, provided that they may be exercised via cashless “net” exercise if the Company
does not have an registration statement registering the shares underlying the New Warrants effective as of March 31, 2021. In
addition, the Company will redeem the New Warrants upon the occurrence of any Fundamental Transaction (as defined in the New Warrants),
and the exercise price of the New Warrants will be subject to weighted-average antidilution provisions.
In
connection with the Warrant Exchange Agreement, the Company entered into a registration rights agreement (the “Registration
Rights Agreement”) with the Investors pursuant to which the Company has agreed to file a registration statement with the
Securities and Exchange Commission no later than December 31, 2020 covering the resale of the New Warrant Shares and to maintain
the effectiveness of the registration statement until the date upon which the New Warrant Shares held by the Investors cease to
be Registrable Securities (as that term is defined in the Registration Rights Agreement).
The Warrant Exchange Agreement,
the form of New Warrant and the Registration Rights Agreement and are filed herewith as Exhibits 10.1, 4.1 and 10.2, respectively,
and are incorporated herein by reference, and the foregoing descriptions are qualified in their entirety by the terms contained
therein.
Item
3.02. Unregistered Sale of Equity Securities.
The
information regarding the issuance of the New Warrants and the Warrant Shares in Item 1.01 of this Report is incorporated herein
by reference. The New Warrants and the Warrant Shares are being issued in a transaction exempt from registration under the Securities
Act of 1933, as amended (the “Securities Act”) in reliance on Sections 4(a)(2) under the Securities Act. Each of the
Investors is representing in connection with the transaction that such person is an accredited investor, has been provided with
such information about the Company as has been requested by such person, and will acquire the securities of the Company without
a view toward public sale or distribution, except pursuant to sales registered under, or exempted from, the registration requirements
of the Securities Act.
Item
8.01. Other Events.
On
February 5, 2018, in addition to the issuance of certain of the Prior Warrants to the Investors, the Company also issued certain
warrants to other parties involved in the private placement transactions as an investor or placement agent (the “February
2018 Warrants”). As of immediately prior to the entry into the Warrant Exchange Agreement, the February 2018 Warrants were
exercisable as to 5,372,667 shares at an exercise price of $1.00 per share (the “Investor Warrants”) and as
to 1,064,830 shares at an exercise price of $1.25 per share (the “Lender Warrants”). The February 2018 Warrants
include a weighted average price-based anti-dilution adjustment provision. Accordingly, as a result of the transactions contemplated
by the Warrant Exchange Agreement, the exercise price of the Investor Warrants has been decreased to $0.96. Due to the
antidilutive effect of the overall reduction in outstanding warrants due to the transactions contemplated by the Warrant Exchange
Agreement, the exercise price of the Lender Warrants remains $1.25 per share.
On
April 30, 2020, the Company issued a press release announcing its entry into the Warrant Exchange Agreement. A copy of the press
release is attached hereto as Exhibit 99.1.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
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Exhibit
Number
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Description
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4.1
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Form of Warrant issuable pursuant to the Warrant Exchange Agreement.
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10.1
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Warrant Exchange Agreement dated as of April 29, 2020, by and among Marrone Bio Innovations, Inc., Ospraie Ag Science LLC, Ardsley Partners Renewable Energy Fund, L.P., National Securities Corporation, Ivan Saval, Ivy Science & Technology Fund and Ivy VIP Science & Technology.
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10.2
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Registration Rights Agreement, dated April 29, 2020, by and among Marrone Bio Innovations, Inc. and the investors named therein.
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99.1
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Press Release related to the Warrant Exchange Agreement, dated April 30, 2020.
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Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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MARRONE
BIO INNOVATIONS, INC.
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Date:
April 30, 2020
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By:
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/s/
James B. Boyd
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Name:
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James B. Boyd
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Title:
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Chief
Financial Officer and President
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Exhibit
4.1
NEITHER
THE ISSUANCE AND SALE OF THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF
1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR ASSIGNED
ONLY (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (II)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, INCLUDING RULE 144 UNDER
SAID ACT, IN EACH CASE IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AND, IN CASE OF (II) OTHER THAN PURSUANT
TO RULE 144, IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES
NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NOTWITHSTANDING THE FOREGOING, AFTER THE DATE THAT IS 180
DAYS FROM ISSUANCE, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.
MARRONE
BIO INNOVATIONS, Inc.
Warrant
To Purchase Common Stock
Warrant
No.:___________
Number
of shares of Common Stock: ________________
Date
of Issuance: April [●], 2020 (“Issuance Date”)
Marrone
Bio Innovations, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ______________________, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below,
to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the
Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), [________] fully paid
nonassessable shares of Common Stock, subject to adjustment as provided herein (the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the
meanings set forth in Section 16. This Warrant is one of the Warrants to purchase Common Stock (the “Exchange
Warrants”) issued pursuant to the Warrant Exchange Agreement (the “Warrant Exchange Agreement”),
dated April [●], 2020 (the “Subscription Date”), by and among the Company, Ospraie Ag Science LLC,
Ardsley Partners Renewable Energy Fund, L.P., Ivan Saval, National Securities Corporation, Ivy Science & Technology Fund and Ivy VIP Science & Technology. Capitalized terms used herein
and not otherwise defined shall have the definitions ascribed to such terms in the Warrant Exchange Agreement or, if not
defined in the Warrant Exchange Agreement, in that certain Securities Purchase Agreement, dated as of December 15, 2017, by
and among the Company and the investors referred to therein (the “Securities Purchase
Agreement”).
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder at any time
or times on or after the Issuance Date, in whole or in part, by delivery of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. On or prior to the
Trading Day immediately preceding the applicable Share Delivery Date (as defined below), the Holder shall either (A) pay to the
Company an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is
being exercised (the “Aggregate Exercise Price”) in cash by wire transfer of immediately available funds or
(B) if the provisions of Section 1(d) are applicable, by notifying the Company that this Warrant is being exercised pursuant to
a Cashless Exercise (as defined in Section 1(d)). For the avoidance of doubt, the portion of this Warrant corresponding to the
number of shares referenced in an Exercise Notice shall be deemed exercised upon delivery by the Holder of such Exercise Notice
to the Company. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution
and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation
of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.
On or before the first (1st) Trading Day following the date on which the Company has received the Exercise Notice,
the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice
to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the earlier of (i)
the second (2nd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case, following
the date on which the Holder delivers the Exercise Notice to the Company, so long as the Holder delivers the Aggregate Exercise
Price (or notice of a Cashless Exercise) on or prior to the Trading Day immediately preceding the earlier of clauses (i) and (ii)
above (the “Share Delivery Date”) (provided that if the Aggregate Exercise Price has not been delivered by
such date, the Share Delivery Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise)
is delivered), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, instruct the
Transfer Agent to issue in book-entry form on the books and records of the Transfer Agent, the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent
and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any. Upon delivery of the 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, then the Company shall as soon as practicable
and in no event later than three (3) Trading Days after any exercise and at its own expense, issue a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares
are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded to the
nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of
Warrant Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance
with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by
the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination. Notwithstanding
anything to the contrary herein, except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise
(if permitted), the Company’s failure to deliver Warrant Shares to the Holder shall not be deemed to be a breach of this
Warrant if the Company has not received the Aggregate Exercise Price pursuant to the requirements of this Section 1(a).
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.75 per share, 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 to issue
to the Holder on or prior to the Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, the number of shares of Common Stock to which the Holder is entitled, in book-entry form on the books
and records of the Transfer Agent, or if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program,
to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise of this Warrant or (II) if the Registration Statement (as defined in the Registration Rights
Agreement) covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant
Shares”) is not available for the resale of such Unavailable Warrant Shares and the Company fails to promptly, but in
no event later than as required pursuant to the Registration Rights Agreement, (x) so notify the Holder and (y) deliver the Warrant
Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit
/ Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice
Failure” and together with the event described in clause (I) above, an “Exercise Failure”), then,
in addition to all other remedies available to the Holder, (X) the Holder, upon written notice to the Company, may void its Exercise
Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised
pursuant to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company’s obligations
to make any payments which have accrued prior to the date of such notice and (Y) if on or after such Trading Day 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 shares
of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”),
then the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at
which point the Company’s obligation to instruct the Transfer Agent to register such shares of Common Stock in book-entry
form (and to issue such shares of Common Stock) or credit the Holder’s balance account with DTC for such shares of Common
Stock shall terminate, or (ii) promptly honor its obligation to instruct the Transfer Agent to register such shares of Common
Stock in book-entry form or credit the Holder’s balance account with DTC, as applicable, and pay cash to the Holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B)
the Closing Sale Price of the Common Stock on the applicable Exercise Date or on the date the Company makes such payment, whichever
is higher. 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 shares of Common Stock (or to electronically deliver such shares of Common Stock)
upon the exercise of this Warrant as required pursuant to the terms hereof.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary, if, beginning March 31, 2021, the Registration
Statement (as defined in the Registration Rights Agreement) covering the resale of the Unavailable Warrant Shares is not available
for the resale of such Unavailable Warrant Shares, and this Warrant has not already expired in accordance with its terms, the
Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive
upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless
Exercise”):
Net
Number = (A x B) - (A x C)
D
For
purposes of the foregoing formula:
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A=
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the
total number of shares with respect to which this Warrant is then being exercised.
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B=
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the
arithmetic average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the
date immediately preceding the date of the Exercise Notice.
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C=
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the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
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D=
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the
Closing Sale Price of the Common Stock on the date of the Exercise Notice.
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For
purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the date hereof, the Company hereby acknowledges and agrees
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 Warrant
Exchange Agreement.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the 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 12.
(f)
Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of
this Warrant at least a number of shares of Common Stock equal to the number of shares of Common Stock as shall from time to time
be necessary to effect the exercise of all of this Warrant then outstanding (the “Required Reserve Amount”
and the failure to have such sufficient number of authorized and unreserved shares of Common Stock, an “Authorized Share
Failure”), then the Company shall promptly take all action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable best efforts
to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors
to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized
Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding shares
of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon
any exercise of this Warrant, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise,
then unless the Holder elects to void such attempted exercise, the Holder may require the Company to pay to the Holder within
three (3) Trading Days of the applicable exercise, cash in an amount equal to the product of (i) the quotient determined by dividing
(x) the number of Warrant Shares that the Company is unable to deliver pursuant to this Section 1(f), by (y) the total number
of Warrant Shares issuable upon exercise of this Warrant (without regard to any limitations or restrictions on exercise of this
Warrant) and (ii) the Black Scholes Value; provided, that (x) references to “the day immediately following the public announcement
of the applicable Fundamental Transaction” in the definition of “Black Scholes Value” shall instead refer to
“the date the Holder exercises this Warrant and the Company cannot deliver the required number of Warrant Shares because
of an Authorized Share Failure” and (y) clause (iii) of the definition of “Black Scholes Value” shall instead
refer to “the underlying price per share used in such calculation shall be the highest Weighted Average Price during the
period beginning on the date of the applicable date of exercise and the date that the Company makes the applicable cash payment.”
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:
(a)
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the Subscription Date, the Company issues
or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed
to have been issued or sold by the Company in connection with any Excluded Securities) for a consideration per share (the “New
Issuance Price”) less than a price (the “Applicable Price”) equal to the Exercise Price in effect
immediately prior to such issue or sale or deemed issuance or sale (the foregoing a “Dilutive Issuance”), then
immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the product
of (A) the Exercise Price in effect immediately prior to such Dilutive Issuance and (B) the quotient determined by dividing (1)
the sum of (I) the product derived by multiplying the Exercise Price in effect immediately prior to such Dilutive Issuance and
the number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus (II) the consideration,
if any, received by the Company upon such Dilutive Issuance, by (2) the product derived by multiplying (I) the Exercise Price
in effect immediately prior to such Dilutive Issuance by (II) the number of shares of Common Stock Deemed Outstanding immediately
after such Dilutive Issuance. For purposes of determining the adjusted Exercise Price under this Section 2(a), the following shall
be applicable:
(i)
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option
for such price per share. For purposes of this Section 2(a)(i), the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less
any consideration paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such
Option, upon exercise of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise
of such Option. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance
of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than
the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this
Section 2(a)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise
or exchange thereof” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security less any consideration paid or payable by the Company with respect to such one
share of Common Stock upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such
Convertible Security. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to
be made pursuant to other provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares
shall be made by reason of such issue or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time,
the Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the
Exercise Price and the number of Warrant Shares, which would have been in effect at such time had such Options or Convertible
Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion
rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms
of any Option or Convertible Security that was outstanding as of the Subscription Date are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise
Price then in effect or a decrease in the number of Warrant Shares.
(iv)
Calculation of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option
Value of such Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been
issued or sold for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable
by the Company pursuant to the terms of such other securities of the Company, less (II) the Option Value. If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration
other than cash received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded
securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such publicly
traded securities on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners
of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration
other than cash or publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties
are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th)
day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.
(vi)
No Readjustments. For the avoidance of doubt, in the event the Exercise Price has been adjusted pursuant to this Section
2(a) and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound or is cancelled after
the facts for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that would have
been in effect if such Dilutive Issuance had not occurred or been consummated.
(b)
Voluntary Adjustment By Company. Subject to the applicable listing standards of the Principal Market, the Company may at
any time during the term of this Warrant, with the prior written consent of the Required Holders, reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
(c)
Adjustment Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription
Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective
at the close of business on the date the subdivision or combination becomes effective.
(d)
Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other
rights with equity features), then the Company’s Board of Directors shall in good faith determine and implement an appropriate
adjustment in the Exercise Price and the number of Warrant Shares (if applicable), as mutually determined by the Company’s
Board of Directors and the Required Holders, so as to protect the rights of the Holder; provided that no such adjustment
pursuant to this Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined
pursuant to this Section 2.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. 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 (other than stock or securities in which an adjustment is being
made pursuant to Section 2(c)), 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, upon the exercise of this Warrant,
in whole or in part, be entitled to receive such Distribution to the same extent that the Holder would have received 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) immediately before the date of which a record is taken for such Distribution, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution. From the time of any Distribution until this Warrant is exercised or expires, the Company shall hold such
Distribution for the benefit of the Holder and distribute such Distribution to the Holder on the applicable Share Delivery Date
with respect to the portion of this Warrant being exercised.
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 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) immediately before the date on which a record is taken for the grant, issuance or
sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.
(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance
with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Required Holders
prior to such Fundamental Transaction, including agreements, if so requested by the Holder, to deliver to each holder of the Exchange
Warrants in exchange for such Exchange Warrants 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 reasonably satisfactory
to the Required Holders, 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 occurrence or consummation of such Fundamental
Transaction). Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition to the
occurrence or consummation of any Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly
and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally
succeed to, and be added to the term “Company” under this Warrant (so that from and after the date of such Fundamental
Transaction, each and every provision of this Warrant referring to the “Company” shall refer instead to each of the
Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity or Successor
Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall assume all of the obligations
of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or Successor
Entities, jointly and severally, had been named as the Company in this Warrant. Upon occurrence or consummation of the Fundamental
Transaction, and it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that, the
Company and the Successor Entity or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder
solely at its option, shares of Common Stock or shares of capital stock of the Successor Entity and/or Successor Entities (the
“Successor Capital Stock”) or, in lieu of the shares of Common Stock or Successor Capital Stock (or other securities,
cash, assets or other property purchasable upon the exercise of this 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 for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event
resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or
the record, eligibility or other determination date for the event resulting in such 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, (i) the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section
3(b) in writing to permit the Fundamental Transaction without redemption, similar repayment, “cash out” or assumption
of this Warrant (as applicable) and (ii) if holders of Common Stock are given any choice as to the securities, cash or other assets
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as the consideration it receives upon
any exercise of this Warrant following a Corporate Event (as defined below). In addition to and not in substitution for any other
rights hereunder, prior to the occurrence or consummation of any Fundamental Transaction pursuant to which holders of shares of
Common Stock are entitled to receive securities, cash, assets or other property with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure that, and any applicable
Successor Entity or Successor Entities shall ensure that, and it shall be a required condition to the occurrence or consummation
of such Corporate Event that, the Holder will thereafter have the right to receive upon exercise of this Warrant at any time after
the occurrence or consummation of the Corporate Event, shares of Common Stock or Successor Capital Stock or, if so elected by
the Holder, in lieu of the shares of Common Stock or Successor Capital Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Corporate Event (but not in lieu of such items still issuable under
Sections 3 and 4(a), which shall continue to be receivable on the shares of Common Stock or on the such shares of stock, securities,
cash, assets or any other property otherwise receivable with respect to or in exchange for shares of Common Stock), such shares
of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights
and any shares of Common Stock) which the Holder would have been entitled to receive upon the occurrence or consummation of such
Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this
Warrant been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date for the
event resulting in such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made pursuant
to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section
4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events. Notwithstanding, anything
herein to the contrary, if a Corporate Event occurs where the holders of shares of Common Stock receive cash and/or securities
listed on an Eligible Market, this Warrant shall no longer be exercisable for shares of Common Stock or Successor Capital Stock
(but such items issuable under Sections 4 and 4(a) shall continue to be receivable).
(c)
Notwithstanding the foregoing, in the event of a Fundamental Transaction other than one in which a Successor Entity that is a
publicly traded corporation whose stock is quoted or listed for trading on an Eligible Market assumes this Warrant such that the
Warrant shall be exercisable for the publicly traded Common Stock of such Successor Entity, at the request of the Holder delivered
before the ninetieth (90th) day after the occurrence or consummation of such Fundamental Transaction, the Company (or
the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after
such request (or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal to the Black Scholes
Value of the remaining unexercised portion of this Warrant on the date of such Fundamental Transaction.
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action
as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall
not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price
then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long
as any of the Exchange Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Exchange Warrants, the number of
shares of Common Stock as shall from time to time be necessary to effect the exercise of the Exchange Warrants then outstanding
(without regard to any limitations on exercise).
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to
vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder
with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with
the giving thereof to the stockholders; provided, that the Company shall not be required to provide the Holder with such
notices and other information to the extent such notices or other information is filed with the SEC pursuant to its Electronic
Data Gathering, Analysis and Retrieval (EDGAR) system.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon
the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and,
if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form 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,
that no Exchange Warrants for fractional Warrant Shares 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 6(h) of the Warrant Exchange Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason
therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) promptly upon
any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to
any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock
or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided
to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice
shall be definitive and may not be disputed or challenged by the Company.
9.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and
the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Required Holders.
10.
GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to the Company at the address set forth in Section 6(h) of the Warrant Exchange 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 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, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT
OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11.
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and each other party to the Warrant
Exchange Agreement 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.
12.
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation
of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic
mail within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant
Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of
the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall
use its reasonable best efforts to cause at its expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from
the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination
or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
13.
REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and 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 damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity
of showing economic loss and without any bond or other security being required.
14.
TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the
consent of the Company, except as may otherwise be required by Section 5(f) of the Warrant Exchange Agreement and Section 11 of
the Registration Rights Agreement.
15.
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).
16.
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its “Subsidiaries” (which for the purposes of this Warrant means any entity in which
the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest), the Company shall
within four (4) Business Days after any such receipt or delivery publicly disclose such material, nonpublic information on a Current
Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information
relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such
notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice
do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
17.
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.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended.
(c)
“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or
more intermediaries controls, is controlled by, or is under common control with, such Person.
(d)
“Approved Stock Plan” means any employee benefit plan which has been approved by the Board of Directors of
the Company, pursuant to which the Company’s securities may be issued to any employee, officer, director or consultant for
services provided to the Company.
(e)
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day immediately following the public announcement of the
applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction
is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for
a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public
announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date
the Fundamental Transaction is consummated, (iii) the underlying price per share used in
such calculation shall be the (x) sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration,
if any, being offered in the Fundamental Transaction or (y) if no cash or other consideration is being offered in the Fundamental
Transaction, the highest Weighted Average Price of the Common Stock during the period beginning on the Trading Day prior to the
execution of definitive documentation relating to the applicable Fundamental Transaction and ending on (A) the Trading Day immediately
following the public announcement of such Fundamental Transaction, if the applicable Fundamental Transaction is publicly announced
or (B) the Trading Day immediately following the consummation of the applicable Fundamental Transaction if the applicable Fundamental
Transaction is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(f)
“Bloomberg” means Bloomberg Financial Markets.
(g)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.
(h)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg,
or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00
p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported
for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.).
If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved pursuant to Section 11. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable
calculation period.
(i)
“Common Stock” means (i) the Company’s Common Stock, par value $0.00001 per share, and (ii) any share
capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common
Stock.
(j)
“Common Stock Deemed Outstanding” means, at any given time, the number of shares of Common Stock actually outstanding
at such time, plus the number of shares of Common Stock deemed to be outstanding pursuant to Sections 2(a)(i) and 2(a)(ii) hereof
regardless of whether the Options or Convertible Securities are actually exercisable at such time, but excluding any shares of
Common Stock owned or held by or for the account of the Company or issuable upon exercise of the Exchange Warrants.
(k)
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.
(l)
“Eligible Market” means the Principal Market, the NYSE American LLC, The NASDAQ Global Select Market, The NASDAQ
Global Market or The New York Stock Exchange, Inc.
(m)
“Excluded Securities” means any Common Stock issued or issuable: (i) in connection with any Approved Stock
Plan, provided, that no more than 250,000 shares of Common Stock (as adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction occurring after the Subscription Date) in the aggregate issued to consultants
(other than the Advisory Members (as defined in the Securities Purchase Agreement)) under all Approved Stock Plans shall be deemed
Excluded Securities, except as agreed in writing by the Lead Investor, or if the Lead Investor or any of its Affiliates then no
longer beneficially owns any shares, the Required Holders; (ii) upon exercise of the Exchange Warrants (as they may be amended
from time to time); (iii) upon exercise of any Options or Convertible Securities which are outstanding on the day immediately
preceding the Subscription Date; provided, that the terms of such Options or Convertible Securities are not amended, modified
or changed to increase the number of such shares issuable thereunder or to decrease the exercise price, exchange price or conversion
price of such securities or to extend the term of such securities; or (iv) pursuant to acquisitions or strategic transactions
(including issuances to vendors, customers or other commercial or strategic partners or potential commercial or strategic partners)
or credit facilities approved by a majority of the disinterested directors of the Company.
(n)
“Expiration Date” means [●].
(o)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of
the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding;
or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule
13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at
least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making
or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934
Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its 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 Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of
Common Stock not held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held
by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to
effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their shares
of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through Subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary
to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment
of such instrument or transaction.
(p)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.
(q)
“Lead Investor” means Ospraie Ag Science LLC.
(r)
“Lead Investor Minimum Threshold” means shares of Common Stock and Warrants exercisable for shares of Common
Stock equal to 50% of the total shares of Common Stock issuable pursuant to Warrants issued to the Lead Investor under the Warrant
Exchange Agreement.
(s)
“Option Value” means the value of an Option based on the Black and Scholes Option Pricing Model obtained from
the “OV” function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance
of the applicable Option, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the
issuance of the applicable Option if the issuance of such Option is not publicly announced, for pricing purposes and reflecting
(i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable
Option as of the applicable date of determination, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the applicable
Option if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable
Option if the issuance of such Option is not publicly announced, (iii) the underlying price per share used in such calculation
shall be the highest Weighted Average Price of the Common Stock during the period beginning on the Trading Day prior to the execution
of definitive documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day immediately following
the public announcement of such issuance, if the issuance of such Option is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iv) a zero cost of
borrow and (v) a 360 day annualization factor.
(t)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(u)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including
such entity whose common stock or common shares or equivalent equity security is quoted or listed on an Eligible Market (or, if
so elected by the Holder, any other market, exchange or quotation system), or, if there is more than one such Person or such entity,
such Person or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(v)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
(w)
“Principal Market” means The NASDAQ Capital Market.
(x)
“Registration Rights Agreement” means that certain Registration Rights Agreement dated as of the Subscription
Date, by and among the parties to the Warrant Exchange Agreement.
(y)
“Required Holders” means the holders of shares of Common Stock issued and issuable under all Warrants issuable
pursuant to the Warrant Exchange Agreement (without regard to any restriction or limitation on the exercise of the Warrants contained
therein) and shall include the Lead Investor so long as the Lead Investor and/or any of its affiliates hold the Lead Investor
Minimum Threshold.
(z)
“SEC” means the Securities and Exchange Commission.
(aa)
“Standard Settlement Period” means the standard settlement period, expressed
in a number of Trading Days, on the Company’s primary Eligible Market with respect to the Common Stock as in effect on the
date of delivery of the applicable Exercise Notice.
(bb)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(cc)
“Successor Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected
by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(dd)
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market
on which the Common Stock is then traded; 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).
[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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MARRONE BIO INNOVATIONS, INC.
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By:
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Name:
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Pamela
G. Marrone
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Title:
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Chief
Executive Officer
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
MARRONE
BIO INNOVATIONS, Inc.
The
undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (“Warrant Shares”)
of Marrone Bio Innovations, Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant
to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
____________
a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
___________
a “Cashless Exercise” with respect to _______________ Warrant Shares.
2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the
Company in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of
the Warrant.
Date:
_______________ __, ______
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Name
of Registered Holder
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ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs American Stock Transfer & Trust Company to issue the above
indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _______________ __, ______
from the Company and acknowledged and agreed to by American Stock Transfer & Trust Company.
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MARRONE BIO INNOVATIONS, INC.
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By:
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Name:
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Title:
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Exhibit
10.1
WARRANT
EXCHANGE AGREEMENT
This
Warrant Exchange Agreement (this “Agreement”) is entered into as of April 29, 2020, by and among Marrone Bio
Innovations, Inc., a Delaware corporation (the “Company”), Ospraie Ag Science LLC (“Ospraie”),
Ardsley Partners Renewable Energy Fund, L.P. (“Ardsley”), National Securities Corporation (“NSC”),
Ivan Saval (Mr. Saval, together with NSC, Ospraie and Ardsley, the “OAI Investors” and each, an “OAI
Investor”), Ivy Science & Technology Fund (“IS&T”) and Ivy VIP Science & Technology (“Ivy
VIP” and, together with IS&T, the “Waddell Investors”, and the Waddell Investors, together with
the OAI Investors, the “Investors”).
RECITALS
WHEREAS,
pursuant to the terms of that certain securities purchase agreement, dated as of December 15, 2017, and that Certain Warrant Amendment
and Plan of Reorganization Agreement, dated as of August 6, 2019 (the “Prior Warrant Reorganization Agreement”),
each OAI Investor is the holder, as of the date hereof, of warrants (collectively, the “OAI Outstanding Warrants”)
representing the right to acquire up to that number of shares of the Company’s common stock, par value $0.00001 per share
(the “Common Stock”) set forth opposite such OAI Investor’s name in column 3 on the Schedule of Investors
attached hereto as Exhibit A (the “Schedule of Investors”);
WHEREAS,
pursuant to the terms of that certain purchase agreement, dated as of August 20, 2015, and that certain amendment, dated as of
December 15, 2017, to the senior secured promissory notes, dated as of August 20, 2015, each Waddell Investor is the holder, as
of the date hereof, of warrants (collectively, the “Waddell Outstanding Warrants”, and the Waddell Outstanding
Warrants, together with the OAI Outstanding Warrants, the “Outstanding Warrants”) representing the right to
acquire up to that number of shares of Common Stock set forth opposite such Waddell Investor’s name in column 3 on the Schedule
of Investors.
WHEREAS,
the Company and the Investors desire to enter into a transaction pursuant to which (i) all of the Outstanding Warrants set forth
opposite each Investor’s name in column 3 of the Schedule of Investors shall be exchanged for warrants in the form of Exhibit
B hereto (the “New Warrants”) representing, in the aggregate for such Investor, the right to receive the
number of shares of Common Stock set forth opposite such Investor’s name in column 4 of the Schedule of Investors (collectively,
the “New Warrant Shares” and the New Warrant Shares, collectively with the New Warrants, the “Securities”),
(ii) the New Warrants shall expire according to the schedule set forth on Exhibit C hereto (the “Expiration Schedule”)
and (iii) the Investors shall exercise certain of the New Warrants on or prior to May 1, 2020;
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement, substantially in the form attached hereto as Exhibit D (the “Registration Rights Agreement”),
pursuant to which the Company has agreed to provide certain registration rights with respect to the Registrable Securities (as
defined in the Registration Rights Agreement) under the Securities Act of 1933, as amended (the “1933 Act”),
and the rules and regulations promulgated thereunder, and applicable state securities laws; and
WHEREAS,
the parties intend for the exchange of Investor’s Outstanding Warrants for New Warrants contemplated pursuant to this
Agreement to be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended and for this Agreement to constitute a “plan of reorganization” for purposes of Section 368 and the
regulations thereunder.
NOW,
THEREFORE, in consideration of the premises, and for the consideration herein set forth the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
AGREEMENT
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1.
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Warrant
Exchange and First Tranche Exercise.
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(a)
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Warrant
Exchange. Without any action on the part of the Company, any Investor, or any other party, effective upon the Closing
(as defined below), each Investor shall automatically exchange all of such Investor’s Outstanding Warrants for New Warrants
representing the right to receive, in the aggregate, the number of shares of Common Stock set forth opposite such Investor’s
name in column 4 of the Schedule of Investors. The New Warrants of each Investor shall expire in accordance with (and the
executed agreements with respect to the New Warrants, when issued, shall reflect) the Expiration Schedule. Effective at the
Closing, each Outstanding Warrant shall automatically be cancelled.
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(b)
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First
Tranche Exercise. Notwithstanding any provision of the First Tranche Warrants (as defined in the Expiration Schedule)
to the contrary, the Investors hereby agree to exercise all of the First Tranche Warrants, and to pay the applicable cash
exercise price therefor to the Company, on or before May 1, 2020 (and, for the avoidance of doubt, if any Investor fails to
deliver an exercise notice with respect to the First Tranche Warrants on or before May 1, 2020, an exercise notice for the
full cash exercise of such First Tranche Warrants shall be deemed to have been given as of May 1, 2020, and the full cash
purchase price for the exercise of such Investor’s First Tranche Warrants shall still be due and payable as of May 1,
2020).
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2.
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Closing.
The Closing shall occur immediately upon the execution of this Agreement and the Registration Rights Agreement by all of the
parties hereto and thereto via electronic exchange of documents.
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3.
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Delivery
of New Warrants. The Company shall not be obligated to issue paper instruments representing the New Warrants pursuant
to the terms of this Agreement unless the paper instruments representing the Outstanding Warrants for which such New Warrants
were exchanged pursuant to Section 1(a) are delivered to the Company, or the Investor notifies the Company that such paper
instruments have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify
the Company from any loss incurred by it in connection with such Outstanding Warrants. Notwithstanding the foregoing, upon
the Closing in accordance with the terms of this Agreement, such Investor shall be deemed to be the holder of the number of
New Warrants set forth opposite such Investor’s in column 4 of the Schedule of Investors with expiration dates reflecting
the Expiration Schedule, and shall receive electronic “PDF” copies of the New Warrants at the Closing. Paper instruments
representing the New Warrants shall be delivered to each Investor as promptly as practicable following the later of (a) the
Closing, (b) the delivery by such Investor of the paper instruments representing the Outstanding Warrants for which such New
Warrants are to be exchanged pursuant to Section 1(a), and (c) the lifting of any “shelter in place” order applicable
to the Company or its counsel. Delivery of paper instruments representing the Outstanding Warrants or of New Warrants may
be by any method of delivery permitted by Section 5(h).
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4.
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Representations,
Warranties and Covenants of Company. The Company hereby represents and warrants to the Investors that:
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(a)
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Authorization;
Enforcement; Validity. The execution and delivery of this Agreement, the Registration Rights Agreement and the New Warrants
(collectively, 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 New Warrants and the reservation for issuance
and the issuance of the New Warrant Shares issuable upon exercise of the New Warrants, have been duly authorized by the Company’s
Board of Directors (the “Board”). This Agreement and the Registration Rights Agreement have been duly executed
and delivered by the Company, and constitute, and any New Warrants, when issued by the Company in accordance with this Agreement
will constitute, the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with
their 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.
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(b)
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Issuance
of Securities. The issuance of the New Warrants are duly authorized and, upon issuance in accordance with the terms of
the Transaction Documents, shall be validly issued and free from all preemptive or similar rights (except for those which
have been validly waived prior to the date hereof), taxes, liens and charges and other encumbrances with respect to the issue
thereof. As of the date hereof, a number of shares of Common Stock shall have been duly authorized and reserved for issuance
which equals or exceeds the maximum number of New Warrant Shares issuable upon exercise of the New Warrants (without taking
into account any limitations on the exercise of the New Warrants set forth therein). Upon exercise of the New Warrants in
accordance with the terms of the New Warrants, the New Warrant Shares when issued will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations
and warranties of the Investors set forth in Section 4 of this Agreement, the offer and issuance by the Company of the Securities
is exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”).
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(c)
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Consents.
The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with
(other than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration
Rights Agreement, any filings pursuant to the Securities Exchange Act of 1934, as amended, the filing with the Principal Market
(as defined in the New Warrants), and any other filings as may be required by any state securities agencies), any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any
of its 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 is required to obtain pursuant
to the preceding sentence have been obtained or effected on or prior to the date hereof (or in the case of filings detailed
above, will be made timely after the date hereof), and the Company is unaware of any facts or circumstances which might prevent
the Company from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents.
The Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts or circumstances
which would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. Subject to receipt of
approval of the Principal Market regarding the listing of the New Warrant Shares, the issuance by the Company of the Securities
shall not have the effect of delisting or suspending the Common Stock from the Principal Market.
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(d)
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Acknowledgment
Regarding the Investors’ Purchase of Securities. The Company acknowledges and agrees that each Investor 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. The Company further acknowledges that each Investor is not acting as a financial advisor or fiduciary
of the Company or any of its Subsidiaries (as defined in the New Warrants) (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by the Investors or any of
its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby
is merely incidental to each Investor’s purchase of the Securities. The Company further represents that the Company’s
decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its
representatives.
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(e)
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No
General Solicitation; Placement Agent’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 shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons
engaged by the Investors or its investment advisor) relating to or arising out of the transactions contemplated hereby. The
Company shall pay, and hold each of the Investors harmless against, any liability, loss or expense (including, without limitation,
reasonable and documented attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. Neither
the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale
of the Securities.
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(f)
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No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting at the direction
of any of the foregoing 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 1933
Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to be integrated
with prior offerings under circumstances that would require approval of stockholders of the Company for such prior offerings
by virtue of such integration for purposes of any applicable stockholder approval rules, including, without limitation, under
the rules and regulations of the Principal Market.
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(g)
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Section
16 Matters. Prior to the date hereof, the Company and the Board has adopted resolutions causing to be exempt from Section
16(b) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3 the disposition of Outstanding Warrants pursuant
to this Agreement in exchange for New Warrants and the disposition of any New Warrants as a result of any exercise of New
Warrants and the acquisition of New Warrant Shares as a result of any exercise of New Warrants by each Investor that is a
director or director by deputization, a true, complete and correct copy of which is attached as Exhibit E.
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5.
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Representations
and Warranties of the Investors. Each of the Investors, severally and not jointly, hereby represents and warrants to the
Company that:
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(a)
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No
Public Sale or Distribution. Such Investor is acquiring the New Warrants, and upon exercise of the New Warrants (other
than pursuant to a Cashless Exercise (as defined in the New Warrants)) will acquire the New Warrant Shares issuable upon exercise
of the New Warrants, for its own account and not with a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, each of the Investors does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act. Such Investors is acquiring the Securities hereunder in the ordinary
course of its business. Such Investor does not presently have any agreement or understanding, directly or indirectly, with
any Person to distribute any of the Securities. As used herein, “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity
and any governmental entity or any department or agency thereof.
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(b)
|
Accredited
Investor Status. Such Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D and is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments
in securities presenting an investment decision like that involved in the purchase of the securities, including investments
in comparable companies, and has requested, received, reviewed and considered all information it deemed relevant in making
an informed decision to enter this Agreement.
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|
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(c)
|
Reliance
on Exemptions. Such Investor understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and each Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of each of the Investors set forth herein in order to determine the availability of such
exemptions and the eligibility of each of the Investors to acquire the Securities.
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(d)
|
Information.
Such Investor and its advisors, if any, have been furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the securities that have been requested by each of the Investors.
Such Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries
nor any other due diligence investigations conducted by each Investor or its advisors, if any, or its representatives shall
modify, amend or affect each Investor’s right to rely on the Company’s representations and warranties contained
herein.
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(e)
|
No
Governmental Review. Such Investor understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability
of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
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|
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(f)
|
Transfer
or Resale. Such Investor understands that except as provided in the Registration Rights Agreement: (i) the Securities
have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered thereunder, (B) each Investor shall have delivered to the
Company an opinion of counsel, the form and substance of which shall be reasonably acceptable to the Company, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from
such registration under the 1933 Act, or (C) each Investor provides the Company with reasonable assurance (including, if requested
by the Company, a customary representation letter reasonably acceptable to the Company) that such Securities can be sold,
assigned or transferred pursuant to Rule 144 promulgated under the 1933 Act, as amended, (or a successor rule thereto) (“Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms
of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller
(or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act)
may require compliance with some other exemption under the 1933 Act or the rules and regulations of the U.S. Securities and
Exchange Commission (the “SEC”) thereunder; and (iii) neither the Company nor any other Person is under
any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
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|
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(g)
|
Legends.
Such Investor understands that the book-entry or other instruments representing the New Warrants and, until such time as the
resale of the New Warrant Shares have been registered under the 1933 Act as contemplated by the Registration Rights Agreement,
the book-entry representing the New Warrant Shares, except as set forth below, shall bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of such New Warrant Shares):
|
[NEITHER
THE ISSUANCE AND SALE OF THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY ARE EXERCISABLE HAVE BEEN] [THIS SECURITY
HAS NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR ASSIGNED ONLY (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OF 1933, AS AMENDED, INCLUDING RULE 144 UNDER SAID ACT, IN EACH CASE IN COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS OR BLUE SKY LAWS AND, IN CASE OF (II) OTHER THAN PURSUANT TO RULE 144, IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NOTWITHSTANDING THE FOREGOING, AFTER THE DATE THAT IS 180 DAYS FROM ISSUANCE, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
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|
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The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the
Securities upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at The
Depository Trust Company (“DTC”), if (i) such Securities are registered for resale under the 1933 Act (provided
that the Company may require the holder to deliver a representation statement agreeing and acknowledging that such Securities
will either be sold pursuant to the applicable prospectus or under Rule 144, that the holder will notify the Company of any
other proposed transfer or disposition of the shares, that the holder will comply with any applicable provisions of Section
16 under the 1934 Act and Rule 144, and that the Company’s counsel may rely on such statements in issuing an opinion
permitting the removal of applicable legends or the issuance of New Warrant Shares without legends), (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, the form and substance
of which shall be reasonably acceptable to the Company, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the 1933 Act, or (iii) such holder provides the Company
with reasonable assurance (including, if requested by the Company, a customary representation letter reasonably acceptable
to the Company) that the Securities can be sold, assigned or transferred pursuant to Rule 144. The Company shall be responsible
for the fees of its transfer agent and all DTC fees associated with such issuance. If the Company shall fail for any reason
or for no reason to issue to the holder of the Securities on or before the earlier of (x) two (2) Trading Days (as defined
in the New Warrants) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below), in
each case, after the occurrence of any of (i) through (iii) above (the initial date of such occurrence, the “Legend
Removal Date”), a certificate without such legend to such holder or to issue such Securities to such holder by electronic
delivery at the applicable balance account at DTC, and if on or after such Trading Day 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 such Securities that
the holder anticipated receiving without legend from the Company (a “Buy-In”), then the Company shall,
within three (3) Trading Days after the holder’s request and in the holder’s discretion, either (i) pay cash to
the holder in an amount equal to the holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation
to deliver such unlegended Securities shall terminate, or (ii) promptly honor its obligation to deliver to the holder such
unlegended Securities as provided above and pay cash to the holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Sale Price (as defined in the New
Warrants) of the Common Stock on the applicable Legend Removal Date or on the date the Company makes the applicable cash payment,
whichever is higher. The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with
such issuance. As used herein, “Standard Settlement Period” means
the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Eligible Market (as
defined in the New Warrants) with respect to the Common Stock as in effect on the applicable
date of determination.
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|
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(h)
|
Organization;
Authority. Such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by this
Agreement to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
|
|
|
(i)
|
Validity;
Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and
delivered on behalf of such Investor and shall constitute the legal, valid and binding obligations of such Investor enforceable
against such Investor in accordance with their respective terms, except as such enforceability may be limited by general principles
of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating
to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
|
|
|
|
|
|
|
(j)
|
No
Conflicts. The execution, delivery and performance by such Investor of this Agreement and the Registration Rights Agreement
and the consummation by each Investor of the transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Investor or (ii) conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which such Investor is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Investor,
except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of each Investor to perform its
obligations hereunder or consummate the transactions contemplated hereby and thereby on a timely basis.
|
|
|
|
|
|
|
(k)
|
Ownership.
Such Investor is the lawful owner of the Outstanding Warrants representing the right to purchase the number of Warrant Shares
set forth opposite such Investor’s name in column (3) on the Schedule of Investors and all rights and benefits incident
to the ownership thereof, free and clear of any liens, claims or encumbrances.
|
|
|
6.
|
Miscellaneous
Provisions.
|
|
|
(a)
|
Amendment;
Modification. This Agreement may not be amended, modified or waived without the written agreement of each party hereto.
|
|
|
|
|
|
|
(b)
|
Waiver.
The parties hereto may (i) extend the time for performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties of the other parties hereto contained herein or
in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements of the other parties hereto
or satisfaction of any of the conditions to such party’s obligations contained herein. Any agreement on the part of
a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf
of such party. The failure of a party hereto to assert any of its rights hereunder shall not constitute a waiver of such rights.
|
|
|
|
|
|
|
(c)
|
Entire
Agreement. This Agreement, together with the Registration Rights Agreement and any New Warrants issued hereunder, contains
the entire understanding between and among the parties and supersedes any prior understandings and agreements among them respecting
the subject matter of this Agreement. The parties hereto acknowledge and agree that the Prior Warrant Reorganization Agreement
is hereby terminated and shall be of no further force and effect.
|
|
|
(d)
|
Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement 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. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such 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 manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
|
|
|
|
|
|
|
(e)
|
Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of,
this Agreement.
|
|
|
|
|
|
|
(f)
|
Severability.
If any provision of this Agreement 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 Agreement so long as this Agreement 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).
|
|
|
|
|
|
|
(g)
|
Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided
that a facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile or .pdf signature.
|
|
|
(h)
|
Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
or any of the other Transaction Documents must be in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon delivery, when sent by facsimile (provided confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party); (iii) upon delivery, when sent by electronic mail (provided
that the sending party does not receive an automated rejection notice); or (iv) one Business Day after deposit with an
overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers
and e-mail addresses for such communications shall be:
|
If
to the Company:
Marrone
Bio Innovations, Inc.
1540 Drew Avenue
Davis, CA 95618
Telephone: 530-302-8289
Facsimile: 530-302-0189
Attention: Linda V. Moore, General Counsel
E-mail: lmoore@marronebio.com
With
a copy (for informational purposes only) to:
Morrison
& Foerster LLP
425 Market Street
San Francisco, CA 94105
Telephone: 415-258-6213
Facsimile: 415-276-7201
Attention: Alfredo B. D. Silva, Esq.
Email: ASilva@mofo.com
If
to an Investor, to its address, facsimile number and e-mail address set forth on the Schedule of Investors, or to such other address,
facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by
the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt
by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have caused this Warrant Exchange Agreement to be duly executed and delivered as of the date
first above written.
|
|
MARRONE
BIO INNOVATIONS, INC.
|
|
|
|
|
|
|
By:
|
/s/
Linda V. Moore
|
|
|
Name:
|
Linda
V. Moore
|
|
|
Title:
|
EVP,
General Counsel and Secretary
|
[Signature
Page to Warrant Exchange Agreement]
|
|
OSPRAIE
AG SCIENCE LLC
|
|
|
|
|
|
|
By:
|
/s/
Jason Mraz
|
|
|
Name:
|
Jason
Mraz
|
|
|
Title:
|
Authorized
Signatory
|
|
|
|
|
|
|
Ardsley
Partners Renewable Energy Fund, L.P.
|
|
|
|
|
|
|
By:
|
/s/
Steve Napoli
|
|
|
Name:
|
Steve
Napoli
|
|
|
Title:
|
Partner
/ CFO
|
|
|
/s/
Ivan Saval
|
|
|
Ivan
Saval
|
[Signature
Page to Warrant Exchange Agreement]
|
|
Ivy
science & technology fund
|
|
|
|
|
|
By:
|
Ivy Investment Management Company, its investment advisor,
|
|
|
|
|
|
|
By:
|
/s/
Zachary H. Shafran
|
|
|
Name:
|
Zachary
H. Shafran
|
|
|
Title:
|
Senior
Vice President
|
|
|
IVy
VIP science & Technology
|
|
|
|
|
|
By:
|
Ivy Investment Management Company, its investment advisor,
|
|
|
|
|
|
|
By:
|
/s/
Zachary H. Shafran
|
|
|
Name:
|
Zachary
H. Shafran
|
|
|
Title:
|
Senior
Vice President
|
[Signature
Page to Warrant Exchange Agreement]
|
|
NATIONAL
SECURITIES CORPORATION
|
|
|
|
|
|
|
By:
|
/s/
Michael Mullen
|
|
|
Name:
|
Michael
Mullen
|
|
|
Title:
|
Chairman
& CEO
|
[Signature
Page to Warrant Exchange Agreement]
EXHIBIT
A
SCHEDULE
OF INVESTORS
|
(1) Investor
|
|
(2) Investor Address
and Facsimile Number
|
|
(3) Total Outstanding Warrant Shares
|
|
|
(4) Total New Warrant Shares
|
|
|
Ospraie Ag Science LLC
|
|
c/o Ospraie Management LLC
437 Madison Avenue, 28th Floor
New York, NY 10022
Attention: Dwight Anderson
Telephone: Email:
|
|
|
30,666,667
|
|
|
|
21,736,081
|
|
|
Ardsley Partners Renewable Energy Fund, L.P.
|
|
Ardsley Partners Renewable Energy Fund, L.P.
262 Harbor Drive, 4th Floor
Stamford, CT 06902
Attention: Steve Napoli
Facsimile:
Telephone:
Email:
|
|
|
5,333,333
|
|
|
|
3,780,185
|
|
|
Ivan Saval
|
|
Ivan Saval
Telephone:
Email:
|
|
|
637,165
|
|
|
|
446,577
|
|
|
Ivy Science & Technology Fund
|
|
c/o Ivy Investment Management Company
6300 Lamar Avenue
Overland Park, KS 66202
Attn.: Zack Shafran, Senior Vice President
Telephone:
Email:
|
|
|
7,540,000
|
|
|
|
3,201,820
|
|
|
Ivy VIP Science & Technology
|
|
c/o Ivy Investment Management Company
6300 Lamar Avenue
Overland Park, KS 66202
Attn.: Zack Shafran, Senior Vice President
Telephone:
Email:
|
|
|
460,000
|
|
|
|
195,337
|
|
|
National Securities Corporation
|
|
200 Vesey Street, 25th Floor, New York, NY 10281
Attention: Jonathan Rich, EVP – Head of Investment Banking
Facsimile:
Telephone:
|
|
|
1,340,644
|
|
|
|
521,855
|
|
|
Total
|
|
|
|
|
45,977,809
|
|
|
|
29,881,855
|
|
EXHIBIT
B
FORM
OF NEW WARRANT
EXHIBIT
C
NEW
WARRANT EXPIRATION SCHEDULE
|
Investor
|
|
New Warrant Shares in respect of New Warrants with an Expiration Date of:
|
|
|
|
|
May 1, 2020
(the “First Tranche Warrants”)
|
|
|
September 15, 2020
(the “Second Tranche Warrants”)
|
|
|
December 15, 2020
(the “Third Tranche Warrants”)
|
|
|
March 15, 2021
(the “Fourth Tranche Warrants”)
|
|
|
December 15, 2021
(the “Fifth Tranche Warrants”)
|
|
|
Ospraie Ag Science LLC
|
|
|
2,467,766
|
|
|
|
1,974,213
|
|
|
|
9,476,221
|
|
|
|
4,264,299
|
|
|
|
3,553,583
|
|
|
Ardsley Partners Renewable Energy Fund, L.P.
|
|
|
429,176
|
|
|
|
343,341
|
|
|
|
1,648,037
|
|
|
|
741,617
|
|
|
|
618,014
|
|
|
Ivan Saval
|
|
|
50,701
|
|
|
|
40,561
|
|
|
|
194,693
|
|
|
|
87,612
|
|
|
|
73,010
|
|
|
Ivy Science & Technology Fund
|
|
|
363,513
|
|
|
|
290,810
|
|
|
|
1,395,889
|
|
|
|
628,150
|
|
|
|
523,457
|
|
|
Ivy VIP Science & Technology
|
|
|
22,177
|
|
|
|
17,742
|
|
|
|
85,160
|
|
|
|
38,322
|
|
|
|
31,936
|
|
|
National Securities Corporation
|
|
|
59,248
|
|
|
|
47,398
|
|
|
|
227,512
|
|
|
|
102,380
|
|
|
|
85,317
|
|
|
Total
|
|
|
3,392,581
|
|
|
|
2,714,065
|
|
|
|
13,027,512
|
|
|
|
5,862,380
|
|
|
|
4,885,317
|
|
EXHIBIT
D
REGISTRATION
RIGHTS AGREEMENT
EXHIBIT
E
BOARD
RESOLUTIONS
Exhibit
10.2
REGISTRATION
RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of April 29, 2020, by and among Marrone Bio Innovations,
Inc., a Delaware corporation, with headquarters located at 1540 Drew Avenue, Davis, CA 95618 (the “Company”),
and the Investors (as hereinafter defined).
WHEREAS:
A.
Pursuant to the Warrant Exchange Agreement (the “Warrant Exchange Agreement”) dated the date hereof, by and
among the Company, Ospraie Ag Science LLC (“Ospraie”), Ardsley Partners Renewable Energy Fund, L.P. (“Ardsley”),
National Securities Corporation (“NSC”), Ivan Saval (Mr. Saval, together with Ospraie, Ardsley and NSC, the
“OAI Investors” and each, an “OAI Investor”), Ivy Science & Technology Fund (“IS&T”)
and Ivy VIP Science & Technology (“Ivy VIP” and, together with IS&T, the “Waddell Investors”,
and the Waddell Investors, together with the OAI Investors, the “Investors”), the Company has agreed, upon
the terms and subject to the conditions of the Warrant Exchange Agreement, to issue and sell to each Investor warrants (the “Warrants”),
which will be exercisable to purchase shares of Common Stock (as exercised, collectively, the “Warrant Shares”)
in accordance with the terms of the Warrants.
B.
In connection with transactions described above, the Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933
Act”).
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:
1.
Definitions.
|
|
A.
|
Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Warrant Exchange Agreement
(or, if not defined herein or in the Warrant Exchange Agreement, the Securities Purchase Agreement, dated as of December 15,
2017, by and among the Company and the Investors). As used in this Agreement, the following terms shall have the following
meanings:
|
(a)
“Additional Effective Date” means the date the Additional Registration Statement is declared effective by the
SEC.
(b)
“Additional Effectiveness Deadline” means the date which is the earlier of (x) (i) the date which is one hundred
twenty (120) calendar days after the earlier of the Additional Filing Date and the Additional Filing Deadline and (y) the fifth
(5th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Additional
Registration Statement will not be reviewed or will not be subject to further review; provided, however, that if the Additional
Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Additional Effectiveness
Deadline shall be extended to the next Business Day on which the SEC is open for business.
(c)
“Additional Filing Date” means the date on which the Additional Registration Statement is filed with the SEC.
(d)
“Additional Filing Deadline” means if Cutback Shares are required to be included in any Additional Registration
Statement, the later of (i) the date sixty (60) days after the date substantially all of the Registrable Securities registered
under the immediately preceding Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date
or the most recent Additional Effective Date, as applicable.
(e)
“Additional Registrable Securities” means, (i) any Cutback Shares not previously included on a Registration
Statement, and (ii) any capital stock of the Company issued or issuable with respect to the Warrants, the Warrant Shares or the
Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on exercise of the Warrants; provided, that any such Additional Registrable
Securities shall cease to be Additional Registrable Securities to the extent: (i) a Registration Statement with respect to the
sale of such Additional Registrable Securities has become effective under the 1933 Act and such Additional Registrable Securities
have been disposed of pursuant to such Registration Statement; (ii) such Additional Registrable Securities are able to be sold
pursuant to Rule 144 without regard to the volume and manner of sale limitations contained thereunder and without the requirement
of the Company to comply with Rule 144(c)(1); (iii) such Additional Registrable Securities shall have been otherwise transferred
and no longer bear a legend restricting transfer under the 1933 Act, and may be resold without registration under the 1933 Act;
or (iv) such Additional Registrable Securities cease to be outstanding.
(f)
“Additional Registration Statement” means a registration statement or registration statements of the Company
filed under the 1933 Act covering the resale of any Additional Registrable Securities.
(g)
“Additional Required Registration Amount” means any Cutback Shares not previously included on a Registration
Statement, without regard to any limitations on the exercise of the Warrants.
(h)
“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the
City of New York are authorized or required by law to remain closed.
(i)
“Cutback Shares” means any of the Initial Required Registration Amount or the Additional Required Registration
Amount of Registrable Securities not included in any Registration Statements previously declared effective hereunder as a result
of a limitation on the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the
SEC pursuant to Rule 415. The number of Cutback Shares shall be allocated pro rata among the Investors with each Investor entitled
to elect the portion of its Warrant Shares that are to be considered Cutback Shares.
(j)
“effective” and “effectiveness” refer to a Registration Statement that has been declared
effective by the SEC and is available for the resale of the Registrable Securities required to be covered thereby.
(k)
“Effective Date” means the Initial Effective Date and the Additional Effective Date, as applicable.
(l)
“Effectiveness Deadline” means the Initial Effectiveness Deadline and the Additional Effectiveness Deadline,
as applicable.
(m)
“Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the NYSE American LLC, The
NASDAQ Global Select Market or The NASDAQ Global Market.
(n)
“Filing Deadline” means the Initial Filing Deadline and the Additional Filing Deadline, as applicable.
(o)
“Initial Effective Date” means the date that the Initial Registration Statement has been declared effective
by the SEC.
(p)
“Initial Effectiveness Deadline” means March 31, 2021; provided, however, that that if the Initial Effectiveness
Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Initial Effectiveness Deadline shall
be extended to the next Business Day on which the SEC is open for business.
(q)
“Initial Filing Date” means the date on which the Initial Registration Statement is filed with the SEC.
(r)
“Initial Filing Deadline” means December 31, 2020.
(s)
“Initial Registrable Securities” means the Warrant Shares issued or issuable upon exercise of the Warrants
and (iii) any capital stock of the Company issued or issuable with respect to the Warrant Shares or the Warrants, in each case
as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any
limitations on the exercise of the Warrants; provided, that any such Initial Registrable Securities shall cease to be Initial
Registrable Securities to the extent: (i) a Registration Statement with respect to the sale of such Initial Registrable Securities
has become effective under the 1933 Act and such Initial Registrable Securities have been disposed of pursuant to such Registration
Statement; (ii) such Initial Registrable Securities are able to be sold pursuant to Rule 144 without regard to the volume and
manner of sale limitations contained thereunder and without the requirement of the Company to comply with Rule 144(c)(1); (iii)
such Initial Registrable Securities shall have been otherwise transferred and no longer bear a legend restricting transfer under
the 1933 Act, and may be resold without registration under the 1933 Act; or (iv) such Initial Registrable Securities cease to
be outstanding.
(t)
“Initial Registration Statement” means a registration statement or registration statements of the Company filed
under the 1933 Act covering the resale of the Initial Registrable Securities.
(u)
“Initial Required Registration Amount” means the maximum number of Warrant Shares issued and issuable pursuant
to the Warrants, as of the Trading Day immediately preceding the applicable date of determination, without regard to any limitations
on the exercise of the Warrants.
(v)
“Investors” means the investors listed on the Schedule of Investors attached hereto and any other holder of
Registrable Securities that is a party to this Agreement or that succeeds to the rights hereunder in accordance with Section 9.
(w)
“Lead Investor” means Ospraie Ag Science LLC.
(x)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or agency thereof.
(y)
“Principal Market” means The NASDAQ Capital Market.
(z)
“register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant
to Rule 415, and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.
(aa)
“Registrable Securities” means the Initial Registrable Securities and the Additional Registrable Securities;
provided, that any such Registrable Securities shall cease to be Registrable Securities to the extent: (i) a Registration
Statement with respect to the sale of such Registrable Securities has become effective under the 1933 Act and such Registrable
Securities have been disposed of pursuant to such Registration Statement; (ii) such Registrable Securities are able to be sold
pursuant to Rule 144 without regard to the volume and manner of sale limitations contained thereunder and without the Company’s
requirement to comply with Rule 144(c)(1); (iii) such Registrable Securities shall have been otherwise transferred and no longer
bear a legend restricting transfer under the 1933 Act, and may be resold without registration under the 1933 Act; or (iv) such
Registrable Securities cease to be outstanding.
(bb)
“Registration Statement” means the Initial Registration Statement and the Additional Registration Statement,
as applicable.
(cc)
“Required Holders” means the holders of at least a majority of the Registrable Securities and shall include
the Lead Investor so long as the Lead Investor or any of its Affiliates together maintain the Lead Investor Minimum Threshold
(as defined in the Warrants).
(dd)
“Required Registration Amount” means either the Initial Required Registration Amount or the Additional Required
Registration Amount, as applicable.
(ee)
“Rule 144” means Rule 144 (or any successor thereto) promulgated under the 1933 Act.
(ff)
“Rule 415” means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities
on a continuous or delayed basis.
(gg)
“SEC” means the United States Securities and Exchange Commission.
(hh)
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market
on which the Common Stock is then traded; 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).
2.
Registration.
(a)
Initial Mandatory Registration. The Company shall prepare, and, in no event later than the Initial Filing Deadline, file
with the SEC the Initial Registration Statement on Form S-3 covering the resale of all of the Initial Registrable Securities.
In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such
a registration on another appropriate form that the Company is then eligible to use, subject to the provisions of Section 2(e).
The Initial Registration Statement prepared pursuant hereto shall register for resale at least the number of shares of Common
Stock equal to the Initial Required Registration Amount determined as of the date the Initial Registration Statement is initially
filed with the SEC. The Initial Registration Statement shall contain the “Selling Stockholders” and “Plan
of Distribution” sections in substantially the form attached hereto respectively as Exhibits B-1 and B-2. The
Company shall use its reasonable best efforts to have the Initial Registration Statement declared effective by the SEC no later
than the Initial Effectiveness Deadline. By 9:30 a.m. New York time on the second Business Day following the Initial Effective
Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection
with sales pursuant to such Initial Registration Statement.
(b)
Additional Mandatory Registrations. The Company shall prepare, and, as soon as practicable but in no event later than the
Additional Filing Deadline, file with the SEC an Additional Registration Statement on Form S-3 covering the resale of all of the
Additional Registrable Securities not previously registered on an Additional Registration Statement hereunder. To the extent the
staff of the SEC does not permit the Additional Required Registration Amount to be registered on an Additional Registration Statement,
the Company shall file Additional Registration Statements successively trying to register on each such Additional Registration
Statement the maximum number of remaining Additional Registrable Securities until the Additional Required Registration Amount
has been registered with the SEC. In the event that Form S-3 is unavailable for such a registration, the Company shall use such
other form as is available for such a registration on another appropriate form that the Company is then eligible to use, subject
to the provisions of Section 2(e). Each Additional Registration Statement prepared pursuant hereto shall register for resale at
least that number of shares of Common Stock equal to the Additional Required Registration Amount determined as of the date such
Additional Registration Statement is initially filed with the SEC. Each Additional Registration Statement shall contain the “Selling
Stockholders” and “Plan of Distribution” sections in substantially the form attached hereto respectively
as Exhibits B-1 and B-2. The Company shall use its reasonable best efforts to have each Additional Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline. By 9:30
a.m. New York time on the second Business Day following the Additional Effective Date, the Company shall file with the SEC in
accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Additional
Registration Statement.
(c)
Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement
and any increase or decrease in the number of Registrable Securities included therein shall be allocated pro rata among the Investors
based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase or decrease thereof is declared effective by the SEC. In no event shall the Company
include any securities other than Registrable Securities on any Registration Statement without the prior written consent of the
Required Holders.
(d)
Investors’ Counsel. Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel
for the Investors to review any registration pursuant to this Section 2 (“Investors’ Counsel”), which
shall be designated by the Required Holders. The Company and Investors’ Counsel shall reasonably cooperate with each other
in performing the Company’s obligations under this Agreement.
(e)
Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) use such other form as is available for such a registration on another appropriate
form that the Company is then eligible to use and (ii) use its reasonable best efforts to register the Registrable Securities
on Form S-3 as soon as practicable after the Company becomes eligible to use such form, provided that the Company shall use its
reasonable best efforts to maintain the effectiveness of the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC. Notwithstanding the foregoing,
the Company shall take all actions necessary to maintain its eligibility to register the Registrable Securities for resale by
the Investors on Form S-3.
3.
Related Obligations. At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to
Section 2(a), 2(b) or 2(e), the Company will use its reasonable best efforts to effect the registration of the Registrable Securities
in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:
(a)
The Company shall use its reasonable best efforts to keep each Registration Statement effective pursuant to Rule 415 as long as
the securities covered thereby are Registrable Securities (the “Registration Period”). The Company shall ensure
that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.
The term “reasonable best efforts” shall mean, among other things, that the Company shall submit to the SEC, within
two (2) Business Days after the later of the date that (i) the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the
case may be, and (ii) the approval of Investors’ Counsel pursuant to Section 3(c) (which approval is immediately sought),
a request for acceleration of effectiveness of such Registration Statement to a time and date not later than two (2) Business
Days after the submission of such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration
Statement as soon as reasonably practicable, but in no event later than fifteen (15) days after the receipt of comments by or
notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective.
(b)
The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities covered by such Registration Statement until such time as all of such Registrable Securities shall
have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form
10-Q, Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”),
the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.
(c)
The Company shall (A) permit Investors’ Counsel to review and comment upon (i) a Registration Statement at least four (4)
Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except
for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports)
within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment
or supplement thereto (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
any similar or successor reports) in a form to which Investors’ Counsel reasonably objects. The Company shall not submit
a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the
prior approval of Investors’ Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Investors’
Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives
relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration
Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference,
if requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate
with Investors’ Counsel in performing the Company’s obligations pursuant to this Section 3.
(d)
The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge,
(i) if requested by an Investor, promptly after the same is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference,
all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, such number of copies
of the prospectus included in such Registration Statement and all amendments and supplements thereto as such Investor may reasonably
request and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.
(e)
The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities
or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Investors’
Counsel and each Investor of the receipt by the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
(f)
The Company shall notify Investors’ Counsel and each Investor in writing of the happening of any event but in any event
on the same Trading Day as such event, as promptly as practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (provided that in no event shall notice contain any material, nonpublic information,
unless an Investor gives its prior written consent thereto), and, subject to Section 3(r), promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement
or amendment to Investors’ Counsel and each Investor as Investors’ Counsel or such Investor may reasonably request.
The Company shall also promptly notify Investors’ Counsel and each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Investors’ Counsel and each Investor by facsimile or
email on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information and (iii) of the Company’s reasonable determination
that a post-effective amendment to a Registration Statement would be appropriate. By 9:30 a.m. New York City time on the second
Business Day following the date any post-effective amendment has become effective, the Company shall file with the SEC in accordance
with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.
(g)
The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness
of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, use its reasonable best efforts to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify Investors’ Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation of any proceeding
for such purpose.
(h)
If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or
an Investor reasonably believes (based on the advice of Investors’ Counsel) that it could reasonably be deemed to be an
underwriter of Registrable Securities, at the reasonable request of such Investor, the Company shall furnish to such Investor,
on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering,
addressed to such Investor, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to
such Investor.
(i)
If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or
an Investor reasonably believes (based on the advice of Investors’ Counsel) that it could reasonably be deemed to be an
underwriter of Registrable Securities, the Company shall make available for inspection by (i) such Investor and (ii) Investors’
Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”),
all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the
“Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers,
directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector
shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified,
unless (a) the disclosure of such Records is necessary to avoid or correct a material misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this Agreement. Each Investor agrees that it shall,
upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality
agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities
in a manner which is otherwise consistent with applicable laws and regulations.
(j)
The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release
of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation
of this Agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor
is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.
(k)
The Company shall promptly use its reasonable best efforts to either (i) cause all of the Registrable Securities covered by a
Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the
Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange
or (ii) secure the inclusion for quotation of all of the Registrable Securities on the Principal Market or another Eligible Market
that is then the principal trading market on which the Common Stock is listed. The Company shall use its reasonable best efforts
to maintain the authorization for quotation of the Common Stock on the Principal Market or any other Eligible Market. Neither
the Company nor any of its Subsidiaries (as defined in Exhibit B to the Warrant Exchange Agreement) shall take any action which
would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company
shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k).
(l)
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Investors may reasonably request and registered in such names as the Investors may request.
(m)
If requested by an Investor, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective
amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being
offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering (to the extent such information relates to information relating to such Investor); and (ii) make all required
filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment.
(n)
The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition
of such Registrable Securities.
(o)
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the applicable Effective Date of a Registration Statement.
(p)
The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in
connection with any registration hereunder.
(q)
Within two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A.
(r)
Notwithstanding anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of
material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion
of the Board of Directors of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to
the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the
Investors in writing of the existence of material, non- public information giving rise to a Grace Period (provided that in each
notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which
the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided
further, that no Grace Period shall exceed twenty (20) consecutive days and during any three hundred sixty five (365) day period
such Grace Periods shall not exceed an aggregate of sixty (60) days and the first day of any Grace Period must be at least five
(5) Trading Days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes
of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive
the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred
to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during
the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence
of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer
applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares
of Common Stock to a transferee of an Investor in accordance with the terms of the Warrant Exchange Agreement in connection with
any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale, prior to the Investor’s
receipt of the notice of a Grace Period and for which the Investor has not yet settled.
(s)
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure
or filing with the SEC, the Principal Market or any Eligible Market and any Investor being deemed an underwriter by the SEC; provided,
however, that the foregoing shall not prohibit the Company from including the disclosure found in the “Plan of Distribution”
section attached hereto as Exhibit B-2 in the Registration Statement.
(t)
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, without the prior written consent of the Required Holders, enter into any agreement with
respect to its securities, that conflict with or impair the registration rights granted to the Investors in this Agreement or
otherwise conflicts with the provisions hereof.
4.
Obligations of the Investors.
(a)
At least five (5) Business Days prior to the first anticipated Filing Date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of
such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities
of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to
effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.
(b)
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.
(c)
Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of copies of
the supplemented or amended prospectus as contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice
that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent
to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Warrant Exchange
Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract
for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described
in Section 3(g) or the first sentence of Section 3(f) and for which the Investor has not yet settled.
(d)
Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable
to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.
5.
Expenses of Registration. All expenses incident to the Company’s performance of or compliance with this Agreement
shall be paid by the Company, including, without limitation, all registration, listing and qualifications fees, printers fees,
fees and expenses of the Company’s independent auditors, and fees and expenses of counsel for the Company shall be paid
by the Company. The Company shall also be responsible for the reasonable fees and disbursements of Investors’ Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement, which amount shall be limited
to $15,000 for each such registration, filing or qualification; provided, however, that the Company shall not be required
to reimburse the Investors’ for fees and disbursements of Investors’ Counsel in accordance with the foregoing with
respect to more than three (3) such registrations. Notwithstanding the foregoing, in connection with any offerings pursuant to
a Registration Statement filed in accordance with this Agreement, each Investor shall pay (i) any underwriting fees, discounts
or commissions attributable to the sale of Registrable Securities by such Investor, (ii) any fees and expenses of brokers, advisors,
accountants or counsel to such Investor (other than as set forth in the immediately preceding sentence) and (iii) any applicable
transfer or similar taxes.
6.
Indemnification. In the event any Registrable Securities are included in a Registration Statement under this Agreement:
(a)
To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Investor, the directors, officers,
partners, members, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning
of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or
several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party
thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities
or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”),
or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary
prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934
Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to
the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the
matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c),
the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person or by counsel to such Indemnified Person for such Indemnified
Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement
thereto if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.
(b)
In connection with any Registration Statement in which an Investor is participating, each such Investor shall, severally and not
jointly, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers
who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the
1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor or by counsel to such Investor expressly for
use in connection with such Registration Statement; provided, however, that the indemnity agreement contained in this Section
6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably
withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount
of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.
(c)
Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to
the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of
the defense thereof with counsel selected by the Indemnified Person or the Indemnified Party and reasonably acceptable to the
indemnifying party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right
to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified
Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified
Party, as applicable, the representation by such counsel of the Indemnified Person or Indemnified Party, as the case may be, and
the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal
counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest
of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified
Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action
or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying
party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as a term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of an unconditional release from all liability in respect to such Claim or litigation
and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to
the extent that the indemnifying party is prejudiced in its ability to defend such action as a result of such failure or delay.
(d)
The indemnification required by this Section 6 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 Indemnified Damages are incurred.
(e)
The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
7.
Contribution. If the indemnification provided for in Section 6 is unavailable or insufficient to hold harmless an indemnified
party in respect of any Losses, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute
to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as appropriate to reflect
the relative fault of the indemnifying party, on the one hand, and indemnified party, on the other hand, which relative fault
shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information supplied by such indemnified party or indemnifying
party, and such parties’ relative intent, knowledge, access to information and opportunity to correct or mitigate the damage
in respect of or prevent the untrue statement or omission giving rise to such indemnification obligation; provided, however, that:
(i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved
in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller
of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement.
8.
Reports Under the 1934 Act. With a view to making available to the Investors the benefits of Rule 144, the Company agrees
that it will: (i) make and keep public information available, as those terms are understood and defined in Rule 144; (ii) without
limiting the generality of the foregoing clause (i), file with the SEC in a timely manner all reports and other documents required
of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (or, if the Company
is not required to file such reports, it will, upon the reasonable request of any Investor, make publicly available such necessary
information for so long as necessary to permit sales pursuant to Rule 144); and (iii) take all such actions necessary to maintain
its eligibility to sell such securities pursuant to Rule 144. Upon the request of an Investor, the Company will deliver to such
Investor a written statement as to whether it has complied with such requirements. The Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no
longer require or otherwise permit such termination.
9.
Assignment of Registration Rights. The rights of any Investor under this Agreement may be assigned by such Investor to
any transferee of all or any portion of such Investor’s Registrable Securities; provided, that: (i) the Investor agrees
in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within
a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished
with written notice of (a) the name and address of such transferee or assignee, and (b) the Registrable Securities with respect
to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the
further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities
laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing with the Company, in form and substance reasonably acceptable to the Company, to be bound by all
of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements
of the Warrant Exchange Agreement.
10.
Amendment of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the
Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of
the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered
to all of the parties to this Agreement.
11.
Miscellaneous.
(a)
This Agreement shall be effective as of the date hereof. This Agreement shall automatically terminate as to any Investor, at such
time when such Investor ceases to hold any Registrable Securities. This Agreement shall terminate automatically, and the Company
shall have no further obligations hereunder, at such time when no Investor holds Registrable Securities.
(b)
If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable
Securities.
(c)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon delivery, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); (iii) upon delivery, when sent by electronic mail (provided that the sending party does not receive an automated rejection
notice); or (iv) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
|
If
to the Company:
|
|
|
|
|
Marrone
Bio Innovations, Inc.
|
|
1540
Drew Avenue
|
|
Davis,
CA 95618
|
|
Telephone:
|
530-302-8289
|
|
Facsimile:
|
530-302-0189
|
|
Attention:
|
Linda
V. Moore, General Counsel
|
|
E-mail:
|
lmoore@marronebio.com
|
|
|
|
|
With
a copy (for informational purposes only) to:
|
|
Morrison
& Foerster LLP
|
|
425
Market Street
|
|
San
Francisco, CA 94105
|
|
Telephone:
|
415-258-6213
|
|
Facsimile:
|
415-276-7201
|
|
Attention:
|
Alfredo
B. D. Silva, Esq.
|
|
Email:
|
ASilva@mofo.com
|
|
|
|
|
If
to the Transfer Agent:
|
|
|
|
|
American
Stock Transfer & Trust Company, LLC
|
|
6201
15th Avenue
|
|
Brooklyn,
NY 11219
|
|
Telephone:
|
718-921-8337
|
|
Facsimile:
|
718-765-8795
|
|
Attention:
|
Craig
Colosso, Relationship Manager
|
|
E-mail:
|
ccolosso@amstock.com
|
If
to an Investor, to its address, facsimile number and/or email address set forth on the Schedule of Investors attached hereto,
with copies to such Investor’s representatives as set forth on the Schedule of Investors, or to such other address, facsimile
number and/or email address to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
facsimile machine or e-mail transmission containing the time, date, recipient facsimile number or e-mail address and an image
of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.
(d)
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.
(e)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement 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. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(f)
If any provision of this Agreement 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 Agreement so long as this Agreement 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).
(g)
This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof. There are
no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement, the other
Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.
(h)
Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors
and assigns of each of the parties hereto.
(i)
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(j)
This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile
transmission or electronic mail of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
(k)
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(l)
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the Warrants held by Investors then outstanding
have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.
(m)
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and
no rules of strict construction will be applied against any party.
(n)
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(o)
The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision
of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained
herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions contemplated herein.
*
* * * * *
[Signature
Page Follows]
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
COMPANY:
|
|
|
|
|
|
|
MARRONE BIO INNOVATIONS, INC.
|
|
|
|
|
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By:
|
/s/
Linda V. Moore
|
|
|
Name:
|
Linda
V. Moore
|
|
|
Title:
|
EVP,
General Counsel and Secretary
|
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
INVESTORS:
|
|
|
|
|
|
|
OSPRAIE AG SCIENCE LLC
|
|
|
|
|
|
|
By:
|
/s/
Jason Mraz
|
|
|
Name:
|
Jason
Mraz
|
|
|
Title:
|
Authorized
Signatory
|
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
INVESTORS:
|
|
|
|
|
|
|
Ardsley Partners Renewable Energy Fund, L.P.
|
|
|
|
|
|
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By:
|
/s/
Steve Napoli
|
|
|
Name:
|
Steve
Napoli
|
|
|
Title:
|
Partner
/ CFO
|
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
INVESTORS:
|
|
|
|
|
|
/s/
Ivan Saval
|
|
|
Ivan
Saval
|
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
INVESTORS:
|
|
|
|
|
|
|
Ivy science & technology fund
|
|
|
|
|
|
|
By: Ivy Investment Management Company, its investment advisor,
|
|
|
|
|
|
|
By:
|
/s/
Zachary H. Shafran
|
|
|
Name:
|
Zachary
H. Shafran
|
|
|
Title:
|
Senior
Vice President
|
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
INVESTORS:
|
|
|
|
|
|
|
IVy VIP science & Technology
|
|
|
|
|
|
|
By: Ivy Investment Management Company, its investment advisor,
|
|
|
|
|
|
|
By:
|
/s/
Zachary H. Shafran
|
|
|
Name:
|
Zachary
H. Shafran
|
|
|
Title:
|
Senior
Vice President
|
IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.
|
|
INVESTORS:
|
|
|
|
|
|
|
NATIONAL SECURITIES CORPORATION
|
|
|
|
|
|
|
By:
|
/s/
Michael Mullen
|
|
|
Name:
|
Michael Mullen
|
|
|
Title:
|
Chairman & CEO
|
SCHEDULE
OF INVESTORS
|
Investor
|
|
Investor
Address and Facsimile Number
|
|
|
|
|
|
Ospraie
Ag Science LLC
|
|
c/o
Ospraie Management LLC
437
Madison Avenue, 28th Floor
New
York, NY 10022
Attention:
Dwight Anderson
Telephone:
Email:
|
|
|
|
|
|
Ardsley
Partners Renewable Energy Fund, L.P.
|
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Ardsley
Partners Renewable Energy Fund, L.P.
262
Harbor Drive, 4th Floor
Stamford,
CT 06902
Attention:
Steve Napoli
Facsimile:
Telephone:
Email:
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National
Securities Corporation
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200
Vesey Street, 25th Floor, New York, NY 10281
Attention:
Jonathan Rich, EVP – Head of Investment Banking
Facsimile:
Telephone:
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Ivan
Saval
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Ivan
Saval
Telephone:
Email:
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Ivy
Science & Technology Fund
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Ivy
Science & Technology Fund
c/o
Ivy Investment Management Company
6300
Lamar Avenue
Overland
Park, KS 66202
Attn.:
Zack Shafran, Senior Vice President
Telephone:
Email:
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Ivy
VIP Science & Technology
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Ivy
VIP Science & Technology
c/o
Ivy Investment Management Company
6300
Lamar Avenue
Overland
Park, KS 66202
Attn.:
Zack Shafran, Senior Vice President
Telephone:
Email:
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EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
American
Stock Transfer & Trust Company, LLC
6201
15th Avenue
Brooklyn,
NY 11219
Telephone:
718-921-8337
Facsimile:
718-765-8795
Attention:
Craig Colosso, Relationship Manager
E-mail:
ccolosso@amstock.com
Re:
Marrone Bio Innovations, Inc.
Ladies
and Gentlemen:
[We
are][I am] counsel to Marrone Bio Innovations, Inc., a Delaware corporation (the “Company”), and have represented
the Company in connection with that certain Registration Rights Agreement, dated as of [____], 2019 (the “Registration
Rights Agreement”), entered into by and among the Company and the persons named therein (collectively, the “Holders”)
pursuant to which the Company agreed, among other things, to register the resale of the Registrable Securities (as defined in
the Registration Rights Agreement) under the Securities Act of 1933, as amended (the “1933 Act”). In connection
with the Company’s obligations under the Registration Rights Agreement, on ___________, 20__, the Company filed a Registration
Statement on Form S-3 (File No. 333-________________) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Securities which names each of the Holders as a
selling stockholder thereunder.
In
connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that
the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS] and to [our][my] knowledge, based on a review of the Stop Orders page of the
SEC’s website, there has not been issued any stop order suspending its effectiveness nor have there been any proceedings
for that purpose instituted nor are any such proceedings pending before or threatened by, the SEC and the Registrable Securities
are available for resale under the 1933 Act pursuant to the Registration Statement.
This
letter shall serve as our standing instruction to you that the shares of Common Stock are freely transferable by the Holders pursuant
to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance
of shares of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
______________, 20__.
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Very truly yours,
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[ISSUER’S COUNSEL]
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By:
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CC:
[LIST NAMES OF HOLDERS]
EXHIBIT
B-1
SELLING
STOCKHOLDERS
The
common stock being offered by the selling stockholders are those previously issued to the selling stockholders, and those issuable
to the selling stockholders, upon exercise of the warrants. For additional information regarding the issuances of those shares
of common stock and warrants, see “Private Placement of Warrants” above. We are registering the shares of common stock
in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the
shares of common stock and the warrants, the selling stockholders have not had any material relationship with us within the past
three years.
The
table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock
by each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by each selling
stockholder, based on its ownership of the shares of common stock and warrants, as of _______________, 20__, assuming exercise
of the warrants held by the selling stockholders on that date, without regard to any limitations on exercises.
The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders.
In
accordance with the terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the
resale of at least the sum of (i) the maximum number of shares of common stock issued and (ii) the maximum number of shares of
common stock issuable upon exercise of the related warrants, determined as if the outstanding warrants were exercised in full
as of the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of
the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration
right agreement, without regard to any limitations on the exercise of the warrants. The fourth column assumes the sale of all
of the shares offered by the selling stockholders pursuant to this prospectus.
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Name
of Selling Stockholder
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Number
of shares of Common Stock Owned Prior to Offering
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Maximum
Number of shares of Common Stock to be Sold Pursuant to this Prospectus
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Number
of shares of Common Stock Owned After Offering
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Ospraie
Ag Science LLC
Ardsley
Partners Renewable Energy Fund, L.P.
Ivan
Saval
Ivy
Science & Technology Fund
Waddell
& Reed Advisors Science & Technology Fund
Ivy
VIP Science & Technology
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Exhibit
B-2
PLAN
OF DISTRIBUTION
We
are registering the shares of common stock previously issued and upon exercise of the warrants to permit the resale of these shares
of common stock by the holders thereof and holders of the shares of common stock warrants from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock.
We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The
selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through
underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s
commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,
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on
any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
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in
the over-the-counter market;
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in
transactions otherwise than on these exchanges or systems or in the over-the- counter market;
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through
the writing of options, whether such options are listed on an options exchange or otherwise;
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
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an
exchange distribution in accordance with the rules of the applicable exchange;
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privately
negotiated transactions;
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short
sales;
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sales
pursuant to Rule 144;
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broker-dealers
may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share;
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a
combination of any such methods of sale; and
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any
other method permitted pursuant to applicable law.
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If
the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions
from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or
agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common
stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage
in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also
sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and
to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all of the warrants or shares of common stock owned by
them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell
the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders
to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling
stockholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be
“underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the
time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name
or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed
brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered
or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the
registration statement, of which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders
and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the
shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing
may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We
will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated
to be $___________in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance
with state securities or “blue sky” laws; provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities
under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled
to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.
Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable
in the hands of persons other than our affiliates.
Exhibit
99.1
Marrone Bio Announces Warrant Exchange Agreement
DAVIS,
Calif., April 30, 2020 — Marrone Bio Innovations, Inc. (Nasdaq: MBII) (the “Company” or “Marrone Bio”)
an international leader in sustainable bioprotection and plant health solutions, has signed a warrant exchange agreement with
existing institutional investors that immediately reduces the total number of outstanding warrants by approximately 35%, from
52.6 million to 36.5 million.
The
warrant exchange transaction was entered into between the Company and existing investors Waddell & Reed, Ospraie Ag Science
LLC, Ardsley Partners Renewable Energy Fund, L.P., National Securities Corporation and Ivan Saval.
Under
the agreement, 46.0 million warrants have been exchanged for 29.9 million new warrants with an exercise price of $0.75 per share.
The new warrants have five different expiration dates. Three of these warrant tranches have expiration dates throughout 2020 and
will provide approximately $14.4 million in net proceeds if exercised in full, with the investors agreeing to exercise the first
$2.5 million as of May 1, 2020. The other two warrant tranches have expiration dates in 2021 and will provide $8.1 million in
net proceeds if exercised in full, for a total of approximately $22.4 million.
“This
warrant exchange transaction is a win-win for all parties. The tranched structure of the warrant expiration dates is intentionally
designed to provide funding when and as we will need it. Assuming full exercise, the warrants are expected to take the Company
to cashflow breakeven under the Company’s current operational plan and will allow us to continue executing upon our growth
plan, while significantly reducing our fully diluted shares outstanding. Specifically, this transaction will result in a 79.1%
reduction in warrants outstanding at the end of 2020, and a 99.6% reduction in warrants outstanding by the end of 2021, thereby
effectively eliminating any warrant overhang,” said Jim Boyd, President and Chief Financial Officer of Marrone Bio Innovations.
“The
new economy as a result of the COVID-19 pandemic is going to present many challenges and opportunities. The impact of good stewardship
of our shared world had never been more self evident. The uncertainty that this new economy presents has to be recognized and
planned for and is why we moved quickly to complete this transaction. We feel privileged to be in a position to contribute and
have investors who believe in our mission to help feed the world in a healthy and sustainable manner,” concluded Boyd.
“I
speak on behalf of the Company’s three largest investors when I say that we are extremely pleased to be entering into this
transaction. Together, we believe that Marrone Bio is incredibly well positioned to be a forerunner in the ongoing transition
to sustainable agriculture. Biologicals will play a significant role in this transition and we believe that Marrone Bio has the
products based upon best-in-class science to seize this opportunity,” added Jason Mraz, President of Ospraie Ag Science.
About
Marrone Bio Innovations
Marrone
Bio Innovations Inc. (NASDAQ: MBII) is a growth-oriented company leading the movement to a more sustainable world through the
discovery, development and sale of innovative biological products for crop protection, plant health and waterway systems treatment
that help customers operate more sustainably while increasing their return on investment. MBI has screened over 18,000 microorganisms
and 350 plant extracts, leveraging its in-depth knowledge of plant and soil microbiomes enhanced by advanced molecular technologies
and natural product chemistry to rapidly develop seven product lines. Supported by a robust portfolio of over 400 issued and pending
patents, MBI’s currently available commercial products are Regalia®, Stargus®, Grandevo®,
Venerate®, Majestene®, Haven® and Amplitude®, Pacesetter™, Zelto®
Jet Oxide® and Jet Ag® and Zequanox®, with a breakthrough bioherbicide and
biofumigant in the Company’s product pipeline. MBI’s Pro Farm Finland-based subsidiary employs a proprietary technology
derived from wood waste to stimulate plant growth and improve plant health, resulting in improved yields and crop quality. Products
include UBP™ 110, Foramin®, UBP™ Seed Treatment, Foramin® ST.
Learn
more about Marrone Bio Innovations at www.marronebio.com. We also use our investor relations website, https://investors.marronebio.com,
as well as our corporate Twitter account, @Marronebio, as means of disclosing material non-public information, and encourage our
investors and others to monitor and review the information we make public in these locations. Follow us on social media: Twitter,
LinkedIn and Instagram.
Forward
Looking Statements
This
press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than
statements of historical facts, included in this press release regarding strategy, future operations and plans, including assumptions
underlying such statements, are forward-looking statements, and should not be relied upon as representing MBI’s views as
of any subsequent date. Examples of such statements include statements regarding the potential exercise of warrants, the Company’s
anticipated cash needs and growth plan, and the potential benefits of the Company’s products. Such forward-looking statements
are based on information available to the Company as of the date of this release and involve a number of risks and uncertainties,
some beyond the Company’s control, that could cause actual results to differ materially from those anticipated by these
forward-looking statements, including the Company’s operational results, trading volatility, other factors affecting the
Company’s stock price and market value and any adverse decisions by regulatory agencies. Additional information that could
lead to material changes in the Company’s performance is contained in its filings with the SEC. The Company is under no
obligation to, and expressly disclaims any responsibility to, update or alter forward-looking statements contained in this release,
whether as a result of new information, future events or otherwise.
Investor
Relations Contact:
Greg
Falesnik, Managing Director
MZ
Group – MZ North America
Main:
949-385-6449
MBII@mzgroup.us
www.mzgroup.us