Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (“Agreement”) is made and entered into on April
23, 2015 (“Effective Date”), by and between Amarantus BioScience Holdings, Inc.,
a Nevada corporation (“Company”), and Discover Growth Fund, a Cayman Islands
exempted mutual fund (“Investor”).

 

Recitals

 

A. The parties desire that, upon the terms and subject to the conditions herein,
Investor will purchase $5 Million in shares of redeemable Series G Preferred
Stock of the Company, which is convertible into Common Stock at $0.06 per share;
and

 

B. The offer and sale of the Preferred Shares provided for herein are being made
pursuant to exemption from registration under Section 4(a)(2) of the Act as a
transaction by an issuer not involving any public offering, and as a private
placement of restricted securities pursuant to Regulation S and Rule 506 of
Regulation D.

 

Agreement

 

In consideration of the foregoing, the receipt and adequacy of which are hereby
acknowledged, Company and Investor agree as follows:

 

I. Definitions. In addition to the terms defined elsewhere in this Agreement and
the Transaction Documents, capitalized terms that are not otherwise defined have
the meanings set forth in the Glossary of Defined Terms attached hereto as
Exhibit 1.

 

II. Purchase and Sale.

 

A. Purchase Amount. Subject to the terms and conditions herein and the
satisfaction of the conditions to Closing set forth below, Investor hereby
irrevocably agrees to purchase 1,087 Preferred Shares of Company at $5,000.00
per share with an 8.0% original issue discount for the sum of $5,000,000.00
(“Purchase Amount”) in cash.

 

B. Deliveries. The following documents will be fully executed and delivered at
the Closing:

 

1. Certificate of Designations, in the form attached hereto as Exhibit 2, as
filed with and accepted by the Secretary of State of Company’s state of
incorporation;

 

2. Transfer Agent Instructions, in the form attached hereto as Exhibit 3;

 

3. Legal Opinion, in the form attached hereto as Exhibit 4;

 

4. Officer’s Certificate, in the form attached hereto as Exhibit 5;

 

5. Secretary’s Certificate, in the form attached hereto as Exhibit 6; and

 

6. Stock certificate for 1,087 Preferred Shares in the name of Investor.

 

 

 

 

C. Closing Conditions. The consummation of the transactions contemplated by this
Agreement (“Closing”) is subject to the satisfaction of each of the following
conditions:

 

1. All documents, instruments and other writings required to be delivered by
Company to Investor pursuant to any provision of this Agreement or in order to
implement and effect the transactions contemplated herein have been fully
executed and delivered, including without limitation those enumerated in Section
II.B above;

 

2. The Common Stock is listed for and currently trading on the same or higher
Trading Market and, subject to Section IV.L below, Company is in compliance with
all requirements to maintain listing on the Trading Market, and there is no
notice of any suspension or delisting with respect to the trading of the shares
of Common Stock on such Trading Market;

 

3. The representations and warranties of Company and Investor set forth in this
Agreement are true and correct in all material respects as if made on such date;

 

4. No material breach or default has occurred under any Transaction Document or
any other agreement between Company and Investor;

 

5. Company has the number of duly authorized shares of Common Stock reserved for
issuance as required pursuant to the terms of this Agreement;

 

6. There is not then in effect any law, rule or regulation prohibiting or
restricting the transactions contemplated in any Transaction Document, or
requiring any consent or approval which will not have been obtained, nor is
there any pending or threatened proceeding or investigation which may have the
effect of prohibiting or adversely affecting any of the transactions
contemplated by this Agreement; no statute, rule, regulation, executive order,
decree, ruling or injunction will have been enacted, entered, promulgated or
adopted by any court or governmental authority of competent jurisdiction that
prohibits the transactions contemplated by this Agreement, and no actions, suits
or proceedings will be in progress, pending or, to Company’s knowledge
threatened, by any person other than Investor or any Affiliate of Investor, that
seek to enjoin or prohibit the transactions contemplated by this Agreement; and

 

7. Any rights of first refusal, preemptive rights, rights of participation, or
any similar right to participate in the transactions contemplated by this
Agreement have been waived in writing.

 

D. Closing. Immediately when all conditions set forth in Section II.C have been
fully satisfied, Company will issue and sell to Investor and Investor will
purchase 1,087 Preferred Shares by payment to Company of $5,000,000.00 in cash,
by wire transfer of immediately available funds to an account designated by
Company.

 

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III. Representations and Warranties.

 

A. Representations Regarding Transaction. Except as set forth under the
corresponding section of the Disclosure Schedules, if any, Company hereby
represents and warrants to, and as applicable covenants with, Investor as of the
Closing:

 

1. Organization and Qualification. Company and each Subsidiary is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, as
applicable, with the requisite power and authority to own and use its properties
and assets and to carry on its business as currently conducted. Neither Company
nor any Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents, except as would not reasonably be expected
to result in a Material Adverse Effect. Each of Company and each Subsidiary is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, would not reasonably be expected to result in a Material Adverse Effect and
no proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

 

2. Authorization; Enforcement. Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder or thereunder. The execution and delivery of each of the Transaction
Documents by Company and the consummation by it of the transactions contemplated
hereby or thereby have been duly authorized by all necessary action on the part
of Company and no further consent or action is required by Company. Each of the
Transaction Documents has been, or upon delivery will be, duly executed by
Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of Company, enforceable against Company in
accordance with its terms, except (a) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (b)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (c) insofar as indemnification
and contribution provisions may be limited by applicable law.

 

3. No Conflicts. The execution, delivery and performance of the Transaction
Documents by Company, the issuance and sale of the Shares and the consummation
by Company of the other transactions contemplated thereby do not and will not
(a) conflict with or violate any provision of Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, (b) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in
the creation of any Lien upon any of the properties or assets of Company or any
Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing Company or
Subsidiary debt or otherwise) or other understanding to which Company or any
Subsidiary is a party or by which any property or asset of Company or any
Subsidiary is bound or affected, (c) conflict with or result in a violation of
any material law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which Company or a
Subsidiary is subject (including U.S. federal and state securities laws and
regulations), or by which any property or asset of Company or a Subsidiary is
bound or affected, or (d) conflict with or violate the terms of any material
agreement by which Company or any Subsidiary is bound or to which any property
or asset of Company or any Subsidiary is bound or affected; except in the case
of each of clauses (b), (c) and (d), such as would not reasonably be expected to
result in a Material Adverse Effect.

 

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4. Litigation. There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of Company, threatened
against or affecting Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”), which would reasonably be expected to adversely
affect or challenge the legality, validity or enforceability of any of the
Transaction Documents or the issuance of any Shares hereunder. The Commission
has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by Company or any Subsidiary under the Exchange Act
or the Act.

 

5. Filings, Consents and Approvals. Neither Company nor any Subsidiary is
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by Company of the Transaction Documents,
other than required federal and state securities filings and such filings and
approvals as are required to be made or obtained under the applicable Trading
Market rules in connection with the transactions contemplated hereby, each of
which has been, or if not yet required to be filed will be, timely filed.

 

6. Issuance of Shares. The Shares are duly authorized and, when issued and paid
for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens.
Company has reserved and will continue to reserve from its duly authorized
capital stock sufficient shares of its Common Stock for issuance pursuant to the
Transaction Documents.

 

7. Disclosure; Non-Public Information. Company will timely file a current report
on Form 8-K describing the material terms and conditions of this Agreement.
Notwithstanding any other provision, except with respect to information that
must be, and only to the extent that it actually is, timely publicly disclosed
by Company pursuant to the foregoing sentence, neither Company nor any other
Person acting on its behalf has provided Investor or its representatives, agents
or attorneys with any information that constitutes or might constitute material,
non-public information, including without limitation this Agreement and the
Exhibits and Disclosure Schedules hereto. No information contained in the
Disclosure Schedules constitutes material non-public information. There is no
adverse material information regarding Company that has not been publicly
disclosed prior to the Effective Date. Company understands and confirms that
Investor will rely on the foregoing representations and covenants in effecting
transactions in securities of Company. All disclosure provided to Investor
regarding Company, its business and the transactions contemplated hereby,
including without limitation the Disclosure Schedules, furnished by or on behalf
of Company with respect to the representations and warranties made herein are
true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.

 

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8. No Integrated Offering. Neither Company, nor any of its Affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering to be integrated with prior
offerings by Company that cause a violation of the Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of the Trading Market.

 

9. Financial Condition. Based on the financial condition of Company and its
projected operating and capital requirements, effective as of the Effective
Date, the Company will require additional capital to carry on its business as
now conducted and as proposed to be conducted. Company does not intend to incur
debts beyond its ability to pay such debts as they mature, taking into account
the timing and amounts of cash to be payable on or in respect of its debt. The
Public Reports set forth as of the dates thereof all outstanding secured and
unsecured Indebtedness of Company or any Subsidiary, or for which Company or any
Subsidiary has commitments, and any default with respect to any Indebtedness.

 

10. Section 5 Compliance. No representation or warranty or other statement made
by Company in the Transaction Documents contains any untrue statement or omits
to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading. Company is not aware of any
facts or circumstances that would cause the transactions contemplated by the
Transaction Documents, when consummated, to violate Section 5 of the Act or
other federal or state securities laws or regulations.

 

11. Investment Company. Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Preferred Shares, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. Company will conduct its business in a manner
so that it will not become subject to the Investment Company Act.

 

12. No Bad Actor Disqualification. Neither Company, any predecessor of Company,
any affiliate of Company, any director, executive officer, other officer of
Company participating in the offering, or any beneficial owner of 20% or more of
Company’s outstanding voting equity securities is subject to any bad actor
disqualification as provided in Rule 506(d) of Regulation D.

 

13. Offshore Transaction. Company has not, and will not, engage in any directed
selling efforts, as defined in Regulation S, in the United States in respect of
any of the Preferred Shares. Company is offering and selling the Preferred
Shares only in offshore transactions, in accordance with Regulation S. Company
and its Affiliates have complied, and will comply, with the offering
restrictions requirements of Regulation S. Company has only offered, and will
only offer, the Preferred Shares to Investor.

 

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14. Acknowledgments Regarding Investor. Company’s decision to enter into this
Agreement has been based solely on the independent evaluation of Company and its
representatives, and Company acknowledges and agrees that:

 

a. Investor is not, has never been, and as a result of the transactions
contemplated by the Transaction Documents will not become an officer, director,
insider, control person, to Company’s knowledge 10% or greater shareholder, or
otherwise an affiliate of Company as defined under Rule 12b-2 of the Exchange
Act;

 

b. Investor does not make or has not made any representations, warranties or
agreements with respect to the Shares, this Agreement, or the transactions
contemplated hereby other than those specifically set forth in Section III.C
below;

 

c. The conversion of Preferred Shares and resale of Conversion Shares will
result in dilution, which may be substantial; the number of Conversion Shares
will increase in certain circumstances; and Company’s obligation to issue and
deliver Conversion Shares in accordance with this Agreement and the Certificate
of Designations is absolute and unconditional regardless of the dilutive effect
that such issuances may have; and

 

d. Investor is acting solely in the capacity of arm’s length purchaser with
respect to this Agreement and the transactions contemplated hereby; neither
Investor nor any of its Affiliates, agents or representatives has or is acting
as a legal, financial, investment, accounting, tax or other advisor to Company,
or fiduciary of Company, or in any similar capacity; neither Investor nor any of
its Affiliates, agents or representatives has provided any legal, financial,
investment, accounting, tax or other advice to Company; any statement made in
connection with this Agreement or the transactions contemplated hereby is not
advice or a recommendation, and is merely incidental to Investor’s purchase of
the Shares.

 

B. Representations Regarding Company. Except as set forth in any current Public
Reports and attached exhibits, or under the corresponding section of the
Disclosure Schedules, if any, Company hereby represents and warrants to, and as
applicable covenants with, Investor as of the Closing:

 

1. Capitalization. The capitalization of the Company as of the Effective Date is
as described in the Public Reports. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents which has not been
waived or satisfied. Except as a result of the purchase and sale of the Shares,
there are no outstanding options, warrants, script rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or securities
convertible into or exercisable for shares of Common Stock. The issuance and
sale of the Shares will not obligate Company to issue shares of Common Stock or
other securities to any Person, other than Investor, and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange, or reset price under such securities. All of the outstanding shares of
capital stock of Company are validly issued, fully paid and nonassessable, have
been issued in material compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors of Company
or others is required for the issuance and sale of the Shares. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to Company’s capital stock to which Company is a party or, to the
knowledge of Company, between or among any of Company’s stockholders.

 

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2. Subsidiaries. All of the direct and indirect subsidiaries of Company are set
forth in the Public Reports or the corresponding section of the Disclosure
Schedules. Company owns, directly or indirectly, all of the capital stock or
other equity interests of each Subsidiary, and all of such directly or
indirectly owned capital stock or other equity interests are owned free and
clear of any Liens. All the issued and outstanding shares of capital stock of
each Subsidiary are duly authorized, validly issued, fully paid, nonassessable
and free of preemptive and similar rights to subscribe for or purchase
securities.

 

3. Public Reports; Financial Statements. Company has filed all required Public
Reports for the one year preceding the Effective Date. As of their respective
dates or as subsequently amended, the Public Reports complied in all material
respects with the requirements of the Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, as applicable, and none of
the Public Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of Company
included in the Public Reports, as amended, comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP, except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of Company and its consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

 

4. Material Changes. Except as specifically disclosed in the current Public
Reports, since the end of the most recent year for which an Annual Report on
Form 10-K has been filed with the Commission, (a) there has been no event,
occurrence or development that has had, or that would reasonably be expected to
result in, a Material Adverse Effect, (b) Company has not incurred any
liabilities (contingent or otherwise) other than (i) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice, and (ii) liabilities not required to be reflected in Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (c) Company has not altered its method of accounting,
(d) Company has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock, and (e) Company has not
issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company equity incentive plans. Company does not have
pending before the Commission any request for confidential treatment of
information.

 

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5. Litigation. There is no Action pending or, to the knowledge of the Company,
threatened, which would reasonably be expected to result in a Material Adverse
Effect. Neither Company nor any Subsidiary, nor to the knowledge of Company any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to the knowledge of
Company, there is not pending or contemplated, any investigation by the
Commission involving Company or any current or former director or officer of
Company.

 

6. No Bankruptcy. There has not been any petition or application filed, or any
judicial or administrative proceeding commenced which has not been discharged,
by or against the Company or any Subsidiary or with respect to any of the
properties or assets of Company or any Subsidiary under any applicable law
relating to bankruptcy, insolvency, reorganization, fraudulent transfer,
compromise, arrangement of debt, creditors’ rights and no assignment has been
made by the Company or any Subsidiary for the benefit of creditors.

 

7. Labor Relations. No material labor dispute exists or, to the knowledge of
Company, is imminent with respect to any of the employees of Company, which
would reasonably be expected to result in a Material Adverse Effect.

 

8. Compliance. Neither Company nor any Subsidiary (a) is in material default
under or in material violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
Company or any Subsidiary under), nor has Company or any Subsidiary received
notice of a claim that it is in material default under or that it is in material
violation of, any indenture, loan or credit agreement or any other similar
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(b) is in violation of any order of any court, arbitrator or governmental body,
or (c) is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business, except in each case as would not
reasonably be expected to have a Material Adverse Effect.

 

9. Regulatory Permits. Company and each Subsidiary possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the Public Reports, except where the failure to possess such
permits would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect (“Material Permits”), and neither Company
nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.

 

10. Title to Assets. Company and each Subsidiary have good and marketable title
in fee simple to all real property owned by them that is material to the
business of Company and each Subsidiary and good and marketable title in all
personal property owned by them that is material to the business of Company and
each Subsidiary, in each case free and clear of all Liens, except for Liens that
do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by Company
and each Subsidiary and Liens for the payment of federal, state or other taxes,
the payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by Company and each Subsidiary are held
by them under valid, subsisting and enforceable leases of which Company and each
Subsidiary are in compliance.

 

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11. Patents and Trademarks. Company and each Subsidiary have, or have rights to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and other similar rights that
are necessary or material for use in connection with their respective businesses
as described in the Public Reports and which the failure to so have would have a
Material Adverse Effect (collectively, “Intellectual Property Rights”). Neither
Company nor any Subsidiary has received a written notice that the Intellectual
Property Rights used by Company or any Subsidiary violates or infringes upon the
rights of any Person. To the knowledge of Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights of Company or each Subsidiary.

 

12. Insurance. Except as set forth in the Disclosure Schedules, the Company and
each Subsidiary are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which Company and each Subsidiary are engaged, including
but not limited to directors and officers insurance coverage at least equal to
the Purchase Amount. To Company’s knowledge, such insurance contracts and
policies are accurate and complete in all material respects. Neither Company nor
any Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without an increase in cost that would constitute a Material Adverse
Effect.

 

13. Transactions with Affiliates and Employees. Except as set forth in the
Public Reports, none of the officers or directors of Company and, to the
knowledge of Company, none of the employees of Company is presently a party to
any transaction with Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than (i) for payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of Company and (iii) for other employee benefits, including stock option
agreements under any equity incentive plan of Company.

 

14. Sarbanes-Oxley; Internal Accounting Controls. Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002, which are
applicable to it as of the date of the Closing. Company presented in its most
recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of Company’s disclosure controls and
procedures based on their evaluations as of the evaluation date. Since the date
of the most recently filed periodic report under the Exchange Act, there have
been no significant changes in Company’s internal accounting controls or its
disclosure controls and procedures or, to Company’s knowledge, in other factors
that could materially affect Company’s internal accounting controls or its
disclosure controls and procedures.

 

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15. Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. Notwithstanding any other provision, Investor
will have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
section that may be due in connection with the transactions contemplated by this
Agreement or the other Transaction Documents.

 

16. Registration Rights. No Person has any right to cause Company to effect the
registration under the Act of any securities of Company.

 

17. Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12 of the Exchange Act, and Company has taken no action
designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has
Company received any notification that the Commission is contemplating
terminating such registration. Except as disclosed in the Public Reports,
Company has not, in the 12 months preceding the Effective Date, received notice
from any Trading Market on which the Common Stock is or has been listed or
quoted to the effect that Company is not in compliance with the listing or
maintenance requirements of such Trading Market. Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.

 

18. Application of Takeover Protections. Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under
Company’s Certificate of Incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to
Investor as a result of Investor and Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation Company’s issuance of the Shares and Investor’s ownership of the
Shares.

 

19. Tax Status. Company and each of its Subsidiaries has made or filed all
federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that Company and each of its Subsidiaries has set aside on
its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes). Company has not executed a waiver with respect to the statute
of limitations relating to the assessment or collection of any foreign, federal,
statute or local tax. None of Company’s tax returns is presently being audited
by any taxing authority. Company would not be classified as a PFIC for its most
recently completed taxable year, and does not expect to be classified as a PFIC
for its current taxable year.

 

20. Foreign Corrupt Practices. Neither Company, nor to the knowledge of Company,
any agent or other person acting on behalf of Company, has (a) directly or
indirectly, used any corrupt funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (b) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (c) failed to disclose fully any
contribution made by Company, or made by any person acting on its behalf of
which Company is aware, which is in violation of law, or (d) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.

 

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21. Accountants. Company’s accountants are set forth in the Public Reports and
such accountants are an independent registered public accounting firm.

 

22. No Disagreements with Accountants or Lawyers. There are no material
disagreements presently existing, or reasonably anticipated by Company to arise,
between Company and the accountants or lawyers formerly or presently employed by
Company.

 

23. Powers of Attorney. There are no outstanding powers of attorney executed on
behalf of the Company or any Subsidiary.

 

C. Representations and Warranties of Investor. Investor hereby represents and
warrants to Company as of the Closing as follows:

 

1. Organization; Authority. Investor is an entity validly existing and in good
standing under the laws of the jurisdiction of its organization with full right,
company power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by Investor of
the transactions contemplated by this Agreement have been duly authorized by all
necessary company or similar action on the part of Investor. Each Transaction
Document to which it is a party has been, or will be, duly executed by Investor,
and when delivered by Investor in accordance with the terms hereof, will
constitute the valid and legally binding obligation of Investor, enforceable
against it in accordance with its terms, except (a) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (b) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies, and (c)
insofar as indemnification and contribution provisions may be limited by
applicable law.

 

2. Investor Status. At the time Investor was offered the Shares, it was, and at
the Effective Date it is: (a) an accredited investor as defined in Rule 501(a)
under the Act; (b) not a registered broker-dealer, member of FINRA, or an
affiliate thereof; and (c) not a U.S. Person, and is not acquiring the Shares
for the account or beneficial ownership of any U.S. Person.

 

3. Experience of Investor. Investor, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares, and has so evaluated the merits and
risks of such investment. Investor is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.

 

11

 

 

4. Ownership. Investor is acquiring the Preferred Shares as principal for its
own account. Investor will not engage in hedging transactions with regard to the
Shares unless in compliance with the Act, and will resell the Shares only
pursuant to registration under the Act or an available exemption therefrom.

 

5. No Short Sales. Neither Investor nor any Affiliate holds any short position
in, nor has engaged in any Short Sales of the Common Stock, or engaged in any
hedging transactions with regard to the Shares prior to the Effective Date.

 

IV. Securities and Other Provisions.

 

A. Investor Due Diligence. Investor will have the right and opportunity to
conduct customary due diligence with respect to any Registration Statement or
Prospectus in which the name of Investor or any Affiliate of Investor appears.

 

B. Furnishing of Information. As long as Investor owns any Shares, Company will
timely file all reports required to be filed by Company after the Effective Date
pursuant to the Exchange Act. As long as Investor owns any Shares, Company will
prepare and furnish to Investor and make publicly available such information as
is required for Investor to sell its Conversion Shares under Rule 144. Company
further covenants that, as long as Investor owns any Shares, Company will take
such further action as Investor may reasonably request, all to the extent
required from time to time to enable Investor to sell its Conversion Shares
without registration under the Act within the limitation of the exemptions
provided by Rule 144.

 

C. Integration. Company will not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security, as defined in Section 2 of
the Act, that would be integrated with the offer or sale of the Shares to
Investor for purposes of the rules and regulations of any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

 

D. Disclosure and Publicity. Company will notify Investor prior to issuing any
current report, press release, public statement or communication with respect to
the transactions contemplated hereby.

 

E. Shareholders Rights Plan. No claim will be made or enforced by Company or, to
the knowledge of Company, any other Person that Investor is an “Acquiring
Person” under any shareholders rights plan or similar plan or arrangement in
effect or hereafter adopted by Company, or that Investor could be deemed to
trigger the provisions of any such plan or arrangement, in either such case, by
virtue of receiving Shares under the Transaction Documents or under any other
agreement between Company and Investor. Company will conduct its business in a
manner so that it will not become subject to the Investment Company Act of 1940,
as amended.

 

F. No Non-Public Information. Company covenants and agrees that neither it nor
any other Person acting on its behalf will, provide Investor or its agents or
counsel with any information that Company believes or reasonably should believe
constitutes material non-public information. On and after the Effective Date,
neither Investor nor any Affiliate of Investor will have any duty of trust or
confidence that is owed directly, indirectly, or derivatively, to Company or the
stockholders of Company, or to any other Person who is the source of material
non-public information regarding Company. Company understands and confirms that
Investor will be relying on the foregoing in effecting transactions in
securities of Company, including without limitation sales of the Shares.

 

12

 

 

G. Indemnification of Investor.

 

1. Obligation to Indemnify. Subject to the provisions of this Section IV.G,
Company will indemnify and hold Investor, its Affiliates, managers and advisors,
and each of their officers, directors, shareholders, partners, employees,
representatives, agents and attorneys, and any person who controls Investor
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, “Investor Parties” and each a “Investor Party”), harmless from
any and all losses, liabilities, obligations, claims, contingencies, damages,
reasonable costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of
investigation (collectively, “Losses”) that any Investor Party may suffer or
incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by Company in this
Agreement or in the other Transaction Documents, (b) any action instituted
against any Investor Party by any creditor or stockholder of Company who is not
an Affiliate of an Investor Party, with respect to any of the transactions
contemplated by the Transaction Documents, (c) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
Prospectus, Prospectus Supplement, or any filing or public statement made by
Company, or arising out of or based upon any omission or alleged omission to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (d)
any Investor Party becoming involved in any capacity in any proceeding by or
against any Person who is a creditor or stockholder of Company, as a result of
Investor’s acquisition of the Shares under this Agreement; provided, however,
that Company will not be obligated to indemnify any Investor Party for any
Losses finally adjudicated to be caused solely by (i) a false statement of
material fact contained within written information provided by such Investor
Party expressly for the purpose of including it in the applicable Registration
Statement, or (ii) such Investor Party’s unexcused material breach of an express
provision of this Agreement or another Transaction Document.

 

2. Procedure for Indemnification. If any action will be brought against an
Investor Party in respect of which indemnity may be sought pursuant to this
Agreement, such Investor Party will promptly notify Company in writing, and
Company will have the right to assume the defense thereof with counsel of its
own choosing. Investor Parties will have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel will be at the expense of Investor Parties except to
the extent that (a) the employment thereof has been specifically authorized by
Company in writing, (b) Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (c) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict with respect to
the dispute in question on any material issue between the position of Company
and the position of Investor Parties such that it would be inappropriate for one
counsel to represent Company and Investor Parties. Company will not be liable to
Investor Parties under this Agreement (i) for any settlement by an Investor
Party effected without Company’s prior written consent, which will not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is either attributable to Investor’s
breach of any of the representations, warranties, covenants or agreements made
by Investor in this Agreement or in the other Transaction Documents. In no event
will the Company be liable for the reasonable fees and expenses for more than
one separate firm of attorneys (plus local counsel as applicable) to represent
all Investor Parties.

 

13

 

 

3. Other than the liability of Investor to Company for uncured material breach
of the express provisions of this Agreement, no Investor Party will have any
liability to Company or any Person asserting claims on behalf of or in right of
Company as a result of acquiring the Shares under this Agreement.

 

H. Reservation of Shares. Company will at all times maintain a reserve from its
duly authorized Common Stock for issuance pursuant to the Transaction Documents
authorized shares of Common Stock in an amount equal to thrice the number of
shares sufficient to immediately issue all Conversion Shares potentially
issuable at such time.

 

I. Activity Restrictions. For so long as Investor or any of its Affiliates holds
any Shares, neither Investor nor any Affiliate will: (1) vote any shares of
Common Stock owned or controlled by it, sign or solicit any proxies, or seek to
advise or influence any Person with respect to any voting securities of Company;
(2) engage or participate in any actions, plans or proposals which relate to or
would result in (a) acquiring additional securities of Company, alone or
together with any other Person, which would result in beneficially owning or
controlling more than 9.99% of the total outstanding Common Stock or other
voting securities of Company, (b) an extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving Company or any of its
Subsidiaries, (c) a sale or transfer of a material amount of assets of Company
or any of its Subsidiaries, (d) any change in the present board of directors or
management of Company, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board, (e) any
material change in the present capitalization or dividend policy of Company, (f)
any other material change in Company’s business or corporate structure,
including but not limited to, if Company is a registered closed-end investment
company, any plans or proposals to make any changes in its investment policy for
which a vote is required by Section 13 of the Investment Company Act of 1940,
(g) changes in Company’s charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of Company by any
Person, (h) a class of securities of Company being delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association, (i) a class of
equity securities of Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Act, or (j) any action, intention, plan or
arrangement similar to any of those enumerated above; or (3) request Company or
its directors, officers, employees, agents or representatives to amend or waive
any provision of this section.

 

J. No Shorting. Provided no Event of Default under Sections I.H.(1), (5), (6),
(8), (9), or (10) of the Certificate of Designations has occurred, for so long
as Investor holds any Shares, neither Investor nor any of its Affiliates will
engage in or effect, directly or indirectly, any Short Sale of Common Stock.
There will be no restriction or limitation of any kind on Investor’s right or
ability to sell or transfer any or all of the Conversion Shares at any time, in
its sole and absolute discretion. Investor may not sell, transfer or assign any
Preferred Shares or any of its rights under this Agreement.

 

14

 

 

K. Stock Splits. If Company at any time on or after the Effective Date
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
or combines (by combination, reverse stock split or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater or lesser
number of shares, the share numbers, prices and other amounts set forth in this
Agreement, as in effect immediately prior to such subdivision or combination,
will be proportionately reduced or increased, as applicable, effective at the
close of business on the date the subdivision or combination becomes effective.

 

L. Trading Restriction. Provided no Event of Default has occurred, during the 2
weeks immediately after the first reverse split or combination of shares of
Common Stock is effectuated after the Effective Date, on any Trading Day that
the volume weighted average price for such day is down more than $0.0005 from
the prior Trading Day and is below the opening bid immediately following the
combination, Investor will not sell more than 10% of the total daily dollar
trading volume on that day, or 10% of the total daily dollar trading volume on
the prior Trading Day, whichever is higher.

 

M. Restrictive Legend. The Shares have not been registered under the Act and may
not be resold in the United States unless registered or an exemption from
registration is available. Company is required to refuse to register any
transfer of the Shares not made pursuant to registration under the Act or an
available exemption from registration. Upon the issuance thereof, and only until
such time as the same is no longer required under the applicable securities laws
and regulations, the certificates representing any of the Shares will bear a
legend in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE ACT. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED unless in compliance with the ACT.

 

Share certificates will be issued without such legend or at Investor’s option
issue electronic delivery at the applicable balance account at DTC, if either
(i) the Shares are registered for resale under the Act, or (ii) Investor
provides an opinion of its counsel to the effect that the Shares may be issued
without restrictive legend.

 

N. Subsequent Financings. Until 6 months after the Closing, Company will not
enter into any financing pursuant to a registration statement or that contains
registration rights, except an underwritten offering of at least $20 million or
in conjunction with a listing onto a NASDAQ or NYSE stock market. For the
avoidance of doubt, Company may enter into an unregistered financing of
restricted stock that contains rights to registration effective only upon an
underwritten offering of at least $20 million or in conjunction with a listing
onto a NASDAQ or NYSE stock market.

 

 

15

 

 

V. Registration Statement.

 

A. Filing.

 

1. Company will at its sole cost and expense prepare and file with the
Commission as promptly as practicable after the Effective Date, and in any event
prior to May 5, 2015, a Registration Statement on Form S-3 (“Registration
Statement”) registering the delayed and continuous resale of all Conversion
Shares pursuant to Rule 415 under the Act, and will use reasonable best efforts
to cause such Registration Statement to be declared effective under the Act as
promptly as practicable, and to remain continuously effective until all
Conversion Shares may be resold by Investor pursuant to Rule 144 without volume
restrictions, manner-of-sale restrictions, or Company being in compliance with
any current public information requirement (the “Registration Period”).

 

2. If Company breaches its obligations under the preceding paragraph, and
Company is not thereafter eligible to register for resale the Conversion Shares
on Form S-3, it shall file a Registration Statement on Form S-1, but such
obligation and filing shall not operate to cure or excuse such breach. If at any
after the initial registration Statement is filed on Form S-3, the Registration
Statement may not remain effective on Form S-3, Company amend the Registration
Statement on Form S-1.

 

B. Procedures. In connection with the Registration Statement, Company will, as
soon as reasonably practicable:

 

1. Prepare and file with the Commission such pre-effective and post-effective
amendments and supplements to the Registration Statement and the Prospectus used
in connection with the Registration Statement, and file such reports under the
Exchange Act, as may be necessary to cause the Registration Statement to become
effective, to keep the Registration Statement continuously effective during the
Registration Period and not misleading, and as may otherwise be required or
applicable under, and to comply with the provisions of, the Act with respect to
the disposition of all Conversion Shares covered by the Registration Statement
during the Registration Period.

 

2. Furnish to Investor such number of copies of the Prospectus, and each
amendment or supplement thereto, in conformity with the requirements of the Act,
and such other documents as Investor may reasonably request in order to
facilitate the disposition of Conversion Shares owned by it.

 

3. Notify Investor: (a) when a Prospectus or any Prospectus supplement or
post-effective amendment is proposed to be filed and, with respect to any
post-effective amendment, when the same has become effective, except for any
filing to be made solely to incorporate by reference a Current Report on Form
8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K to be filed
with the Commission; (b) of any request by the Commission or any other federal
or state governmental authority for amendments or supplements to a Registration
Statement or a Prospectus or for additional information; (c) of the issuance by
the Commission of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose; (d) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Conversion Shares
for sale in any jurisdiction, or the initiation or threatening of any proceeding
for such purpose, and (e) of the occurrence of any event or circumstance that
makes any statement made in the Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
Registration Statement, Prospectus or documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, in no event shall any such notice contain any information
which would constitute material, non-public information regarding the Company.

 

16

 

 

4. Use reasonable best efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of, any order suspending the effectiveness of the Registration
Statement, or the lifting of any suspension of the qualification, or exemption
from qualification, of any of the Conversion Shares for sale in any
jurisdiction, at the earliest practicable moment.

 

5. Incorporate in a Prospectus supplement or post-effective amendment such
information as Investor requests be included therein regarding Investor or the
plan of distribution of the Conversion Shares; and make all required filings of
the Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of such matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this paragraph that would violate applicable law.

 

6. Whenever necessary, prepare and deliver to Investor any required supplement
or amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other required
document, including such reports as may be required to be filed under the
Exchange Act, so that, as thereafter delivered, the Prospectus will not contain
an 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 light of
the circumstances under which they were made, not misleading.

 

7. Use reasonable best efforts to cause all Conversion Shares to be listed on
the Trading Market or such other securities exchange or automated quotation
system, if any, as is then the principal securities exchange or automated
quotation system on which the Common Stock is then listed.

 

8. Use reasonable best efforts to cause all Conversion Shares registered by the
Registration Statement to be registered or qualified under the securities or
“blue sky” laws of such states as Investor requests; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or to subject itself to any material tax in any such
jurisdiction where it is not then so subject.

 

17

 

 

9. Fully cooperate with the Transfer Agent, Investor and its brokers to
facilitate the timely clearing and delivery of Conversion Shares to be sold
pursuant to the Registration Statement free of any restrictive legends and in
such denominations and registered in such names as Investor may request,
including timely completion and delivery of all forms, documents and instruments
requested by the Transfer Agent or any broker.

 

C. Effectiveness. If the Registration Statement is not declared effective within
90 days of the Closing for any reason, for each 30 days, or portion thereof,
from such date until the end of the Registration Period that all Conversion
Shares are not registered for immediate resale, Company will issue to Investor
an additional 22 Preferred Shares.

 

VI. General Provisions.

 

A. Notice. Unless a different time of day or method of delivery is specifically
provided in the Transaction Documents, any and all notices or other
communications or deliveries required or permitted to be provided hereunder will
be in writing and will be deemed given and effective on the earliest of: (a) the
date of transmission, if such notice or communication is delivered via facsimile
or electronic mail prior to 5:00 p.m. Eastern time on a Trading Day and an
electronic confirmation of delivery is received by the sender, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered later than 5:00 p.m. Eastern time or on a day that is not a Trading
Day, (c) the next Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The addresses for such
notices and communications are such other address as may be designated in
writing, in the same manner, by such Person.

 

B. Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by Company
and Investor or, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement will be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor will any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

 

C. No Third-Party Beneficiaries. Except as otherwise set forth in Section IV.G,
this Agreement and the Transaction Documents will inure solely to the benefit of
the parties hereto, and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person. A Person who is not a party shall not have any
rights under the Contracts (Rights of Third Parties) Law, 2014 of the Cayman
Islands to enforce any term of this Agreement or any Transaction Document.

 

D. Fees and Expenses. Company has paid a flat rate documentation fee to
Investor’s counsel incurred in connection with drafting this Agreement and the
other Transaction Documents. Except as otherwise provided in this Agreement,
each party will pay the fees and expenses of its own advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of the Transaction Documents. Company acknowledges and agrees that
Investor’s counsel solely represents Investor, and does not represent Company or
its interests in connection with the Transaction Documents or the transactions
contemplated thereby. Company will pay all stamp and other taxes and duties, if
any, levied in connection with the sale or issuance of the Shares to Investor.

 

18

 

 

E. Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement will not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, will incorporate such substitute provision in this Agreement.

 

F. Replacement of Certificates. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, Company will issue or cause to
be issued in exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to Company of such loss, theft
or destruction and customary and reasonable indemnity, if requested. The
applicants for a new certificate or instrument under such circumstances will
also pay any reasonable third-party costs associated with the issuance of such
replacement certificates.

 

G. Governing Law. All matters between the parties, including without limitation
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents will be governed by and construed and enforced in
accordance with the laws of the Cayman Islands, without regard to the principles
of conflicts of law that would require or permit the application of the laws of
any other jurisdiction, except for corporation law matters applicable to Company
which will be governed by the corporate law of its jurisdiction of formation.
The parties hereby waive all rights to a trial by jury. In any action,
arbitration or proceeding, including appeal, arising out of or relating to any
of the Transaction Documents or otherwise involving the parties, the prevailing
party will be awarded its reasonable attorneys’ fees and other costs and
expenses reasonably incurred in connection with the investigation, preparation,
prosecution or defense of such action or proceeding.

 

H. Arbitration. Any dispute, controversy, claim or action of any kind arising
out of, relating to, or in connection with this Agreement, or in any way
involving Company and Investor or their respective Affiliates, including any
issues of arbitrability, will be resolved solely by final and binding
arbitration in English before a retired judge at JAMS International, or its
successor, in the Territory of the Virgin Islands, pursuant to the most
expedited and Streamlined Arbitration Rules and Procedures available. Any
interim or final award may be entered and enforced by any court of competent
jurisdiction. The final award will include the prevailing party’s reasonable
arbitration, expert witness and attorney fees, costs and expenses.

 

I. Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of Investor and
Company will be entitled to specific performance under the Transaction
Documents, and equitable and injunctive relief to prevent any actual or
threatened breach under the Transaction Documents, to the full extent permitted
under applicable laws.

 

19

 

 

J. Payment Set Aside. To the extent that Company makes a payment or payments to
Investor pursuant to any Transaction Document or Investor enforces or exercises
its rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to Company, a
trustee, receiver or any other person under any law, including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action, then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied will be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

 

K. Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and will not be deemed to limit or affect any of the
provisions hereof

 

L. Time of the Essence. Time is of the essence with respect to all provisions of
this Agreement.

 

M. Survival. The representations and warranties contained herein will survive
the Closing and the delivery of the Shares until all Preferred Shares issued to
Investor have been converted or redeemed.

 

N. Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party will not be employed
in the interpretation of the Transaction Documents or any amendments hereto. 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. All currency references in any Transaction
Document are to U.S. dollars.

 

O. Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together will be considered one and the same agreement and will
become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by portable document
format, facsimile or electronic transmission, such signature will create a valid
and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an
original thereof.

 

P. Entire Agreement. This Agreement, including the Exhibits hereto, which are
hereby incorporated herein by reference, contains the entire agreement and
understanding of the parties, and supersedes all prior and contemporaneous
agreements, term sheets, letters, discussions, communications and
understandings, both oral and written, which the parties acknowledge have been
merged into this Agreement. No party, representative, advisor, attorney or agent
has relied upon any collateral contract, agreement, assurance, promise,
understanding, statement or representation not expressly set forth herein. The
parties hereby absolutely, unconditionally and irrevocably waive all rights and
remedies, at law and in equity, directly or indirectly arising out of or
relating to, or which may arise as a result of, any Person’s reliance on any
such statement or assurance.

 

20

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories on the Effective Date.

 

 

Company:         AMARANTUS BIOSCIENCE HOLDINGS, INC.               By:      
Name:       Title:                   By:       Name:       Title:              
    Investor:         DISCOVER GROWTH FUND               By:       Name:      
Title:                   By:       Name:         Title:                        
 

 

21

 

 

Exhibit 1

 

Glossary of Defined Terms

 

“$” means the currency of the United States of America, in which all dollar
amounts in the Transaction Documents will be expressed.

 

“Act” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder.

 

“Action” has the meaning set forth in Section III.A.4.

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the Act.

 

“Agreement” means this Stock Purchase Agreement.

 

“Approval” has the meaning set forth in Section IV.K.

 

“Certificate of Designations” has the meaning set forth in Section II.B.1.

 

“Closing” has the meaning set forth in Section II.D.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Stock” means the Common Stock of Company and any replacement or
substitute thereof, or any share capital into which such Common Stock will have
been changed or any share capital resulting from a reclassification of such
Common Stock.

 

“Company” has the meaning set forth in the first paragraph of the Agreement.

 

“Conversion Shares” includes all shares of Common Stock potentially issuable in
relation to the Preferred Shares, including Common Stock that must be issued
upon conversion of any Preferred Shares, and Common Stock that must or may be
issued in payment of any Dividends or Conversion Premium.

 

“Disclosure Schedules” means the disclosure schedules of Company delivered
concurrently herewith. The Disclosure Schedules will contain no material
non-public information.

 

“DTC” means The Depository Trust Company, or any successor performing
substantially the same function for Company.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.

 

“Effective Date” has the meaning set forth in the first paragraph of the
Agreement.

 

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“GAAP” means U.S. generally accepted accounting principles applied on a
consistent basis during the periods involved.

 

“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in
excess of $100,000, other than trade accounts payable incurred in the ordinary
course of business, (b) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others, whether or not the same are or
should be reflected in Company’s balance sheet, or the notes thereto, except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $100,000 due under leases required to
be capitalized in accordance with GAAP.

 

“Intellectual Property Rights” has the meaning set forth in Section III.B.10.

 

“Legal Opinion” means an opinion from Company’s independent legal counsel, in
the form attached as Exhibit 4.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

 

“Material Adverse Effect” includes any material adverse effect on (a) the
legality, validity or enforceability of any Transaction Document, or (b) the
results of operations, assets, business, or financial condition of Company and
the Subsidiaries, taken as a whole, which is not disclosed in the Public Reports
prior to the Effective Date, or (c) Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document.

 

“Material Permits” has the meaning set forth in Section III.B.8.

 

“Officer’s Certificate” means a certificate executed by an authorized officer of
Company, in the form attached as Exhibit 5.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government, or an agency or subdivision thereof, or other entity
of any kind.

 

“Preferred Shares” means shares of Series G Preferred Stock of the Company to be
issued to Investor pursuant to this Agreement.

 

“Prospectus” means the final prospectus filed for the Registration Statement.

 

“Prospectus Supplement” means the supplement to the Prospectus complying with
Rule 424(b) of the Securities Act that is filed with the Commission and
delivered by the Company to Investor.

 

“Public Reports” includes all reports filed by Company under the Act or the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the Effective Date and thereafter.

 

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“Purchase Amount” has the meaning set forth in Section II.A.1.

 

“Investor” has the meaning set forth in the first paragraph of the Agreement.

 

“Registration Statement” includes a then valid, current and effective
Registration Statement registering all Conversion Shares for resale, including
the prospectus therein, amendments and supplements to such Registration
Statement or prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement, and any information
contained or incorporated by reference in a prospectus filed with the Commission
in connection with the Registration Statement, to the extent such information is
deemed under the Act to be part of any registration statement.

 

“Regulation D” means Regulation D under the Securities Act and the rules
promulgated by the Commission thereunder.

 

“Regulation S” means Regulation S under the Securities Act and the rules
promulgated by the Commission thereunder.

 

“Secretary’s Certificate” means a certificate, in the form attached as Exhibit
6, signed by the secretary of Company.

 

“Shares” include the Preferred Shares and the Conversion Shares.

 

“Short Sale” means a “short sale” as defined in Rule 200 of Regulation SHO of
the Exchange Act.

 

“Subsidiary” means any Person Company owns or controls, or in which Company,
directly or indirectly, owns a majority of the capital stock or similar interest
that would be disclosable pursuant to Regulation S-K, Item 601(b)(21).

 

“Trading Day” means any day on which the Common Stock is traded on the Trading
Market; provided that it will not include any day on which the Common Stock is
(a) scheduled to trade for less than 5 hours, or (b) suspended from trading.

 

“Transaction Documents” means this Agreement, the other agreements, certificates
and documents referenced herein or the form of which is attached hereto, and the
exhibits, schedules and appendices hereto and thereto.

 

“Transfer Agent Instructions” means a letter agreement executed by Company, its
current transfer agent, and any successor transfer agent for the Common Stock,
in the form attached as Exhibit 3.

 

“U.S. Person” has the meaning set forth in Regulation S promulgated under the
Act.

 

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Exhibit 2

 

Form of Certificate of Designations

 

 

AMARANTUS BIOSCIENCE HOLDINGS, INC.

 

 

CERTIFICATE OF DESIGNATIONS OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES G PREFERRED STOCK

 

 

The undersigned, Gerald E. Commissiong and Robert Farrell, hereby certify that:

 

1. The undersigned are the Chief Executive Officer and Chief Financial Officer,
respectively, of Amarantus BioScience Holdings, Inc., a Nevada corporation (the
“Corporation”);

 

2. The Corporation is authorized to issue 10,000,000 shares of preferred stock,
$0.001 par value, of which currently 250,000 shares are designated as Series A,
none of which are issued and outstanding, 3,000,000 shares are designated as
Series B, none of which are issued and outstanding, 750,000 shares are
designated as Series C, 750,000 of which are issued and outstanding, 1,300 are
designated as Series D, 1,299.327 of which are issued and outstanding, 13,335
are designated as Series E, 7,677.17 of which are issued and outstanding, and
none designated as Series F, none of which are issued and outstanding; and

 

3. The following resolutions were duly adopted by the Board of Directors:

 

WHEREAS, the Certificate of Incorporation of the Corporation provides for a
class of its authorized stock known as preferred stock, comprised of 10,000,000
shares, $0.001 par value per share (the “Preferred Stock”), issuable from time
to time in one or more series;

 

WHEREAS, the Board of Directors of the Corporation is authorized to fix the
dividend rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly unissued series of
Preferred Stock and the number of shares constituting any Series and the
designation thereof, of any of them;

 

WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant
to its authority as aforesaid and as set forth in this Certificate of
Designations of Preferences, Rights and Limitations of Series G Preferred Stock,
to designate the rights, preferences, restrictions and other matters relating to
the Series G Preferred Stock, which will consist of up to 10,000 shares of the
Preferred Stock which the Corporation has the authority to issue, as follows:

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
for the issuance of a series of Preferred Stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights,
preferences, restrictions and other matters relating to such series of Preferred
Stock as follows:

 

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I. Terms of Preferred Stock.

 

A. Designation and Amount. A series of Preferred Stock is hereby designated as
the Corporation’s Series G Preferred Stock, par value of $0.001 per share (the
“Series G Preferred Stock”), the number of shares of which so designated are
10,000 shares of Series G Preferred Stock; which Series G Preferred Stock will
not be subject to increase without any consent of the holders of the Series G
Preferred Stock (each a “Holder” and collectively, the “Holders”) that may be
required by applicable law.

 

B. Ranking and Voting.

 

1. Ranking. The Series G Preferred Stock will, with respect to dividend rights
and rights upon liquidation, winding-up or dissolution, rank: (a) senior to the
Corporation’s Common Stock, $0.001 par value per share (“Common Stock”); (b)
pari passu with any other series of the Preferred Stock, as set forth in the
Certificate of Designations of Preferences, Rights and Limitations with respect
to such Preferred Stock; and (c) junior to all existing and future indebtedness
of the Corporation. Without the prior written consent of the Holders of a
majority of the outstanding shares of Series G Preferred Stock (voting
separately as a single class), the Corporation may not issue any additional
shares of Series G Preferred Stock, or, excluding shares of Series E Preferred
Stock, any other Preferred Stock that is pari passu or senior to the Series G
Preferred Stock with respect to any rights, until 6 months after the earlier of
such date (i) a registration statement is effective and available for the resale
of all Conversion Shares underlying the outstanding shares of Series G Preferred
Stock, or (ii) Securities Act Rule 144 is available for the immediate
unrestricted resale of all Conversion Shares underlying the outstanding shares
of Series G Preferred Stock.

 

2. Voting. Except as required by applicable law or as set forth herein, the
holders of shares of Series G Preferred Stock will have no right to vote on any
matters, questions or proceedings of this Corporation including, without
limitation, the election of directors.

 

C. Dividends.

 

1. Commencing on the date of the issuance of any such shares of Series G
Preferred Stock (each respectively an “Issuance Date”), each outstanding share
of Series G Preferred Stock will accrue cumulative dividends (“Dividends”), at a
rate equal to 8.25% per annum, subject to adjustment as provided in this
Certificate of Designations (“Dividend Rate”), of the Face Value. Dividends will
be payable with respect to any shares of Series G Preferred Stock upon any of
the following: (a) upon redemption of such shares in accordance with Section
I.F; (b) upon conversion of such shares in accordance with Section I.G; and (c)
when, as and if otherwise declared by the board of directors of the Corporation.

 

2. Dividends, as well as any applicable Conversion Premium payable hereunder,
will be paid: (a) in the Corporation’s sole and absolute discretion, immediately
in cash; or (b) to the extent not paid in cash within 3 Trading Days after the
Notice Date for any reason whatsoever, in shares of Common Stock valued at (i)
if there is no Event of Default, (A) 80.0% of the average of the lowest 5
individual daily volume weighted average prices during the applicable
Measurement Period, which may be non-consecutive, less $0.005 per share of
Common Stock, not to exceed (B) 100% of the lowest sales price on the last day
of such period less $0.005 per share of Common Stock (ii) following any Event of
Default, (A) 65.0% of the lowest daily volume weighted average price during any
Measurement Period, less $0.005 per share of Common Stock, not to exceed (B)
70.0% of the lowest sales price on the last day of any such period, less $0.005
per share of Common Stock. All amounts that are required or permitted to be paid
in cash pursuant to this Certificate of Designations will be paid by wire
transfer of immediately available funds to an account designated by Holder.

 

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3. So long as any shares of Series G Preferred Stock are outstanding, the
Company will not repurchase shares of Common Stock other than as payment of the
exercise or conversion price of a convertible security or payment of withholding
tax, and no dividends or other distributions will be paid, declared or set apart
with respect to any Common Stock, except for Purchase Rights.

 

D. Protective Provision.

 

1. So long as any shares of Series G Preferred Stock are outstanding, the
Corporation will not, without the affirmative approval of the Holders of a
majority of the shares of the Series G Preferred Stock then outstanding (voting
separately as one class), (i) alter or change adversely the powers, preferences
or rights given to the Series G Preferred Stock or alter or amend this
Certificate of Designations, (ii) authorize or create any class of stock ranking
as to distribution of dividends senior to the Series G Preferred Stock, (iii)
amend its certificate of incorporation or other charter documents in breach of
any of the provisions hereof, (iv) increase the authorized number of shares of
Series G Preferred Stock or (v) enter into any agreement with respect to the
foregoing.

 

2. A “Deemed Liquidation Event” will mean: (a) a merger or consolidation in
which the Corporation is a constituent party or a subsidiary of the Corporation
is a constituent party and the Corporation issues shares of its capital stock
pursuant to such merger or consolidation, except any such merger or
consolidation involving the Corporation or a subsidiary in which the shares of
capital stock of the Corporation outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or exchanged for
shares of capital stock that represent, immediately following such merger or
consolidation, at least a majority, by voting power, of the capital stock of the
surviving or resulting corporation or if the surviving or resulting corporation
is a wholly owned subsidiary of another corporation immediately following such
merger or consolidation, the parent corporation of such surviving or resulting
corporation; or (b) the sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the
Corporation or any subsidiary of the Corporation of all or substantially all the
assets of the Corporation and its subsidiaries taken as a whole, or the sale or
disposition (whether by merger or otherwise) of one or more subsidiaries of the
Corporation if substantially all of the assets of the Corporation and its
subsidiaries taken as a whole are held by such subsidiary or subsidiaries,
except where such sale, lease, transfer, exclusive license or other disposition
is to a wholly owned subsidiary of the Corporation.

 

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3. The Corporation will not have the power to effect a Deemed Liquidation Event
unless the agreement or plan of merger or consolidation for such transaction
provides that the consideration payable to the stockholders of the Corporation
will be allocated among the holders of capital stock of the Corporation in
accordance with Section I.E.

 

E. Liquidation.

 

1. Upon any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, after payment or provision for payment of debts and
other liabilities of the Corporation, pari passu with any distribution or
payment made to the holders of Preferred Stock and Common Stock by reason of
their ownership thereof, the Holders of Series G Preferred Stock will be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount with respect to each share of Series
G Preferred Stock equal to $5,000.00 (“Face Value”), plus any accrued but unpaid
Dividends thereon (collectively with the Face Value, the “Liquidation Value”).
If, upon any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the amounts payable with respect to the shares of
Series G Preferred Stock are not paid in full, the holders of shares of Series G
Preferred Stock will share equally and ratably with the holders of shares of
Preferred Stock and Common Stock in any distribution of assets of the
Corporation in proportion to the liquidation preference and an amount equal to
all accumulated and unpaid Dividends, if any, to which each such holder is
entitled.

 

2. If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation will be insufficient to make payment in full to all
Holders, then such assets will be distributed among the Holders at the time
outstanding, ratably in proportion to the full amounts to which they would
otherwise be respectively entitled.

 

F. Redemption for Cash.

 

1. Corporation’s Redemption Option. Provided that no Event of Default has
occurred, the Corporation will have the right at any time upon 3 Trading Days’
prior written notice, in its sole and absolute discretion, to redeem for cash
all or any portion of the shares of Series G Preferred Stock then outstanding.
On the Dividend Maturity Date, the Corporation may redeem paying Holder an
amount per share equal to 100% of the Liquidation Value for the shares redeemed.

 

2. Early Redemption.

 

a. Prior to the Dividend Maturity Date, the Corporation may redeem outstanding
Series G Preferred Stock by paying Holder an amount per share (the “Early
Redemption Price”) equal to the sum of the following: (i) 100% of the Face
Value, plus (ii) the Conversion Premium, minus (iii) any Dividends that have
been paid, with respect to the shares redeemed.

 

b. After receipt of approval to list the Common Stock on NASDAQ or NYSE and
within 10 days prior to the effectiveness of the listing, the Corporation may
redeem outstanding Series G Preferred Stock by paying Holder an amount per share
equal to 120% of the Face Value.

 

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3. Credit Risk Adjustment.

 

a. The Dividend Rate will adjust downward by an amount equal to the Credit
Spread Adjustment for each amount, if any, equal to the Adjustment Factor that
the Measuring Metric rises above the Maximum Triggering Level.

 

b. The Dividend Rate will adjust upward by an amount equal to the Credit Spread
Adjustment for each amount, if any, equal to the Adjustment Factor that the
Measuring Metric falls below the Minimum Triggering Level. In addition, the
Dividend Rate will adjust upward by 10% upon any Event of Default.

 

c. The adjusted Dividend Rate used for calculation of the Liquidation Value,
Conversion Premium, Early Redemption Price or Dividend, as applicable, will be
determined based upon the volume weighted average price of the Common Stock for
the Trading Day prior to the Notice Date.

 

d. Notwithstanding the foregoing, in no event will the Dividend Rate at any time
be below 0 or above 24%.

 

4. Mandatory Redemption. If the Corporation determines to liquidate, dissolve or
wind-up its business and affairs, or effect any Deemed Liquidation Event, the
Corporation will, within three Trading Days of such determination and prior to
effectuating any such action, redeem the Series G Preferred Stock for cash, at
the Early Redemption Price set forth in Section I.F.2 if the event is prior to
the Dividend Maturity Date, or at the Liquidation Value if the event is on or
after the Dividend Maturity Date.

 

5. Mechanics of Redemption. In order to redeem any of the Holders’ Series G
Preferred Stock then outstanding, 3 Trading Days prior to payment the
Corporation must deliver written notice to each Holder setting forth (a) the
number of shares of Series G Preferred Stock that the Corporation is redeeming,
(b) the applicable Dividend Rate, Liquidation Value and Early Redemption Price,
and (c) the calculation of the amount paid. Upon receipt of payment in cash,
each Holder will promptly submit to the Corporation such Holder’s Series G
Preferred Stock certificates. For the avoidance of doubt, the delivery of such a
notice shall not affect Holder’s rights under Section I.G until after receipt of
cash payment by Holder.

 

G. Conversion.

 

1. Mechanics of Conversion.

 

a. One or more shares of the Series G Preferred Stock may be converted, in part
or in whole, into shares of Common Stock, at any time or times after the
Issuance Date, in the sole and absolute discretion of Holder or, subject to the
terms and conditions hereof, the Corporation; (i) if at the option of Holder, by
delivery of one or more written notices to the Corporation or its transfer agent
(each, a “Holder Conversion Notice”), of the Holder’s election to convert any or
all of its Series G Preferred Stock; or (ii) if at the option of the
Corporation, if the Equity Conditions are met, delivery of written notice to
Holder (each, a “Corporation Conversion Notice” and, with the Holder Conversion
Notice, each a “Conversion Notice”), of the Corporation’s election to convert
the Series G Preferred Stock. Each Conversion Notice will set forth the number
of shares of Series G Preferred Stock being converted, the minimum number of
Conversion Shares and the amount of Dividends and any applicable Conversion
Premium due as of the date of the Conversion Notice (the “Notice Date”), and the
calculation thereof.

 

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b. Notwithstanding Section I.G.1.c, if the Corporation pays in cash no later
than close of the 3rd Trading Day after the Notice Date, time being of the
essence, the full amount of Dividends and Conversion Premium due as of the
Notice Date, no further amount will be due with respect to Dividends and
Conversion Premium for the shares in the Conversion Notice.

 

c. As soon as practicable, and in any event within 3 Trading Days after the
Notice Date, time being of the essence, the Corporation will do all of the
following: (i) transmit the Delivery Notice by facsimile or electronic mail to
the Holder, and to the Corporation’s transfer agent (the “Transfer Agent”) with
instructions to comply with the Delivery Notice; (ii) either (A) if the
Corporation is approved through The Depository Trust Corporation (“DTC”),
authorize and instruct the credit by the Transfer Agent of such aggregate number
of Conversion Shares to which Holder is then entitled, as set forth in the
Delivery Notice, to Holder’s or its designee’s balance account with the DTC Fast
Automated Securities Transfer (FAST) Program, through its Deposit/Withdrawal at
Custodian (DWAC) system, or (B) only if the Corporation is not approved through
DTC, issue and surrender to a common carrier for overnight delivery to the
address as specified in the Delivery Notice a certificate bearing no restrictive
legend, registered in the name of Holder or its designee, for the number of
Conversion Shares to which Holder is then entitled, as set forth in the Delivery
Notice; and (iii) at all times thereafter diligently take or cause to be taken
all actions reasonably necessary to cause the Conversion Shares to be issued as
soon as practicable.

 

d. If during the Measuring Period the Holder is entitled to receive additional
Conversion Shares with regard to a Conversion Notice, Holder may at any time
deliver one or more additional written notices to the Corporation or its
transfer agent (each, an “Additional Notice” and with the Conversion Notice,
each a “Delivery Notice”) setting forth the additional number of Conversion
Shares to be delivered, and the calculation thereof.

 

e. If the Corporation for any reason does not issue or cause to be issued to the
Holder within 3 Trading Days after the date of a Delivery Notice, the number of
Conversion Shares to which the Holder is entitled as stated in the Delivery
Notice, then, in addition to all other remedies available to the Holder, the
Corporation will pay in cash to the Holder on each day after such 3rd Trading
Day that the issuance of such Conversion Shares is not timely effected an amount
equal to 2% of the product of (i) the aggregate number of Conversion Shares not
issued to the Holder on a timely basis and to which the Holder is entitled and
(ii) the highest Closing Price of the Common Stock between the date on which the
Corporation should have issued such shares to the Holder and the actual date of
receipt of Conversion Shares by Holder.

 

f. Notwithstanding any other provision: all of the requirements of Section I.F
and this Section I.G are each independent covenants; the Corporation’s
obligations to issue and deliver Conversion Shares upon any Conversion Notice
are absolute, unconditional and irrevocable; any breach or alleged breach of any
representation or agreement, or any violation or alleged violation of any law or
regulation, by any party or any other person will not excuse full and timely
performance of any of the Corporation’s obligations under these sections; and
under no circumstances may the Corporation seek or obtain any temporary, interim
or preliminary injunctive or equitable relief to prevent or interfere with any
issuance of Conversion Shares to Holder.

 

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g. No fractional shares of Common Stock are to be issued upon conversion of
Series G Preferred Stock, but rather the Corporation will issue to Holder scrip
or warrants registered on the books of the Corporation (certificated or
uncertificated) which will entitle Holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. The Holder will
not be required to deliver the original certificates for the Series G Preferred
Stock in order to effect a conversion hereunder. The Corporation will pay any
and all taxes which may be payable with respect to the issuance and delivery of
any Conversion Shares.

 

2. Holder Conversion. In the event of a conversion of any Series G Preferred
Stock pursuant to a Holder Conversion Notice, the Corporation will (a) satisfy
the payment of Dividends and Conversion Premium as provided in Section I.C.2,
and (b) issue to the Holder of such Series G Preferred Stock a number of
Conversion Shares equal to (i) the Face Value multiplied by (ii) the number of
such Series G Preferred Stock subject to the Holder Conversion Notice divided by
(iii) the applicable Conversion Price with respect to such Series G Preferred
Stock; all in accordance with the procedures set forth in Section I.G.1.

 

3. Corporation Conversion. The Corporation will have the right to send the
Holder a Corporation Conversion Notice at any time in its sole and absolute
discretion, if the Equity Conditions are met as of the time such Corporation
Conversion Notice is given. Upon any conversion of any Series G Preferred Stock
pursuant to a Corporation Conversion Notice, the Corporation will on the date of
such notice (a) satisfy the payment of Dividends and Conversion Premium as
provided in Section I.C.2, and (b) issue to the Holder of such Series G
Preferred Stock a number of Conversion Shares equal to (i) the Face Value
multiplied by (ii) the number of such Series G Preferred Stock subject to the
Holder Conversion Notice divided by (iii) the applicable Conversion Price with
respect to such Series G Preferred Stock; all in accordance with the procedures
set forth in Section I.G.1.

 

4. Stock Splits. If the Corporation at any time on or after the filing of this
Certificate of Designations 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 applicable Conversion Price,
Adjustment Factor, Maximum Triggering Level, Minimum Triggering Level, and other
share based metrics in effect immediately prior to such subdivision will be
proportionately reduced and the number of shares of Common Stock issuable will
be proportionately increased. If the Corporation at any time on or after such
Issuance Date combines (by combination, reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a smaller number of
shares, the applicable Conversion Price, Adjustment Factor, Maximum Triggering
Level, Minimum Triggering Level, and other share based metrics in effect
immediately prior to such combination will be proportionately increased and the
number of Conversion Shares will be proportionately decreased. Any adjustment
under this Section will become effective at the close of business on the date
the subdivision or combination becomes effective.

 

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5. Rights. In addition to any adjustments pursuant to Section I.G.4, if at any
time the Corporation 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 shares of Common Stock (the “Purchase
Rights”), then Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which Holder could have
acquired if Holder had held the number of shares of Common Stock acquirable upon
conversion of all Preferred Stock held by Holder 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.

 

6. Definitions. The following terms will have the following meanings:

 

a. “Adjustment Factor” means $0.0025 per share of Common Stock.

 

b. “Closing Price” means, for any security as of any date, the last closing bid
price for such security on the Trading Market, or, if the Trading Market begins
to operate on an extended hours basis and does not designate the closing bid
price, then the last bid price of such security prior to 4:00 p.m., Eastern
time, or, if the Trading Market is not the principal securities exchange or
trading market for such security, the last closing bid price of such security on
the principal securities exchange or trading market where such security is
listed or traded, or if the foregoing do not apply, the last closing bid price
of such security in the over-the-counter market on the electronic bulletin board
for such security, or, if no closing bid price is reported for such security,
the average of the bid prices of any market makers for such security as reported
in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).

 

c. “Conversion Price” means a price per share of Common Stock equal to $0.06 per
share of Common Stock, subject to adjustment as otherwise provided herein.

 

d. “Conversion Shares” means all shares of Common Stock that are required to be
or may be issued upon conversion of Series G Preferred Stock.

 

e. “Credit Spread Adjustment” means 150 basis points.

 

f. “Dividend Maturity Date” means the 6-year anniversary of the Issuance Date.

 

g. “Conversion Premium” for each share of Series G Preferred Stock means the
Face Value, multiplied by the product of (i) the applicable Dividend Rate, and
(ii) the number of whole years between the Issuance Date and the Dividend
Maturity Date.

 

h. “Equity Conditions” means on each day during the Measuring Period, (i) the
Common Stock is not under chill or freeze from DTC, the Common Stock is
designated for trading on the OTCQB, NASDAQ or NYSE and shall not have been
suspended from trading on such market, and delisting or suspension by the
Trading Market has not been threatened or pending, either in writing by such
market or because Company has fallen below the then effective minimum listing
maintenance requirements of such market; (ii) the Corporation has delivered
Conversion Shares upon all conversions or redemptions of the Series G Preferred
Stock in accordance with their terms to the Holder on a timely basis; (iii) the
Corporation will have no knowledge of any fact that would cause both of the
following (A) a registration statement not to be effective and available for the
resale of all Conversion Shares, and (B) Section 3(a)(9) under the Securities
Act of 1933, as amended, not to be available for the issuance of all Conversion
Shares, or Securities Act Rule 144 not to be available for the resale of all the
Conversion Shares underlying the Series G Preferred Stock without restriction;
(iv) there has been a minimum of $5 million, or 5 times the Face Value of
Preferred Share being converted, whichever is lower; in aggregate trading volume
in the prior 20 Trading Days; (v) all shares of Common Stock to which Holder is
entitled have been timely received into Holder’s designated account in
electronic form fully cleared for trading; (vi) the Corporation otherwise shall
have been in compliance with and shall not have breached any provision,
covenant, representation or warranty of any Transaction Document; and (vii) no
Event of Default shall have occurred.

 

8

 

 

i. “Measuring Metric” means the volume weighted average price of the Common
Stock on any Trading Day following the Issuance Date of the Series G Preferred
Stock.

 

j. “Measuring Period” means the period beginning on the Issuance Date and ending
3 Trading Days after all applicable Conversion Shares have actually been
received into Holder’s designated brokerage account in electronic form and fully
cleared for trading; provided that for each day during the Measurement Period on
which less than all of the conditions set forth in Section I.G.6.h exist, 1
Trading Day will be added to what otherwise would have been the end of the
Measurement Period.

 

k. “Maximum Triggering Level” means $0.08 per share of Common Stock.

 

l. “Minimum Triggering Level” means $0.045 per share of Common Stock.

 

m. “Stock Purchase Agreement” means the Stock Purchase Agreement or other
agreement pursuant to which any share of Series G Preferred Stock is issued,
including all exhibits thereto and all related Transaction Documents as defined
therein.

 

n. “Trading Day” means any day on which the Common Stock is traded on the
Trading Market.

 

o. “Trading Market” means or whatever is at the time the principal trading
exchange or market for the Common Stock. All Trading Market data will be
measured as provided by the appropriate function of the Bloomberg Professional
service of Bloomberg Financial Markets or its successor performing similar
functions.

 

9

 

 

7. Issuance Limitation. Notwithstanding any other provision, at no time may the
Corporation issue shares of Common Stock to Holder which, when aggregated with
all other shares of Common Stock then deemed beneficially owned by Holder, would
result in Holder owning more than 4.99% of all Common Stock outstanding
immediately after giving effect to such issuance, as determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder; provided, however, that Holder may increase such amount to 9.99%
upon not less than 61 days’ prior notice to the Corporation. No provision of
this paragraph may be waived by Holder or the Corporation.

 

8. Conversion at Maturity. On the Dividend Maturity Date, all remaining
outstanding Series G Preferred Stock will automatically be converted into shares
of Common Stock.

 

H. Events of Default. Any occurrence of any one or more of the following shall
constitute an “Event of Default”:

 

1. Holder does not timely receive Conversion Shares for any reason whatsoever
following a Conversion Notice, including without limitation the issuance of
restricted shares if Holder provides a legal opinion that shares may be issued
without restrictive legend;

 

2. Any breach or failure to perform any covenant or provision of this
Certificate of Designations, the Stock Purchase Agreement, or any Transaction
Document;

 

3. Any representation or warranty made in the Stock Purchase Agreement or any
Transaction Document shall be untrue or incorrect in any respect as of the date
when made or deemed made;

 

4. The occurrence of any default or event of default under any material
agreement, lease, document or instrument to which the Corporation or any
subsidiary is obligated, including without limitation of an aggregate of at
least $100,000 of indebtedness;

 

5. Any Registration Statement required pursuant to the Stock Purchase Agreement
is not timely filed on the requisite form for any reason;

 

6. While any Registration Statement is required to be maintained effective, the
effectiveness of the Registration Statement lapses for any reason, including,
without limitation, the issuance of a stop order, or the Registration Statement,
or the prospectus contained therein, is unavailable to Holder sale of all
Conversion Shares for any 3 or more Trading Days, which may be non-consecutive;

 

7. The suspension from trading or the failure of the Common Stock to be trading
or listed on the OTCQB, OTCQX, NASDAQ or NYSE stock market;

 

8. The Corporation’s notice, written or oral, to Holder, including without
limitation, by way of public announcement or through any of its agents, of its
intention not to comply, as required, with a Conversion Notice at any time,
including without limitation any objection or instruction to its transfer agent
not to comply with any notice from Holder;

 

10

 

 

9. Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings for the relief of debtors shall be instituted by or against the
Corporation or any subsidiary and, if instituted against the Corporation or any
subsidiary by a third party, an order for relief is entered or the proceedings
are not be dismissed within 30 days of their initiation;

 

10. The appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, or other similar official of the Corporation or
any subsidiary or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the execution of a composition
of debts, or the occurrence of any other similar federal, state or foreign
proceeding, or the admission by it in writing of its inability to pay its debts
generally as they become due, the taking of corporate action by the Corporation
or any Subsidiary in furtherance of any such action or the taking of any action
by any person to commence a foreclosure sale or any other similar action under
any applicable law;

 

11. A judgment or judgments for the payment of money aggregating in excess of
$100,000 are rendered against the Corporation or any of its subsidiaries and are
not satisfied upon entry;

 

12. Except for its quarterly report on Form 10-Q for the quarter ended March 31,
2015, which will be filedwithin the applicable extension period, the Corporation
does not for any reason timely file when first due all reports, schedules,
forms, proxy statements, statements and other documents required to be filed by
it pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder;

 

13. Any regulatory, administrative or enforcement proceeding is initiated
against Corporation or any subsidiary by any governmental agency; or

 

14. Any provision of the Stock Purchase Agreement or any Transaction Document
shall at any time for any reason, other than pursuant to the express terms
thereof, cease to be valid and binding on or enforceable against the parties
thereto, or the validity or enforceability thereof shall be contested by any
party thereto, or a proceeding shall be commenced by the Corporation or any
subsidiary or any governmental authority having jurisdiction over any of them,
seeking to establish the invalidity or unenforceability thereof, or the
Corporation or any subsidiary denies that it has any liability or obligation
purported to be created under any Transaction Document.

 

I. Stock Register. The Corporation will keep at its principal office, or at the
offices of the transfer agent, a register of the Series G Preferred Stock, which
will be prima facie indicia of ownership of all outstanding shares of Series G
Preferred Stock. Upon the surrender of any certificate representing Series G
Preferred Stock at such place, the Corporation, at the request of the record
Holder of such certificate, will execute and deliver (at the Corporation’s
expense) a new certificate or certificates in exchange therefor representing in
the aggregate the number of shares represented by the surrendered certificate.
Each such new certificate will be registered in such name and will represent
such number of shares as is requested by the Holder of the surrendered
certificate and will be substantially identical in form to the surrendered
certificate.

 

11

 

 

II. Miscellaneous.

 

A. Notices. Any and all notices to the Corporation will be addressed to the
Corporation’s Chief Executive Officer at the Corporation’s principal place of
business on file with the Secretary of State of the State of Nevada. Any and all
notices or other communications or deliveries to be provided by the Corporation
to any Holder hereunder will be in writing and delivered personally, by
electronic mail or facsimile, sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile telephone number or address of
such Holder appearing on the books of the Corporation, or if no such facsimile
telephone number or address appears, at the principal place of business of the
Holder. Any notice or other communication or deliveries hereunder will be deemed
given and effective on the earliest of (1) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified in this Section II.A prior to 5:30 p.m. Eastern time, (2) the
date after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
section later than 5:30 p.m. but prior to 11:59 p.m. Eastern time on such date,
(3) the second business day following the date of mailing, if sent by nationally
recognized overnight courier service, or (4) upon actual receipt by the party to
whom such notice is required to be given.

 

B. Lost or Mutilated Preferred Stock Certificate. Upon receipt of evidence
reasonably satisfactory to the Corporation (an affidavit of the registered
Holder will be satisfactory) of the ownership and the loss, theft, destruction
or mutilation of any certificate evidencing shares of Series G Preferred Stock,
and in the case of any such loss, theft or destruction upon receipt of indemnity
reasonably satisfactory to the Corporation (provided that if the Holder is a
financial institution or other institutional investor its own agreement will be
satisfactory) or in the case of any such mutilation upon surrender of such
certificate, the Corporation will, at its expense, execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.

 

C. Headings. The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designations and will not be deemed to
limit or affect any of the provisions hereof.

 

12

 

 

RESOLVED, FURTHER, that the chairman, chief executive officer, chief financial
officer, president or any vice-president, and the secretary or any assistant
secretary, of the Corporation be and they hereby are authorized and directed to
prepare and file a Designation of Preferences, Rights and Limitations of Series
G Preferred Stock in accordance with the foregoing resolution and the provisions
of Nevada law.

 

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 23rd day
of April 2015.

 

 

Signed:        Name: Gerald E. Commissiong   Title: Chief Executive Officer    
          Signed:     Name: Robert Farrell   Title: Chief Financial Officer  

 

13

 

 

Exhibit 3

 

Form of Transfer Agent Instructions

 

[Letterhead of Amarantus BioScience Holdings, Inc.]

 

April 23, 2015

 

VStock Transfer, LLC

18 Lafayette Place

Woodmere, NY 11598

Fax: 646-536-3179

 

Re: Amarantus BioScience Holdings, Inc.

 

Ladies and Gentlemen:

 

In accordance with the Stock Purchase Agreement (“Agreement”), dated April 23,
2015, by and between Amarantus BioScience Holdings, Inc., a Nevada corporation
(“Company”), and Discover Growth Fund, a Cayman Islands exempted mutual fund
(“Investor”), pursuant to which Company may reserve, issue and deliver shares
(“Shares”) of Company’s Common Stock (“Common Stock”) upon conversion of shares
of the Series G Preferred Stock purchased by Investor, this will serve as our
irrevocable, absolute and unconditional instruction, authorization and direction
to you to (a) immediately reserve 180 million Shares for issuance to Investor,
(b) upon receipt of written notice, from either Company or from Investor with a
copy to Company, reserve any additional Shares requested to be reserved, and (c)
whenever either Company or Investor issues a Delivery Notice, immediately issue
the Shares requested. Capitalized terms used herein without definition will have
the respective meanings ascribed to them in the Agreement.

 

The Shares will remain in the created reserve until the earlier of their
issuance or such date as Investor and Company provide written instructions that
the Shares or any part of them may be taken out of the reserve and will no
longer be subject to the terms of these instructions.

 

Upon your receipt of a copy of a Delivery Notice, you will immediately process
the notice in accordance with your rush procedures, and use your best efforts to
issue and deliver to Investor the number of Shares set forth in the notice as
soon as practicable, and in any event within 3 Trading Days after receipt of the
notice, either: (a) only if you receive written notice that the Registration
Statement is not effective and Investor does not provide an opinion of its
counsel to the effect that the Shares may be issued without restrictive legend,
by delivering by overnight carrier to the address specified in the notice a
physical certificate bearing a restrictive legend; (b) only if Company is not
approved through DTC, but the Registration Statement is effective or Investor
provides an opinion of its counsel to the effect that the Shares may be issued
without restrictive legend, by delivering by overnight carrier to the address
specified in the notice a physical certificate bearing no restrictive legend; or
(c) if Company is DTC eligible and the Registration Statement is effective or
Investor provides an opinion of its counsel to the effect that the Shares may be
issued without restrictive legend, by issuing pursuant to the DTC Fast Automated
Securities Transfer (FAST) Program and crediting to Investor’s or its designee’s
balance account with DTC through its Deposit Withdrawal At Custodian (DWAC)
system, and notifying Investor to cause its bank or broker to post the DWAC
transaction.

 

 

 

 

Company hereby confirms that the Shares should not be subject to any
stop-transfer restrictions and will otherwise be freely transferable on the
books and records of Company, and if the Shares are certificated, the
certificates will not bear any legend restricting transfer of the Shares
represented thereby.

 

Company hereby confirms that no instructions other than as contemplated herein
will or may be given to you by Company with respect to the Shares. Company may
not instruct you to disregard any reserve or Delivery Notice and you may not do
so. You are to comply promptly with any Delivery Notice or share reservation
notice received from Investor, notwithstanding any contrary instructions from
Company.

 

Company will not replace you as Company’s transfer agent, until a reputable
registered transfer agent has agreed in writing to serve as Company’s transfer
agent and to be bound by all terms and conditions of this letter agreement. In
the event that you resign as Company’s transfer agent, Company will engage a
suitable replacement reputable registered transfer agent that will agree to
serve as transfer agent for Company and be bound by the terms and conditions of
these irrevocable instructions as soon as practicable and in any even within 3
Trading Days. You may not disclose any information, deliver any documents, or
transfer any files to any successor transfer agent until after Investor
acknowledges in writing that a suitable successor transfer agent has agreed in
writing to be bound by the terms and conditions of these instructions.

 

Company must keep its bill current with you. If Company is not current and is on
suspension, Investor will have the right to pay Company’s outstanding bill, in
order for you to act upon these instructions. If the outstanding bill is not
paid by Company or Investor, you have no obligation to act under instructions
until your bill is paid.

 

Company and you hereby acknowledge and confirm that complying with the terms of
these instructions does not and will not prohibit you from satisfying any and
all fiduciary responsibilities and duties you may owe to Company.

 

Company will indemnify you and your officers, directors, principals, partners,
advisors, attorneys, agents and representatives, and hold each of them harmless
from and against any and all loss, liability, damage, claim or expense
(including the reasonable fees and disbursements of attorneys) incurred by or
asserted against you or any of them arising out of or in connection with the
instructions set forth herein, the performance of your duties hereunder and
otherwise in respect hereof, including the costs and expenses of defending
yourself or themselves against any claim or liability hereunder, except that
Company will not be liable hereunder as to amounts in respect of which it is
finally determined by a court of competent jurisdiction to be due solely to your
intentional misconduct. You will entitled to indemnity and will have no
liability to Company in respect of any action taken or omitted to be taken in
good faith, and you will be absolutely entitled to rely in this regard on the
advice of your counsel, including in house counsel. Accordingly, you shall have
no duty or obligation to confirm the accuracy of any calculations or information
set forth in any Delivery Notice submitted by the Investor.

 

2

 

 

Investor is intended to be and is a third party beneficiary hereof, and no
amendment or modification to the instructions set forth herein may be made
without the prior written consent of Investor. The above instructions cannot be
revoked, cancelled or modified without prior written approval of Investor.

 

The Board of Directors of Company has approved the foregoing irrevocable
instructions and does hereby extend Company’s irrevocable agreement to indemnify
your firm for all loss, liability or expense in carrying out the authority and
direction herein contained on the terms herein set forth. You have not
previously received contrary instructions from Company or its agents, nor are
you aware of any facts or circumstances that would make the transaction improper
or illegal under applicable laws or regulations.

 

IN WITNESS WHEREOF, the parties have caused this letter agreement regarding
Transfer Agent Instructions to be duly executed and delivered as of the date
first written above.

 

 

  AMARANTUS BIOSCIENCE HOLDINGS, INC.               By:                        
Name:        Title:    

 

 

ACCEPTED AND AGREED:         VSTOCK TRANSFER, LLC               By:  
                          Name:      Title:      

 

 

3

 

 

Exhibit 4

 

Form of Legal Opinion

  

1. The Company is a corporation validly existing and in good standing under the
laws of the state of its incorporation.

 

2. The Company has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Transaction Documents, to sell and
issue the Shares under the Purchase Agreement and to issue the Common Stock
issuable upon conversion of the Shares pursuant to the Certificate of
Designations (the “Conversion Shares”).

 

3. The Shares have been duly authorized by the Company, and upon issuance and
delivery against payment therefor in accordance with the terms of the Purchase
Agreement, the Shares will be validly issued, outstanding, fully paid and
nonassessable. The Conversion Shares issuable upon conversion of the Shares have
been duly authorized and reserved for issuance, and upon issuance and delivery
upon conversion thereof in accordance with the terms of the Certificate of
Designations, will be validly issued, outstanding, fully paid and nonassessable.
The rights, preferences and privileges of the Shares are as stated in the
Certificate of Designation. Such issuance of the Shares and the Conversion
Shares will not be subject to any statutory or, to our knowledge, contractual
preemptive rights of any stockholder of the Company.

 

4. The execution, delivery and performance of the Transaction Documents have
been duly authorized by all necessary corporate action on the part of the
Company, and the Transaction Documents have been duly executed and delivered by
the Company.

 

5. Each Transaction Document constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting creditors’ rights, and
subject to general equity principles and to limitations on availability of
equitable relief, including specific performance.

 

6. The execution and delivery of the Transaction Documents by the Company does
not, and the Company’s performance of its obligations thereunder will not (a)
violate the Certificate of Incorporation or the Bylaws, each as in effect on the
date hereof, (b) violate in any material respect any federal or state law, rule
or regulation, or judgment, order or decree of any state or federal court or
governmental or administrative authority, in each case that, to our knowledge,
is applicable to the Company or its properties or assets (except to the extent
such violation would not have a material adverse effect on the Company’s
business, properties, assets, financial condition or results of operations or
prevent the performance by the Company of any material obligation under the
Transaction Documents), or (c) to our knowledge, require the authorization,
consent, approval of or other action of, notice to or filing or qualification
with, any state or federal governmental authority, except (i) as have been, or
will be prior to the Closing, duly obtained or made, (ii) the filing of a Form D
pursuant to Securities and Exchange Commission Regulation D, (iii) any filings
which may be required under applicable federal securities, state securities or
blue sky laws, (iv) the filing and effectiveness of the Registration Statement,
or (v) the filing of the Proxy Statement, except to the extent failure to be so
obtained or made would not have a material adverse effect on the Company’s
business, properties, assets, financial condition or results of operations or
its ability to consummate the transactions contemplated under the Transaction
Documents.

 

7. The Company is not, and immediately after the consummation of the
transactions contemplated by the Transaction Documents will not be, an
investment company within the meaning of Investment Company Act of 1940, as
amended. 

 

 

 

 

Exhibit 5

 

Form of Officer’s Certificate

 

AMARANTUS BIOSCIENCE HOLDINGS, INC.

 

April 23, 2015

 

The undersigned hereby certifies that:

 

The undersigned is the duly appointed Chief Executive Officer of Amarantus
BioScience Holdings, Inc., a Nevada corporation (“Company”).

 

This Officer’s Certificate (“Certificate”) is being delivered to Discover Growth
Fund, a Cayman Islands exempted mutual fund (“Investor”), by Company, to fulfill
the requirement under the Stock Purchase Agreement, dated April 23, 2015,
between Investor and Company (“Agreement”). Terms used and not defined in this
Certificate have the meanings set forth in the Agreement.

 

The representations and warranties of Company set forth in the Agreement are
true and correct in all material respects as if made on the above date (except
for any representations and warranties that are expressly made as of a
particular date, in which case such representations and warranties will be true
and correct as of such particular date), and no default has occurred under the
Agreement, or any other agreement with Investor or any Affiliate of Investor.

 

Company is not, and will not be as a result of the Closing, in default of the
Agreement, any other agreement with Investor or any Affiliate of Investor.

 

All of the conditions to the Closing required to be satisfied by Company prior
to the Closing have been satisfied in their entirety.

 

IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as
of the date set forth above.

 

 

Signed:        Name:       Title:      

 

 

 

 

Exhibit 6

 

Form of Secretary’s Certificate

 

April 23, 2015

 

The undersigned hereby certifies that:

 

The undersigned is the duly appointed Secretary of Amarantus BioScience
Holdings, Inc., a Nevada corporation (the “Company”).

 

This Secretary’s Certificate (“Certificate”) is being delivered to Discover
Growth Fund, a Cayman Islands exempted mutual fund (“Investor”), by Company, to
fulfill the requirement under the Stock Purchase Agreement, dated April 23,
2015, between Investor and Company (“Agreement”). Terms used and not defined in
this Certificate have the meanings set forth in the Agreement.

 

Attached hereto as Exhibit “A” is a true, correct and complete copy of the
Certificate of Incorporation of Company, as in effect on the Effective Date.

 

Attached hereto as Exhibit “B” is a true, correct and complete copy of the
Bylaws of Company, as in effect on the Effective Date.

 

Attached hereto as Exhibit “C” is a true, correct and complete copy of the
resolutions of the Board of Directors of Company authorizing the Agreement, the
Transaction Documents, and the transactions contemplated thereby. Such
resolutions have not been amended or rescinded and remain in full force and
effect as of the date hereof.

 

IN WITNESS WHEREOF, the undersigned has executed this Secretary’s Certificate as
of the date set forth above.

 

 

Signed:        Name:       Title: