EXHIBIT 10.03

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR SATISFACTORY ASSURANCES
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED WITH RESPECT TO SUCH SALE,
OFFER, PLEDGE OR HYPOTHECATION.

 

WARRANT TO PURCHASE COMMON STOCK

 

OF

 

XENETIC BIOSCIENCES, INC.

 

Void after December 30, 2019

 

Date of Issuance: December 31, 2014

 

This certifies that, for value received, Serum Institute of India Limited, a
company organized under the laws of India, or its registered assigns (the
“Holder”) is entitled, subject to the terms set forth below, to purchase from
Xenetic Biosciences, Inc. (the “Company”), a Nevada corporation, three million
and two hundred thousand (3,200,000) shares of the Common Stock of the Company,
par value $0.01 per share, (the “Warrant Shares”), upon surrender hereof, at the
principal office of the Company referred to below and simultaneous payment
therefor in lawful money of the United States, at the Exercise Price as set
forth in Section 2 below.

 

Subject to the terms and conditions set forth herein, this Warrant shall be
exercisable with respect to the vested portion as set forth in Section 1, in
whole or in part, during the term commencing at December 31, 2016 and ending at
December 30, 2019.

 

The Holder further agrees that, in addition to any other applicable transfer
restrictions in the applicable securities laws and agreements, without the
Company’s prior written consent, the Holder shall not transfer more than [***]%
of the total number of securities of the Company held by it (calculated on an as
converted to Common Stock basis) per rolling six months and more than [***]% of
the securities of the Company held by it (calculated on an as converted to
Common Stock basis) per rolling calendar year.

 

1.Vesting. The exercisability of this Warrant shall vest as follows:

 

a.Following completion of Phase II(b) human clinical trials for SC and IV modes
of administration of PSA-EPO, [***]% of the Warrant Shares shall vest.

 

b.Following the initiation of Phase III human trials for SC and IV modes of
administration of PSA-EPO, [***]% of the Warrant Shares shall vest; provided,
however, that the Holder shall take all reasonable steps to advance the Phase
III human trials within India, or in appropriate and approved alternative
territories, including, but not limited to, Singapore, Malaysia and South
Africa.

 

2.Exercise Price. The Exercise Price per share of Common Stock at which this
Warrant may be exercised shall be equal to the higher of $0.77 per share or the
Fair Market Value on the date of issuance, as adjusted from time to time
pursuant to Section 12 below (the “Exercise Price”). For purposes of this
Section 2, the “Fair Market Value” of one share of Common Stock on the date of
issuance shall have one of the following meanings:

 

1

 

 

a.if the Common Stock is listed on a recognized national stock exchange, such as
The Nasdaq Stock Market LLC, the Fair Market Value shall be the Closing Price of
the Common Stock on such recognized national stock exchange on the most recent
trading day prior to the date of issuance of this Warrant; for the purposes of
this Warrant, “Closing Price” means the final price at which one share of Common
Stock is traded during any trading day;

 

b.if the Common Stock is not listed on a recognized national stock exchange but
quoted in an over-the-counter market, the Fair Market Value shall be deemed to
be the volume weighted average price per share of Common Stock for the 20
trading days ending on the day prior to the date of issuance of this Warrant;

 

c.if section (a) or (b) above is not applicable, the Fair Market Value shall
equal the highest price per share which the Company could obtain on the date of
issuancefrom a willing buyer (not a current employee or director) for shares of
Common Stock sold by the Company, from authorized but unissued shares, as
determined in good faith by the Company’s Board of Directors.

 

3.Exercise of Warrant.

 

a.Subject to the terms and conditions set forth herein, the purchase rights
represented by this Warrant are exercisable by the Holder in whole or in part,
from time to time, by the surrender of this Warrant and the Notice of Exercise
attached hereto as Exhibit A duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), upon payment in cash or by
check acceptable to the Company of an amount equal to the aggregate Exercise
Price of the Warrant Shares being purchased.

 

b.This Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of its surrender for exercise as provided above,
and the person entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of record of such
shares as of the close of business on such date. As promptly as practicable on
or after such date, the Company shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
shares issuable upon such exercise. In the event that this Warrant is exercised
in part, the Company will execute and deliver a new Warrant of like tenor
exercisable for the number of shares for which this Warrant may then be
exercised.

 

4.No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. In lieu of
any fractional share to which the Holder would otherwise be entitled, the
Company shall make a cash payment equal to the Exercise Price multiplied by such
fraction.

 

5.Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss, theft, or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and substance to the Company or, in the case of
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense shall execute and deliver, in lieu of this Warrant, a new warrant of
like tenor and amount.

 

2

 

 

6.Rights of Stockholders. Until the Holder exercises this Warrant and the
Company issues the Holder Warrant Shares purchasable upon the exercise hereof,
as provided herein, the Holder shall not be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company that may at any time be issuable on the exercise hereof for any purpose,
nor shall anything contained herein be construed to confer upon the Holder, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent or assert dissenter’s rights
with respect to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, or change of
stock to no par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise.

 

7.Market Stand-off. The Holder agrees that the Holder shall not sell or
otherwise transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic
effect as a sale, of any shares of the Company’s capital stock acquired through
the exercise of this Warrant during the 180 day period following the
commencement of the Company’s public offerings (or such other period as may be
requested by the Company or an underwriter to accommodate regulatory
restrictions on (i) the publication or other distribution of research reports
and (ii) analyst recommendations and opinions). The Holder further agrees that
to the extent that the executive officers and directors of the Company are
subject to a longer market stand-off period, the Holder shall be subject to such
longer market stand-off period as well. The Company may impose stop transfer
instructions and may stamp each certificate with a legend with respect to the
shares subject to the foregoing restriction until the end of such 180 day (or
other) period. The Holder agrees to execute a market stand-off agreement with
the underwriters in the offerings in customary form consistent with the
provisions of this section.

 

8.Representations and Warranties of the Holder. By acceptance of this Warrant,
the Holder represents and warrants to the Company as follows:

 

a.                   Authority. The Holder represents that it has full power and
authority to enter into this Warrant. This Warrant constitutes the Holder’s
valid and legally binding obligation, enforceable in accordance with its terms,
except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, or similar laws relating to or affecting the enforcement of
creditors’ rights and (ii) laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

 

b.                   No Conflicts. The execution, delivery and performance by
the Holder of this Warrant and the consummation by the Holder of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents of the Holder, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Holder is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to the Holder, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Holder to perform its obligations
hereunder.

 

3

 

 

c.                   Investment Intent. The Holder understands that this Warrant
and the Warrant Shares (the “Securities”) are “restricted securities” and have
not been and will not be registered under the Securities Act of 1933, as amended
(the “Securities Act”) or any applicable state securities law and is acquiring
the Securities as principal for its own account and not with a view to, or for
distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities laws. The Holder is
acquiring the Securities hereunder in the ordinary course of its business. The
Holder does not presently have any agreement, plan or understanding, directly or
indirectly, with any person to distribute or effect any distribution of any of
the Securities (or any securities which are derivatives thereof) to or through
any person or entity; the Holder is not a registered broker-dealer under Section
15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
an entity engaged in a business that would require it to be so registered as a
broker-dealer.

 

d.                   Investor Status. At the time the Holder was offered the
Securities, it was, and at the date hereof it is, either (i) an “accredited
investor” as defined in Rule 501(a) under the Securities Act or (ii) not a “U.S.
person” as defined in Rule 902 of Regulation S of the Securities Act.

 

e.                   General Solicitation. The Holder is not acquiring the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general advertisement.

 

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

 

g.                   Access to Information. The Holder acknowledges that it has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and the
merits and risks of investing in the Securities; (ii) access to information
about the Company and its subsidiaries and their respective financial condition,
results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. The Holder has sought such accounting,
legal and tax advice as it has considered necessary to make an informed decision
with respect to its acquisition of the Securities.

 

h.                   Brokers and Finders. No person will have, as a result of
the transactions contemplated by this Warrant, any valid right, interest or
claim against or upon the Company or the Holder for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Holder.

 

i.                    Independent Investment Decision. The Holder has
independently evaluated the merits of its decision to purchase Securities
pursuant to this Warrant. The Holder understands that nothing in this Warrant or
any other materials presented by or on behalf of the Company to it in connection
with the purchase of the Securities constitutes legal, tax or investment advice.
The Holder has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Securities.

 

4

 

 

j.                    Reliance on Exemptions. The Holder understands that the
Securities being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and the
Holder’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of the Holder set forth herein in order to
determine the availability of such exemptions and the eligibility of the Holder
to acquire the Securities.

 

k.                   No Governmental Review. The Holder understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities
or the fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

 

l.                    Regulation M. The Holder is aware that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of the Securities and other activities with respect to the Securities by
the Holder.

 

m.                 Residency. The residency of the Holder (or, in the case of a
partnership or corporation, such entity’s principal place of business) is
correctly set forth on the signature page hereto.

 

9.Transfer of Warrant.

 

a.Warrant Register. The Company will maintain a register (the “Warrant
Register”) containing the names and addresses of the Holder. The Holder may
change its address as shown on the Warrant Register by written notice to the
Company requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to the
Holder as shown on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant Register, the Company
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for all purposes, notwithstanding any notice to the contrary.

 

b.Warrant Agent. The Company may, by written notice to the Holder, appoint an
agent for the purpose of maintaining the Warrant Register referred to in Section
9(a) above, issuing the Common Stock or other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or
any or all of the foregoing. Thereafter, any such registration, issuance,
exchange, or replacement, as the case may be, shall be made at the office of
such agent.

 

c.Compliance with Securities Laws.

 

i.The Warrant and the Warrant Shares are characterized as “restricted
securities” under the Securities Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering, and that under the
Securities Act and applicable regulations thereunder, such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, the Holder represents that it is familiar
with the Securities and Exchange Commission (“SEC”) Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act. The Company is under no obligation to register any of the
securities sold hereunder. No public market now exists for this Warrant or the
Warrant Shares and that it is uncertain whether a public market will ever exist
for this Warrant or the Warrant Shares.

 

5

 

 

ii.This Warrant and all certificates for the Warrant Shares issued upon exercise
hereof shall be stamped or imprinted with legends in substantially the following
form (in addition to any legend required by state securities laws):

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SUCH ACT, (B) A “NO ACTION” LETTER OF THE SECURITIES AND EXCHANGE COMMISSION
WITH RESPECT TO SUCH SALE OR OFFER OR (C) SATISFACTORY ASSURANCES TO THE
CORPORATION THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED WITH RESPECT TO
SUCH SALE OR OFFER.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC
OFFERING, AS SET FORTH IN THE WARRANT PURSUANT TO WHICH THESE SHARES WERE
ISSUED, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.”

 

d.Disposition of the Holder's Rights.

 

i.Transferability. This Warrant shall not be transferred or assigned in whole or
in part by Holder and any attempt by Holder to transfer or assign any rights,
duties or obligations that arise under this Warrant shall be void. Any transfer
of the Warrant Shares issuable upon exercise of this Warrant (the “Securities”)
must be in compliance with all applicable securities laws. The Holder agrees not
to make any sale, assignment, transfer, pledge or other disposition of all or
any portion of the Securities, or any beneficial interest therein, unless and
until the transferee thereof has agreed in writing for the benefit of the
Company to take and hold such Securities subject to, and to be bound by, the
terms and conditions set forth in this Warrant to the same extent as if the
transferee were the original Holder hereunder, and (A) such Holder shall have
given prior written notice to the Company of such Holder’s intention to make
such disposition and shall have furnished the Company with a detailed
description of the manner and circumstances of the proposed disposition, (B) the
transferee shall have confirmed to the satisfaction of the Company in writing,
substantially in the form of Exhibit A-1, that the Securities are being acquired
(i) solely for the transferee’s own account and not as a nominee for any other
party, (ii) for investment and (iii) not with a view toward distribution or
resale, and shall have confirmed such other matters related thereto as may be
reasonably requested by the Company, and (C) such Holder shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the Company,
to the effect that such disposition will not require registration of such
Securities under applicable securities laws.

 

6

 

 

10.Reservation of Stock. The Company covenants that during the term this Warrant
is exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of this Warrant and, from time to time, will take all steps
necessary to amend its Articles of Incorporation, as amended and/or amended and
restated from time to time (the “Certificate”) as the same may be amended from
time to time to provide sufficient reserves of shares of Common Stock issuable
upon exercise of the Warrant.

 

11.Amendments.

 

a.Any term of this Warrant may be amended, and any waiver of any term of this
Warrant may be granted, with the written consent of the Company and the holder
of this Warrant. Any amendment or waiver effected in accordance with this
Section 11 shall be binding upon each future holder of the Warrant and the
Company, notwithstanding the fact that such future holder did not consent to
such amendment or waiver.

 

b.No waivers of or exceptions to any term, condition or provision of the
Warrant, in any one or more instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such term, condition or provision.

 

12.Adjustments. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from time to time as follows:

 

a.Reclassification, etc. If the Company at any time while this Warrant, or any
portion thereof, remains outstanding and unexpired shall, by reclassification of
securities or otherwise, change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities which
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 12.

 

b.Split, Subdivision or Combination of Warrant Shares. If the Company at any
time while this Warrant, or any portion thereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which purchase
rights under this Warrant exist, into a different number of securities of the
same class, the Exercise Price for such securities shall be proportionately
decreased in the case of a split or subdivision or proportionately increased in
the case of a combination.

 

c.Merger or Reorganization. If at any time there shall be any reorganization,
recapitalization, merger or consolidation (a “Reorganization”) involving the
Company (other than as otherwise provided for herein) in which the Company’s
equity securities are converted into or exchanged for securities, cash or other
property, then, as a part of such Reorganization, lawful provision shall be made
so that the Holder shall thereafter be entitled to receive upon exercise of this
Warrant the kind and amount of securities, cash or other property of the
successor corporation resulting from such Reorganization, equivalent in value to
that which a holder of the Warrant Shares deliverable upon exercise of this
Warrant would have been entitled in such Reorganization if the right to purchase
the Warrant Shares hereunder had been exercised immediately prior to such
Reorganization. In any such case, appropriate adjustment (as determined in good
faith by the Board of Directors of the successor corporation) shall be made in
the application of the provisions of this Warrant with respect to the rights and
interests of the Holder after such Reorganization to the end that the provisions
of this Warrant shall be applicable after the event, as near as reasonably may
be, in relation to any shares or other securities deliverable after that event
upon the exercise of this Warrant.

 

7

 

 

d.Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 12, the Company shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and furnish
to the Holder a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request, at any time, of the Holder, furnish
or cause to be furnished to the Holder a like certificate setting forth: (i)
such adjustments and readjustments; (ii) the Exercise Price at the time in
effect; and (iii) the number of shares and the amount, if any, of other property
which at the time would be received upon the exercise of the Warrant.

 

13.Miscellaneous.

 

a.Additional Undertaking. The Holder hereby agrees to take whatever additional
action and execute whatever additional documents the Company may deem necessary
or advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on either the Holder or the shares of Common Stock issued
upon exercise hereof pursuant to the provisions of this Warrant.

 

b.Governing Law. This Warrant shall be governed by, and construed in accordance
with, the laws of the State of New York without resort to its conflict-of-laws
rules.

 

c.Jurisdiction. The Holder and the Company irrevocably consents to the exclusive
jurisdiction of, and venue in, the state courts in the State of New York (or in
the event of exclusive federal jurisdiction, the federal district courts in the
State of New York), in connection with any action based upon, arising out of or
in connection with this Warrant or the matters contemplated herein, and agrees
that process may be served upon them in any manner authorized by the law of the
State of New York for such persons.

 

d.Successors and Assigns. The provisions of this Warrant shall inure to the
benefit of, and be binding upon, the Company and its successors and assigns and
upon the Holder and its successors, whether or not any such person shall have
become a party to this Warrant and have agreed in writing to join herein and be
bound by the terms hereof.

 

e.Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

 

8

 

 

f.Notices. All notices and other communications required or permitted hereunder
shall be in writing and shall be sent by facsimile or electronic mail or
otherwise delivered by hand, messenger or courier service addressed:

 

i.if to the Holder, to the Holder at the Holder’s address, facsimile number or
electronic mail address as shown in the Company’s records, as may be updated in
accordance with the provisions hereof, or until the Holder so furnishes an
address, facsimile number or electronic mail address to the Company, then to and
at the address, facsimile number or electronic mail address of the last holder
of this Warrant for which the Company has contact information in its records; or

 

ii.if to the Company, to the attention of the Chief Executive Officer of the
Company at 99 Hayden Ave, Suite 230, Lexington, Massachusetts 02421, United
States or at such other current address as the Company shall have furnished to
the Holder or at s.maguire@xeneticbio.com.

 

Each such notice or other communication shall for all purposes of this Warrant
be treated as effective or having been given (i) if delivered by hand, messenger
or courier service, when delivered (or if sent via a nationally-recognized
overnight courier service, freight prepaid, specifying next-business-day
delivery, one business day after deposit with the courier), or (ii) if sent via
facsimile, upon confirmation of facsimile transfer or, if sent via electronic
mail, upon confirmation of delivery when directed to the relevant electronic
mail address, if sent during normal business hours of the recipient, or if not
sent during normal business hours of the recipient, then on the recipient’s next
business day. In the event of any conflict between the Company’s books and
records and this Warrant or any notice delivered hereunder, the Company’s books
and records will control absent fraud or error.

 

g.Severability. If any provision of this Warrant becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, portions
of such provision, or such provision in its entirety, to the extent necessary,
shall be severed from this Warrant, and such illegal, unenforceable or void
provision shall be replaced with a valid and enforceable provision that will
achieve, to the extent possible, the same economic, business and other purposes
of the illegal, unenforceable or void provision. The balance of this Warrant
shall be enforceable in accordance with its terms.

 

h.Rights and Obligations Survive Exercise of the Warrant. Except as otherwise
provided herein, the rights and obligations of the Company and the Holder under
this Warrant shall survive exercise of this Warrant.

 

i.Entire Agreement. Except as expressly set forth herein, this Warrant
(including the exhibits attached hereto) constitutes the entire agreement and
understanding of the Company and the Holder with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to the
subject matter hereof.

 

 

[signature page follows]

 

9

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first
written above.

 

 

XENETIC BIOSCIENCES, INC.

 

 

By: ________________________

       Name:

       Title:

 

 

AGREED AND ACKNOWLEDGED

 

SERUM INSTITUTE OF INDIA LIMITED

 

 

By: ________________________

       Name:

       Title:

 

Address:

 

Email:

Fax:

 

 

 

 

10

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

To: Xenetic Biosciences, Inc.

 

(1)          The undersigned hereby elects to purchase ________ shares of Common
Stock (the “Shares”) of Xenetic Biosciences, Inc., pursuant to the terms of the
attached Warrant as follows:

 

(a)The undersigned herewith makes payment of the full purchase price for the
Shares at the Exercise Price per share provided for in the Warrant of $________,
for an aggregate Exercise Price of $________, by delivery to the Company of a
certified or official bank check payable to the order of the Company or by wire
transfer of immediately available funds to an account designated in writing by
the Company, in the amount of the aggregate Exercise Price.

 

(2)          In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), and are restricted
securities under the Securities Act and that the undersigned will not offer,
sell, or otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the Securities Act or any
state securities laws.

 

(3)          The undersigned represents and warrants that the shares of Common
Stock being purchased are being acquired for investment for its own account, not
as a nominee or agent, and not with a view to, or for resale in connection with,
the distribution thereof, and that the undersigned has no present intention of
selling, granting any participation in, or otherwise distributing the shares,
nor does it have any contract, undertaking, agreement or arrangement for the
same, and all representations and warranties of the undersigned set forth in
Section 8 of the attached Warrant are true and correct as of the date hereof.

 

(4)          The undersigned has executed, and delivers herewith, an Investment
Representation Statement and Market Stand-Off Agreement in a form substantially
similar to the form attached to the Warrant as Exhibit A-1.

 

(5)          Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned as is specified below:

 

Name ________________________________

 

(6)          Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned as is specified below:

 

Name ________________________________

 

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________________________________________

(Print name of the warrant holder)

 

 

________________________________________

(Signature)

 

 

________________________________________

(Name and title of signatory, if applicable)

 

 

________________________________________

(Date)

 

 

________________________________________

(Fax number)

 

 

________________________________________

(Email address)

 

 

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EXHIBIT A-l

 

INVESTMENT REPRESENTATION STATEMENT

AND

MARKET STAND-OFF AGREEMENT

 

 

INVESTOR: ___________________________________     COMPANY: XENETIC BIOSCIENCES,
INC.     SECURITIES: THE WARRANT ISSUED ON DECEMBER 31, 2014 (THE  “WARRANT”)
AND THE SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF (INCLUDING UPON
SUBSEQUENT CONVERSION OF THOSE SECURITIES)     DATE:
___________________________________

 

In connection with the purchase or acquisition of the above-listed Securities,
the undersigned Investor represents and warrants to, and agrees with, the
Company as follows:

 

1.Investment Intent. The Investor understands that the Warrant and Warrant
Shares (the “Securities”) are “restricted securities” and have not been and will
not be registered under the Securities Act of 1933, as amended (the “Securities
Act”) or any applicable state securities law and is acquiring the Securities as
principal for its own account and not with a view to, or for distributing or
reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities laws. The Investor is acquiring the
Securities hereunder in the ordinary course of its business. The Investor does
not presently have any agreement, plan or understanding, directly or indirectly,
with any person to distribute or effect any distribution of any of the
Securities (or any securities which are derivatives thereof) to or through any
person or entity; the Investor is not a registered broker-dealer under Section
15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
an entity engaged in a business that would require it to be so registered as a
broker-dealer.

 

2.Investor Status. At the time the Investor was offered the Securities, it was,
and at the date hereof it is, either (i) an “accredited investor” as defined in
Rule 501(a) under the Securities Act or (ii) not a “U.S. person” as defined in
Rule 902 of Regulation S of the Securities Act.

 

3.General Solicitation. The Investor is not acquiring the Securities as a result
of any advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
advertisement.

 

4.Investment Experience. The 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 Securities, and has so evaluated the merits
and risks of such investment. The Investor is able to bear the economic risk of
an investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.

 

5.Access to Information. The Investor acknowledges that it has been afforded (i)
the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
its subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. The Investor has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed decision with respect to its acquisition of the Securities.

 

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6.Brokers and Finders. No person will have, as a result of the transactions
contemplated by the Warrant, any valid right, interest or claim against or upon
the Company or the Investor for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Investor.

 

7.Independent Investment Decision. The Investor has independently evaluated the
merits of its decision to purchase Securities pursuant to the Warrant. The
Investor understands that nothing in the Warrant or any other materials
presented by or on behalf of the Company to it in connection with the purchase
of the Securities constitutes legal, tax or investment advice. The Investor has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Securities.

 

8.Reliance on Exemptions. The Investor understands that the Securities being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and the Investor’s
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of the Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of the Investor to acquire
the Securities.

 

9.No Governmental Review. The Investor understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

 

10.Regulation M. The Investor is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of the Securities and
other activities with respect to the Securities by the Investor.

 

11.Residency. The residency of the Investor (or, in the case of a partnership or
corporation, such entity’s principal place of business) is correctly set forth
on the signature page hereto.

 

12.Market Stand-off. The Investor agrees that the Investor shall not sell or
otherwise transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic
effect as a sale, of any shares of the Company’s capital stock acquired through
the exercise of the Warrant during the 180 day period following the commencement
of the Company’s public offerings (or such other period as may be requested by
the Company or an underwriter to accommodate regulatory restrictions on (i) the
publication or other distribution of research reports and (ii) analyst
recommendations and opinions). The Investor further agrees that to the extent
that the executive officers and directors of the Company are subject to a longer
market stand-off period, the Investor shall be subject to such longer market
stand-off period as well. The Company may impose stop transfer instructions and
may stamp each certificate with a legend with respect to the shares subject to
the foregoing restriction until the end of such 180 day (or other) period. The
Investor agrees to execute a market stand-off agreement with the underwriters in
the offerings in customary form consistent with the provisions of this section.

 

[signature page follows]

 

14

 

 

The Investor is signing this Investment Representation Statement and Market
Stand-Off Agreement on the date first written above.

 

  INVESTOR      

________________________________________

(Print name of the investor)

 

 

________________________________________

(Signature)

 

 

________________________________________

(Name and title of signatory, if applicable)

 

 

________________________________________

(Street address)

 

 

________________________________________

(City, state and ZIP)

 

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