Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This Securities Purchase Agreement
(this “Agreement”) is dated as of June 17, 2021, between Biostage, Inc., a Delaware corporation (the “Company”),
and ___________ (the “Purchaser”).


 


WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities
Act of 1933, as amended (the “Securities Act”) contained in Section 4(a)(2) thereof and/or Regulation D thereunder,
the Company desires to issue and sell to Purchaser, and Purchaser desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.


 


NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and Purchaser agree as follows:


 


ARTICLE I.

DEFINITIONS


 


1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:


 


“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.


 


“Board
of Directors” means the board of directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchaser’s obligation to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities
may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.


 






    	 	 



     


    

 


“Company
Counsel” means Burns & Levinson LLP, with offices located at 125 High Street, Boston, MA 02110.


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).


 


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


 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“FDA”
shall have the meaning ascribed to such term in Section 3.1(dd).


 


“FDCA”
shall have the meaning ascribed to such term in Section 3.1(dd).


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).


 


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


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).


 


 “Per
Share Purchase Price” equals $2.00.


 


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


 


“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(dd).


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.


 


“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.


 


“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).


 


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


 






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“Securities
Act” shall have the meaning ascribed to such term in the recitals.


 


“Shares”
means the shares of Common Stock issued or issuable to Purchaser pursuant to this Agreement.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include the location and/or reservation of borrowable shares of Common Stock). 


 


“Subscription
Amount” means the aggregate amount to be paid for Shares and Warrants, purchased hereunder as specified below Purchaser’s
name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds.


 


“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
OTCQB or OTCQX (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Warrants and any other documents or agreements executed in connection with the transactions
contemplated hereunder.


 


“Transfer
Agent” means Computershare, the current transfer agent of the Company, and any successor transfer agent of the Company.


 


“Warrants”
means the warrant delivered to the Purchaser at the Closing in accordance with Section 2.2(a) hereof, in the form of Exhibit A
attached hereto.


 


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


 


 


ARTICLE II.

PURCHASE AND SALE


 


2.1           Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agrees
to purchase, $_________ of Shares and Warrants in accordance with Section 2.2(a). The Company shall deliver to Purchaser its Shares and
a Warrant as determined pursuant to Section 2.2(a), and the Company and Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing.


 






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2.2           Deliveries.


 


(a)          On
or prior to the Closing Date, the Company agrees to deliver or cause to be delivered to Purchaser the following (which may be waived,
in whole or in part, but only in writing signed by Purchaser):


 


(i)          this
Agreement duly executed by the Company;


 


(ii)      
Shares registered in the name of Purchaser equal to Purchaser’s Subscription Amount divided by the Per Share Purchase Price (and
the result rounded down to the nearest whole share number), registered in the name of Purchaser;


 


(iii)      a
Warrant registered in the name of Purchaser to purchase up to a number of shares of Common Stock equal to 50% of the aggregate amount
of Purchaser’s Shares acquired hereunder, with an exercise price equal to $2.00, subject to adjustment therein;


 


(iv)     the
Company shall have provided Purchaser with the Company’s wire instructions;


 


(v) the Chief Financial
Officer shall have delivered to Purchaser a certificate certifying that the representations and warranties of the Company contained herein
are true and correct as of the Closing.


  


(b)          On
or prior to the Closing Date, Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following (which may
be waived, in whole or in part, but only in writing signed by the Company):


 


(i)          this
Agreement duly executed by Purchaser; and


 


(ii)         
Purchaser’s Subscription Amount, which shall be delivered to the Company on or prior to the Closing Date.


 


ARTICLE III.

REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company. Company hereby represents and warrants as of the date hereof and as of the Closing Date to Purchaser
as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):


 


(a)            Subsidiaries.
The Company has no subsidiaries except for (i) those set forth on Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed
with the Commission on April 13, 2021, and (ii) those that are not, individually or in the aggregate, material to the business or operations
of the Company.


 


(b)           Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.


 






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


 


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


 


(e)            Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, (ii) application(s) to the applicable Trading Market for the listing of the Shares and Warrant Shares
for trading thereon in the time and manner required thereby and (iii) such filings as are required to be made under applicable state securities
laws (collectively, the “Required Approvals”).


  


(f)            Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant
Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock a sufficient number of
shares of Common Stock for issuance of the Warrant Shares.


 






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(g)           Capitalization.
The capitalization of the Company is as set forth in the SEC Reports as of the time of filing of such SEC Reports. The Company has not
issued any capital stock since its most recently filed periodic report under the Exchange Act, other than issuances disclosed in the SEC
reports, issuances of the Company’s equity securities to the Company’s officers, directors, employees or consultants in the
ordinary course of business, pursuant to the grant of equity awards or the exercise of employee stock options under the Company’s
stock option or equity incentive plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction Documents. Except (i) as a result of the purchase and
sale of the Securities, (ii) as set forth in the SEC Reports, and (iii) equity securities of the Company issued to officers, directors,
employees or consultants in the ordinary course of business as described above in this clause (g), there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the
capital stock of the Company or any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of the Company
or any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock
or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such securities. The Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the
issuance and sale of the Securities. There are no stockholders’ agreements, voting agreements or other similar agreements with respect
to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the
Company’s stockholders.


 


(h)           SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under Section 13(a) or 15(d) of the Exchange Act for the two years preceding the date hereof (or such shorter period
as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis, except
with respect to the Company’s Form 8-K filed on May 10, 2019 and Form 8-K filed on August 31, 2020, or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the Exchange Act, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been
an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply
in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto
as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required
by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.


 






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(i)             Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest financial statements included within the SEC
Reports: (i) and except as disclosed in the SEC Reports, there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) and except as disclosed in the SEC Reports, the Company has not incurred
any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director
or Affiliate, except pursuant to existing Company stock option, equity incentive or stock purchase plans. The Company does not have pending
before the Commission any request for confidential treatment of information.


  


(j)             Litigation.
Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the Exchange Act or the Securities Act.


  


(k)           Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(l)            Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in the case of clause (iii) as could not have or reasonably be expected to result
in a Material Adverse Effect.


 






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(m)          Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as
all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received
all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.


 


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


 


(o)           Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them in each case free and clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor
in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.


 


(p)           Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest
audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties.


 


(q)           Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant increase in cost.


 






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


 


(s)           Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain 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. The Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls
and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The
Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since
the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its Subsidiaries.


 


(t)            Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.


 


(u)           Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.


 


(v)           Registration
Rights. Except for the Registration Rights Agreement between the Company and Aspire Capital Fund, LLC, dated as of December 15, 2015,
filed as an exhibit to the Company’s Current Report on Form 8-K on December 15, 2015, no Person has any right to cause the Company
or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.


 






    	 	9	 



     


    

 


(w)           Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.


 


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


 


(y)         Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such
claim.


 


(z)         Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.


  


(aa)        [Reserved]


 


(bb)   Acknowledgement
Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated thereby and any advice given by Purchaser or any of its respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchaser’s purchase of the Securities. The Company further represents to Purchaser that the Company’s decision to
enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company.


 


(cc)         Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company.


 






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(dd)         FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food,
Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled,
tested, distributed, sold, and/or marketed by or on behalf of the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by
the Company or on behalf of in compliance in all material respects with all applicable requirements under FDCA and similar laws, rules
and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing
practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing
of reports. There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or
legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries,
and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any
other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution
of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii)
withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales
promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company
or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes
to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation
of any laws, rules or regulations by the Company or any of its Subsidiaries. The properties, business and operations of the Company have
been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. 
The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any
product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing
for marketing any product being developed or proposed to be developed by the Company.


  


(ee)           Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee
or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).


 


(ff)            U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.


 


(gg)          Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.


 


(hh)           Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.


 






    	 	11	 



     


    

 


(ii)         Private
Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated hereby.


 


(jj)         No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Shares, the Warrants and the Warrant Shares for
sale only to the Purchaser.


 


(kk)         No
Disqualification Events.  With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities
Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with
the Company in any capacity at the time of sale (each, an "Issuer Covered Person" and, together, "Issuer Covered
Persons") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the
Securities Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company
has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).


 


(ll) The foregoing
representations and warranties set forth in this Section 3.1 shall be deemed renewed by the Company at the Closing as if made at such
time.


   


3.2           Representations
and Warranties of the Purchaser. Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):


 


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


 






    	 	12	 



     


    

 


(b)          Understandings
or Arrangements. Purchaser is acquiring the Securities as principal for his, her or its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation
and warranty not limiting Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws).
Purchaser is acquiring the Securities hereunder in the ordinary course of its business.  Purchaser understands that the Shares, the
Warrants and the Warrant Shares are “restricted securities” and have not been registered under the Securities Act or any applicable
state securities law and is acquiring such Securities as principal for its own account and not with a view to or for distributing or reselling
such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention
of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation
of the Securities Act or any applicable state securities law (this representation and warranty not limiting Purchaser’s right to
sell such Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws).


 


(c)          Purchaser
Status. At the time Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants, it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act.


 


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


 


(e)          Access
to Information. Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment.


 


(f)          Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, Purchaser has not, nor has any
Person acting on behalf of or pursuant to any understanding with Purchaser, directly or indirectly executed any purchases or sales, including
Short Sales, of the securities of the Company during the period commencing as of the time that Purchaser first received a term sheet
(written or oral) from the Company or any other Person representing the Company setting forth the material pricing terms of the transactions
contemplated hereunder and ending immediately prior to the execution hereof. Other than to other Persons party to this Agreement or to
Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees,
agents and Affiliates, Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or
securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.


 


The Company acknowledges and agrees that the representations
contained in this Section 3.2 shall not modify, amend or affect Purchaser’s right to rely on the Company’s representations
and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other
document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated
hereby.


 






    	 	13	 



     


    

 


ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1           Removal
of Legends.


 


(a)          The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act.


 


(b)          
The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:


 


[NEITHER THIS SECURITY
NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS] [THIS SECURITY HAS NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.


 


The Company acknowledges
and agrees that Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant
a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined
in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms
of such arrangement, Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer
would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be
required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the
Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection
with a pledge or transfer of the Securities.


 


(c)          Certificates
evidencing the Shares or the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i)
while a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale
of such Securities pursuant to Rule 144, or (iii) if such Securities are eligible for sale under Rule 144, without the requirement for
the Company to be in compliance with the current public information required under Rule 144 as to such Securities and without volume or
manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) (the “Effective Date”). The Company shall
cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer Agent to
effect the removal of the legend hereunder. If all or any portion of such Securities is exercised at a time when there is an effective
registration statement to cover the resale of such Securities, or if such Securities may be sold under Rule 144 and the Company is then
in compliance with the current public information required under Rule 144, or if such Securities may be sold under Rule 144 without the
requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Securities and
without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Securities shall be issued
free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this
Section 4.1(c), it will, no later than three Trading Days following the delivery by Purchaser to the Company or the Transfer Agent of
a certificate representing such Securities, as applicable, issued with a restrictive legend (such third Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to Purchaser a certificate representing such shares that is free from all restrictive
and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4.


 






    	 	14	 



     


    

 


4.2           Furnishing
of Information. Until Purchaser does not own Securities, the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange
Act.


 


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


 


4.4           Securities
Laws Disclosure; Publicity. To the extent required by applicable laws or regulations, Company shall by 9:00 a.m. (New York City time)
within four (4) Trading Days immediately following the date hereof, file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto, with the Commission within the time required by the Exchange Act. Effective upon the issuance of such press release,
the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral,
between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one
hand, and the Purchaser or any of its Affiliates on the other hand, shall terminate. The Company and Purchaser shall consult with each
other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor Purchaser
shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of Purchaser, or without the prior consent of Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public statement or communication.


 


4.5           Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchaser or other acquisition of securities of the Company including purchases
on the open market.


 


4.6           
Exercise Procedures. The terms and provisions expressly described in each Warrant, including the form of Notice of Exercise included
in the Warrants, set forth the totality of the procedures required of the Purchaser in order to exercise the Warrants. Without limiting
the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. No additional legal opinion, other information
or instructions shall be required of the Purchaser to exercise its Warrants. The Company shall honor exercises of the Warrants, properly
submitted in accordance with the respective terms thereof, and in each such case shall deliver Warrant Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.


 






    	 	15	 



     


    




 


4.7        Indemnification
of Purchaser. Subject to the provisions of this Section 4.7, the Company will indemnify and hold Purchaser and its directors, officers,
shareholders, members, managers, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, managers,
partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack
of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result
of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such
stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which
constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing
(provided that the failure to provide such notice shall only affect the Company’s obligations under this Section 4.7 if and only
to the extent that the Company is prejudiced by the failure to provide such notice) , and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right
to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the
Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company
and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel (plus any reasonably necessary local counsel). The Company will not be liable to any Purchaser Party under
this Agreement (y) for any settlement by Purchaser Party effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable
to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party
in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.7 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or
others and any liabilities the Company may be subject to pursuant to law.


 


4.8           Reservation
of Common Stock. As of the Closing Date the Company will have reserved, and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue
Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.


 


4.9         Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the quotation of the Common Stock on the Trading Market
on which it is currently listed. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading
Market, it will then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary
to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible.


 


4.10         Certain
Transactions and Confidentiality. Purchaser covenants that until such time as the transactions contemplated by this Agreement, and
any other material non-public information that may be in the Purchaser’s possession, are publicly disclosed by the Company, including
pursuant to the initial press release as described in Section 4.4, Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the disclosure schedules attached hereto, and such other information, if any. 
Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Purchaser expressly acknowledges
and agrees that Purchaser will not engage in effecting transactions in any securities of the Company unless such transactions are in compliance
with all applicable laws, including without limitation, federal and state securities laws and regulations.


 






    	 	16	 



     


    

 


4.11         Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof, promptly upon request of Purchaser. The Company shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon
request of Purchaser.


 


4.12         Reverse
Stock Split. The Purchaser acknowledges that the Company may seek to have its Common Stock listed on a national Trading Market (such
as the Nasdaq Capital Market), and in connection with satisfying the applicable listing requirements, it may seek stockholder approval
to effect a reverse stock split and thereafter effectuate such reverse stock split.


 


ARTICLE V.

MISCELLANEOUS


 


5.1           Fees
and Expenses. Except as expressly set forth in the Transaction Documents, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any
fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by Purchaser),
stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.


 


5.2           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.3           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile
or email attachment at the facsimile number or email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m.
(New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages attached hereto on a day
that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.


 


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


 






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


 


5.6           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of Purchaser (other
than by merger). Purchaser may assign any or all of its rights under this Agreement to any Person to whom Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions
of the Transaction Documents that apply to the “Purchaser.”


 


5.7           No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.7.


 


5.8           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the Commonwealth of Massachusetts, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the Commonwealth of Massachusetts. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the Commonwealth of Massachusetts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.7, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for
its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such
Action or Proceeding.


 


5.9      Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


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


 


5.11         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.


 






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5.12        Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever Purchaser exercises a Warrant and the Company does not timely perform its related obligations
in connection with such exercise within the periods therein provided, then Purchaser may rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company, any such relevant exercise notice, demand or election in whole or in part without prejudice
to its future actions and rights; provided, however, that in the case of a rescission of an exercise of a Warrant,
the Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the
return to Purchaser of the aggregate exercise price paid to the Company for such shares (in the case of a Warrant) and the restoration
of Purchaser’s right to acquire such shares pursuant to Purchaser’s Warrant (including, issuance of a replacement warrant
certificate evidencing such restored right).


  


5.13         Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also provide a customary
indemnity associated with the issuance of such replacement Securities which indemnity by the applicant the Company agrees shall be sufficient.


 


5.14         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser and
the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not
be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate and agree that it shall not be necessary to post a bond or other security.


 


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


  


5.16         Saturdays,
Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.


 


5.17         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.


 


(Signature Pages Follow)


 



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IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.


 


	Biostage Inc.	 	Address for Notice:
	 	 	 
	By:	 	 	84 October Hill Road
	 	Name:  Hong Yu	 	Holliston, MA 01746
	 	Title:    President	 	Attention: CEO
	 	 	 	 
	With a copy to (which shall not constitute notice):	 	 
	 	 	 
	Burns & Levinson LLP	 	 
	125 High Street	 	 
	Boston, MA 02110	 	 
	Attention: Chad Porter, Esq.	 	 


 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 






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[PURCHASER SIGNATURE PAGE TO
BIOSTAGE SECURITIES PURCHASE AGREEMENT]


 


IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by its respective authorized signatories as of the date first indicated
above.


 


Name of Purchaser: ____________


 


Signature of Purchaser:                                                              


 


Email Address of Purchaser: _____________


 


Facsimile Number of Purchaser:


 


Address for Notice to Purchaser:     _____________


_____________


_____________


_____________


 


Address for Delivery of Securities to Purchaser (if not same as address
for notice):


 


_____________


_____________


_____________


_____________


 


Subscription Amount: US $_________


 


Shares of Common Stock: _________


 


Warrant Shares: _________


 






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