Document:

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of January __, 2018, among Hancock Jaffe Laboratories,
Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS,
the Company is offering Notes and Warrants (each as defined below) to acquire up to that number of shares of Common Stock as is
determined in accordance with the terms of the Notes and the Warrants (the “Offering”);

 

WHEREAS,
the Company has engaged Alexander Capital to act as placement agent for this Offering; and

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, 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 each Purchaser agree as follows:

 

Article
I

DEFINITIONS

 

1.1
Definitions. In addition to the terms
defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such
terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:

 

“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 Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived.

 

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

 

“Common
Stock” means the Company’s common stock, par value $0.00001 per share.

 

“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 share, 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.

 

“Conversion
Price” shall have the meaning ascribed to such term in the Notes.

 

“Conversion
Shares” shall have the meaning ascribed to such term in the Notes.

 

“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.

 

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

 

“Notes”
means the Senior Secured Convertible Notes issued by the Company to the Purchasers hereunder, in the form of Exhibit A attached
hereto.

 

“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.

 

“Principal
Amount” means, as to each Purchaser, the principal amount of the Note, set forth below such Purchaser’s signature
block on the signature pages hereto next to the heading “Principal Amount,” in United States Dollars.

 

“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.

 

“Requisite
Holders” shall mean those Purchasers holding Notes having a majority of the aggregate principal amount of all Notes
issued pursuant to this Agreement.

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants
or conversion in full of all Notes, ignoring any conversion or exercise limits set forth therein, and assuming that the Conversion
Price is at all times on and after the date of determination 75% of the then Conversion Price on the Trading Day immediately prior
to the date of determination.

 

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

 

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

 

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

 

“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, as to each Purchaser, the aggregate amount to be paid for Notes and Warrants, which shall equal the Principal
Amount, set forth below such Purchaser’s signature block on the signature pages hereto next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.

 

“Subsidiary”
means a subsidiary of the Company, as set forth in Section 3.1.

 

“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 American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, the OTC Bulletin Board or the Pink OTC Markets (or any successors to any of the foregoing).

 

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

 

“Transfer
Agent” means any transfer agent the Company in the future retains with respect to its shares of Common Stock.

 

“Underlying
Shares” means the shares of Common Stock issuable upon conversion of the Notes.

 

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“Warrants”
means the Warrants to Purchase shares of Common Stock delivered to the Purchasers hereunder, in the form of Exhibit B 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, substantially concurrent with the execution and delivery of this Agreement
by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, the Notes.
Each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall
deliver to each Purchaser its respective Note and Warrant, as determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction or waiver of the
covenants and conditions set forth in Sections 2.2 and Section 2.3, the Closing shall occur at the offices of Alexander Capital,
17 State Street, New York, NY 10007, or such other location as the parties shall mutually agree.

 

2.2
Deliveries.

 

(a)
On or prior to the Closing Date, the Company
shall deliver or cause to be delivered to each Purchaser the following:

 

(i)
this Agreement duly executed by the Company;

 

(ii)
a Note with a principal amount equal to such
Purchaser’s Principal Amount, registered in the name of such Purchaser; and

 

(iii)
a Warrant registered in the name of such Purchaser
with an exercise price per share equal to the lesser of (a) $14.40 or (b) 120% of the Conversion Price, and to purchase up to
a number of shares of Common Stock equal to 50% of the number of shares of Common Stock issuable upon conversion of such Purchaser’s
Note; provided, however, in the event (a) the Company does not consummate an initial public offering of its Common Stock under
the Securities Act (an “IPO”) or becomes a reporting company under the Exchange Act on or before February 28,
2018 or (b) an Event of Default (as defined in the Note) occurs and is not cured, the percentage used to determine the number
of Warrant Shares above shall increase from 50% to 75%.

 

(b)
On or prior to the Closing Date, each Purchaser
shall deliver or cause to be delivered to the Company the following:

 

(i)
this Agreement duly executed by the Purchaser;
and

 

(ii)
such Purchaser’s Subscription Amount by
wire transfer to the account specified in writing by the Company.

 

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2.3
Closing Conditions.

 

(a)
The obligations of the Company hereunder in connection
with the Closing are subject to the following conditions being met:

 

(i)
the accuracy in all material respects on the
Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in
which case they shall be accurate as of such date);

 

(ii)
all obligations, covenants and agreements of
each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii)
the delivery by each Purchaser of the items set
forth in Section 2.2(b) of this Agreement.

 

(b)
The respective obligations of the Purchasers
hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)
the accuracy in all material respects on the
Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);

 

(ii)
all obligations, covenants and agreements of
the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii)
the delivery by the Company of the items set
forth in Section 2.2(a) of this Agreement; and

 

(iv)
there shall have been no Material Adverse Effect
with respect to the Company since the date hereof.

 

Article
III

REPRESENTATIONS AND WARRANTIES

 

3.1
Representations and Warranties of the Company.
Except as set forth in the Disclosure Schedule attached hereto (including the exhibits attached to the Disclosure Schedule, collectively,
the “Disclosure Schedule”), which Disclosure Schedule shall be deemed a part hereof, the Company hereby makes
the following representations and warranties to each Purchaser as of the Closing Date:

 

(a)
Subsidiaries. The Company owns, directly
or indirectly, all of the equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
equity securities of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.

 

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(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, operating agreements, 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.

 

(c)
Authorization; Enforcement. The Company
has the requisite 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,
operating agreement, bylaws or other organizational or charter documents, (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.

 

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(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 in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this
Agreement and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable state
securities laws (collectively, the “Required Approvals”).

 

(f)
Issuance of the Securities. The Underlying
Shares and Warrant Shares, when issued in accordance with the terms of the Notes and the Warrants, respectively, will be validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents or federal or state securities laws.

 

(g)
Capitalization. Set forth in the Disclosure
Schedule is the issued and outstanding equity securities of the Company. 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.
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 stockholder agreements, voting agreements or other similar agreements with respect to the Common
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)
Financial Statements. The Company has
delivered to each Purchaser its (i) audited financial statements for the years ended December 31, 2015 and 2016 (the “Audited
Financials”), and (ii) its unaudited financial statements for the period ended September 30, 2017 (the “Unaudited
Financials,” and together with the Audited Financials, collectively, the “Financial Statements”).
The Audited Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods indicated. The Audited Financial Statements fairly present in all material
respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein.
Except as set forth in the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business subsequent to September 30, 2017; (ii) obligations under
contracts and commitments incurred in the ordinary course of business; and (iii) liabilities and obligations of a type or nature
not required under GAAP to be reflected in the Financial Statements, which, in all such cases, individually and in the aggregate
would not reasonably be expected to have a Material Adverse Effect.

 

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(i)
Material Changes; Undisclosed Events, Liabilities
or Developments. Since the date of the latest Financial Statements, except as set forth in the Disclosure Schedule: (i) 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) 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, (iii) the Company has not altered its method of accounting, (iv)
the Company has not declared or made any distribution of cash or other property to its stockholders or purchased, redeemed or
made any agreements to purchase or redeem any shares of Common Stock, and (v) the Company has not issued any equity securities
to any officer, director or Affiliate.

 

(j)
Litigation. 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 set forth in the Disclosure Schedule, 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. Except as set forth on Schedule 3.1(j), 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.

 

(k)
Compliance. Neither the Company nor any
Subsidiary: (i) has 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 each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

 

(l)
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 currently conducted, except where the failure to possess such
permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither
the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material
Permit.

 

(m)
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 that is material to the business of the Company and the Subsidiaries, 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.

 

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(n)
Intellectual Property. To the Company’s
knowledge, 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 as necessary or required for use in connection with their respective businesses and which the failure to so
have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).

 

(o)
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. 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.

 

(p)
Transactions With Affiliates and Employees.
Except as set forth in the Disclosure Schedule, 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, stockholder or partner, in each case in excess of
$150,000 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.

 

(q)
Private Placement. Assuming the accuracy
of the Purchasers’ 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 Purchasers as contemplated hereby.

 

(r)
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.

 

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(s)
Disclosure. All of the disclosure furnished
by or on behalf of the Company to the Purchasers regarding the Company, its business and proposed business and the transactions
contemplated hereby, including the Disclosure Schedule, to the knowledge of the Company is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during
the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.

 

(t)
No Integrated Offering. Assuming the accuracy
of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of the Securities Act which would require the registration of any such securities under
the Securities Act.

 

(u)
Solvency. The Company has no knowledge
of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy
or reorganization laws of any jurisdiction within one year from the Closing Date. The Disclosure Schedules set forth as of the
date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for
borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same
are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary received notice of a claim that it is in default with respect to any Indebtedness.

 

(v)
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 no material tax obligations 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.

 

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(w)
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 Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

 

(x)
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 the FCPA.

 

(y)
Acknowledgment Regarding Purchasers’
Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers 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 no Purchaser is 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 any Purchaser or any
of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby
is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each 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 and its representatives.

 

(z)
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”).

 

(aa)
No Bad Actor Disqualifying Event. No “bad
actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”)
is applicable to the Company or, to the Company’s knowledge, any Company Covered Person, except for a Disqualification Event
as to which Rule 506(d)(2)(ii–iv) or (d)(3), is applicable.

 

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3.2
Representations and Warranties of the Purchasers.
Each Purchaser, for itself and for no other 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):

 

(a)
Organization; Authority. Such Purchaser
is either 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 the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
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 such Purchaser. Each Transaction Document
to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such 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.

 

(b)
Own Account. Such Purchaser understands
that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable
state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing
or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities 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 such Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws).
Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

(c)
Purchaser Status. At the time such 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 or converts
any Notes it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

 

(d)
Experience of Such Purchaser. Such 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. Such Purchaser is able to bear the economic risk of an investment in the Securities and
is able to afford a complete loss of such investment.

 

(e)
General Solicitation. Such Purchaser is
not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement. Such Purchaser was only contacted by an agent of the Company for this private
placement and no other offering.

 

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(f)
No Bad Actor. Such Purchaser hereby represents
that neither it nor any of its Rule 506(d) Related Parties is a “bad actor” within the meaning of Rule 506(d). For
purposes of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor
disqualification” provision of Rule 506(d).

 

(g)
Foreign Purchaser. If Purchaser is not
a United States person, such Purchaser represents that it has satisfied itself as to the full observance of the laws of its jurisdiction
in connection with any invitation to subscribe for the Notes or any use of this Agreement, including (i) the legal requirements
within its jurisdiction for the purchase of the Notes, (ii) any foreign exchange restrictions applicable to such purchase, (iii)
any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that
may be relevant to the purchase, holding, redemption, sale or transfer of the Notes. Such Purchaser further represents that its
payment for, and its continued beneficial ownership of the Notes, will not violate any applicable securities or other laws of
its jurisdiction.

 

(h)
Access to Information. Purchaser acknowledges
that it has carefully and fully reviewed the Disclosure Schedule and has been afforded: (i) the opportunity to ask such questions
as it has deemed necessary of representatives of the Company concerning, among other items, those set forth in “ii”
below of this Section 3.2(i), that the Purchaser deemed relevant in making a decision to purchase the Securities, the terms and
conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to all information
about the Company including, but not limited to, the terms of the Securities, the Offering, the Company’s business and proposed
business, its FDA status with regard to the Company’s products, clinical trials and related items (and any other information
regarding the same), its capitalization, the Disclosure Schedule (including exhibits thereto), the Company’s products, the
Financial Statements, the financial status and conditions of the Company, the Company’s prospects, management and controlling
stockholders and the terms of its outstanding securities 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 including with regard to the items in “ii”
above. Purchaser acknowledges that no third party has made or will make any representation or warranty to such Purchaser regarding
the adequacy or completeness for such Investor’s purpose of the information such Purchaser as requested. The Purchaser is
not relying on any information contained in presentations or memorandums prepared by or on behalf of the Company in connection
with this Offering.

 

The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any express 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.

 

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Article
IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1
Transfer Restrictions.

 

(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 a Purchaser, the Company may require the transferor thereof to provide
to the Company an opinion of corporate 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. As a condition of transfer, any such transferee shall agree
in writing to be bound by the terms of this Agreement and shall make the representations set forth in Section 3.2, and then shall
have the rights and obligations of a Purchaser under this Agreement.

 

(b)
The Purchasers agree 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 ANY SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE 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 AS EVIDENCED BY A
LEGAL OPINION OF CORPORATE COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO
THE COMPANY.

 

4.2
Acknowledgment of Dilution. The Company
acknowledges that the issuance of the Securities may result in dilution of the outstanding number of shares of Common Stock, which
dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction
Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the Notes and the Warrant
Shares pursuant to the Warrants, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

 

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4.3
Furnishing of Information; Public Information.

 

(a)
Until the earliest of the time that (i) no Purchaser
owns Securities or (ii) the Warrants have expired, and so long as the Company is a reporting company pursuant to the Exchange
Act, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and
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 thereof pursuant to the Exchange Act even if the Company subsequently is no longer then subject
to the reporting requirements of the Exchange Act.

 

(b)
Following the date that the Company becomes a
reporting company pursuant to the Exchange Act and the Securities are eligible to be resold pursuant to Rule 144 and ending at
such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144, the Company shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) (a “Public Information Failure”), then, in addition to such
Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not
as a penalty, by reason of any such delay in or reduction of its ability to sell Underlying Shares, an amount in cash equal to
two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information
Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier
of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required
for the Purchasers to transfer the Underlying Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled
pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments.” Public Information
Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure
Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure
Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public
Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full.
Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such
Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief. The Company shall promptly notify Purchaser of the occurrence of a Public Information
Failure.

 

4.4
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 in a manner that would require the registration under the
Securities Act of the sale of the Securities.

 

4.5
Conversion and Exercise Procedures. The
form of Notice of Exercise included in the Warrants and the conversion feature included in the Notes set forth the totality of
the procedures required of the Purchasers in order to exercise the Warrants or convert the Notes. No additional legal opinion,
other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their Notes. The Company
shall honor exercises of the Warrants and conversions of the Notes and shall deliver Underlying Shares in accordance with the
terms, conditions and time periods set forth in the Transaction Documents. Each Purchaser agrees and acknowledges that upon (i)
an IPO or (ii) the written consent of the Company and the Requisite Holders, the aggregate principal amount of all the outstanding
Notes shall convert into shares of Common Stock at the Conversion Price. For clarity, such consent by the Requisite Holders shall
be binding upon all Purchasers.

 

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4.6
Securities Laws Disclosure; Publicity.
The Company and each Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated
hereby, and neither the Company nor any 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 any Purchaser, or without the prior consent of
each 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. Notwithstanding the foregoing, the Company shall not issue a press release disclosing
the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or
Trading Market, without the prior written consent of such Purchaser, except: (a) as required by state or federal securities laws,
(b) to the extent requested by the Commission and (c) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clauses (b) and
(c).

 

4.7
Use of Proceeds. The Company shall use
the net proceeds from the sale of the Securities hereunder for working capital and general corporate purposes and expenses. The
Company shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of
trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any shares
of Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA
or OFAC regulations.

 

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4.8
Indemnification of Purchasers. Subject
to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors, officers, stockholders,
stockholders, 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 such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, agents, stockholders,
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 stockholders 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, 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. The Company will not be liable
to any Purchaser Party under this Agreement (y) for any settlement by a 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 4.9 shall be made by periodic payments of the amount thereof during the course of the investigation or defense,
in a commercially reasonable manner. 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. For the avoidance of doubts, no officers, directors, employees, or stockholders of the Company shall be held personally
liable under this Section 4.9.

 

4.9
Reservation and Listing of Securities.
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such Common Stock to be approved for listing or quotation
on such Trading Market as soon as commercially reasonable thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market.

 

4.10
Equal Treatment of Purchasers. No consideration
(including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver
or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this
Agreement. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate
to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

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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 any 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 Purchasers 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 any Purchaser.

 

4.12
Company Registration. If the Company proposes
to register (including, for this purpose, a registration effected by the Company for stockholders other than the Purchasers) any
of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other
than in an Excluded Registration (as defined below)), the Company shall, at such time, promptly give the Purchaser notice of such
registration. Upon the request of the Purchaser given within twenty (20) days after such notice is given by the Company, the Company
shall, subject to the provisions of Section 4.13, cause to be registered all of the Warrant Shares and Underlying Shares (collectively,
the “Registrable Securities”) that each such Purchaser has requested to be included in such registration. The
Company shall have the right to terminate or withdraw any registration initiated by it under this Section 4.12 before the effective
date of such registration, whether or not any Purchaser has elected to include Registrable Securities in such registration. For
purposes of this Section 4.12, “Excluded Registration” means (i) a registration relating to the sale of securities
to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating
to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would
be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration
in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being
registered. The right of any Purchaser to request registration or inclusion of Registrable Securities in any registration pursuant
to this Section 4.13 shall terminate upon the earlier of: the closing of a Deemed Liquidation Event (as defined in the Company’s
Certificate of Incorporation), such time as Rule 144 or another similar exemption under the Securities Act is available for the
sale of all of such Purchaser’s shares without limitation during a three-month period without registration, and the first
anniversary of the IPO.

 

4.13
Underwriting Requirements. In connection
with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 4.12, the Company
shall not be required to include any of the Purchaser’s Registrable Securities in such underwriting unless the Purchaser
accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as
the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total
number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the
number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is
compatible with the success of the offering, then the Company shall be required to include in the offering only that number of
such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will
not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested
to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be
allocated among the selling Purchasers in proportion (as nearly as practicable to) the number of Registrable Securities owned
by each selling Purchaser or in such other proportions as shall mutually be agreed to by all such selling Purchaser.

 

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Article
V

MISCELLANEOUS

 

5.1
Fees and Expenses. 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 conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.

 

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 e-mail at the e-mail
address 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 e-mail or facsimile at the e-mail
address 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.

 

5.4
Amendments; Waivers. Each of the Transaction
Documents shall not be amended, and no provision of any Transaction Document may be waived, except upon written consent of the
Company and the Requisite Holders. Each Purchaser acknowledges that (i) in the event of a conflict, this provision controls all
Transaction Documents regarding the subject matter hereof, and (ii) an amendment of the Transaction Documents (or waiver of any
provision of the Transaction Documents) may occur by consent of the Requisite Holders and shall be binding upon all Purchasers.

 

5.5
No Short Sales. For as long as any Purchaser
holds Securities, neither the Purchaser nor any of its Affiliates nor any entity managed or controlled by each such Purchaser
will, directly or indirectly, or cause or assist any Person to (x) enter into any Short Sale or (y) trade in derivative securities
to the same effect.

 

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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 each Purchaser (other than by
merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such 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 “Purchasers.”

 

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 4.9 and this Section
5.8.

 

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 State of New York, 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, stockholders, partners, stockholders, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan 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 suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, 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 suit, 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.

 

5.9
Survival. The representations and warranties
contained herein shall survive the Closing and the delivery of the Securities until the earlier of (i) one year following the
Closing Date and (ii) the date the Notes are no longer outstanding.

 

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.

 

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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.

 

5.12
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 and an indemnification relating thereto. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.

 

5.13
Remedies. In addition to being entitled
to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers 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.

 

5.14
Payment Set Aside. To the extent that
the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a 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.

 

5.15
 Usury. To the extent it may lawfully do
so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts
to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection
with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction
Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided
that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed
the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature
of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that
if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased
by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed
by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application
is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company
to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser
to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to
be at such Purchaser’s election.

 

    	21

    	 

    

 

5.16
Independent Nature of Purchasers’ Obligations
and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations
of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be
entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review
and negotiation of the Transaction Documents.

 

5.17
Liquidated Damages. The Company’s
obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation
of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding
the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable
shall have been canceled.

 

5.18
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.

 

5.19
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 the number of shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and
forward stock splits, combinations and other similar transactions of the shares of Common Stock that occur after the date of this
Agreement.

 

5.20
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT,
OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY,
TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

 

(Signature
Pages Follow)

 

    	22

    	 

    

 

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.

 

	HANCOCK
    JAFFE LABORATORIES, INC.	 	Address
    for Notice:
	 	 	 	 	 
	By:	/s/
    Steve Cantor	 	Fax:	 
	Name:	Steve
    Cantor	 	Email:	 
	Title:	Co-Chief
    Executive Officer	 	 	 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

    	23

    	 

    

 

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

 

Date:
__________

 

Name
of Purchaser: _________________________________________________________

 

Signature
of Authorized Signatory of Purchaser: ___________________________________

 

Name
of Authorized Signatory: ________________________________________________

 

Title
of Authorized Signatory: _________________________________________________

 

Email
Address of Authorized Signatory:__________________________________________

 

Address
for Notice to Purchaser:________________________________________________

 

Address
for Delivery of Securities to Purchaser

(if
not same as address for notice): ______________________________________________

 

Subscription
Amount (dollar amount paid for the Notes): $ ____________________________

 

Principal
Amount (Subscription Amount): $ ________________________________________

 

    	24

    	 

    

 

 

[INSERT
DISCLOSURE SCHEDULE HERE]

 

 

    	25

    	 

    

 

 

Exhibit
A

 

Form
of Note

 

    	26

    	 

    

 

 

Exhibit
B

 

Form
of Warrant

 

    	27NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE 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 APPLICABLE STATE SECURITIES LAWS, 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 AS EVIDENCED BY A LEGAL OPINION OF CORPORATE COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

Original
Issue Date: January [*], 2018

 

$[*]

 

CONVERTIBLE
NOTE 

 

THIS
CONVERTIBLE NOTE is one of a series of duly authorized and validly issued Convertible Notes of Hancock Jaffe Laboratories, Inc.,
a Delaware corporation (the “Company”), having its principal place of business at 70 Doppler Irvine, California,
92618 (this Note, the “Note” and, collectively with the other Notes of such series, the “Notes”).

 

FOR
VALUE RECEIVED, the Company promises to pay to [*] or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $[*] together with interest thereon on February 28, 2018 (the
“Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder.
This Note shall bear interest in accordance with Section 2. This Note is subject to the following additional provisions:

 

Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms
not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have
the following meanings:

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence
in any of the foregoing or takes any limited liability company or other action for the purpose of effecting any of the foregoing.

 

    	 	1	 

    	 	 	 

    

 

“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.

 

“Buy-In”
shall have the meaning set forth in Section 4(d)(vi).

 

“Common
Stock” means shares of the Company’s common stock, par value $0.00001 per share, and any other class of securities
into which such securities may hereafter be reclassified or changed.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.

 

“Event
of Default” shall have the meaning set forth in Section 6(a).

 

“New
York Courts” shall have the meaning set forth in Section 7(d).

 

“Note
Register” shall have the meaning set forth in Section 2.

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Notes.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of January [__], 2018, by and among the Company and the
Holders signatory thereto, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Securities
Act” shall have the meaning set forth in the preamble legend to this Note.

 

“Share
Delivery Date” means, subject to Sections 4(d)(i) and (ii), five (5) Business Days after the applicable
Conversion Date.

 

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

 

    	 	2	 

    	 	 	 

    

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock (or an equivalent thereof) is listed
or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange, the OTC Bulletin Board or the Pink OTC Markets (or any successors to any of
the foregoing).

 

Section
2. Interest; Prepayment. The Company acknowledges and agrees that this Note shall bear interest at a rate of fifteen percent
(15%) per annum, to be paid quarterly in cash on the last Trading Day of each fiscal quarter. Regularly scheduled interest payments
shall be made on this Note. All payments hereunder will be paid to the Person in whose name this Note is registered on the records
of the Company regarding registration and transfers of this Note (the “Note Register”). At the discretion of
the Company, the Principal Amount and unpaid accrued interest of this Note may be prepaid at anytime, provided that written notice
is provided to the Holder at least fifteen (15) days in advance of the prepayment.

 

Section
3. Registration of Transfers and Exchanges.

 

a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same; provided, that the minimum principal amount of any replacement
Note shall be $50,000.00. No service charge will be payable for such registration of transfer or exchange.

 

b)
Investment Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations to successor Holders who provide the same investment representations to the
Company.

 

c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

a)
Voluntary and Mandatory Conversion.

 

i.
At any time after the Original Issue Date until the Maturity Date, the outstanding principal amount of this Note, plus all accrued
but unpaid interest (the “Accreted Value”) shall be convertible, in whole or in part, into shares of Common
Stock at the option of the Holder, at any time and from time to time, at the Conversion Price specified in Section 3(b)(i)
below and in the manner specified in Section 3(d)(ii) below. The Holder shall effect any conversion pursuant to this
Section 4(a)(i) by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A
(each, a “Notice of Conversion”), specifying therein, among other things, the date on which such conversion
shall be effected (such date, the “Voluntary Conversion Date”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions
hereunder, the Holder shall be required to physically surrender this Note to the Company. The Company may deliver an objection
to any Notice of Conversion within two (2) Business Days of delivery of such Notice of Conversion.

 

    	 	3	 

    	 	 	 

    

 

ii.
If on or prior to the Maturity Date, the Company consummates its initial public offering of its Common Stock pursuant to the Securities
Act (the “IPO”), the entire Accreted Value of this Note shall be converted into shares of Common Stock at the
Conversion Price specified in Section 3(b)(ii) below and in the manner specified in Section 3(d)(iii) below.

 

b)
Conversion Price.

 

i.
The Conversion Price in effect on a Voluntary Conversion Date in connection with a voluntary conversion pursuant to Section
4(a)(i) shall be $12.00.

 

ii.
The Conversion Price in effect on an IPO Conversion Date (as defined below) in connection with a mandatory conversion pursuant
to Section 4(a)(ii) shall be the lesser of (A) $12.00 or (B) the product equal to the price per share of Common Stock sold
in the Company’s IPO, multiplied by 70%.

 

c)
Adjustments to Conversion Price.

 

i.
In the event the Company (i) makes a distribution or distributions on shares of Common Stock payable in Common Stock (which, for
avoidance of doubt, shall not include any Common Stock issued by the Company upon conversion of, or payment of interest on, the
Notes), (ii) subdivides outstanding Common Stock into a larger number of Common Stock, (iii) combines (including by way of a reverse
split) outstanding Common Stock into a smaller number of Common Stock or (iv) issues, in the event of a reclassification of Common
Stock, any Common Stock of the Company, then the Conversion Price shall be adjusted by multiplying the Conversion Price by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event, and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to this Section shall become effective immediately after the record date for the determination of members entitled to receive
such distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or
re-classification.

 

ii.
If at any time or from time to time after the issuance date of this Note there shall be a capital reorganization of the Company
(other than by way of a stock split or combination of shares or stock dividends or distributions, or a reclassification, exchange
or substitution of shares), or a merger or consolidation of the Company with or into another corporation where the holders of
the Company’s outstanding voting securities prior to such merger or consolidation do not own over fifty percent (50%) of
the outstanding voting securities of the merged or consolidated entity, immediately after such merger or consolidation, or the
sale of all or substantially all of the Company’s properties or assets to any other person (an “Organic Change”),
then as a part of such Organic Change an appropriate revision to the conversion price shall be made if necessary and provision
shall be made if necessary (by adjustments of the conversion price or otherwise) so that, upon any subsequent conversion of this
Note, the Holder shall have the right to receive, in lieu of Conversion Shares, the kind and amount of shares of stock and other
securities or property of the Company or any successor corporation resulting from the Organic Change. In any such case, appropriate
adjustment shall be made in the application of the provisions of Section 4(a) with respect to the rights of the Holder
after the Organic Change to the end that the provisions of Section 4(a) (including any adjustment
in the conversion price then in effect and the number of shares of stock or other securities deliverable upon conversion of this
Note) shall be applied after that event in as nearly an equivalent manner as may be practicable.

 

    	 	4	 

    	 	 	 

    

 

d)
Mechanics of Conversion.

 

i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the Accreted Value by (y) the Conversion Price.

 

ii.
Mechanics of Voluntary Conversion. In connection with a conversion by the Company pursuant to Section 4(a)(i), the
Company shall provide Holder the Notice of Conversion in accordance with Section 4(a)(i). Upon receipt of the notice from
the Company, this Note shall automatically, and without any further action on the part of the Holder and whether or not the Note
is surrendered to the Company, be converted into shares of Common Stock at the Conversion Price specified in Section 4(b)(i)
above. The Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion
unless this Note is either delivered to the Company or the Holder notifies the Company that this Note been lost, stolen or destroyed
and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with
such loss, theft or destruction. Upon receipt by the Company of this Note or an agreement satisfactory to the Company to indemnify
the Company from any loss incurred by it in connection with such loss, theft or destruction, the Company at its expense shall,
as soon as practicable thereafter, issue and deliver at such office to such Holder, or to the nominee or nominees of such Holder,
a certificate or certificates for the shares of Common Stock to which such Holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been upon the date specified in the Notice of Conversion, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of
such Common Stock as of such date. Notwithstanding the foregoing, if the Company’s transfer agent is participating in the
DTC Fast Automated Securities Transfer Program, the Company may credit such aggregate number of shares of Common Stock to which
the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at custodian system.

 

ii.
Mechanics of Mandatory Conversion. Upon a mandatory conversion pursuant to Section 4(a)(ii), the Accreted Value
shall automatically, and without any further action on the part of the Holder and whether or not the Note is surrendered to the
Company, be converted into shares of Common Stock at the Conversion Price specified in Section 4(b)(ii) above on the consummation
of the IPO (the “IPO Conversion Date” and together with the Voluntary Conversion Date, the “Conversion
Date”). The Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon
such mandatory conversion unless this Note is either delivered to the Company or the Holder notifies the Company that this Note
been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred
by it in connection with such loss, theft or destruction. Upon receipt by the Company of this Note or an agreement satisfactory
to the Company to indemnify the Company from any loss incurred by it in connection with such loss, theft or destruction, the Company
at its expense shall, as soon as practicable thereafter, issue and deliver at such office to such Holder, or to the nominee or
nominees of such Holder, a certificate or certificates for the shares of Common Stock to which such Holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been upon the completion of the IPO, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders
of such shares of Common Stock as of such date. Notwithstanding the foregoing, if the Company’s transfer agent is participating
in the DTC Fast Automated Securities Transfer Program, the Company may credit such aggregate number of shares of Common Stock
to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at custodian system.

 

    	 	5	 

    	 	 	 

    

 

iv.
Failure to Deliver Certificates. Except in the case of a mandatory conversion in connection with Section 4(a)(ii),
in the case a Notice of Conversion is issued by the Holder to the Company, and such certificate or certificates are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which
event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly
return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Notice of Conversion.

 

v.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action the Company may have against the Holder. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare an Event of Default (as defined below) pursuant to Section
6 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall
have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce
damages pursuant to any other Section hereof or under applicable law.

 

    	 	6	 

    	 	 	 

    

 

vi.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion at IPO. Subject to Sections 4(d)(i)
and (ii), in addition to any other rights available to the Holder, if the Company fails for any reason to deliver to
the Holder such certificate or certificates by the Share Delivery Date pursuant to Sections 4(d)(i) and (ii), and
if after such Share Delivery Date the Holder is required by its brokerage firm 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 Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available
to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage
commissions) for the shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common
Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the
sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of
the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion
(in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would
have been issued if the Company had timely complied with its delivery requirements under Sections 4(d)(i) and (ii).
For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect
to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause 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 certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

vii.
Fractional Common Shares. No fractional shares of Common Stock shall be issued upon the conversion of this Note. As to
any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Conversion Price or round up to the next whole share of Common Stock.

 

Section
5. Negative Covenants.

 

Except
as set forth in the Disclosure Schedules and exhibits thereto attached to the Purchase Agreement, as long as at least thirty-three
percent (33%) of the aggregate Principal Amount of the Notes issued pursuant to the Purchase Agreement remains outstanding, the
Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:

 

    	 	7	 

    	 	 	 

    

 

a)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

b)
pay cash dividends or distributions on any equity securities of the Company;

 

c)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested
directors of the Company (even if less than a quorum otherwise required for board approval); or

 

d)
enter into any agreement with respect to any of the foregoing.

 

Section
6. Events of Default.

 

a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i.
any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing
to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date
or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above,
is not cured within fifteen (15) Trading Days;

 

ii.
the Company shall fail to observe or perform any other material covenant or agreement contained in the Notes which failure is
not cured, if possible to cure, within the earlier to occur of (A) fifteen (15) Trading Days after notice of such failure sent
by the Holder or by any other Holder to the Company and thirty (30) Trading Days after receipt of written notice thereof;

 

iii.
any material representation or warranty made in this Note or any other Transaction Documents shall be untrue or incorrect in any
material respect as of the date when made that would cause a Material Adverse Effect;

 

iv.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a bankruptcy
event; or

 

v.
following the date the Company initially becomes a reporting company pursuant to the Exchange Act and its shares of Common Stock
are listed on a Trading Market, the Common Stock shall subsequently not be eligible for listing or quotation for trading on a
Trading Market and shall not be eligible to resume listing or quotation for trading thereon within ten (10) Trading Days.

 

    	 	8	 

    	 	 	 

    

 

b)
Remedies Upon Event of Default. If any Event of Default occurs and is continuing before the Maturity Date, the outstanding
principal amount of this Note, plus liquidated damages, interest and other amounts owing in respect thereof through the date of
acceleration, shall become, at the Holder’s election, immediately due and payable in cash. Commencing fifteen (15) Trading
Days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, the Principal Amount
on this Note shall increase twenty percent (20%). Upon the payment in full, the Holder shall promptly surrender this Note to or
as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have
all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b).
No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. If this Note
is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or
the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note the Company
shall be obligated and pay reasonable attorneys’ fees in connection with such collection, enforcement or action.

 

Section
7. Miscellaneous.

 

a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized
overnight courier service, addressed to the Company, at the address set forth above, or such other e-mail address, or address
as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any
and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered
personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address,
or address of the Holder appearing on the signature pages attached to the Purchase Agreement. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via e-mail at the email address set forth on the signature pages attached to the Purchase Agreement
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice
or communication is delivered via e-mail at the e-mail address set forth on the signature pages attached to the Purchase Agreement
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by
the party to whom such notice is required to be given.

 

b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation
of the Company.

 

    	 	9	 

    	 	 	 

    

 

c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts 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 suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, 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 Note 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 applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

 

f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.

 

    	 	10	 

    	 	 	 

    

 

g)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.

 

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

 

i)
Amendment. This Note may be modified or amended or the provisions hereof waived in accordance with the Purchase Agreement.

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.

 

	 	Hancock
    Jaffe Laboratories, Inc.
	 	 	 
	 	By:	/s/
    Steve Cantor
	 	Name: 	Steve
    Cantor
	 	Title:	Co-Chief
    Executive Officer

 

    	 	11	 

    	 	 	 

    

 

ANNEX
A 

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert the principal under the Convertible Note due February 28, 2018 (the “Note”)
of Hancock Jaffe Laboratories, Inc., a Delaware corporation (the “Company”), into shares of Common Stock of
the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the
name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged
to the holder for any conversion, except for such transfer taxes, if any. Capitalized terms used but not defined herein shall
have the meaning ascribed to such term in the Note.

 

	Conversion
    Price: 	$12.00	 

 

	Date
    to Effect Conversion:	 	 

 

	Accreted
    Value to be Converted:	 	 

 

	Number
    of shares of Common Stock to be issued: 	 	 

 

	Cash
    to be paid to Holder:	 	 

 

	Signature:	 	 

 

	Name:	 	 

 

	Address
    for Delivery of Common Share Certificates: 	 	 

 

Or

 

	DWAC
    Instructions:	 	 

 

	Broker
    No: 	 	 

 

	Account
    No:

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