Exhibit 10.2

 

SERIES B-1 WARRANT AGENT AGREEMENT

 

This Series B-1 Warrant Agent Agreement (this “Warrant Agreement”), dated as of
September 4, 2020 (the “Issuance Date”) between Aditx Therapeutics, Inc., a
company incorporated under the laws of the State of Delaware (the “Company”),
and VStock Transfer, LLC (the “Warrant Agent”).

 

WHEREAS, pursuant to the terms of that certain Underwriting Agreement
(“Underwriting Agreement”), dated September 1, 2020, by and among the Company
and Dawson James Securities, Inc., as representatives of the underwriters set
forth therein, the Company is engaged in a public offering (the “Offering”) of
up to 2,400,000 Units, each Unit consisting of one share (the “Shares”) of
common stock, par value $0.001 per share (the “Common Stock”) of the Company
(or, to the extent that the purchase of shares of Common Stock would cause the
beneficial ownership of a purchaser in the Offering, together with its
affiliates and certain related parties, to exceed 4.99% of the then issued and
outstanding Common Stock, in lieu of the Common Stock, one share of the
Company’s Series A Preferred Stock (the “Preferred Stock”)), one Series A-1
Warrant (the “Series A-1 Warrants”) to purchase one share of Common Stock; and
one Series B-1 Warrant (the “Warrants”) to purchase one share of Common Stock
(such shares of Common Stock underlying the Warrants, the “Warrant Shares”);

 

WHEREAS, the Company has filed with the Securities and Exchange Commission (the
“Commission”) a Registration Statement on Form S-1 (File No. 333-248491) (as the
same may be amended from time to time, the “Registration Statement”), for the
registration under the Securities Act of 1933, as amended (the “Securities
Act”), of the Shares, Series A Warrants, the Common Stock underlying the Series
A Warrants, the Warrants and Warrant Shares, and such Registration Statement was
declared effective on September 1, 2020;

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to so act, in accordance with the terms set
forth in this Warrant Agreement in connection with the issuance, registration,
transfer, exchange and exercise of the Warrants;

 

WHEREAS, the Company desires to provide for the provisions of the Warrants, the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the
holders of the Warrants; and

 

WHEREAS, all acts and things have been done and performed which are necessary to
make the Warrants the valid, binding and legal obligations of the Company, and
to authorize the execution and delivery of this Warrant Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

 

1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent
to act as agent for the Company with respect to the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in
accordance with the express terms and conditions set forth in this Warrant
Agreement (and no implied terms or conditions).

 

2. Warrants.

 

2.1. Form of Warrants. The Warrants shall be registered securities and shall be
evidenced by a global certificate (“Global Certificate”) in the form of Exhibit
A to this Warrant Agreement, which shall be deposited on behalf of the Company
with a custodian for The Depository Trust Company (“DTC”) and registered in the
name of Cede & Co., a nominee of DTC. If DTC subsequently ceases to make its
book-entry settlement system available for the Warrants, the Company may
instruct the Warrant Agent regarding making other arrangements for book-entry
settlement. In the event that the Warrants are not eligible for, or it is no
longer necessary to have the Warrants available in, book-entry form, the Company
may instruct the Warrant Agent to provide written instructions to DTC to deliver
to the Warrant Agent for cancellation the Global Certificate, and the Company
shall instruct the Warrant Agent to deliver to DTC separate certificates
evidencing Warrants (“Definitive Certificates” and, together with the Global
Certificate, “Warrant Certificates”) registered as requested through the DTC
system.

 

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2.2. Issuance and Registration of Warrants.

 

2.2.1. Warrant Register. The Warrant Agent shall maintain books (“Warrant
Register”) for the registration of original issuance and the registration of
transfer of the Warrants.

 

2.2.2. Issuance of Warrants. Upon the initial issuance of the Warrants, the
Warrant Agent shall issue the Global Certificate and deliver the Warrants in the
DTC book-entry settlement system in accordance with written instructions
delivered to the Warrant Agent by the Company. Ownership of security
entitlements in the Warrants shall be shown on, and the transfer of such
ownership shall be effected through, records maintained (i) by DTC and (ii) by
institutions that have accounts with DTC (each, a “Participant”).

 

2.2.3. Beneficial Owner; Holder. Prior to due presentment for registration of
transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name that Warrant shall be registered on the Warrant
Register (the “Holder”) as the absolute owner of such Warrant for purposes of
any exercise thereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Warrant Agent or any agent of the Company or the Warrant Agent from giving
effect to any written certification, proxy or other authorization furnished by
DTC governing the exercise of the rights of a holder of a beneficial interest in
any Warrant. The rights of beneficial owners in a Warrant evidenced by the
Global Certificate shall be exercised by the Holder or a Participant through the
DTC system, except to the extent set forth herein or in the Global Certificate.

 

2.2.4. Execution. The Warrant Certificates shall be executed on behalf of the
Company by any authorized officer of the Company (an “Authorized Officer”),
which need not be the same authorized signatory for all of the Warrant
Certificates, either manually or by facsimile signature. The Warrant
Certificates shall be countersigned by an authorized signatory of the Warrant
Agent, which need not be the same signatory for all of the Warrant Certificates,
and no Warrant Certificate shall be valid for any purpose unless so
countersigned. In case any Authorized Officer of the Company that signed any of
the Warrant Certificates ceases to be an Authorized Officer of the Company
before countersignature by the Warrant Agent and issuance and delivery by the
Company, such Warrant Certificates, nevertheless, may be countersigned by the
Warrant Agent, issued and delivered with the same force and effect as though the
person who signed such Warrant Certificates had not ceased to be such officer of
the Company; and any Warrant Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Warrant
Certificate, shall be an Authorized Officer of the Company authorized to sign
such Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such an Authorized Officer.

 

2.2.5. Registration of Transfer. At any time at or prior to the Expiration Date
(as defined below), a transfer of any Warrants may be registered and any Warrant
Certificate or Warrant Certificates may be split up, combined or exchanged for
another Warrant Certificate or Warrant Certificates evidencing the same number
of Warrants as the Warrant Certificate or Warrant Certificates surrendered. Any
Holder desiring to register the transfer of Warrants or to split up, combine or
exchange any Warrant Certificate shall make such request in writing delivered to
the Warrant Agent, and shall surrender to the Warrant Agent the Warrant
Certificate or Warrant Certificates evidencing the Warrants the transfer of
which is to be registered or that is or are to be split up, combined or
exchanged and, in the case of registration of transfer, shall provide a
signature guarantee. Thereupon, the Warrant Agent shall countersign and deliver
to the person entitled thereto a Warrant Certificate or Warrant Certificates, as
the case may be, as so requested. The Warrant Agent may require reasonable and
customary payment, by the Holder requesting a registration of transfer of
Warrants or a split-up, combination or exchange of a Warrant Certificate (but,
for purposes of clarity, not upon the exercise of the Warrants and issuance of
Warrant Shares to the Holder), of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with such registration of
transfer, split-up, combination or exchange, together with reimbursement to the
Warrant Agent of all reasonable expenses incidental thereto.

 

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2.2.6. Loss, Theft and Mutilation of Warrant Certificates. Upon receipt by the
Company and the Warrant Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of
loss, theft or destruction, of indemnity or security in customary form and
amount, and reimbursement to the Company and the Warrant Agent of all reasonable
expenses incidental thereto, and upon surrender to the Warrant Agent and
cancellation of the Warrant Certificate if mutilated, the Warrant Agent shall,
on behalf of the Company, countersign and deliver a new Warrant Certificate of
like tenor to the Holder in lieu of the Warrant Certificate so lost, stolen,
destroyed or mutilated. The Warrant Agent may charge the Holder an
administrative fee for processing the replacement of lost Warrant Certificates,
which shall be charged only once in instances where a single surety bond
obtained covers multiple certificates. The Warrant Agent may receive
compensation from the surety companies or surety agents for administrative
services provided to them.

 

2.2.7. Proxies. The Holder of a Warrant may grant proxies or otherwise authorize
any person, including the Participants and beneficial holders that may own
interests through the Participants, to take any action that a Holder is entitled
to take under this Agreement or the Warrants; provided, however, that at all
times that Warrants are evidenced by a Global Certificate, exercise of those
Warrants shall be effected on their behalf by Participants through DTC in
accordance the procedures administered by DTC.

 

3. Terms and Exercise of Warrants.

 

3.1. Exercise Price. Each Warrant shall entitle the Holder, subject to the
provisions of the applicable Warrant Certificate and of this Warrant Agreement,
to purchase from the Company the number of shares of Common Stock stated
therein, at the price of $5.00 per whole share, subject to the subsequent
adjustments provided in Section 4 hereof. The term “Exercise Price” as used in
this Warrant Agreement refers to the price per share at which shares of Common
Stock may be purchased at the time a Warrant is exercised.

 

3.2. Duration of Warrants. Warrants may be exercised only during the period
(“Exercise Period”) commencing on September 4, 2020 and terminating at 5:00
P.M., Eastern Standard Time (the “close of business”) on the fifth anniversary
of the Issuance Date, September 4, 2025 (“Expiration Date”). Each Warrant not
exercised on or before the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof under this Warrant Agreement shall
cease at the close of business on the Expiration Date.

 

3.3. Exercise of Warrants.

 

3.3.1. Exercise and Payment. (a) Subject to the provisions of this Warrant
Agreement, a Holder (or a Participant or a designee of a Participant acting on
behalf of a Holder) may exercise Warrants by delivering to the Warrant Agent,
not later than 5:00 P.M., Eastern Standard Time, on any business day during the
Exercise Period an election to purchase the Warrant Shares underlying the
Warrants to be exercised (i) in the form included in Exhibit B to this Warrant
Agreement or (ii) via an electronic warrant exercise through the DTC system
(each, an “Election to Purchase”). No later than one (1) Trading Day following
delivery of an Election to Purchase, the Holder (or a Participant acting on
behalf of a Holder in accordance with DTC procedures) shall: (i) (A) surrender
of the Warrant Certificate evidencing the Warrants to the Warrant Agent at its
office designated for such purpose or (B) deliver the Warrants to an account of
the Warrant Agent at DTC designated for such purpose in writing by the Warrant
Agent to DTC from time to time, and (ii) unless the cashless exercise procedure
specified in Section 3.3.7(b) or (c) below is permitted and specified in the
applicable Notice of Exercise, deliver to the Company the Exercise Price for
each Warrant to be exercised, in lawful money of the United States of America by
certified or official bank check payable to the Company or bank wire transfer in
immediately available funds to:

 

Account Name:

Bank Name:

Bank Address:

ACH/ABA Routing Number:

Account Number:

Swift Code:

 

No ink-original Election to Purchase shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Election to
Purchase form be required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender the Warrants to the Company
until the Holder has purchased all of the Warrant Shares available thereunder
and the Warrant has been exercised in full, in which case, the Holder shall
surrender such Warrant to the Company for cancellation within three (3) Trading
Days of the date the final Election to Purchase is delivered to the Company.
Partial exercises of a Warrant resulting in purchases of a portion of the total
number of Warrant Shares available thereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased. The Holder and the
Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to any
Election to Purchase within one (1) Business Day of receipt of such notice. The
Holder and any assignee, by acceptance of a Warrant, acknowledge and agree that,
by reason of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on
the face thereof.

 

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Any person so designated by the Holder (or a Participant or designee of a
Participant on behalf of a Holder) to receive Warrant Shares shall be deemed to
have become holder of record of such Warrant Shares as of the time that an
appropriately completed and duly signed Election to Purchase has been delivered
to the Warrant Agent, provided that the Holder (or Participant on behalf of the
Holder) makes delivery of the deliverables referenced in the immediately
preceding sentence by the date that is one (1) Trading Day after the delivery of
the Election to Purchase. If the Holder (or Participant on behalf of the Holder)
fails to make delivery of such deliverables on or prior to the Trading Day
following delivery of the Election to Purchase, such Election to Purchase shall
be void ab initio.

 

(b) If any of (i) the Warrants, (ii) the Election to Purchase, or (iii) the
Exercise Price therefor, is received by the Warrant Agent on any date after 5:00
P.M., Eastern Standard Time, or on a date that is not a Trading Day, the
Warrants with respect thereto will be deemed to have been received and exercised
on the Trading Day next succeeding such date. “Business day” means a day other
than a Saturday or Sunday on which commercial Banks in New York City are open
for the general conduct of banking business. The “Exercise Date” will be the
date on which the materials in the foregoing sentence are received by the
Warrant Agent (if by 5:00 P.M., New York City time), or the following Trading
Day (if after 5:00 P.M., New York City time), regardless of any earlier date
written on the materials. If the Warrants are received or deemed to be received
after the Expiration Date, the exercise thereof will be null and void and any
funds delivered to the Company will be returned to the Holder or Participant, as
the case may be, as soon as practicable. In no event will interest accrue on any
funds deposited with the Company in respect of an exercise or attempted exercise
of Warrants.

 

(c) If less than all the Warrants evidenced by a surrendered Warrant Certificate
are exercised, the Warrant Agent shall split up the surrendered Warrant
Certificate and return to the Holder a Warrant Certificate evidencing the
Warrants that were not exercised.

 

3.3.2. Issuance of Warrant Shares.

 

(a) The Warrant Agent shall, on the Trading Day following the Exercise Date of
any Warrant, advise the Company, the transfer agent and registrar for the
Company’s Common Stock, in respect of (i) the number of Warrant Shares indicated
on the Election to Purchase as issuable upon such exercise with respect to such
exercised Warrants, (ii) the instructions of the Holder or Participant, as the
case may be, provided to the Warrant Agent with respect to the delivery of the
Warrant Shares and the number of Warrants that remain outstanding after such
exercise and (iii) such other information as the Company or such transfer agent
and registrar shall reasonably request.

 

(b) The Company shall, by no later than 5:00 P.M., Eastern Standard Time, on the
second Trading Day following the delivery of the Election to Purchase (provided
the payment of the Exercise Price has been submitted as required by Section
3.3.1) (such date and time, the “Delivery Time”), cause its registrar to
electronically transmit the Warrant Shares issuable upon that exercise to DTC by
crediting the account of DTC or of the Participant, as the case may be, through
its Deposit/Withdrawal at Custodian (DWAC) system. If the Company fails for any
reason to deliver to the Holder the Warrant Shares subject to an Election to
Purchase by the Delivery Time, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant Shares
subject to such exercise (based on the closing price of the Common Stock on the
date of the applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated damages begin
to accrue) for each Trading Day after such Delivery Time until such Warrant
Shares are delivered or Holder rescinds such exercise. The Company agrees to
maintain a transfer agent that is a participant in the FAST program so long as
this Warrant remains outstanding and exercisable.

 

3.3.3. Valid Issuance. All Warrant Shares issued by the Company upon the proper
exercise of a Warrant in conformity with this Warrant Agreement shall be validly
issued, fully paid and non-assessable.

 

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3.3.4. No Fractional Exercise. No fractional Warrant Shares will be issued upon
the exercise of the Warrant. If, by reason of any adjustment made pursuant to
Section 4, a Holder would be entitled, upon the exercise of such Warrant, to
receive a fractional interest in a share, the Company shall, upon such exercise,
round up or down, as applicable, to the nearest whole number the number of
Warrant Shares to be issued to such Holder.

 

3.3.5. No Transfer Taxes. Issuance of Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other incidental expense
in respect of the issuance of such Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares shall be issued
in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event Warrant Shares are to be issued in
a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by an assignment form duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any
Election to Purchase and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.

 

3.3.6. Date of Issuance. The Company will treat an exercising Holder as a
beneficial owner of the Warrant Shares as of the Exercise Date, except that, if
the Exercise Date is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the open of business on the next succeeding date on which the stock transfer
books are open.

 

3.3.7. Restrictive Legend Events. (a) The Company shall use it reasonable best
efforts to maintain the effectiveness of the Registration Statement and the
current status of the prospectus included therein or to file and maintain the
effectiveness of another registration statement or to file a registration
statement and another current prospectus covering the Warrants and the Warrant
Shares at any time that the Warrants are exercisable. The Company shall provide
to the Warrant Agent and each Holder prompt written notice of any time that the
Company is unable to deliver the Warrant Shares via DTC transfer or otherwise
without restrictive legend because (i) the Commission has issued a stop order
with respect to the Registration Statement, (ii) the Commission otherwise has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, (iii) the Company has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or permanently,
(iv) the prospectus contained in the Registration Statement is not available for
the issuance of the Warrant Shares to the Holder or (v) otherwise (each a
“Restrictive Legend Event”). To the extent that the Warrants cannot be exercised
as a result of a Restrictive Legend Event or a Restrictive Legend Event occurs
after a Holder has exercised Warrants in accordance with the terms of the
Warrants but prior to the delivery of the Warrant Shares, the Company shall, at
the election of the Holder, which shall be given within five (5) days of receipt
of such notice of the Restrictive Legend Event, either (A) rescind the
previously submitted Election to Purchase and the Company shall return all
consideration paid by registered holder for such shares upon such rescission, or
(B) treat the attempted exercise as a cashless exercise as described in
paragraph (b) below and refund the cash portion of the exercise price to the
Holder. Notwithstanding anything herein to the contrary, the Company shall not
be required to make any cash payments or net cash settlement to the Holder in
lieu of delivery of the Warrant Shares.

 

(b) If a Restrictive Legend Event has occurred, the Warrant shall only be
exercisable on a cashless basis. Upon a “cashless exercise”, the Holder shall be
entitled to receive the number of Warrant Shares equal to the quotient obtained
by dividing (A-B) (X) by (A), where:

 

(A)=the last VWAP immediately preceding the date of exercise giving rise to the
applicable “cashless exercise”, as set forth in the applicable Election to
Purchase (to clarify, the “last VWAP” will be the last VWAP as calculated over
an entire Trading Day such that, in the event that this Warrant is exercised at
a time that the Trading Market is open, the prior Trading Day’s VWAP shall be
used in this calculation);

 

(B)=the Exercise Price of the Warrant, as adjusted as set forth herein; and

 

(X)=the number of Warrant Shares that would be issuable upon exercise of the
Warrant in accordance with the terms of the Warrant if such exercise were by
means of a cash exercise rather than a cashless exercise.

 

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(c) Notwithstanding anything to the contrary herein, a “cashless exercise” as
described in this Section 3.3.7(c), may occur after the earlier of (i) 10
Trading Days from the issuance date of the Warrant or (ii) the time when $10.0
million of volume is traded in the Common Stock, if the VWAP of the Common Stock
on any Trading Day on or after the Closing Date fails to exceed the Exercise
Price in effect as of the date hereof (subject to adjustment for any stock
splits, stock dividends, stock combinations, recapitalizations and similar
events). In such event, the aggregate number of Warrant Shares issuable in such
cashless exercise pursuant to any given Election to Purchase electing to effect
a cashless exercise shall equal the product of (x) the aggregate number of
Warrant Shares that would be issuable upon exercise of this Warrant in
accordance with the terms of this Warrant if such exercise were by means of a
cash exercise rather than a cashless exercise and (y) 1.00.

 

If the Warrant Shares are issued in a cashless exercise pursuant to Section
3.3.7(b) or (c), the Company acknowledges and agrees that, in accordance with
Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the
registered characteristics of the Warrants being exercised and the Company
agrees not to take any position contrary thereto. Upon receipt of an Election to
Purchase for a cashless exercise pursuant to Section 3.3.7(b) or (c), the
Warrant Agent will promptly deliver a copy of the Election to Purchase to the
Company to confirm the number of Warrant Shares issuable in connection with the
cashless exercise. The Company shall calculate and transmit to the Warrant Agent
in a written notice, and the Warrant Agent shall have no duty, responsibility or
obligation under this section to calculate, the number of Warrant Shares
issuable in connection with any cashless exercise. The Warrant Agent shall be
entitled to rely conclusively on any such written notice provided by the
Company, and the Warrant Agent shall not be liable for any action taken,
suffered or omitted to be taken by it in accordance with such written
instructions or pursuant to this Warrant Agreement.

 

3.3.8. Disputes. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the number of Warrant Shares
issuable in connection with any exercise, the Company shall promptly deliver to
the Holder the number of Warrant Shares that are not disputed.

 

3.3.9 Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any other rights available to the Holder, if the
Company fails to cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 3.3.2 above pursuant to an
exercise on or before the Delivery Time, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall (A) pay in cash to the Holder the amount, if any, by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (2) the
price at which the sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy- In and, upon request of the Company,
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof.

 

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3.3.10 Beneficial Ownership Limitation. The Company shall not affect any
exercise of this Warrant, and a Holder shall not have the right to exercise any
portion of a Warrant, pursuant to Section 3 or otherwise, to the extent that
after giving effect to such issuance after exercise as set forth on the
applicable Election to Purchase, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or
any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon
exercise of such Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, non-exercised portion of such Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties
and (ii) exercise or conversion of the unexercised or non-converted portion of
any other securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or
any of its Affiliates or Attribution Parties. Except as set forth in the
preceding sentence, for purposes of this Section 3.3.10, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance therewith. To
the extent that the limitation contained in this Section 3.3.10 applies, the
determination of whether a Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of a Warrant is exercisable shall be in the sole
discretion of the Holder, and the submission of a Notice of Exercise shall be
deemed to be the Holder’s determination of whether a Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of a Warrant is exercisable, in
each case subject to the Beneficial Ownership Limitation, and the Company shall
have no obligation to verify or confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 3.3.10, in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with the Commission, as
the case may be, (B) a more recent public announcement by the Company or (C) a
more recent written notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of
the Company, including such Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be
4.99% (or, upon election by a Holder prior to the issuance of any Warrants,
9.99%) of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock issuable upon exercise
of a Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 3.3.10, provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 3.3.10 shall continue to apply. Any
increase in the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 3.3.10 to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

 

4. Adjustments.

 

4.1. Adjustment upon Subdivisions or Combinations. If the Company at any time
after the Issuance Date subdivides (by any stock split, stock dividend,
recapitalization, reorganization, scheme, arrangement or otherwise) its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased. If
the Company at any time after the Issuance Date combines (by any stock split,
stock dividend, recapitalization, reorganization, scheme, arrangement or
otherwise) its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination will
be proportionately increased and the number of Warrant Shares will be
proportionately decreased. Any adjustment under this Section 4.1 shall become
effective at the close of business on the date the subdivision or combination
becomes effective. The Company shall promptly notify Warrant Agent of any such
adjustment and give specific instructions to Warrant Agent with respect to any
adjustments to the warrant register.

 

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4.2. Adjustment for Other Distributions. In the event the Company shall fix a
record date for the making of a dividend or distribution to all holders of
Common Stock of any evidences of indebtedness or assets or subscription rights,
options or warrants (excluding those referred to in Section 4.1 or other
dividends paid out of retained earnings), then in each such case the Holder
will, upon the exercise of Warrants, be entitled to receive, in addition to the
number of Warrant Shares issuable thereupon, and without payment of any
additional consideration therefor, the amount of such dividend or distribution,
as applicable, which such Holder would have held on the date of such exercise
had such Holder been the holder of record of such Warrant Shares as of the date
on which holders of Common Stock became entitled to receive such dividend or
distribution. Such adjustment shall be made whenever any such distribution is
made and shall become effective immediately after the record date mentioned
above.

 

4.3. Reclassification, Consolidation, Purchase, Combination, Sale or Conveyance.
If, at any time while the Warrants are outstanding, (a) the Company, directly or
indirectly, in one or more related transactions effects any merger or
consolidation of the Company with or into another person, (b) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its assets in one
or a series of related transactions, (c) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or another person)
is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has
been accepted by the holders of 50% or more of the outstanding Common Stock (not
including any Common Stock held by the other person or other persons making or
party to, or associated or affiliated with the other persons making, such
purchase offer, tender offer or exchange offer), (d) the Company, directly or
indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, or (e) the Company, directly
or indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another person whereby such other person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other person or other persons making or party to, or associated or
affiliated with the other persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of a Warrant, each Holder
shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the same amount and kind of securities, cash or
property, if any, of the successor or acquiring corporation or of the Company,
if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which each
Warrant is exercisable immediately prior to such Fundamental Transaction. For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration that
such Holder receives upon any exercise of each Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a
Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) and for which stockholders received any equity securities of the
Successor Entity and for which stockholders received any equity securities of
the Successor Entity, to assume in writing all of the obligations of the Company
under this Warrant Agreement in accordance with the provisions of this Section
4.3 pursuant to written agreements and shall, upon the written request of such
Holder, deliver to such Holder in exchange for the applicable Warrants created
by this Warrant Agreement a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to the Warrants
which are exercisable for a corresponding number of shares of capital stock of
such Successor Entity (or its parent entity), if any, plus any Alternate
Consideration, receivable as a result of such Fundamental Transaction by a
holder of the number of shares of Common Stock for which the Warrants are
exercisable immediately prior to such Fundamental Transaction, and with an
exercise price which applies the Exercise Price hereunder to such shares of
capital stock, if any, plus any Alternate Consideration (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock plus Alternative
consideration after that Fundamental Transaction for the purpose of protecting
the economic value of such Warrant immediately prior to the consummation of such
Fundamental Transaction). Upon the occurrence of any such Fundamental
Transaction the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant Agreement and the Warrants referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this
Warrant Agreement and the Warrants with the same effect as if such Successor
Entity had been named as the Company herein and therein. The Company shall
instruct the Warrant Agent in writing to mail by first class mail, postage
prepaid, to each Holder, written notice of the execution of any such amendment,
supplement or agreement with the Successor Entity. Any supplemented or amended
agreement entered into by the successor corporation or transferee shall provide
for adjustments, which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 4.3. The Warrant Agent shall have
no duty, responsibility or obligation to determine the correctness of any
provisions contained in such agreement or such notice, including but not limited
to any provisions relating either to the kind or amount of securities or other
property receivable upon exercise of warrants or with respect to the method
employed and provided therein for any adjustments, and shall be entitled to rely
conclusively for all purposes upon the provisions contained in any such
agreement. The provisions of this Section 4.3 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales and
conveyances of the kind described above.

 

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4.4. Other Events. If any event occurs of the type contemplated by the
provisions of Section 4.1 or 4.2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, Adjustment Rights, phantom stock rights or other rights with equity
features to all holders of Common Stock for no consideration), then the
Company’s Board of Directors will, at its discretion and in good faith, make an
adjustment in the Exercise Price and the number of Warrant Shares or designate
such additional consideration to be deemed issuable upon exercise of a Warrant,
so as to protect the rights of the registered Holder. No adjustment to the
Exercise Price will be made pursuant to more than one sub-section of this
Section 4 in connection with a single issuance.

 

4.5. Notices of Changes in Warrant. Upon every adjustment of the Exercise Price
or the number of Warrant Shares issuable upon exercise of a Warrant, the Company
shall give prompt written notice thereof to the Warrant Agent, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease, if any, in the number of Warrant Shares purchasable at such price
upon the exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Upon the
occurrence of any event specified in Sections 4.1 or 4.2, then, in any such
event, the Company shall give written notice to each Holder, at the last address
set forth for such holder in the Warrant Register, as of the record date or the
effective date of the event. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such event. The Warrant Agent shall
be entitled to rely conclusively on, and shall be fully protected in relying on,
any certificate, notice or instructions provided by the Company with respect to
any adjustment of the Exercise Price or the number of shares issuable upon
exercise of a Warrant, or any related matter, and the Warrant Agent shall not be
liable for any action taken, suffered or omitted to be taken by it in accordance
with any such certificate, notice or instructions or pursuant to this Warrant
Agreement. The Warrant Agent shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received written notice thereof from
the Company.

 

5. Restrictive Legends; Fractional Warrants. In the event that a Warrant
Certificate surrendered for transfer bears a restrictive legend, the Warrant
Agent shall not register that transfer until the Warrant Agent has received an
opinion of counsel for the Company stating that such transfer may be made and
indicating whether the Warrants must also bear a restrictive legend upon that
transfer. The Warrant Agent shall not be required to effect any registration of
transfer or exchange which will result in the transfer of or delivery of a
Warrant Certificate for a fraction of a Warrant.

 

6. Other Provisions Relating to Rights of Holders of Warrants.

 

6.1. No Rights as Stockholder. Except as otherwise specifically provided herein,
a Holder, solely in its capacity as a holder of Warrants, shall not be entitled
to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant Agreement
be construed to confer upon a Holder, solely in its capacity as the registered
holder of Warrants, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of share capital,
consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights or rights to participate in new issues
of shares, or otherwise, prior to the issuance to the Holder of the Warrant
Shares which it is then entitled to receive upon the due exercise of Warrants.

 

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6.2. Reservation of Common Stock. The Company shall at all times reserve and
keep available a number of its authorized but unissued shares of Common Stock
that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Warrant Agreement.

 

7. Concerning the Warrant Agent and Other Matters.

 

7.1. Any instructions given to the Warrant Agent orally, as permitted by any
provision of this Warrant Agreement, shall be confirmed in writing by the
Company as soon as practicable. The Warrant Agent shall not be liable or
responsible and shall be fully authorized and protected for acting, or failing
to act, in accordance with any oral instructions which do not conform with the
written confirmation received in accordance with this Section 7.1.

 

7.2. (a) Whether or not any Warrants are exercised, for the Warrant Agent’s
services as agent for the Company hereunder, the Company shall pay to the
Warrant Agent such fees as may be separately agreed between the Company and
Warrant Agent and the Warrant Agent’s out of pocket expenses in connection with
this Warrant Agreement, including, without limitation, the fees and expenses of
the Warrant Agent’s counsel. While the Warrant Agent endeavors to maintain
out-of-pocket charges (both internal and external) at competitive rates, these
charges may not reflect actual out-of-pocket costs, and may include handling
charges to cover internal processing and use of the Warrant Agent’s billing
systems. (b) All amounts owed by the Company to the Warrant Agent under this
Warrant Agreement are due within 30 days of the invoice date. Delinquent
payments are subject to a late payment charge of one and one-half percent (1.5%)
per month commencing 45 days from the invoice date. The Company agrees to
reimburse the Warrant Agent for any attorney’s fees and any other costs
associated with collecting delinquent payments. (c) No provision of this Warrant
Agreement shall require Warrant Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
under this Warrant Agreement or in the exercise of its rights.

 

7.3. As agent for the Company hereunder the Warrant Agent: (a) shall have no
duties or obligations other than those specifically set forth herein or as may
subsequently be agreed to in writing by the Warrant Agent and the Company; (b)
shall be regarded as making no representations and having no responsibilities as
to the validity, sufficiency, value, or genuineness of the Warrants or any
Warrant Shares; (c) shall not be obligated to take any legal action hereunder;
if, however, the Warrant Agent determines to take any legal action hereunder,
and where the taking of such action might, in its judgment, subject or expose it
to any expense or liability it shall not be required to act unless it has been
furnished with an indemnity reasonably satisfactory to it; (e) may rely on and
shall be fully authorized and protected in acting or failing to act upon any
certificate, instrument, opinion, notice, letter, telegram, telex, facsimile
transmission or other document or security delivered to the Warrant Agent and
believed by it to be genuine and to have been signed by the proper party or
parties; (f) shall not be liable or responsible for any recital or statement
contained in the Registration Statement or any other documents relating thereto;
(g) shall not be liable or responsible for any failure on the part of the
Company to comply with any of its covenants and obligations relating to the
Warrants, including without limitation obligations under applicable securities
laws; (h) may rely on and shall be fully authorized and protected in acting or
failing to act upon the written, telephonic or oral instructions with respect to
any matter relating to its duties as Warrant Agent covered by this Warrant
Agreement (or supplementing or qualifying any such actions) of officers of the
Company, and is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the Company or counsel
to the Company, and may apply to the Company, for advice or instructions in
connection with the Warrant Agent’s duties hereunder, and the Warrant Agent
shall not be liable for any delay in acting while waiting for those
instructions; any applications by the Warrant Agent for written instructions
from the Company may, at the option of the Agent, set forth in writing any
action proposed to be taken or omitted by the Warrant Agent under this Warrant
Agreement and the date on or after which such action shall be taken or such
omission shall be effective; the Warrant Agent shall not be liable for any
action taken by, or omission of, the Warrant Agent in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than five business days after the date such
application is sent to the Company, unless the Company shall have consented in
writing to any earlier date) unless prior to taking any such action, the Warrant
Agent shall have received written instructions in response to such application
specifying the action to be taken or omitted; (i) may consult with counsel
satisfactory to the Warrant Agent, including its in-house counsel, and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered, or omitted by it hereunder in good
faith and in accordance with the advice of such counsel; (j) may perform any of
its duties hereunder either directly or by or through nominees, correspondents,
designees, or subagents, and it shall not be liable or responsible for any
misconduct or negligence on the part of any nominee, correspondent, designee, or
subagent appointed with reasonable care by it in connection with this Warrant
Agreement; (k) is not authorized, and shall have no obligation, to pay any
brokers, dealers, or soliciting fees to any person; and (l) shall not be
required hereunder to comply with the laws or regulations of any country other
than the United States of America or any political subdivision thereof.

 

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7.4. (a) In the absence of gross negligence or willful or illegal misconduct on
its part, the Warrant Agent shall not be liable for any action taken, suffered,
or omitted by it or for any error of judgment made by it in the performance of
its duties under this Warrant Agreement. Anything in this Warrant Agreement to
the contrary notwithstanding, in no event shall Warrant Agent be liable for
special, indirect, incidental, consequential or punitive losses or damages of
any kind whatsoever (including but not limited to lost profits), even if the
Warrant Agent has been advised of the possibility of such losses or damages and
regardless of the form of action. Any liability of the Warrant Agent will be
limited in the aggregate to the amount of fees paid by the Company hereunder.
The Warrant Agent shall not be liable for any failures, delays or losses,
arising directly or indirectly out of conditions beyond its reasonable control
including, but not limited to, acts of government, exchange or market ruling,
suspension of trading, work stoppages or labor disputes, fires, civil
disobedience, riots, rebellions, storms, electrical or mechanical failure,
computer hardware or software failure, communications facilities failures
including telephone failure, war, terrorism, insurrection, earthquakes, floods,
acts of God or similar occurrences. (b) In the event any question or dispute
arises with respect to the proper interpretation of the Warrants or the Warrant
Agent’s duties under this Warrant Agreement or the rights of the Company or of
any Holder, the Warrant Agent shall not be required to act and shall not be held
liable or responsible for its refusal to act until the question or dispute has
been judicially settled (and, if appropriate, it may file a suit in interpleader
or for a declaratory judgment for such purpose) by final judgment rendered by a
court of competent jurisdiction, binding on all persons interested in the matter
which is no longer subject to review or appeal, or settled by a written document
in form and substance satisfactory to Warrant Agent and executed by the Company
and each such Holder. In addition, the Warrant Agent may require for such
purpose, but shall not be obligated to require, the execution of such written
settlement by all the Holders and all other persons that may have an interest in
the settlement.

 

7.5. The Company covenants to indemnify the Warrant Agent and hold it harmless
from and against any loss, liability, claim or expense (“Loss”) arising out of
or in connection with the Warrant Agent’s duties under this Warrant Agreement,
including the costs and expenses of defending itself against any Loss, unless
such Loss shall have been determined by a court of competent jurisdiction to be
a result of the Warrant Agent’s gross negligence or willful misconduct.

 

7.6. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 90 days after the earlier of the Expiration Date and the date on which
no Warrants remain outstanding (the “Termination Date”). On the business day
following the Termination Date, the Agent shall deliver to the Company any
entitlements, if any, held by the Warrant Agent under this Warrant Agreement.
The Agent’s right to be reimbursed for fees, charges and out-of-pocket expenses
as provided in this Section 8 shall survive the termination of this Warrant
Agreement.

 

7.7. If any provision of this Warrant Agreement shall be held illegal, invalid,
or unenforceable by any court, this Warrant Agreement shall be construed and
enforced as if such provision had not been contained herein and shall be deemed
an Agreement among the parties to it to the full extent permitted by applicable
law.

 

7.8. The Company represents and warrants that: (a) it is duly incorporated and
validly existing under the laws of its jurisdiction of incorporation; (b) the
offer and sale of the Warrants and the execution, delivery and performance of
all transactions contemplated thereby (including this Warrant Agreement) have
been duly authorized by all necessary corporate action and will not result in a
breach of or constitute a default under the articles of association, bylaws or
any similar document of the Company or any indenture, agreement or instrument to
which it is a party or is bound; (c) this Warrant Agreement has been duly
executed and delivered by the Company and constitutes the legal, valid, binding
and enforceable obligation of the Company; (d) the Warrants will comply in all
material respects with all applicable requirements of law; and (e) to the best
of its knowledge, there is no litigation pending or threatened as of the date
hereof in connection with the offering of the Warrants.

 

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7.9. In the event of inconsistency between this Warrant Agreement and the
descriptions in the Registration Statement, as they may from time to time be
amended, the terms of this Warrant Agreement shall control.

 

7.10. Set forth in Exhibit C hereto is a list of the names and specimen
signatures of the persons authorized to act for the Company under this Warrant
Agreement (the “Authorized Representatives”). The Company shall, from time to
time, certify to you the names and signatures of any other persons authorized to
act for the Company under this Warrant Agreement.

 

7.11. Except as expressly set forth elsewhere in this Warrant Agreement, all
notices, instructions and communications under this Agreement shall be in
writing, shall be effective upon receipt and shall be addressed, if to the
Company, to its address set forth beneath its signature to this Agreement, or,
if to the Warrant Agent, to VStock Transfer, LLC 18 Lafayette Place, Woodmere,
New York 11598, or to such other address of which a party hereto has notified
the other party.

 

7.12. (a) This Warrant Agreement shall be governed by and construed in
accordance with the laws of the State of New York. All actions and proceedings
relating to or arising from, directly or indirectly, this Warrant Agreement may
be litigated in courts located within the Borough of Manhattan in the City and
State of New York. The Company hereby submits to the personal jurisdiction of
such courts and consents that any service of process may be made by certified or
registered mail, return receipt requested, directed to the Company at its
address last specified for notices hereunder. Each of the parties hereto hereby
waives the right to a trial by jury in any action or proceeding arising out of
or relating to this Warrant Agreement. (b) This Warrant Agreement shall inure to
the benefit of and be binding upon the successors and assigns of the parties
hereto. This Warrant Agreement may not be assigned, or otherwise transferred, in
whole or in part, by either party without the prior written consent of the other
party, which the other party will not unreasonably withhold, condition or delay;
except that (i) consent is not required for an assignment or delegation of
duties by Warrant Agent to any affiliate of Warrant Agent and (ii) any
reorganization, merger, consolidation, sale of assets or other form of business
combination by Warrant Agent or the Company shall not be deemed to constitute an
assignment of this Warrant Agreement. (c) No provision of this Warrant Agreement
may be amended, modified or waived, except in a written document signed by both
parties. The Company and the Warrant Agent may amend or supplement this Warrant
Agreement without the consent of any Holder for the purpose of curing any
ambiguity, or curing, correcting or supplementing any defective provision
contained herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the parties may deem
necessary or desirable and that the parties determine, in good faith, shall not
adversely affect the interest of the Holders. All other amendments and
supplements shall require the vote or written consent of Holders of at least
50.1% of the then outstanding Warrants, provided that adjustments may be made to
the Warrant terms and rights in accordance with Section 4 without the consent of
the Holders.

 

7.13. Payment of Taxes. The Company will from time to time promptly pay all
taxes and charges that may be imposed upon the Company or the Warrant Agent in
respect of the issuance or delivery of Warrant Shares upon the exercise of
Warrants, but the Company may require the Holders to pay any transfer taxes in
respect of the Warrants or such shares. The Warrant Agent may refrain from
registering any transfer of Warrants or any delivery of any Warrant Shares
unless or until the persons requesting the registration or issuance shall have
paid to the Warrant Agent for the account of the Company the amount of such tax
or charge, if any, or shall have established to the reasonable satisfaction of
the Company and the Warrant Agent that such tax or charge, if any, has been
paid.

 

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7.14. Resignation of Warrant Agent.

 

7.14.1. Appointment of Successor Warrant Agent. The Warrant Agent, or any
successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving thirty (30) days’
notice in writing to the Company, or such shorter period of time agreed to by
the Company. The Company may terminate the services of the Warrant Agent, or any
successor Warrant Agent, after giving thirty (30) days’ notice in writing to the
Warrant Agent or successor Warrant Agent, or such shorter period of time as
agreed. If the office of the Warrant Agent becomes vacant by resignation,
termination or incapacity to act or otherwise, the Company shall appoint in
writing a successor Warrant Agent in place of the Warrant Agent. If the Company
shall fail to make such appointment within a period of 30 days after it has been
notified in writing of such resignation or incapacity by the Warrant Agent, then
the Warrant Agent or any Holder may apply to any court of competent jurisdiction
for the appointment of a successor Warrant Agent at the Company’s cost. Pending
appointment of a successor to such Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. Any successor Warrant Agent (but not including the initial Warrant
Agent), whether appointed by the Company or by such court, shall be a person
organized and existing under the laws of any state of the United States of
America, in good standing, and authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with
all the authority, powers, rights, immunities, duties, and obligations of its
predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed, and except for executing and
delivering documents as provided in the sentence that follows, the predecessor
Warrant Agent shall have no further duties, obligations, responsibilities or
liabilities hereunder, but shall be entitled to all rights that survive the
termination of this Warrant Agreement and the resignation or removal of the
Warrant Agent, including but not limited to its right to indemnity hereunder. If
for any reason it becomes necessary or appropriate or at the request of the
Company, the predecessor Warrant Agent shall execute and deliver, at the expense
of the Company, an instrument transferring to such successor Warrant Agent all
the authority, powers, and rights of such predecessor Warrant Agent hereunder;
and upon request of any successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more fully and
effectually vesting in and confirming to such successor Warrant Agent all such
authority, powers, rights, immunities, duties, and obligations.

 

7.14.2. Notice of Successor Warrant Agent. In the event a successor Warrant
Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.

 

7.14.3. Merger or Consolidation of Warrant Agent. Any person into which the
Warrant Agent may be merged or converted or with which it may be consolidated or
any person resulting from any merger, conversion or consolidation to which the
Warrant Agent shall be a party or any person succeeding to the shareowner
services business of the Warrant Agent or any successor Warrant Agent shall be
the successor Warrant Agent under this Warrant Agreement, without any further
act or deed. For purposes of this Warrant Agreement, “person” shall mean any
individual, firm, corporation, partnership, limited liability company, joint
venture, association, trust or other entity, and shall include any successor (by
merger or otherwise) thereof or thereto.

 

8. Miscellaneous Provisions.

 

8.1. Persons Having Rights under this Warrant Agreement. Nothing in this Warrant
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the Holders any right,
remedy, or claim under or by reason of this Warrant Agreement or of any
covenant, condition, stipulation, promise, or agreement hereof.

 

8.2. Examination of the Warrant Agreement. A copy of this Warrant Agreement
shall be available at all reasonable times at the office of the Warrant Agent
designated for such purpose for inspection by any Holder. Prior to such
inspection, the Warrant Agent may require any such holder to provide reasonable
evidence of its interest in the Warrants.

 

8.3. Counterparts. This Warrant Agreement may be executed in any number of
original, facsimile or electronic counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.

 

8.4. Effect of Headings. The Section headings herein are for convenience only
and are not part of this Warrant Agreement and shall not affect the
interpretation thereof.

 

-13-

 

 

9. Certain Definitions. As used herein, the following terms shall have the
following meanings:

 

(a) “Adjustment Right” means any right granted with respect to any securities
issued in connection with, or with respect to, any issuance, sale or delivery
(or deemed issuance, sale or delivery in accordance with Section 4) of Common
Stock (other than rights of the type described in Section 4.2 and 4.3 hereof)
that could result in a decrease in the net consideration received by the Company
in connection with, or with respect to, such securities (including, without
limitation, any cash settlement rights, cash adjustment or other similar rights)
but excluding anti-dilution and other similar rights (including pursuant to
Section 4.4 of this Agreement).

 

(b) “Trading Day” means any day on which the Common Stock is traded on the
Trading Market, or, if the Trading Market is not the principal trading market
for the Common Stock, then on the principal securities exchange or securities
market in the United States on which the the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock
is are scheduled to trade on such exchange or market for less than 4.5 hours or
any day that the Common Stock is suspended from trading during the final hour of
trading on such exchange or market (or if such exchange or market does not
designate in advance the closing time of trading on such exchange or market,
then during the hour ending at 4:00 P.M., Eastern Standard Time).

 

(c) “Trading Market” means NYSE MKT, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market or the New York Stock Exchange.

 

(d) “VWAP” means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or
quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the holders of a majority in
interest of the Warrants then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, this Warrant Agent Agreement has been duly executed by the
parties hereto as of the day and year first above written.

 

  ADITX THERAPEUTICS, INC.         By: /s/ Amro Albanna   Name: Amro Albanna  
Title: Chief Executive Officer         VSTOCK TRANSFER, LLC         By: /s/
Young D. Kim   Name: Young D. Kim   Title: Compliance Officer

 

-15-

 

 

EXHIBIT A

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

 

ADITX THERAPEUTICS, INC.
WARRANT CERTIFICATE

NOT EXERCISABLE AFTER _________________________

 

This certifies that the person whose name and address appears below, or
registered assigns, is the registered owner of the number of Warrants set forth
below. Each Warrant entitles its registered holder to purchase from ADITX
THERAPEUTICS, INC., a company incorporated under the laws of the State of
Delaware (the “Company”), at any time prior to 5:00 P.M. (Eastern Standard Time)
on September 4, 2025, one share of common stock, par value $0.001 per share, of
the Company (each, a “Warrant Share” and collectively, the “Warrant Shares”), at
an exercise price of $5.00 per share, subject to possible adjustments as
provided in the Warrant Agreement (as defined below).

 

This Warrant Certificate, with or without other Warrant Certificates, upon
surrender at the designated office of the Warrant Agent, may be exchanged for
another Warrant Certificate or Warrant Certificates evidencing the same number
of Warrants as the Warrant Certificate or Warrant Certificates surrendered. A
transfer of the Warrants evidenced hereby may be registered upon surrender of
this Warrant Certificate at the designated office of the Warrant Agent by the
registered holder in person or by a duly authorized attorney, properly endorsed
or accompanied by proper instruments of transfer, a signature guarantee, and
such other and further documentation as the Warrant Agent may reasonably request
and duly stamped as may be required by the laws of the State of New York and of
the United States of America.

 

The terms and conditions of the Warrants and the rights and obligations of the
holder of this Warrant Certificate are set forth in the Warrant Agent Agreement
dated as of September 4, 2020 (the “Warrant Agreement”) between the Company and
VStock Transfer, LLC (the “Warrant Agent”). A copy of the Warrant Agreement is
available for inspection during business hours at the office of the Warrant
Agent.

 

This Warrant Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by an authorized signatory of the Warrant
Agent.

 

WITNESS the facsimile signature of a proper officer of the Company.

 

  ADITX THERAPEUTICS, INC.       By:                         Name:       Title:
 

 

Dated:_______________

 

Countersigned:

 

VSTOCK TRANSFER, LLC       By:                                   Name:      
Title:    

 

PLEASE DETACH HERE

 

Certificate No.: ____________ Number of Warrants: ________

 

WARRANT CUSIP NO.:___________

 

-16-

 

 

EXHIBIT B

 

[Form of Election to Purchase]

 

(To Be Executed Upon Exercise Of Warrants not evidenced by a Global Certificate)

 

The undersigned hereby irrevocably elects to exercise the right, represented by
Warrants evidenced by this Warrant Certificate, to receive __________ Warrant
Shares and herewith either:

 

Check the means of exercise:

 

__________ (i) tenders payment for such Warrant Shares to the order of ADITX
THERAPEUTICS, INC., a Delaware corporation, in the amount of $ __________in
accordance with the terms hereof, or

 

__________ (ii) if permitted, makes the payment by the cancellation of such
number of Warrant Shares as is necessary, in accordance with the formula set
forth in subsection 3.3.7(b), to exercise this Warrant with respect to the above
number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 3.3.7(b); or

 

__________ (iii) if permitted, makes the cashless exercise election in
accordance with the formula set forth in subsection 3.3.7(c).

 

The undersigned requests that a certificate for such Warrant Shares be
registered in the name of ______________________, whose address is
_________________________ ___ and that such certificate be delivered to
_____________________________, whose address is
_______________________________________. If the number of Warrants being
exercised hereby is less than all the Warrants evidenced by this Warrant
Certificate, the undersigned requests that a new Warrant Certificate
representing the remaining unexercised Warrants be registered in the name of
___________________________________, whose address is
____________________________ and that such Warrant Certificate be delivered to
_______________________________________________ whose address is
_______________________.

 

  Signature,     Date:         [Signature Guarantee]

 

-17-

 

 

EXHIBIT C

 

AUTHORIZED REPRESENTATIVES

 

Name   Title   Signature Amro Albanna   Chief Executive Officer   /s/ Amro
Albanna

 

 

-18-