Exhibit 10.1

 

PURCHASE AGREEMENT

 

THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 2nd day of February,
2016 by and among Cesca Therapeutics Inc., a Delaware corporation (the
“Company”), Boyalife Investment Inc. (“Boyalife USA”), and Boyalife (Hong Kong)
Limited (“Boyalife Hong Kong”). Boyalife USA and Boyalife Hong Kong are each
referred to in this Agreement, individually, as an “Investor” and, together, as
the “Investors”.

 

Recitals

 

A.     The Company and the Investors are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended; and

 

B.     The Investors wish to purchase from the Company, and the Company wishes
to sell and issue to the Investors, upon the terms and conditions stated in this
Agreement, (i) to Boyalife Hong Kong, an aggregate of up to 14,705,882 (as
adjusted for any stock splits, stock dividends, combinations, recapitalizations
or the like) shares (the “Shares”) of the Company’s Common Stock, par value
$0.001 per share (together with any securities into which such shares may be
reclassified, the “Common Stock”), at a purchase price of $0.17 per share (as
adjusted for any stock splits, stock dividends, combinations, recapitalizations
or the like) (the “Per Share Price”), (ii) to Boyalife USA, a senior secured
debenture in the principal amount equal to $8,000,000 as of the Initial Closing,
which principal amount shall increase by $4,500,000 as of the Subsequent
Closing, in the form attached hereto as Exhibit A (the “Debenture”), and (iii)
to the Investors, as set forth herein, warrants to purchase an aggregate number
of shares of Common Stock equal to eighty percent (80%) of the sum of (x) the
Shares plus (y) the number of shares of Common Stock (as adjusted for any stock
splits, stock dividends, combinations, recapitalizations or the like) into which
the Debenture is convertible (assuming fully converted into Common Stock as of
the Subsequent Closing), in the form attached hereto as Exhibit B (the
“Warrants”); and

 

C.     At the Initial Closing, the parties hereto will execute and deliver a
Nomination and Voting Agreement, in the form attached hereto as Exhibit C (the
“Nomination and Voting Agreement”), pursuant to which, among other things,
Boyalife Hong Kong will be granted the right to designate one member of the
Company’s board of directors; and

 

D.     At the Initial Closing, the Company and Boyalife USA will execute and
deliver a Security Agreement, in the form attached hereto as Exhibit D (the
“Security Agreement”), granting to Boyalife USA, as security for the Company’s
obligations under the Debenture, a senior security interest of first priority in
all right, title and interests of the Company in and to substantially all of the
assets of the Company.

 

In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.     Definitions. In addition to those terms defined above and elsewhere in
this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings set forth below:

 

 
 

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“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common control with, such Person.

 

“Boyalife Hong Kong Warrants” means Warrants to purchase an aggregate number of
shares of Common Stock equal to the aggregate number of Warrant Shares
multiplied by a ratio with (a) a numerator equal to the Shares and (b) a
denominator equal to the sum of the Shares and the Debenture Shares.

 

“Boyalife USA Warrants” means Warrants to purchase an aggregate number of shares
of Common Stock equal to the aggregate number of Warrant Shares multiplied by a
ratio with (a) a numerator equal to the Debenture Shares and (b) a denominator
equal to the sum of the Shares and the Debenture Shares.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
Sacramento, California are open for the general transaction of business.

 

“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

 

“Confidential Information” means trade secrets, confidential information and
know-how (including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and supplier
lists and related information).

 

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Debenture Shares” means the shares of Common Stock issuable upon the conversion
of the Debenture as of the Subsequent Closing.

 

“Deemed Liquidation Event” means (i) the acquisition of the Company by another
entity by means of any transaction or series of related transactions to which
the Company is party (including, without limitation, any stock acquisition,
reorganization, merger or consolidation but excluding a consolidation with a
wholly-owned subsidiary of the Company, a merger effected exclusively to change
the domicile of the Company) other than a transaction or series of transactions
in which the holders of the voting securities of the Company outstanding
immediately prior to such transaction continue to retain (either by such voting
securities remaining outstanding or by such voting securities being converted
into voting securities of the surviving entity), as a result of shares in the
Company held by such holders prior to such transaction, at least fifty percent
(50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such transaction
or series of transactions or (ii) any liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary.

 

“Initial Boyalife USA Warrants” means Warrants to purchase an aggregate number
of shares of Common Stock equal to the aggregate number of Boyalife USA Warrants
multiplied by a ratio with (a) a numerator equal to the outstanding principal of
the Debenture as of the Initial Closing and (b) a denominator equal to the
outstanding principal of the Debenture as of the Subsequent Closing.

 

 
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“Intellectual Property Rights” means the ownership or right to use patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar rights in connection with the
respective businesses of the Company as described in the SEC Filings.

 

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise), or
business of the Company taken as a whole, or (ii) the ability of the Company to
perform its obligations under the Transaction Documents.

 

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Pro Rata” means, with respect to each Investor, a ratio with (a) the numerator
equal to the sum of (i) the Shares issued to such Investor under this Agreement
(ii) the Debenture Shares issuable to such Investor, (iii) the Warrant Shares
issuable to such Investor and (iv) the number of shares of the Company’s Common
Stock purchased by such Investor pursuant to the Secondary Stock Purchases (b)
the denominator equal to the sum of (i) the aggregate number of Shares issued to
the Investors under this Agreement, (ii) the aggregate number of Debenture
Shares issuable to the Investors, (iii) the aggregate number of Warrant Shares
issuable to the Investors and (iv) the aggregate number of shares of the
Company’s Common Stock purchased by the Investors pursuant to the Secondary
Stock Purchases.

 

“Sabby Affiliates” shall mean Sabby Healthcare Master Fund, Ltd., Sabby
Volatility Warrant Master Fund, Ltd. and their Affiliates.

 

“SEC Filings” has the meaning set forth in Section 4.6.

 

“Securities” means the Shares, the Debenture, the Debenture Shares, the Warrants
and the Warrant Shares.

 

“Subsequent Boyalife USA Warrants” means Warrants to purchase an aggregate
number of shares of Common Stock equal to the aggregate number of Boyalife USA
Warrants subtracted by the number of Initial Boyalife Warrants.

 

“Transaction Documents” means this Agreement, the Nomination and Voting
Agreement, the Debenture and the Warrants.

 

“Warrant Shares” means the shares of Common Stock issuable upon the exercise of
the Warrants.

 

“1933 Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

 

 
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“1934 Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

 

2.     Purchase and Sale of the Shares, the Debenture and the Warrants. Subject
to the terms and conditions of this Agreement:

 

(a)     On the Initial Closing Date, Boyalife Hong Kong shall purchase, and the
Company shall sell and issue to Boyalife Hong Kong, the Shares and the Boyalife
Hong Kong Warrants, in exchange for an aggregate amount equal to $2,500,000 (the
“Boyalife Hong Kong Purchase Price”);

 

(b)     On the Initial Closing Date, Boyalife USA shall purchase, and the
Company shall sell and issue to Boyalife USA, the Debenture (reflecting a
principal amount of $8,000,000) and the Initial Boyalife USA Warrants, in
exchange for an aggregate amount equal to $8,000,000 (the “Initial Boyalife USA
Purchase Price”); and

 

(c)     On the Subsequent Closing Date, Boyalife USA shall purchase, and the
Company shall sell and issue to Boyalife USA, the Subsequent Boyalife USA
Warrants and the outstanding principal amount of the Debenture shall
automatically be increased by an additional $4,500,000 and, in exchange
therefore, Boyalife USA shall pay to the Company an aggregate amount equal to
$4,500,000 (the “Subsequent Boyalife USA Purchase Price” and, together with the
Initial Boyalife USA Purchase Price, the “Boyalife USA Purchase Price” and the
Boyalife USA Purchase Price, together with the Boyalife Hong Kong Purchase
Price, the “Purchase Price”).

 

3.     Closings.

 

(a)     The initial closing of the purchase and sale of the Shares, the
Debenture (reflecting a principal amount of $8,000,000), the Boyalife Hong Kong
Warrants and the Initial Boyalife USA Warrants (the “Initial Closing”) shall
take place at the offices of Dorsey & Whitney LLP, 305 Lytton Avenue, Palo Alto,
CA, 94301, at 10:00 am local time, as soon as practical following the date of
this Agreement, but no later than three Business Days following the date which
all conditions to the obligations of the parties set forth in Section 6.1 and
Section 6.2 are satisfied or waived (other than such conditions that by their
nature must be satisfied simultaneously with the Initial Closing), or at such
other time and place as the Company and the Investors may agree (the “Initial
Closing Date”). The subsequent closing of the purchase and sale of the
Subsequent Boyalife USA Warrants and the increase of $4,500,000 to the principal
amount of the Debenture (the “Subsequent Closing” and, together with the Initial
Closing, the “Closings”) shall take place at the offices of Dorsey & Whitney
LLP, 305 Lytton Avenue, Palo Alto, CA, 94301, at 10:00 am local time, as soon as
practical following the date which all conditions to the obligations of the
parties set forth in Section 6.3 and Section 6.4 are satisfied or waived (other
than such conditions that by their nature must be satisfied simultaneously with
the Subsequent Closing), or at such other time and place as the Company and the
Investors may agree (the “Subsequent Closing Date”).

 

(b)     Upon receipt by the Company of the Boyalife Hong Kong Purchase Price, in
cash by wire transfer of immediately available funds, on the Initial Closing
Date, the Company shall deliver to Boyalife Hong Kong certificates representing
the Shares and the Boyalife Hong Kong Warrants.

 

 
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(c)     Upon receipt by the Company of the Initial Boyalife USA Purchase Price,
in cash by wire transfer of immediately available funds, on the Initial Closing
Date, the Company shall deliver to Boyalife USA certificates representing the
Debenture (reflecting a principal amount of $8,000,000) and the Initial Boyalife
USA Warrants.

 

(d)     Upon receipt by the Company of the Subsequent Boyalife USA Purchase
Price, in cash by wire transfer of immediately available funds, on the
Subsequent Closing Date, the Company shall deliver to Boyalife USA certificates
representing the Subsequent Boyalife USA Warrants.

 

4.     Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as set forth in the SEC
Filings or in that certain disclosure letter dated as of the date hereof and
delivered to the Investors:

 

4.1     Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and to own its properties. The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property makes such qualification or leasing necessary unless the
failure to so qualify has not and could not reasonably be expected to have a
Material Adverse Effect.

 

4.2     Authorization. The Company has full power and authority and, except for
the filing of such securities filings relating to the offer, sale and issuance
of the Securities with the relevant authorities, has taken all requisite action
on the part of the Company, its officers, directors and stockholders necessary
for (i) the authorization, execution and delivery of the Transaction Documents,
(ii) the authorization of the performance of all obligations of the Company
hereunder or thereunder, and (iii) the authorization, issuance (or reservation
for issuance) and delivery of the Securities. The Transaction Documents
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally.

 

4.3     Capitalization. The authorized capital stock of the Company consists of
350,000,000 shares of Common Stock and 2,000,000 shares of preferred stock. As
of December 31, 2015, 42,807,468 shares of Common Stock were issued and
outstanding and no shares of preferred stock were issued and outstanding. All of
the issued and outstanding shares of the Company’s capital stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
pre-emptive rights and were issued in full compliance with applicable state and
federal securities law and any rights of third parties. Except for the Sabby
Affiliates, no Person is entitled to pre-emptive or similar statutory or
contractual rights with respect to any securities of the Company. Except as
described in the SEC Filings, there are no outstanding warrants, options,
convertible securities or other rights, agreements or arrangements of any
character under which the Company is or may be obligated to issue any equity
securities of any kind and except as contemplated by this Agreement, the Company
is not currently in negotiations for the issuance of any equity securities of
any kind. Except as described in the SEC Filings, there are no voting
agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among the Company and any of the security holders
of the Company relating to the securities of the Company held by them. Except as
described in the SEC Filings, no Person has the right to require the Company to
register any securities of the Company under the 1933 Act, whether on a demand
basis or in connection with the registration of Securities of the Company for
its own account or for the account of any other Person.

 

 
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The issuance and sale of the Securities hereunder will not obligate the Company
to issue shares of Common Stock or other securities to any other Person (other
than the Investors) and will not result in the adjustment of the exercise,
conversion, exchange or reset price of any outstanding security.

 

Except as described in the SEC Filings, the Company does not have outstanding
stockholder purchase rights or “poison pill” or any similar arrangement in
effect giving any Person the right to purchase any equity interest in the
Company upon the occurrence of certain events.

 

4.4     Valid Issuance. The Shares have been duly and validly authorized and,
when issued and paid for pursuant to this Agreement, will be validly issued,
fully paid and nonassessable, and shall be free and clear of all encumbrances
and restrictions (other than those created by the Investors), except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws. The Debenture and the Warrants have been duly and
validly authorized. Upon the conversion of the Debenture, the Debenture Shares
will be validly issued, fully paid and non-assessable, free and clear of all
encumbrances and restrictions, except for restrictions on transfer set forth in
the Transaction Documents or imposed by applicable securities laws and except
for those created by the Investors. Upon the due exercise of the Warrants, the
Warrant Shares will be validly issued, fully paid and non-assessable, free and
clear of all encumbrances and restrictions, except for restrictions on transfer
set forth in the Transaction Documents or imposed by applicable securities laws
and except for those created by the Investors. The Company has reserved a
sufficient number of shares of Common Stock for issuance upon the exercise of
the Warrants and conversion of the Debenture, free and clear of all encumbrances
and restrictions, except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws and except for
those created by the Investors.

 

4.5     Consents. The execution, delivery and performance by the Company of the
Transaction Documents and the offer, issuance and sale of the Securities require
no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to
file within the applicable time periods. Subject to the accuracy of the
representations and warranties of the Investors set forth in Section 5 hereof,
the Company has taken all action necessary to exempt (i) the issuance and sale
of the Shares, the Debenture and the Warrants, (ii) the issuance of the Warrant
Shares upon due exercise of the Warrants, (iii) the issuance of the Debenture
Shares upon conversion of the Debenture, and (iv) the other transactions
contemplated by the Transaction Documents from the provisions of any stockholder
rights plan or other “poison pill” arrangement, any anti-takeover, business
combination or control share law or statute binding on the Company or to which
the Company or any of its assets and properties may be subject and any provision
of the Company’s Certificate of Incorporation or By-laws that is or could
reasonably be expected to become applicable to the Investors as a result of the
transactions contemplated hereby, including without limitation, the issuance of
the Securities and the ownership, disposition or voting of the Shares, the
Warrant Shares and Debenture Shares by the Investors or the exercise of any
right granted to the Investors pursuant to this Agreement or the other
Transaction Documents.

 

 
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4.6     Delivery of SEC Filings; Business. The Company has made available to the
Investors through the EDGAR system, true and complete copies of the Company’s
most recent Annual Report on Form 10-K for the fiscal year ended June 30, 2015
(the “10-K”), and all other reports filed by the Company pursuant to the 1934
Act since the filing of the 10-K and prior to the date hereof (collectively, the
“SEC Filings”). The SEC Filings are the only filings required of the Company
pursuant to the 1934 Act for such period. The Company is engaged in all material
respects only in the business described in the SEC Filings, and the SEC Filings
contain a complete and accurate description in all material respects of the
business of the Company.

 

4.7     Use of Proceeds. The proceeds received by the Company from this
transaction upon the Initial Closing shall first be used to retire all of the
Company’s currently outstanding debentures issued to the Sabby Affiliates,
including all liabilities of any kind or nature due and payable to the Sabby
Affiliates. The proceeds received by the Company from this transaction upon the
Subsequent Closing will be used for working capital and general corporate
purposes.

 

4.8     No Material Adverse Change. Since September 30, 2015, except as
identified and described in the SEC Filings, there has not been:

 

(i)     any change in the consolidated assets, liabilities, financial condition
or operating results of the Company from that reflected in the financial
statements included in the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2015, except for changes in the ordinary course of
business which have not had and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;

 

(ii)     any declaration or payment of any dividend, or any authorization or
payment of any distribution, on any of the capital stock of the Company, or any
redemption or repurchase of any securities of the Company;

 

(iii)     any material damage, destruction or loss, whether or not covered by
insurance to any assets or properties of the Company;

 

(iv)     any waiver, not in the ordinary course of business, by the Company of a
material right or of a material debt owed to it;

 

(v)     any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company taken as a whole (as
such business is presently conducted and as it is proposed to be conducted);

 

(vi)     any change or amendment to the Company’s Certificate of Incorporation
or by-laws, or material change to any material contract or arrangement by which
the Company is bound or to which any of their respective assets or properties is
subject;

 

 
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(vii)     any material labor difficulties or labor union organizing activities
with respect to employees of the Company;

 

(viii)     any material transaction entered into by the Company other than in
the ordinary course of business;

 

(ix)     the loss of the services of any key employee, or material change in the
composition or duties of the senior management of the Company;

 

(x)     the loss or threatened loss of any customer which has had or could
reasonably be expected to have a Material Adverse Effect; or

 

(xi)     any other event or condition of any character that has had or could
reasonably be expected to have a Material Adverse Effect.

 

4.9     SEC Filings. At the time of filing thereof, the SEC Filings complied as
to form in all material respects with the requirements of the 1934 Act and did
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.

 

4.10     No Conflict, Breach, Violation or Default. The execution, delivery and
performance of the Transaction Documents by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company’s Certificate of Incorporation or the Company’s Bylaws, both as in
effect on the date hereof (true and complete copies of which have been made
available to the Investors through the EDGAR system), or (ii)(a) any statute,
rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or its assets or
properties, or (b) any agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of its assets or properties is
subject.

 

4.11     Tax Matters. Except as described in the SEC Filings: the Company has
timely prepared and filed all tax returns required to have been filed by the
Company with all appropriate governmental agencies and timely paid all taxes
shown thereon or otherwise owed by it; the charges, accruals and reserves on the
books of the Company in respect of taxes for all fiscal periods are adequate in
all material respects, and there are no material unpaid assessments against the
Company nor, to the Company’s Knowledge, any basis for the assessment of any
additional taxes, penalties or interest for any fiscal period or audits by any
federal, state or local taxing authority except for any assessment which is not
material to the Company, taken as a whole; all taxes and other assessments and
levies that the Company is required to withhold or to collect for payment have
been duly withheld and collected and paid to the proper governmental entity or
third party when due; and there are no tax liens or claims pending or, to the
Company’s Knowledge, threatened against the Company or any of its assets or
property. There are no outstanding tax sharing agreements or other such
arrangements between the Company and any other corporation or entity.

 

4.12     Title to Properties. Except as disclosed in the SEC Filings, the
Company and has good and marketable title to all real properties and all other
properties and assets owned by it, in each case free from liens, encumbrances
and defects that would materially affect the value thereof or materially
interfere with the use made or currently planned to be made thereof by them; and
except as disclosed in the SEC Filings, the Company holds any leased real or
personal property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or currently planned to be made
thereof by them.

 

 
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4.13     Patents and Trademarks. To the Company’s knowledge, the Company has
rights to use all Intellectual Property Rights that are necessary or material
for use in connection with its business as described in the SEC Filings and
which the failure to so have could, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. Except as
described in the SEC Filings, the Company has not received any written notice
that the Intellectual Property Rights used by the Company violates or infringes
upon the rights of any Person. Except as set forth in the SEC Filings, all such
Intellectual Property Rights are enforceable and, to the Company’s knowledge, do
not violate or infringe the Intellectual Property Rights of others in any
respect that would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect and, to the Company’s knowledge, there is no
existing infringement by another Person of any of the Company’s Intellectual
Property Rights.

 

4.14     Certificates, Authorities and Permits. The Company has adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by it, and the Company
has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if determined
adversely to the Company, could reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate.

 

4.15     Labor Matters.

 

(a)     The Company is not a party to or bound by any collective bargaining
agreements or other agreements with labor organizations. The Company has not
violated in any material respect any laws, regulations, orders or contract
terms, affecting the collective bargaining rights of employees, labor
organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety,
welfare, wages and hours.

 

(b)     (i) There are no labor disputes existing, or to the Company’s Knowledge,
threatened, involving strikes, slow-downs, work stoppages, job actions,
disputes, lockouts or any other disruptions of or by the Company’s employees,
(ii) there are no unfair labor practices or petitions for election pending or,
to the Company’s Knowledge, threatened before the National Labor Relations Board
or any other federal, state or local labor commission relating to the Company’s
employees, (iii) no demand for recognition or certification heretofore made by
any labor organization or group of employees is pending with respect to the
Company and (iv) to the Company’s Knowledge, the Company enjoys good labor and
employee relations with its employees and labor organizations.

 

(c)     The Company is in compliance in all material respects with all
applicable laws respecting employment (including laws relating to classification
of employees and independent contractors) and employment practices, terms and
conditions of employment, wages and hours, and immigration and naturalization.
There no claims are pending against the Company before the Equal Employment
Opportunity Commission or any other administrative body or in any court
asserting any violation of Title VII of the Civil Rights Act of 1964, the Age
Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal,
state or local Law, statute or ordinance barring discrimination in employment.

 

 
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(d)     Except as disclosed in the SEC Filings, the Company is not a party to,
or bound by, any employment or other contract or agreement that contains any
severance, termination pay or change of control liability or obligation,
including, without limitation, any “excess parachute payment,” as defined in
Section 2806(b) of the Internal Revenue Code.

 

(e)     Each of the Company’s employees is a Person who is either a United
States citizen or a permanent resident entitled to work in the United States. To
the Company’s Knowledge, the Company has no liability for the improper
classification by the Company of such employees as independent contractors or
leased employees prior to the Initial Closing.

 

4.16     Environmental Matters. The Company is not in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”), owns or operates any real property
contaminated with any substance that is subject to any Environmental Laws, is
liable for any off-site disposal or contamination pursuant to any Environmental
Laws, or is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim has had or could reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate;
and there is no pending or, to the Company’s Knowledge, threatened investigation
that might lead to such a claim.

 

4.17     Litigation. Except as disclosed in the SEC Filings, there are no
pending actions, suits or proceedings against or affecting the Company or any of
its properties; and to the Company’s Knowledge, no such actions, suits or
proceedings are threatened or contemplated.

 

4.18     Financial Statements. The financial statements included in each SEC
Filing present fairly, in all material respects, the consolidated financial
position of the Company as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis (“GAAP”) (except as may be
disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-Q under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, the Company has not incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the
aggregate, have had or could reasonably be expected to have a Material Adverse
Effect.

 

4.19     Insurance Coverage. The Company maintains in full force and effect
insurance coverage that is customary for comparably situated companies for the
business being conducted and properties owned or leased by the Company, and the
Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.

 

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

 

4.21     No Directed Selling Efforts or General Solicitation. Neither the
Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.

 

4.22     No Integrated Offering. The 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 Company security or solicited any offers to buy any
security, under circumstances that would adversely affect reliance by the
Company on Section 4(2) for the exemption from registration for the transactions
contemplated hereby or would require registration of the Securities under the
1933 Act.

 

4.23     Private Placement. The offer and sale of the Securities to the
Investors as contemplated hereby is exempt from the registration requirements of
the 1933 Act.

 

4.24     Questionable Payments. The Company is not, nor, to the Company’s
Knowledge, any of its respective current or former stockholders, directors,
officers, employees, agents or other Persons acting on behalf of the Company,
has on behalf of the Company or in connection with its business: (a) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any nature.

 

4.25     Transactions with Affiliates. Except as disclosed in the SEC Filings,
none of the officers or directors of the Company and, to the Company’s
Knowledge, none of the employees of the Company is presently a party to any
transaction with the Company (other than as holders of stock options and/or
warrants, and 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 Company’s Knowledge, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.

 

4.26     Internal Controls. Except as described in the SEC Filings: the Company
is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002
currently applicable to the Company; the Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences; and,
the Company has established disclosure controls and procedures (as defined in
1934 Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the
Company is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s most recently
filed period report under the 1934 Act, as the case may be, is being prepared.
The Company maintains a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the 1934
Act.

 

 
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5.     Representations and Warranties of the Investors. Each of the Investors
hereby represents and warrants to the Company that:

 

5.1     Organization and Existence. Such Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement.

 

5.2     Authorization. The execution, delivery and performance by such Investor
of the Transaction Documents to which such Investor is a party have been duly
authorized and will each constitute the valid and legally binding obligation of
such Investor, enforceable against such Investor in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.

 

5.3     Purchase Entirely for Own Account. The Securities to be received by such
Investor hereunder will be acquired for such Investor’s own account, not as
nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of the 1933 Act, and such Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act without prejudice, however, to such Investor’s right
at all times to sell or otherwise dispose of all or any part of such Securities
in compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time. Such Investor is not a
broker-dealer registered with the SEC under the 1934 Act or an entity engaged in
a business that would require it to be so registered.

 

5.4     Investment Experience. Such Investor acknowledges that it can bear the
economic risk and complete loss of its investment in the Securities and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment contemplated hereby.

 

5.5     Disclosure of Information. Such Investor has had an opportunity to
receive all information related to the Company requested by it and to ask
questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the Securities. Such
Investor acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by such Investor
shall modify, amend or affect such Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.

 

5.6     Restricted Securities. Such Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Securities may be resold without registration under the 1933 Act only in
certain limited circumstances. Such Investor is aware of the provisions of Rule
144 and promulgated under the 1933 Act, which subjects resales of the Securities
to the satisfaction of certain conditions. Such Investor acknowledges and
understands that the Company may not be satisfying the current applicable public
information requirements at the time such Investor wishes to sell the Shares,
the Warrant Shares or the Debenture Shares, and that therefore, such Investor
may be precluded from selling such securities. Such Investor acknowledges that,
in the event the applicable requirements of Rule 144 is not met, registration
under the 1933 Act or an exemption from registration will be required for any
disposition of the Shares, the Warrant Shares and the Debenture Shares. Such
Investor acknowledges that the Company has no intention to register the
Securities and understands that it will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales and that such persons, and the brokers who participate in the
transactions, do so at their own risk.

 

 
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5.7     Legends. It is understood that, except as provided below, the
Securities, and any certificates evidencing the Shares, the Warrant Shares and
the Debenture Shares may bear the following or any similar legend (including any
additional legends required by applicable state law):

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”

 

5.8     Accredited Investor. Such Investor is an accredited investor as defined
in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

 

5.9     No General Solicitation. Such Investor did not learn of the investment
in the Securities as a result of any public advertising or general solicitation.

 

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

 

5.11     Prohibited Transactions. Since the earlier of (a) such time when such
Investor was first contacted by the Company or any other Person regarding the
transactions contemplated hereby or (b) thirty (30) days prior to the date
hereof, neither such Investor nor any Affiliate of such Investor nor any Person
acting on behalf of or pursuant to any understanding with such Investor
(collectively, “Trading Affiliates”) has, directly or indirectly, effected or
agreed to effect any short sale, whether or not against the box, established any
“put equivalent position” (as defined in Rule 16a-1(h) under the 1934 Act) with
respect to the Common Stock, granted any other right (including, without
limitation, any put or call option) with respect to the Common Stock or with
respect to any security that includes, relates to or derived any significant
part of its value from the Common Stock or otherwise sought to hedge its
position in the Securities (each, a “Prohibited Transaction”). Prior to the
termination of this Agreement, such Investor shall not, and shall cause its
Trading Affiliates not to, engage, directly or indirectly, in a Prohibited
Transaction.

 

 
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5.12     Lock-Up.

 

(a)     Agreement. Such Investor agrees that for a period of six months
following the Initial Closing Date (which the Company may extend in order to
comply with FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor
provisions or amendments thereto), such Investor shall not cause or permit any
Transfer of any shares of Common Stock (including the Securities, shares of
Common Stock acquired pursuant to the Secondary Stock Purchases and any
securities received in exchange therefore) received pursuant to this Agreement,
as part of the Securities or the Secondary Stock Purchases. In furtherance of
the foregoing, such Investor agrees that until the six month anniversary of the
Initial Closing Date (which the Company may extend in order to comply with FINRA
Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or
amendments thereto) (a) the Company is authorized to place “stop orders” on its
books to prevent any transfer of Common Stock held by such Investor in violation
of this Agreement, and (ii) the Company and any duly appointed transfer agent
for the registration or transfer of the securities described herein are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of Section 5.12(a) of this Agreement. Such
Investor shall be deemed to have effected a “Transfer” of a security if such
Investor directly or indirectly: (i) sells, pledges, encumbers, assigns, grants
an option with respect to, transfers or disposes of such security or any
interest in such security; or (ii) enters into an agreement or commitment
providing for the sale of, pledge of, encumbrance of, assignment of, grant of an
option with respect to, transfer of or disposition of such security or any
interest therein.

 

(b)     Legend. Such Investor understands and agrees that the certificates
evidencing the Shares, the Warrant Shares, the Debenture Shares and shares of
Common Stock acquired pursuant to the Secondary Stock Purchases shall bear the
following legend in substantially the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD AS SET FORTH IN AN
AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF
WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.”

 

6.     Conditions to Closings.

 

6.1     Conditions to the Investors’ Obligations at the Initial Closing. The
obligation of each Investor to purchase the Shares, the Debenture, the Boyalife
Hong Kong Warrants and the Initial Boyalife USA Warrants, as applicable, at the
Initial Closing, is subject to the fulfillment to such Investor’s satisfaction,
on or prior to the Initial Closing Date, of the following conditions, any of
which may be waived by such Investor:

 

 
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(a)     The representations and warranties made by the Company in Section 4
hereof qualified as to materiality shall be true and correct at all times prior
to and on the Initial Closing Date, except to the extent any such representation
or warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct as of such earlier date,
and, the representations and warranties made by the Company in Section 4 hereof
not qualified as to materiality shall be true and correct in all material
respects at all times prior to and on the Initial Closing Date, except to the
extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct in
all material respects as of such earlier date. The Company shall have performed
in all material respects all obligations and conditions herein required to be
performed or observed by it on or prior to the Initial Closing Date.

 

(b)     The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Shares, the Debenture, the Warrants and the
consummation of the other transactions contemplated by the Transaction Documents
to be consummated on or prior to the Initial Closing Date, all of which shall be
in full force and effect.

 

(c)     No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated hereby
or in the other Transaction Documents.

 

(d)     The Company shall have delivered a certificate, executed on behalf of
the Company by its Chief Executive Officer or its Chief Financial Officer, dated
as of the Initial Closing Date, certifying to the fulfillment of the conditions
specified in subsections (a), (b), (c) and (g) of this Section 6.1.

 

(e)     The Company shall have delivered a certificate, executed on behalf of
the Company by its Secretary, dated as of the Initial Closing Date, certifying
the resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents,
and the issuance of the Securities, certifying the current versions of the
Certificate of Incorporation and Bylaws of the Company and certifying as to the
signatures and authority of Persons signing the Transaction Documents and
related documents on behalf of the Company.

 

(f)     The Investors shall have received an opinion from Dorsey & Whitney LLP,
the Company’s counsel, dated as of the Initial Closing Date, in form and
substance reasonably acceptable to the Investors and addressing such legal
matters as the Investors may reasonably request.

 

(g)     No stop order or suspension of trading shall have been imposed by the
SEC or any other governmental or regulatory body with respect to public trading
in the Common Stock.

 

(h)     The Company shall have executed and delivered to the Investors the
Nomination and Voting Agreement.

 

 
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(i)     The Company shall have executed and delivered to Boyalife USA the
Security Agreement.

 

(j)     The Company and the Sabby Parties shall have entered into a Consent,
Repayment and Release Agreement in the form previously provided to the
Investors.

 

6.2     Conditions to Obligations of the Company at the Initial Closing. The
Company’s obligation to sell and issue the Shares, the Debenture and the
Warrants to the Investors, as applicable, at the Closing is subject to the
fulfillment to the satisfaction of the Company on or prior to the Initial
Closing Date of the following conditions, any of which may be waived by the
Company:

 

(a)     The representations and warranties made by the Investors in Sections 5.1
and 5.2 hereof shall be true and correct in all material respects when made, and
shall be true and correct in all material respects on the Initial Closing Date
with the same force and effect as if they had been made on and as of said date.
The representations and warranties made by the Investors in Sections 5.3 through
5.11 hereof (the “Investment Representations”) shall be true and correct in all
respects when made, and shall be true and correct in all respects on the Initial
Closing Date with the same force and effect as if they had been made on and as
of said date. The Investors shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by it on
or prior to the Initial Closing Date.

 

(b)     Boyalife Hong Kong shall have delivered the Boyalife Hong Kong Purchase
Price to the Company.

 

(c)     Boyalife USA shall have delivered the Initial Boyalife USA Purchase
Price to the Company.

 

(d)     The Investors shall have executed and delivered to the Company the
Nomination and Voting Agreement.

 

(e)     Boyalife USA shall have executed and delivered to the Company the
Security Agreement.

 

(f)     The Company shall have obtained either (i) such approval as may be
required by the applicable rules and regulations of the Nasdaq Stock Market LLC
(or any successor entity) from the shareholders of the Company with respect to
the transactions contemplated by the Transaction Documents, including (A) the
issuance of all of the Shares, Debenture Shares and Warrant Shares in excess of
19.99% of the issued and outstanding Common Stock on the Closing and (B) such
transactions constituting a change of control of the Company, as applicable (the
“Shareholder Approval”), or (ii) an exemption from Shareholder Approval from the
Nasdaq Stock Market LLC pursuant to Nasdaq Rule 5365(f) (the “Financial
Viability Exemption”)

 

(g)     In the event a Financial Viability Exemption is sought and granted by
the Nasdaq Stock Market LLC, any applicable requirements necessary to satisfy
such Financial Viability Exemption shall have been complied with, including the
making of any required filings with the SEC and the expiration of any applicable
waiting periods.

 

 
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(h)     The Company and the Sabby Parties shall have entered into a Consent,
Repayment and Release Agreement in the form previously provided to the
Investors.

 

6.3     Conditions to Boyalife USA’s Obligations at the Subsequent Closing. The
obligation of Boyalife USA at the Subsequent Closing to purchase the Subsequent
Boyalife USA Warrants and increase the principal amount of the Debenture by
$4,500,000, is subject to the fulfillment to Boyalife USA’s satisfaction, on or
prior to the Subsequent Closing Date, of the following conditions, any of which
may be waived by Boyalife USA:

 

(a)     All outstanding debentures issued to the Sabby Affiliates, including all
liabilities of any kind or nature due and payable to the Sabby Affiliates, shall
be repaid in full.

 

(b)     All outstanding warrants to purchase the Company’s Common Stock (and all
registration rights in connection therewith) issued to the Sabby Affiliates on
or after August 31, 2015 shall have been amended in a form reasonably acceptable
to the Investors.

 

6.4     Conditions to Obligations of the Company at the Subsequent Closing. The
obligation of the Company at the Subsequent Closing to sell and issue the
Subsequent Boyalife USA Warrants and increase the principal amount of the
Debenture by $4,500,000, is subject to the fulfillment to the Company’s
satisfaction, on or prior to the Subsequent Closing Date, of the following
conditions, any of which may be waived by the Company:

 

(a)     All outstanding debentures issued to the Sabby Affiliates, including all
liabilities of any kind or nature due and payable to the Sabby Affiliates, shall
be repaid in full.

 

(b)     All outstanding warrants to purchase the Company’s Common Stock (and all
registration rights in connection therewith) issued to the Sabby Affiliates on
or after August 31, 2015 shall have been amended in a form reasonably acceptable
to the Company.

 

(c)     Boyalife USA shall have delivered the Subsequent Boyalife USA Purchase
Price to the Company.

 

6.5     Termination of Obligations to Effect Closings; Effects.

 

(a)     The obligations of the Company, on the one hand, and the Investors, on
the other hand, to effect the Initial Closing shall terminate as follows:

 

(i)     Upon the mutual written consent of the Company and the Investor;

 

(ii)     By the Company if any of the conditions set forth in Section 6.2 shall
have become incapable of fulfillment, and shall not have been waived by the
Company; or

 

(iii)     By the Investors if any of the conditions set forth in Section 6.1
shall have become incapable of fulfillment, and shall not have been waived by
the Investor;

 

provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Initial Closing shall not then
be in breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Closing.

 

 
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(b)     The obligations of the Company, on the one hand, and the Investors, on
the other hand, to effect the Subsequent Closing shall terminate as follows:

 

(i)     Upon the mutual written consent of the Company and the Investor;

 

(ii)     By Boyalife USA if any of the conditions set forth in Section 6.3 shall
have become incapable of fulfillment, and shall not have been waived by Boyalife
USA; or

 

(iii)     By the Company if any of the conditions set forth in Section 6.4 shall
have become incapable of fulfillment, and shall not have been waived by the
Company;

 

provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Subsequent Closing.

 

(c)     Nothing in this Section 6.5 shall be deemed to release any party from
any liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents.

 

7.     Covenants and Agreements of the Company.

 

7.1     Reservation of Common Stock. The Company shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of providing for the exercise of the Warrants and the conversion
of the Debenture, such number of shares of Common Stock as shall from time to
time equal the number of shares sufficient to permit the exercise of the
Warrants and the conversion of the Debenture issued pursuant to this Agreement
in accordance with their respective terms.

 

7.2     No Conflicting Agreements. The Company will not take any action, enter
into any agreement or make any commitment that would conflict or interfere in
any material respect with the Company’s obligations to the Investors under the
Transaction Documents.

 

7.3     Investor Participation Right. The Company hereby grants to each Investor
the right of first refusal to purchase such Investor’s Pro Rata portion of fifty
percent (50%) of any New Securities (as defined in this Section 7.3(a)) which
the Company may, from time to time, propose to sell and issue after the date of
this Agreement (the “Participation Rights”).

 

(a)     “New Securities” shall mean any capital stock (including Common Stock
and/or Preferred Stock) of the Company whether now authorized or not, and
rights, convertible securities, options or warrants to purchase such capital
stock, and securities of any type whatsoever that are, or may become,
exercisable or convertible into capital stock; provided that the term “New
Securities” does not include:

 

 
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(i)     the Securities;

 

(ii)     securities issued or issuable to officers, directors and employees of,
or consultants to, the Company pursuant to stock grants, option plans, purchase
plans or other employee stock incentive programs or arrangements approved by the
Board of Directors of the Company, or upon exercise of options or warrants
granted to such parties pursuant to any such plan or arrangement;

 

(iii)     securities issued upon the exercise or conversion of options, warrants
or convertible securities outstanding as of the date of this Agreement;

 

(iv)     securities issued or issuable in connection with the acquisition of
another corporation by the Company by merger, purchase of substantially all of
the assets or other reorganization or pursuant to a joint venture, development
project or other strategic transaction, provided, that the terms of such
issuances are approved by the Board of Directors of the Company;

 

(v)     securities issued or issuable to banks, lessors or other financial
institutions pursuant to a debt financing or commercial leasing transaction;

 

(vi)     securities issued or issuable in connection with sponsored research,
collaboration, technology license, development, OEM, marketing or other similar
agreements or strategic partnerships approved by the Board of Directors of the
Company;

 

(vii)     securities issued or issuable to suppliers or third party service
providers in connection with the provision of goods or services pursuant to
transactions approved by the Board of Directors of the Company; and

 

(viii)     any right, option or warrant to acquire any security convertible into
the securities excluded from the definition of New Securities pursuant to
subsections (i) through (vii) above.

 

(b)     In the event the Company has closed a sale or issuance of New
Securities, it shall give the Investors written notice of the terms of the sale
or issuance not less than fifteen (15) days after such closing. Each Investor
shall have ten (10) days from the date of receipt of such written notice to
exercise its Participation Rights by giving written notice to the Company, and
the Investors shall participate on the same terms and conditions as the other
investors and shall execute and deliver definitive transaction documents in the
same form as the other investors as requested by the Company.

 

(c)     The Participation Rights granted to the Investors in this Section 7.3
shall not be applicable to an Investor if (i) at the time of the issuance of New
Securities such Investor is not an “Accredited Investor” as defined in
Regulation D, Rule 501(a) of the 1933 Act and (ii) such issuance of New
Securities is only being offered to Accredited Investors.

 

 
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(d)     The Participation Rights granted under this Section 7.3 shall expire
upon, and shall not be applicable to the issuance of any New Securities that
closes before the first to occur of (i) the “Maturity Date”, as defined in the
Debenture; (ii) upon the repayment of the entire principal balance and accrued
interest thereon outstanding under the Debenture, pursuant to the terms thereof;
(iii) the acquisition of the Company by another entity by means of any
transaction or series of related transactions to which the Company is party
(including, without limitation, any stock acquisition, reorganization, merger or
consolidation but excluding a consolidation with a wholly-owned subsidiary of
the Company, a merger effected exclusively to change the domicile of the
Company) other than a transaction or series of transactions in which the holders
of the voting securities of the Company outstanding immediately prior to such
transaction continue to retain (either by such voting securities remaining
outstanding or by such voting securities being converted into voting securities
of the surviving entity), as a result of shares in the Company held by such
holders prior to such transaction, at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such transaction or series of
transactions; or (iv) a sale, lease or other conveyance of all or substantially
all of the assets of the Company.

 

7.4     Indebtedness and Other Transactions. For so long as the Debenture
remains outstanding, the Company will not take any of the following actions
without the prior written consent of the Investors: (a) issue any New Securities
that are equity securities for the primary purpose of raising capital at a price
per share less than the Per Share Price; (b) issue any New Securities or approve
the incurrence of indebtedness for borrowed money, other than debt or equity
securities issued for the primary purpose of raising capital of up to
$15,000,000 in the aggregate; or (c) authorize or effect a Deemed Liquidation
Event unless required by fiduciary duties applicable to the Company’s Board of
Directors under applicable law.

 

8.     Miscellaneous.

 

8.1     Survival. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement for two years after the Closing.

 

8.2     Successors and Assigns. This Agreement may not be assigned by a party
hereto without the prior written consent of the Company or the Investors, as
applicable; provided, however, that the Company may assign its rights and
delegate its duties hereunder to any surviving or successor corporation or
entity in connection with a merger or consolidation of the Company with another
corporation, or a sale, transfer or other disposition of all or substantially
all of the Company’s assets to another corporation or entity, without the prior
written consent of the Investors. The provisions of this Agreement shall inure
to the benefit of and be binding upon the respective permitted successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

8.3     Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.

 

 
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8.4     Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.

 

8.5     Notices. All notices and other communications hereunder shall be in
writing and shall be deemed received (a) on the date of delivery if delivered
personally and/or by messenger service, (b) on the date of confirmation of
receipt of transmission by facsimile (or, the first Business Day following such
receipt if (i) the date is not a Business Day or (ii) confirmation of receipt is
given after 5:00 p.m., Pacific Time) or (c) on the date of confirmation of
receipt if delivered by a nationally or internationally recognized courier
service (or, the first Business Day following such receipt if (i) the date is
not a Business Day or (ii) confirmation of receipt is given after 5:00 p.m.,
Pacific Time), to the parties at the following address or facsimile numbers (or
at such other address or facsimile number for a party as shall be specified by
like notice):

 

If to the Company:

 

Cesca Therapeutics Inc.

2711 Citrus Road

Rancho Cordova, California 95742

Attention: Chief Executive Officer

 

With a copy to:

 

Dorsey & Whitney LLP 

305 Lytton Avenue

Palo Alto, CA, 94301

Attention: Evan Ng, Esq.

 

If to either of the Investors:

 

c/o Boyalife Group Ltd.

800 Jiefang Road East

Wuxi City, China 214002

 

8.6     Expenses. The parties hereto shall pay their own costs and expenses in
connection herewith. In the event that legal proceedings are commenced by any
party to this Agreement against another party to this Agreement in connection
with this Agreement or the other Transaction Documents, the party which does not
prevail in such proceedings shall pay the reasonable attorneys’ fees and other
reasonable out-of-pocket costs and expenses incurred by the prevailing party in
such proceedings.

 

8.7     Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investors. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any Securities purchased under this Agreement at the time outstanding, each
future holder of all such Securities, and the Company.

 

 
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8.8     Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Company
or the Investors without the prior consent of the Company (in the case of a
release or announcement by the Investors) or the Investors (in the case of a
release or announcement by the Company) (which consents shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of any securities exchange or
securities market, in which case the Company or the Investors, as the case may
be, shall allow the Investors or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance. Promptly following the
Initial Closing Date, the Company shall issue a press release disclosing the
consummation of the transactions contemplated by this Agreement and file a
Current Report on Form 8-K attaching the press release described in the
foregoing sentence as well as copies of the Transaction Documents. In addition,
the Company will make such other filings and notices in the manner and time
required by the Nasdaq Stock Market LLC and the SEC. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Investor, or
include the name of any Investor in any filing with the SEC (other than any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the 1934 Act) or any regulatory agency,
without the prior written consent of the Investors, except to the extent such
disclosure is required by law or trading market regulations, in which case the
Company shall provide the Investors with prior notice of such disclosure.

 

8.9     Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.

 

8.10     Entire Agreement. This Agreement, including the exhibits, and the other
Transaction Documents constitute the entire agreement among the parties hereof
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.

 

8.11     Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

 

 
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8.12     Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
California without regard to the choice of law principles thereof. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of California located in Sacramento County and the United States
District Court for the Northern District of California for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto by the same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the jurisdiction
of any such court in any such suit, action or proceeding and to the laying of
venue in such court. Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.

 

[signature page follows]

 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.

 

 

 

 

COMPANY

 

        CESCA THERAPEUTICS INC.  

 

 

 

 

 

By:

/s/ ROBIN STRACEY

 

 

 

Robin Stracey

 

 

 

Chief Executive Officer

 

 

 

 

INVESTORS

 

        BOYALIFE INVESTMENT INC.  

 

 

 

 

 

By:

/s/ XIAOCHUN XU

 

 

Name:

Xiaochun Xu

 

 

Title:

Chairman

 

 

 

 

BOYALIFE (HONG KONG) LIMITED

 

 

 

 

 

 

By:

/s/ XIAOCHUN XU

 

 

Name:

Xiaochun Xu

 

 

Title:

Chairman

 

 

 

 

(Signature Page to Purchase Agreement)

 

 
 

--------------------------------------------------------------------------------

 

 

EXHIBIT A

 

Form of Debenture

 

See attached

 

 
 

--------------------------------------------------------------------------------

 

 

EXHIBIT B

 

Form of Warrant

 

See attached

 

 
 

--------------------------------------------------------------------------------

 

 

EXHIBIT C

 

Form of Nomination and Voting Agreement

 

See attached

 

 
 

--------------------------------------------------------------------------------

 

 

EXHIBIT D

 

Form of Security Agreement

 

See attached