Document:

docslib-287715v42022_regr

 

 

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”)
is made and entered into as of March __, 2022, by and among
Scientific Industries, Inc., a Delaware corporation (the
“Company”),
and each of the investors listed on Schedule A hereto
(collectively, the “Investors”
and each, an “Investor”).

 

WHEREAS, the Company and the Investors
are parties to a Securities Purchase Agreement, dated as of January
__, 2022 (the “Purchase
Agreement”), pursuant to which, among other things,
the Investors have requested, and the Company has agreed to
provide, registration rights with respect to (i) the shares of the
Common Stock (as defined below) purchased by the Investors from the
Company thereunder (the “Purchased
Shares”) and (ii) the shares of Common Stock issuable
upon the exercise of warrants delivered to the Investors thereunder
(the “Warrant
Shares” and, together with the Purchased Shares, the
“Shares”);
and

 

WHEREAS, in light of the foregoing, the
Parties desire to set forth certain registration rights applicable
to the Registrable Securities (as defined below).

 

NOW THEREFORE, in consideration of the
mutual covenants and agreements set forth herein and for good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by each Party hereto, the Parties hereby agree
as follows:

 

1. Definitions.
As used in this Agreement, the following terms have the meanings
indicated:

 

“Affiliate”
of any specified Person means any other person that, directly or
indirectly, is in control of, is controlled by, or is under common
control with, such specified Person. For purposes of this
definition, “control” of a Person means the power,
direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether through ownership
of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have
meanings correlative to the foregoing.

 

“Agreement”
has the meaning set forth in the preamble.

 

“Automatic Shelf
Registration Statement” means an “automatic shelf registration
statement” as defined under Rule 405.

 

“Blackout
Period” has the meaning set forth in Section 3(n).

 

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

 

“Business
Day” means any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of New
York are authorized or required to be closed.

 

 “Commission”
means the Securities and Exchange Commission or any other federal
agency then administering the Securities Act or the Exchange
Act.

 

“Common
Stock” means the common stock, par value $0.05 per
share, of the Company.

 

“Company”
has the meaning set forth in the preamble.

 

“Company
Securities” means any equity interest of any class or
series in the Company.

 

“Demand
Effectiveness Period” has the meaning set forth in
Section
2(a)(ii).

 

“Demand
Notice” has the meaning set forth in Section 2(a)(i).

 

“Demand Registration
Period” means the period commencing 180 days after the
expiration of the Mandatory Shelf Effectiveness Period and ending
on the fifth (5th) anniversary of the
date hereof.

 

 “Effective
Date” means the time and date that a Registration
Statement is first declared effective by the Commission or
otherwise becomes effective.

 

 “Effectiveness
Period” shall mean the Demand Effectiveness Period or
the Mandatory Shelf Effectiveness Period, as
applicable.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.

 

“FINRA”
means the Financial Industry Regulatory Authority,
Inc.

 

“Holder”
means any record holder of Registrable Securities that (i) is a
Party hereto or (ii) to whom registration rights conferred by this
Agreement have been transferred in compliance with Section 10(d) hereof;
provided,
however, that any
Person referenced in clause (ii) shall be a Holder only if
such Person agrees in writing to be bound by and subject to the
terms set forth in this Agreement.

 

“Holder Demand
Registration” has the meaning set forth in
Section
2(a)(i).

 

“Initiating
Holders” means the Holders delivering the Demand
Notice or the Underwritten Offering Notice, as
applicable.

 

“Investor”
has the meaning set forth in the preamble.

 

“Losses”
has the meaning set forth in Section 6(a).

 

“Mandatory Shelf
Effectiveness Period” has the meaning set forth in
Section
2(b)(i).

 

“Mandatory Shelf
Filing Date” has the meaning set forth in Section 2(b)(i).

 

“Mandatory Shelf
Registration Statement” has the meaning set forth in
Section
2(b)(i).

 

“Mandatory Shelf
Securities” means the Registrable Securities issued
pursuant to the Purchase Agreement.

 

“Parties”
means the Company, the Investors and any Person that may become a
party to this Agreement pursuant to the terms hereof.

 

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

 

“Piggyback
Notice” has the meaning set forth in Section 2(d)(i).

 

“Piggyback
Registration” has the meaning set forth in
Section
2(d)(i).

 

“Proceeding”
means any action, claim, suit, proceeding or investigation
(including a preliminary investigation or partial proceeding, such
as a deposition) pending or, to the knowledge of the Company, to be
threatened.

 

“Prospectus”
means the prospectus included in a Registration Statement
(including a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective
Registration Statement in reliance upon Rule 430A, Rule 430B or
Rule 430C promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and
supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

“Purchase
Agreement” has the meaning set forth in the
preamble.

 

“Records”
has the meaning set forth in Section 3(l).

 

“Registrable
Securities” means the Shares; provided, however, that Registrable
Securities shall not include: (i) any Shares the offering and
sale of which has been registered under the Securities Act, and
that have been disposed of pursuant to an effective Registration
Statement; (ii) any Shares transferred to a Person who is not
entitled to the registration and other rights hereunder;
(iii) any Shares that have been sold or transferred by the
Holder thereof pursuant to Rule 144 (or any similar provision then
in force under the Securities Act) and the transferee thereof does
not receive “restricted securities” as defined in Rule
144; and (iv) any Shares that cease to be outstanding (whether
as a result of repurchase and cancellation, conversion or
otherwise). The Company shall not be required to register the
offering and sale of the same Registrable Securities under more
than one Registration Statement at any one time.

 

“Registration
Expenses” means: (i) all registration and filing
fees (including fees and expenses (A) with respect to filings
required to be made with the Trading Market or FINRA and
(B) in compliance with applicable state securities or
“Blue Sky” laws); (ii) reasonable printing
expenses (including expenses of printing certificates for Company
Securities and of printing Prospectuses if the printing of
Prospectuses is reasonably requested by a Selling Stockholder
included in the Registration Statement); (iii)
reasonable messenger, telephone and delivery expenses; (iv)
reasonable transfer agent fees; (v) reasonable fees and
disbursements of counsel, auditors and accountants for the Company;
(vi) Securities Act liability insurance, if the Company so
desires such insurance; and (vii) reasonable fees and expenses
of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this
Agreement.

 

“Registration
Statement” means a registration statement of the
Company in the form required to register the resale of the
Registrable Securities under the Securities Act, and including any
Prospectus, amendments and supplements to each such registration
statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such
registration statement.

 

“Requested
Underwritten Offering” has the meaning set forth in
Section
2(c)(i).

 

“Rule
144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act.

 

“Rule
405” means Rule 405 promulgated by the Commission
pursuant to the Securities Act.

 

“Rule
415” means Rule 415 promulgated by the Commission
pursuant to the Securities Act.

 

“Rule
424” means Rule 424 promulgated by the Commission
pursuant to the Securities Act.

 

“Securities
Act” means the Securities Act of 1933, as
amended.

 

“Selling
Expenses” means (i) all discounts, commissions or fees
of underwriters, selling brokers, dealer managers or similar
industry professionals and stock transfer taxes applicable to the
sale of Registrable Securities, (ii) and fees and disbursements of
counsel for any Holder or Selling Stockholder and (iii) all
expenses relating to marketing the sale of the Registrable
Securities, including expenses related to conducting a “road
show.”

 

“Selling
Stockholder” means a Party (other than the Company)
included as a selling stockholder selling Registrable Securities
pursuant to a Registration Statement.

 

“Selling Stockholder
Indemnified Persons” has the meaning set forth in
Section
6(a).

 

 “Shares”
has the meaning set forth in the preamble.

 

“Shelf Registration
Statement” means a Registration Statement of the
Company filed with the Commission on Form S-3 (or any equivalent or
successor form under the Securities Act) for an offering to be made
on a continuous or delayed basis pursuant to Rule 415 (or any
similar rule that may be adopted by the Commission) covering
Registrable Securities, as applicable.

 

“Suspension
Period” has the meaning set forth in Section 3(o).

 

“Trading
Market” means the principal national securities
exchange on which Registrable Securities are listed.

 

“Underwritten
Offering” means an underwritten offering of Common
Stock in which shares of Common Stock are sold to one or more
underwriters for reoffering to the public (whether a Requested
Underwritten Offering or in connection with a public offering of
Common Stock by the Company, a public offering of Common Stock by
stockholders, or both, but excluding an offering relating solely to
an employee benefit plan, an offering relating to a transaction on
Form S-4 or S-8 (or any similar forms adopted after the date hereof
as replacements therefor) or an offering on any registration
statement form that does not permit secondary sales).

 

“Underwritten
Offering Notice” has the meaning set forth in
Section
2(c)(i).

 

“WKSI”
means a “well known seasoned
issuer” as defined under Rule 405.

 

Unless
the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or
neuter forms; (b) references to Sections refer to Sections of
this Agreement; (c) the terms “include,”
“includes,” “including” and words of like
import shall be deemed to be followed by the words “without
limitation”; (d) the terms “hereof,”
“herein” or “hereunder” refer to this
Agreement as a whole and not to any particular provision of this
Agreement; (e) unless the context otherwise requires, the term
“or” is not exclusive and shall have the inclusive
meaning of “and/or”; (f) defined terms herein will
apply equally to both the singular and plural forms and derivative
forms of defined terms will have correlative meanings;
(g) references to any law or statute shall include all rules
and regulations promulgated thereunder, and references to any law,
statute or rule shall be construed as including any legal and
statutory provisions consolidating, amending, succeeding or
replacing the applicable law, statute or rule; (h) references
to any Person include such Person’s successors and permitted
assigns; and (i) references to “days” are to
calendar days unless otherwise indicated.

 

2. Registration.

 

(a) Demand
Registration.

 

(i) During the Demand
Registration Period, the Holders of at least 200,000 Registrable
Securities (adjusted for any stock split, stock dividend, reverse
stock split or similar change in the Common Stock after the date of
this Agreement) shall have the option and right, exercisable by
delivering a written notice to the Company (a “Holder Demand
Notice”), to require the Company to, pursuant to the
terms of and subject to the limitations contained in this
Agreement, prepare and file with the Commission a Registration
Statement on Form S-1 (or any equivalent or successor form under
the Securities Act) (or to the extent the Company is eligible to
use Form S-3 or any equivalent or successor form or forms, on Form
S-3 or any comparable or successor form) registering the offering
and sale of at least 200,000 Registrable Securities (adjusted for
any stock split, stock dividend, reverse stock split or similar
change in the Common Stock after the date of this Agreement) on the
terms and conditions specified in the Holder Demand Notice, which
may include sales on a delayed or continuous basis pursuant to Rule
415 pursuant to a Shelf Registration Statement (a
“Holder Demand
Registration”). The Holder Demand Notice must set
forth the number and type of Registrable Securities that the
Initiating Holders anticipate will be included in such Holder
Demand Registration and the intended methods of disposition
thereof.

 

(ii) Within
five (5) Business Days of the receipt of the Demand Notice, the
Company shall give written notice of such Demand Notice to all
Holders (other than the Initiating Holders) and, within thirty (30)
days thereof, shall, subject to the limitations of this
Section 2(a), file
a Registration Statement in accordance with the terms and
conditions of the Demand Notice, which Registration Statement shall
cover, in addition to the Registrable Securities set forth in the
Demand Notice, all of the Registrable Securities that such Holders
shall in writing request to be included in the Demand Registration
(provided such request is given to the Company within ten (10) days
of receipt of notice of the Demand Notice given by the Company
pursuant to this Section
2(a)(ii) and includes such information regarding the
requesting Holder as is required to be disclosed in connection with
such Demand Registration pursuant to Regulation S-K promulgated
under the Securities Act). The Company shall use commercially
reasonable efforts to cause such Registration Statement to become
and remain effective under the Securities Act until the earlier of
(A) one hundred eighty (180) days (or one (1) year if a Shelf
Registration Statement is requested) after the Effective Date or
(B) the date on which all Registrable Securities covered by
such Registration Statement have been sold or cease to be
Registrable Securities (the “Demand
Effectiveness Period”); provided, however, that such period shall
be extended for a period of time equal to the period the Selling
Stockholders refrain from selling any securities included in such
Registration Statement at the request of an underwriter of the
Company or the Company pursuant to this Agreement.

 

(iii) Subject
to the other limitations contained in this Agreement, the Company
is not obligated hereunder to effect: (A) more than two (2)
Demand Registrations during the Demand Registration Period, (B)
more than one (1) Demand Registration in a calendar year, (C) a
Demand Registration within one hundred eighty (180)) days of the
closing of any Underwritten Offering, or (D) a subsequent Demand
Registration pursuant to a Demand Notice if a Registration
Statement covering all of the Registrable Securities covered by
such Demand Notice shall already have become effective under the
Securities Act and remains effective under the Securities Act and
is sufficient to permit offers and sales of such Registrable
Securities on the terms and conditions specified in such Demand
Notice in accordance with the intended timing and method or methods
of distribution thereof specified in such Demand
Notice.

 

(iv) Subject
to Section 2(a)(i),
a Selling Stockholder may withdraw all or any portion of its
Registrable Securities included in a Demand Registration from such
Demand Registration at any time prior to the effectiveness of the
applicable Registration Statement. Upon delivery of a notice by a
Selling Stockholder to the effect that the Selling Stockholder is
withdrawing Registrable Securities such that the remaining
Registrable Securities are below the Minimum Amount, the Company
shall cease all efforts to secure effectiveness of the applicable
Registration Statement.

 

(v) Subject to the
limitations contained in this Agreement, the Company shall effect
any Demand Registration on such appropriate registration form of
the Commission (x) as shall be selected by the Company and
(y) as shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of
disposition specified in the Initiating Holders’ request for
such registration; provided, however, that if the Company
becomes, and is at the time of its receipt of a Demand Notice, a
WKSI, the Demand Registration for any offering and selling of
Registrable Securities shall be effected pursuant to an Automatic
Shelf Registration Statement, which shall be on Form S-3 or any
equivalent or successor form under the Securities Act if available
to the Company. If at any time a Registration Statement is
effective and a Selling Stockholder provides written notice to the
Company that it intends to effect an offering of all or part of the
Registrable Securities included on such Registration Statement, the
Company will amend or supplement such Registration Statement as may
be necessary in order to enable such offering to take
place.

 

(vi) Without
limiting Section 3,
in connection with any Demand Registration pursuant to and in
accordance with this Section 2(a), the Company shall
(A) promptly prepare and file or cause to be prepared and
filed (1) such additional forms, amendments, supplements,
prospectuses, certificates, letters, opinions and other documents,
as may be necessary or advisable to register or qualify the
securities subject to such Demand Registration, including under the
securities laws of such states as the Selling Stockholders shall
reasonably request; provided, however, that no such
registration or qualification shall be required in any jurisdiction
where, as a result thereof, the Company would become subject to
general service of process or to taxation or would be required to
qualify to do business or register as a broker or dealer, and
(2) such forms, amendments, supplements, prospectuses,
certificates, letters, opinions and other documents as may be
necessary to apply for listing or to list the Registrable
Securities subject to such Demand Registration on the Trading
Market and (B) do any and all other acts and things that may
be reasonably necessary or appropriate or reasonably requested by
the Selling Stockholders to enable the Selling Stockholders to
consummate a public sale of such Registrable Securities in
accordance with the intended timing and method or methods of
distribution thereof.

 

(b) Mandatory Shelf
Registration.

 

(i) The Company shall
use its reasonable efforts to prepare and file with the Commission,
as soon as practicable following the date hereof, and no later than
ninety (90) days after the date hereof (such filing date, the
“Mandatory Shelf
Filing Date”), a Registration Statement providing for
registration and resale, on a continuous or delayed basis pursuant
to Rule 415, of all of the Mandatory Shelf Securities (the
“Mandatory Shelf
Registration Statement”). The Mandatory Shelf
Registration Statement shall be on Form S-1 (or any equivalent or
successor form) under the Securities Act (or to the extent the
Company is eligible to use Form S-3 or any equivalent or successor
form or forms, on Form S-3 or any comparable or successor form).
The Company shall use its reasonable efforts to cause the Mandatory
Shelf Registration Statement to be declared effective under the
Securities Act by the Commission on or before the date that is
ninety (90) days the Mandatory Shelf Filing Date of the filing (or,
in the event of a “full review” by the Commission, the
date that is one hundred twenty (120) days after the date of the
filing).. The Company shall use its reasonable efforts to keep the
Mandatory Shelf Registration Statement (or any successor Shelf
Registration Statement) continuously effective under the Securities
Act until the earlier of (A) the date when all of the Mandatory
Shelf Securities covered by such Mandatory Shelf Registration
Statement have been sold or cease to be Registrable Securities and
(B) one (1) year after the Effective Date (such period, the
“Mandatory Shelf
Effectiveness Period”).

 

(ii) Without
limiting Section 3,
the Company shall, as promptly as practicable during the Mandatory
Shelf Effectiveness Period:

 

(1) if required by
applicable law, file with the Commission a post-effective amendment
to the Mandatory Shelf Registration Statement or prepare and, if
required by applicable law, file a supplement to the related
Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required
document necessary to permit the Holders of Mandatory Shelf
Securities to deliver such Prospectus to purchasers of Mandatory
Shelf Securities in accordance with applicable law and, if the
Company shall file a post-effective amendment to the Mandatory
Shelf Registration Statement, use its reasonable efforts to cause
such post-effective amendment to be declared effective under the
Securities Act as promptly as is practicable;

 

(2) provide the Holders of Mandatory Shelf Securities
copies of any documents to filed pursuant to Section
2(b)(ii)(1) a reasonable
period of time prior to such filing, and use commercially reasonable efforts to address in
each such document when so filed with the Commission such comments
as such Holder of Mandatory Shelf Securities reasonably shall
propose prior to the filing thereof; and

 

(3) notify the Holders
of Mandatory Shelf Securities as promptly as practicable after the
effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section
2(b)(ii)(1).

 

(c) Requested Underwritten
Offering.

 

(i) Any Holder then
able to effectuate a Demand Registration pursuant to the terms of
Section 2(a) shall
have the option and right, exercisable by delivering written notice
to the Company (an “Underwritten
Offering Notice”), to require the Company, pursuant to
the terms of and subject to the limitations of this Agreement, to
effectuate a distribution of Registrable Securities by means of an
Underwritten Offering pursuant to an effective Registration
Statement (or pursuant to an effective Automatic Shelf Registration
Statement) (a “Requested
Underwritten Offering”); provided, however, that the Registrable
Securities requested to be included in such Requested Underwritten
Offering have an aggregate value at least equal to
$5,000,000.

 

(ii) The
managing underwriter or managing underwriters of a Requested
Underwritten Offering shall be designated by the Initiating Holders
(provided,
however, that such
designated managing underwriter or managing underwriters shall be a
nationally recognized investment banking firm reasonably acceptable
to the Company). Notwithstanding the foregoing, the Company is not
obligated to effect a Requested Underwritten Offering within 90
days of the closing of an Underwritten Offering.

 

(iii) If
the managing underwriter or underwriters of a proposed Requested
Underwritten Offering of the Registrable Securities included in a
Demand Registration advise the Company that, in its or their
opinion, the number of securities requested to be included in such
Requested Underwritten Offering exceeds the number which can be
sold in such Requested Underwritten Offering without being likely
to have a significant adverse effect on the price, timing or
distribution of the securities offered or the market for the
securities offered, the securities to be included in such Requested
Underwritten Offering shall be allocated, (A) first,
pro rata among the Parties
(other than the Company) that (prior to any cutback) would
participate in such Underwritten Offering based on the relative
number of Registrable Securities that would be held by each such
Party following any related resale distribution, if any;
provided,
however, that any
securities thereby allocated to a Party that exceed such
Party’s request shall be reallocated among the remaining
Parties in like manner; (B) second, and only if all the
securities referred to in clause (A) have been included in
such registration, to the Company up to the number of securities
that the Company proposes to include in such registration that, in
the opinion of the managing underwriter or underwriters can be sold
without having such adverse effect and (C) third, and only if
all of the securities referred to in clause (B) have been
included in such registration, up to the number of securities that
in the opinion of the managing underwriter or underwriters can be
sold without having such adverse effect.

 

(d) Piggyback
Registration.

 

(i) If the Company
shall at any time propose to conduct a registered offering of
Common Stock (whether a registered offering of Common Stock by the
Company or a registered offering of Common Stock by the
Company’s stockholders (including a Requested Underwritten
Offering), or both, but excluding an offering pursuant to
Section 2(b), an
offering relating solely to an employee benefit plan, an offering
relating to a transaction on Form S-4 or S-8 (or any similar forms
adopted after the date hereof as replacements therefor) or an
offering on any registration statement form that does not permit
secondary sales), the Company shall promptly notify all Holders of
such proposal reasonably in advance of (and in any event at least
five (5) Business Days before) the commencement of such offering,
which notice will set forth the principal terms and conditions of
the issuance, including the proposed offering price (or range of
offering prices), the anticipated filing date of the registration
statement (if not yet filed) and the number of shares of Common
Stock that are proposed to be registered (the “Piggyback
Notice”); provided, however, notwithstanding any
other provision of this Agreement, if the managing underwriter or
managing underwriters of an Underwritten Offering (other than a
Requested Underwritten Offering) advise the Company that in their
reasonable opinion that the inclusion of a Holder’s
Registrable Securities requested for inclusion in the subject
Underwritten Offering (and any related registration, if applicable)
would likely have an adverse effect on the price, timing, marketing
or distribution of Common Stock proposed to be included in such
Underwritten Offering, the Company shall have no obligation to
provide a Piggyback Notice to such Holder and such Holder shall
have no right to include any Registrable Securities in such
Underwritten Offering (and any related registration, if
applicable). The Piggyback Notice shall offer the Holders the
opportunity to include in such offering (and any related
registration, if applicable) the number of Registrable Securities
as they may request (a “Piggyback
Registration”); provided, however, that in the event that
the Company proposes to effectuate the subject offering pursuant to
an effective Shelf Registration Statement of the Company other than
an Automatic Shelf Registration Statement, only Registrable
Securities of Holders which are subject to such effective Shelf
Registration Statement may be included in such Piggyback
Registration. The Company shall use commercially reasonable efforts
to include in each such Piggyback Registration such Registrable
Securities for which the Company has received written requests for
inclusion within three (3) Business Days (or within one (1)
Business Day in the case of an “overnight” offering or
“bought deal”) after sending the Piggyback Notice,
provided that such
written request sets forth such information regarding the Selling
Stockholder as is required to be disclosed in connection with the
offering (and any related registration, if applicable) pursuant to
Regulation S-K promulgated under the Securities Act.

 

(ii) If
a Holder decides not to include for registration in an offering
contemplated by this Section 2(c) (and any related
registration, if applicable) such Holder’s Registrable
Securities following the receipt of a Piggyback Notice, such Holder
shall nevertheless continue to have the right to include any of
such Holder’s Registrable Securities in any subsequent
offering contemplated by this Section 2(c) (and any related
registration, if applicable) in accordance with this Section 2(c).

 

(iii) If
the managing underwriter or managing underwriters of an
Underwritten Offering advise the Company and the Holders that in
their reasonable opinion that the inclusion of all of the
Registrable Securities requested for inclusion in an Underwritten
Offering (other than a Requested Underwritten Offering) would
likely have an adverse effect on the price, timing, marketing or
distribution of Common Stock proposed to be included in such
offering, the Company shall include in such Underwritten Offering
only that number of shares of Common Stock proposed to be included
in such Underwritten Offering that, in the reasonable opinion of
the managing underwriter or managing underwriters, will not have
such effect, with such number to be allocated as follows:
(A) first, to the Company, (B) second, if there remains
availability for additional shares of Common Stock to be included
in such Underwritten Offering following the allocation to the
Company under (A), pro rata
among the Parties (other than the Company) that (prior to any
cutback) would participate in such Underwritten Offering based on
the relative number of Registrable Securities that would be held by
each such Party following any related resale distribution, if any,
and (C) if there remains availability for additional shares of
Common Stock to be included in such registration following the
allocation to the Parties under (B), third pro rata among all other Persons
holding Common Stock who may be seeking to register such Common
Stock pursuant to incidental or piggyback registration rights based
on the number of Common Stock such Person is entitled to include in
such registration.

 

(iv) Any
Holder or Limited Partner shall have the right to withdraw all or
part of its request for inclusion of its Registrable Securities in
a Piggyback Registration by giving written notice to the Company of
its request to withdraw; provided, however, that (i) such
request must be made in writing prior to the effectiveness of such
Registration Statement and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, a Holder or Limited
Partner shall no longer have any right to include Registrable
Securities in the Piggyback Registration as to which such
withdrawal was made.

 

(v) The Company shall
have the right to terminate or suspend any registered offering as
to which Holders have a right to a Piggyback Registration pursuant
to this Section
2(c) (other than any registered offering initiated by a
Holder pursuant to Section
2(a) or 2(b)) at any time in its sole discretion, and
without any obligation to any Party (whether or not such Party has
elected to exercise its right to a Piggyback Registration pursuant
to this Section
2(c)).

 

3. Registration
and Underwritten Offering Procedures.

 

The
procedures to be followed by the Company and each Selling
Stockholder electing to sell Registrable Securities in a
Registration Statement pursuant to this Agreement, and the
respective rights and obligations of the Company and such Selling
Stockholders with respect to the preparation, filing and
effectiveness of such Registration Statement and the effectuation
of any Underwritten Offering, are as follows:

 

(a) in connection with
a Demand Registration, the Company will, at least three (3)
Business Days prior to the anticipated filing of the Registration
Statement and any related Prospectus or any amendment or supplement
thereto (other than, after effectiveness of the Registration
Statement, any filing made under the Exchange Act that is
incorporated by reference into the Registration Statement),
(i) furnish to such Selling Stockholders copies of all such
documents prior to filing and (ii) use commercially reasonable
efforts to address in each such document when so filed with the
Commission such comments as such Selling Stockholders reasonably
shall propose prior to the filing thereof.

 

(b) in connection with
a Piggyback Registration or a Requested Underwritten Offering, the
Company will, at least three (3) Business Days prior to the
anticipated filing of any initial Registration Statement that
identifies the Selling Stockholders and any related Prospectus or
any amendment or supplement thereto (other than amendments and
supplements that do not materially alter the previous disclosure or
do nothing more than name the Selling Stockholders and provide
information with respect thereto), as applicable, (i) furnish
to such Selling Stockholders copies of any such Registration
Statement or related Prospectus or amendment or supplement thereto
that identify the Selling Stockholder and any related Prospectus or
any amendment or supplement thereto (other than amendments and
supplements that do not materially alter the previous disclosure or
do nothing more than name Selling Stockholders and provide
information with respect thereto) prior to filing and (ii) use
commercially reasonable efforts to address in each such document
when so filed with the Commission such comments as such Selling
Stockholders reasonably shall propose prior to the filing
thereof.

 

(c) The Company will
use commercially reasonable efforts to as promptly as reasonably
practicable (i) prepare and file with the Commission such
amendments, including post-effective amendments, and supplements to
each Registration Statement and the Prospectus used in connection
therewith as may be necessary under applicable law to keep such
Registration Statement continuously effective with respect to the
disposition of all Registrable Securities covered thereby during
the Effectiveness Period; (ii) cause the related Prospectus to
be amended or supplemented by any required prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424;
and (iii) respond to any comments received from the Commission
with respect to each Registration Statement or any amendment
thereto and, as promptly as reasonably practicable provide such
Selling Stockholders true and complete copies of all correspondence
from and to the Commission relating to such Registration Statement
that pertains to such Selling Stockholders as selling stockholders
but not any comments that would result in the disclosure to such
Selling Stockholders of material and non-public information
concerning the Company.

 

(d) The Company will
comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the
Registration Statements and the disposition of all Registrable
Securities covered by each Registration Statement.

 

(e) The Company will
notify such Selling Stockholders who are included in a Registration
Statement as promptly as reasonably practicable: (i)(A) when a
Prospectus or any prospectus supplement or post-effective amendment
to a Registration Statement in which such Selling Stockholder is
included has been filed; (B) when the Commission notifies the
Company whether there will be a “review” of the
applicable Registration Statement and whenever the Commission
comments in writing on such Registration Statement (in which case
the Company shall provide true and complete copies thereof and all
written responses thereto to each of such Selling Stockholders that
pertain to such Selling Stockholders as selling stockholders); and
(C) with respect to each applicable Registration Statement or
any post-effective amendment thereto, when the same has been
declared effective; (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or
supplements to such Registration Statement or Prospectus or for
additional information that pertains to such Selling Stockholders
as sellers of Registrable Securities; (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of
such Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding
for such purpose; and (v) of the occurrence of any event or
passage of time that makes any statement made in such Registration
Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect
or that requires any revisions to such Registration Statement,
Prospectus or other documents so that, in the case of such
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided, however, that no notice by the
Company shall be required pursuant to this clause (v) in the
event that the Company either promptly files a prospectus
supplement to update the Prospectus or a Form 8-K or other
appropriate Exchange Act report that is incorporated by reference
into the Registration Statement, which in either case, contains the
requisite information that results in such Registration Statement
no longer containing any untrue statement of material fact or
omitting to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading).

 

(f) The Company will
use commercially reasonable efforts to avoid the issuance of or, if
issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction,
as promptly as reasonably practicable, or if any such order or
suspension is made effective during any Blackout Period or
Suspension Period, as promptly as reasonably practicable after such
Blackout Period or Suspension Period is over.

 

(g) During the
Effectiveness Period, the Company will furnish to each Selling
Stockholder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits
to the extent requested by such Selling Stockholder (including
those incorporated by reference) promptly after the filing of such
documents with the Commission; provided, however, that the Company will
not have any obligation to provide any document pursuant to this
clause that is available on the Commission’s EDGAR
system.

 

(h) The Company will
promptly deliver to each Selling Stockholder, without charge, as
many copies of each Prospectus or Prospectuses (including each form
of prospectus) authorized by the Company for use and each amendment
or supplement thereto as such Selling Stockholder may reasonably
request during the Effectiveness Period. Subject to the terms of
this Agreement, including Section 3(o), the Company
consents to the use of such Prospectus and each amendment or
supplement thereto by each of the Selling Stockholders in
connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement
thereto.

 

(i) The Company will
cooperate with such Selling Stockholders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free of all
restrictive legends indicating that the Registrable Securities are
unregistered or unqualified for resale under the Securities Act,
Exchange Act or other applicable securities laws, and to enable
such Registrable Securities to be in such denominations and
registered in such names as any such Selling Stockholder may
request in writing. In connection therewith, if required by the
Company’s transfer agent, the Company will promptly, after
the Effective Date of the Registration Statement, cause an opinion
of counsel as to the effectiveness of the Registration Statement to
be delivered to and maintained with its transfer agent, together
with any other authorizations, certificates and directions required
by the transfer agent which authorize and direct the transfer agent
to issue such Registrable Securities without any such legend upon
sale by the Selling Stockholder of such Registrable Securities
under the Registration Statement.

 

(j) Upon the occurrence
of any event contemplated by Section 3(e)(v), as promptly as
reasonably practicable, the Company will prepare a supplement or
amendment, including a post-effective amendment, if required by
applicable law, to the affected Registration Statement or a
supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, no
Registration Statement nor any Prospectus will contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.

 

(k) In connection with
any Requested Underwritten Offering, the Company will use
commercially reasonable efforts to cause appropriate officers and
employees to be available, on a customary basis and upon reasonable
notice, to meet with prospective investors in presentations,
meetings and “road shows.”

 

(l) With respect to
Underwritten Offerings, (i) the right of any Selling
Stockholder to include such Selling Stockholder’s Registrable
Securities in an Underwritten Offering shall be conditioned upon
such Selling Stockholder’s participation in such underwriting
and the inclusion of such Selling Stockholder’s Registrable
Securities in the underwriting to the extent provided herein,
(ii) each Selling Stockholder participating in such
Underwritten Offering agrees to enter into an underwriting
agreement in customary form and sell such Selling
Stockholder’s Registrable Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled to
select the managing underwriter or managing underwriters hereunder
and (iii) each Selling Stockholder participating in such
Underwritten Offering agrees to complete and execute all
questionnaires, powers of attorney, indemnities, custody
agreements, lock-ups, “hold back” agreements, and other
documents reasonably required under the terms of such underwriting
arrangements. The Company hereby agrees with each Selling
Stockholder that, in connection with any Underwritten Offering in
accordance with the terms hereof, it will negotiate in good faith
and execute all customary indemnities, underwriting agreements and
other documents reasonably required under the terms of such
underwriting arrangements, including using all commercially
reasonable efforts to procure customary legal opinions and auditor
“comfort” letters. In the event such Selling
Stockholders seek to complete an Underwritten Offering, for a
reasonable period prior to the filing of any Registration Statement
and throughout the Effectiveness Period, the Company will make
available upon reasonable notice at the Company’s principal
place of business or such other reasonable place for inspection
during normal business hours by the managing underwriter or
managing underwriters selected in accordance with this Section 3(l) such financial and
other information and books and records of the Company
(collectively, the “Records”),
and cause the officers, employees, counsel and independent
certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary (and in the case of
counsel, not violate an attorney-client privilege in such
counsel’s reasonable belief) to conduct a reasonable
investigation within the meaning of Section 11 of the Securities
Act; provided,
however, that,
unless the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the Registration Statement or
the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, the Company
shall not be required to provide any Records under this
Section 3(l) if (i)
the Company believes, after consultation with counsel for the
Company, that to do so would cause the Company to forfeit an
attorney-client privilege that was applicable to such Records, or
(ii) if either (A) the Company has requested and been granted from
the Commission confidential treatment of such Records contained in
any filing with the Commission or documents provided supplementally
or otherwise or (B) the Company reasonably determines in good faith
that such Records are confidential and so notifies the Person so
inspecting in writing, unless prior to furnishing any such Records
with respect to clause (ii) such Person requesting such Records
agrees to enter into a confidentiality agreement in customary form
and subject to customary exceptions; and provided, further, that each Party agrees
that it shall, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake
appropriate action and to prevent disclosure of the Records deemed
confidential.

 

(m) Each Selling
Stockholder agrees to furnish to the Company any other information
regarding the Selling Stockholder and the distribution of such
securities as the Company reasonably determines is required to be
included in any Registration Statement or any prospectus or
prospectus supplement relating to an Underwritten
Offering.

 

(n) Notwithstanding any
other provision of this Agreement, the Company shall not be
required to file a Registration Statement (or any amendment
thereto) or effect a Requested Underwritten Offering (or, if the
Company has filed a Shelf Registration Statement and has included
Registrable Securities therein, the Company shall be entitled to
suspend the offer and sale of Registrable Securities pursuant to
such Registration Statement) for a period of up to 120 days, if
(A) the Board determines that a postponement is in the best
interest of the Company and its stockholders generally due to a
pending transaction involving the Company (including a pending
securities offering by the Company, or any proposed financing,
acquisition, merger, tender offer, business combination, corporate
reorganization, consolidation or other significant transaction
involving the Company), (B) the Board determines such
registration would render the Company unable to comply with
applicable securities laws, (C) the Board determines such
registration would require disclosure of material information that
the Company has a bona fide business purpose for preserving as
confidential, or (D) audited financial statements as of a date
other than the fiscal year end of the Company would be required to
be prepared (any such period, a “Blackout
Period”); provided, however, that in no event shall
any Blackout Period together with any Suspension Period
collectively exceed an aggregate of 120 days in any 12 month
period. In addition, if the Company receives a Demand Notice and
the Company is then in the process of preparing to engage in a
public offering, the Company shall inform the Initiating Holders of
the Company’s intent to engage in a public offering and may
require the Initiating Holders to withdraw the Demand Notice for a
period of up to one hundred twenty (120) days so that the Company
may complete its public offering. In the event that the Company
ceases to pursue such public offering, it shall promptly inform the
Initiating Holders, and the Initiating Holders shall be permitted
to submit a new Demand Notice.

 

(o) Discontinued Disposition. Each
Selling Stockholder agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in
clauses (ii) through (v) of Section 3(e), such Selling
Stockholder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such
Selling Stockholder’s receipt of the copies of the
supplemental Prospectus or amended Registration Statement as
contemplated by Section
3(j) or until it is advised in writing by the Company that
the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in
such Prospectus or Registration Statement (a “Suspension
Period”). During any Suspension Period, if so directed
by the Company, such Selling Stockholder must deliver to the
Company all copies in its possession, other than permanent file
copies then in the Selling Stockholder’s possession, of the
Prospectus covering such Registrable Shares current at the time of
receipt of such notice, and shall keep the information contained in
such, as well as any knowledge related to the reason for the
Suspension Period, confidential. The Company may provide
appropriate stop orders to enforce the provisions of this
Section
3(o).

 

(p) Except as otherwise
specifically provided in this Agreement, in all offerings of the
Company’s securities the Company shall have sole discretion
to select the underwriters.

 

4. No
Inconsistent Agreements. The Company shall not hereafter
enter into, and is not currently a party to, any agreement with
respect to its securities that is inconsistent in any material
respect with the rights granted to the Parties by this
Agreement.

 

5. Registration
Expenses. All Registration Expenses incident to the
Company’s performance of or compliance with its obligations
under this Agreement shall be borne by the Company, whether or not
any Registrable Securities are sold pursuant to a Registration
Statement. In addition, the Company shall be responsible for all of
its expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including expenses
payable to third parties and including all salaries and expenses of
its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred
in connection with the listing of the Registrable Securities on the
Trading Market. The Company shall not be required to pay any
Selling Expenses, fees of any counsel retained by any underwriter
with respect to any Requested Underwritten Offering, or any other
expenses of the Parties (other than the Company) not specifically
required to be paid pursuant to this Section 5.

 

6. Indemnification.

 

(a) The Company shall
indemnify and hold harmless each Selling Stockholder whose
Registrable Securities are covered by a Registration Statement,
each Person who controls such Selling Stockholder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), and each of their respective officers and directors
and any agent thereof (collectively, “Selling Stockholder
Indemnified Persons”), to the fullest extent permitted
by applicable law, from and against any and all losses, claims,
damages, liabilities, joint or several, costs (including reasonable
costs of preparation and reasonable attorneys’ fees) and
expenses, judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions,
suits or proceedings, whether civil, criminal, administrative or
investigative, in which any Selling Stockholder Indemnified Person
may be involved, or is threatened to be involved, as a party or
otherwise, under the Securities Act or otherwise (collectively,
“Losses”),
as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in any Registration
Statement under which any Registrable Securities of such Selling
Stockholder were registered, in any related preliminary prospectus
(if the Company authorized the use of such preliminary prospectus
prior to the Effective Date), or in any related summary or final
prospectus or free writing prospectus (if such free writing
prospectus was authorized for use by the Company) or in any
amendment or supplement thereto (if used during the period the
Company is required to keep the Registration Statement current), or
arising out of, based upon or resulting from the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in
the light of the circumstances in which they were made, not
misleading; provided, however, that the Company shall
not be liable to any Selling Stockholder Indemnified Person to the
extent that any such claim arises out of, is based upon or results
from: (i) an untrue or alleged untrue statement or omission or
alleged omission made in such Registration Statement, such
preliminary, summary or final prospectus or free writing prospectus
or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or on behalf
of such Selling Stockholder Indemnified Person or any underwriter
specifically for use in the preparation thereof; or (ii) any sales
by a Selling Stockholder after the delivery by the Company to such
Selling Stockholder of written notice of a Suspension Period and
before the written confirmation by the Company that sales may be
resumed. The Company shall notify the Selling Stockholders promptly
of the institution, threat or assertion of any Proceeding of which
the Company is aware in connection with the transactions
contemplated by this Agreement. This indemnity shall be in addition
to any liability the Company may otherwise have.

 

(b) In connection with
any Registration Statement in which a Selling Stockholder
participates, all such participating Selling Stockholders shall,
severally and not jointly, indemnify and hold harmless the Company,
each Person who controls the Company (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act), and
each of their respective officers, directors and any agent thereof
to the fullest extent permitted by applicable law, from and against
any and all Losses as incurred, arising out of or relating to (i)
any untrue or alleged untrue statement of a material fact contained
in any such Registration Statement, in any preliminary prospectus
(if used prior to the Effective Date of such Registration
Statement), or in any summary or final prospectus or free writing
prospectus or in any amendment or supplement thereto (if used
during the period the Company is required to keep the Registration
Statement current), or arising out of, based upon or resulting from
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances in which they were
made, not misleading, but only to the extent that the same are made
in reliance and in conformity with information relating to the
Selling Stockholder furnished in writing to the Company by or on
behalf of such Selling Stockholder for use therein and (ii) any
sales by such Selling Stockholders after the delivery by the
Company to such Selling Stockholders of written notice of a
Suspension Period and before the written confirmation by the
Company that sales may be resumed. This indemnity shall be in
addition to any liability such Selling Stockholder may otherwise
have. In no event shall the liability of any Selling Stockholder
hereunder be greater in amount than the dollar amount of the
proceeds received by such Selling Stockholder under the sale of the
Registrable Securities giving rise to such indemnification
obligation, except in the case of fraud or willful misconduct by
such Selling Stockholder.

 

(c) Any Person entitled
to indemnification hereunder shall (i) give prompt written
notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) unless in such indemnified
party’s reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to
such claim or there may be reasonable defenses available to the
indemnified party that are different from or additional to those
available to the indemnifying party, permit such indemnifying party
to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than
one counsel (in addition to any local counsel) for all parties
indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party there
may be one or more legal or equitable defenses available to such
indemnified party that are in addition to or may conflict with
those available to another indemnified party with respect to such
claim. The delay or failure to give prompt written notice shall not
release the indemnifying party from its obligations hereunder
except to the extent that the indemnifying party has been
prejudiced by such delay or failure. An indemnifying party shall
not be liable for any settlement effected by the indemnified party
without the written consent of such indemnifying
party.

 

(d) If the
indemnification provided for in this Section 6 is held by a court of
competent jurisdiction to be unavailable to an indemnified party
with respect to any Losses referred to herein, the indemnifying
party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of
such Losses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and of
the indemnified party, on the other, in connection with the untrue
or alleged untrue statement of a material fact or the omission to
state a material fact that resulted in such Losses, as well as any
other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission;
provided,
however, that in no
event shall any contribution by a Selling Stockholder hereunder
exceed the net proceeds from the offering received by such Selling
Stockholder.

 

7. Facilitation
of Sales Pursuant to Rule 144. For so
long as the Company is subject to the reporting requirements of
Sections 13 or 15(d) of the Exchange Act, the Company shall (i)
timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including the reports under
Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144), and (ii) take such further action
as any Holder may reasonably request, all to the extent required
from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the
limitations of the exemption provided by Rule 144. Upon the
request of any Holder in connection with that Holder’s sale
pursuant to Rule 144, the Company shall deliver to such Holder a
written statement as to whether it has complied with such
requirements.

 

8. Duration
of Agreement. This
Agreement shall terminate and be of no further force or effect when
there shall no longer be any Registrable Securities outstanding;
provided,
however, that the
Company’s and any Selling Stockholder’s obligations
under Section 6
shall survive such termination.

 

9. Uplisting.
The Company agrees to take such steps as are commercially
reasonable in order for the Company to meet the listing
requirements of the Nasdaq Capital Market and, if such listing
requirements are met, to list the Common Stock on the Nasdaq
Capital Market.

 

10. Miscellaneous.

 

(a) Remedies. In the event of a
breach by the Company of any of its obligations under this
Agreement, each Holder, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary
damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of
this Agreement and further agrees that, in the event of any action
for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.

 

(b) Amendments and Waivers. No
provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of an amendment, by the
Company and Investors holding a majority in interest of the
Registrable Securities then outstanding or, in the case of a
waiver, by the party against whom enforcement of any such waived
provision is sought, provided that if any amendment, modification
or waiver disproportionately and adversely impacts an Investor (or
group of Investors), the consent of such disproportionately
impacted Investor (or group of Investors) shall also be required.
The Company shall provide prior notice to all Parties of any
proposed waiver or amendment. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of
any Party to exercise any right hereunder in any manner impair the
exercise of any such right. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions of this Agreement with
respect to a matter that relates exclusively to the rights of
Selling Stockholders whose Registrable Securities are being sold
pursuant to a Registration Statement and that does not materially
adversely affect the rights of other Parties may be given by
Selling Stockholders selling of a majority of the Registrable
Securities being sold pursuant to such Registration Statement. Any
amendment effected in accordance with accordance with this Section
10(b) shall be binding upon each Investor and holder of Registrable
Securities and the Company.

 

(c) 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 (i) the date of transmission,
if such notice or communication is delivered via facsimile or
electronic mail as specified in this Section 10(c) prior to 5:00
p.m. Eastern Time on a Business Day, (ii) the Business Day
after the date of transmission, if such notice or communication is
delivered via facsimile or electronic mail as specified in this
Agreement later than 5:00 p.m. Eastern Time on any date and earlier
than 11:59 p.m. Eastern Time on such date, (iii) the Business
Day following the date of mailing, if sent by nationally recognized
overnight courier service, (iv) the date of delivery, if delivered
personally, or (v) upon actual receipt by the Party to whom
such notice is required to be given. The contact information for
such notices and communications shall be as set forth on the
signature pages hereto (or as any such party may designate by
written notice to the other parties in accordance with this
Section
10(c)).

 

(d) Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
Parties and their respective heirs, executors, administrators,
successors, legal representatives and permitted assigns. Except as
provided in this Section
10(d), this Agreement, and any rights or obligations
hereunder, may not be assigned without the prior written consent of
the Company. Notwithstanding anything in the foregoing to the
contrary, the registration rights of any of the Investors pursuant
to this Agreement with respect to all or any portion of its
Registrable Securities may be assigned without such consent (but
only with all related obligations) with respect to such Registrable
Securities by such Party to a transferee of not less than 200,000
of such Registrable Securities (adjusted for any stock split, stock
dividend, reverse stock split or similar change in the Common Stock
after the date of this Agreement); provided (i) the Company
is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or
assignee and the Registrable Securities with respect to which such
registration rights are being assigned and (ii) such
transferee or assignee agrees in writing to be bound by and subject
to the terms set forth in this Agreement. The Company may not
assign its rights or obligations hereunder without the prior
written consent of the Holders.

 

(e) No Third Party Beneficiaries.
Nothing in this Agreement, whether express or implied, shall be
construed to give any Person, other than the parties hereto or
their respective successors and permitted assigns, any legal or
equitable right, remedy, claim or benefit under or in respect of
this Agreement.

 

(f) Execution and Counterparts.
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all
of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by
facsimile or electronic mail transmission, such signature shall
create a valid binding obligation of the Party executing (or on
whose behalf such signature is executed) the same with the same
force and effect as if such signature delivered by facsimile or
electronic mail transmission were the original
thereof.

 

(g) Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Agreement shall be
governed by, and construed in accordance with, the internal laws of
the State of New York, without giving effect to its choice of law
or conflict of law provisions or rules. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York over any suit,
action, or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served
on each Party anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of
the Parties irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum. Each of the Parties agrees that a judgment in
any such suit, action or proceeding may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. EACH OF THE
PARTIES HEREBY IRREVOCABLY WAIVES ANY RIGHT TO REQUEST A TRIAL BY
JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

 

(h) Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any
remedies provided by law.

 

(i) Headings. The section and
paragraph headings contained in this Agreement are for reference
purposes only and should not affect in any way the meaning or
interpretation of this Agreement.

 

(j) 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 shall use their 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.

 

(k) Entire Agreement. This
Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous contracts, agreements and understandings with
respect to the subject matter hereof and the matters addressed or
governed hereby, whether oral or written.

 

[SIGNATURE
PAGE FOLLOWS]

 

287715

 

 

 

IN WITNESS WHEREOF, the Parties have
executed this Agreement as of the date first written
above.

 

 

	
 

	

SCIENTIFIC INDUSTRIES, INCBy:
________________________________Name: Title:

 

 

Information for Notice:

Scientific
Industries, Inc.80 Orville Drive, Suite 102Bohemia, NY
11716Attention: Helena SantosFax: (631) 567-5896Electronic mail:
hsantos@scientificindustries.com

With a
copy to:Reitler Kailas & Rosenblatt

885 3rd
Ave, 20th FloorNew York, NY 10022

Attention:
John F.F. Watkins, Esq.Fax: (212) 371-5500Electronic mail:
jwatkins@reitlerlaw.com

 

 

List of
Investors

 

[TBU]docslib-287710v62022_pipe

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAWS.

 

 

	

No.

	

Warrant to Purchase

	
 

	

Shares of Common Stock

	
 

	
 

	
 

	

Dated: March _, 2022

 

 

SCIENTIFIC INDUSTRIES, INC.

 

WARRANT

 

TO PURCHASE SHARES OF COMMON STOCK

 

 

 

This
certifies that, for good and valuable consideration, SCIENTIFIC
INDUSTRIES, INC., a Delaware corporation (the “Company”), grants to
_______ (the “Warrantholder”), the
right to subscribe for and purchase from the Company _____ Shares
(the “Warrant
Shares”) at a per Share price equal to $5.50 per
Share, subject to adjustment as provided herein (the
“Exercise
Price”). This Warrant shall be exercisable as set
forth below and shall expire, without notice, at 5:00 p.m., New
York City time, on ______, 2027 (the “Expiration Date”). The
Exercise Price and the number of Warrant Shares are subject to
adjustment from time to time as provided in Section 5. This Warrant is
issued in connection with that certain Securities Purchase
Agreement, dated as of ______, 2022 (the “Purchase Agreement”), by
and among the Company and the purchasers named
therein.

 

For
purposes of this Warrant, the following defined terms shall have
the following meanings:

 

“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 of 1933, as amended.

 

“Business Day” means any
day on which the Trading Markets are open for
business.

 

“Exercise Date” means the
date on which the Exercise Notice and Warrant is delivered to the
Company.

 

“Fundamental Transaction”
means any of the following (i) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to
which all or substantially all of the holders of Common Stock are
permitted to tender or exchange their shares for other securities,
cash or property. (ii) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for
other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by
Section 5.1 hereof,
or a Distribution covered by Section 5.2 hereof). (iii) any
sale, lease, license, transfer, conveyance or other disposition of
all or substantially all of the assets of the Company, in one or a
series of related transactions. (iv) any reorganization,
consolidation, merger, demerger or sale of shares of the Company
where the holders of the Company’s outstanding shares as of
immediately before the transaction (or series of related
transactions) beneficially own less than a majority by voting power
of the outstanding shares of the surviving or successor entity as
of immediately after the transaction. or (v) any
“person” (together with his, her or its Affiliates) or
“group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act) acquires, directly or indirectly, the
beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) of outstanding shares of
capital stock and/or other equity securities of the Company, in a
single transaction or series of related transactions (including,
without limitation, one or more tender offers or exchange offers),
representing at least 50% of the voting power of or economic
interests in the then outstanding shares of capital stock of the
Company.

 

“Market Price” means, as
of the date of determination, the average of the closing prices of
a share of Common Stock on all Trading Markets on which the Common
Stock may at the time be listed, or, if there have been no sales on
any such Trading Market on any day, the average of the highest bid
and lowest asked prices on all such Trading Markets at the end of
such day.

 

“OTC Markets” means either
OTC QX or OTC QB of the OTC Markets Group, Inc.

 

“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.

 

“Shares” means shares of
the Company’s Common Stock, $0.05 par value per share (the
“Common
Stock”).

 

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

 

“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average sales price
of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or
quoted as reported by such Trading Market, (b) if the Common
Stock is not then listed or quoted for trading on a Trading Market
and if prices for the Common Stock are then reported on The Pink
Open Market (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (c) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser
selected in good faith by the purchasers of a majority in interest
of the Shares then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be borne equally by
the Company and the purchasers. For the avoidance of doubt,
with respect to clause (a) above, the VWAP for any date on which
the Common Stock is not traded shall be the VWAP of the nearest
preceding date.

 

SECTION
1. 

VESTING; EXERCISE
OF WARRANT; LIMITATION ON EXERCISE; TAXES; TRANSFER;
DIVISIBILITY.

 

1.1.           VESTING.
The Warrant Shares shall vest immediately upon
issuance.

 

1.2.           EXERCISE
OF WARRANT. This Warrant may be exercised for vested Warrant
Shares, in whole or in part, at any time after payment prior to the
Expiration Date. This Warrant may be exercised by delivery by the
Warrantholder to the Company of the following:

 

(a)           this
Warrant, accompanied by the Exercise Form annexed hereto (the
“Exercise
Form”) duly executed by the Warrantholder, at the
Company’s offices at 80 Orville Drive, Suite 102, Bohemia,
New York 11716 (or such other office or agency of the Company as it
may designate by notice to the Warrantholder) during normal
business hours on any Business Day;

 

(b)           payment
of an amount equal to (x)
the number of Warrant Shares then issuable multiplied by
(y) the Exercise Price by
wire transfer or immediately available funds or by certified or
official bank check; and

 

(c)           such
documentation as to the identity and authority of the Warrantholder
as the Company may reasonably request.

 

1.3.           ISSUANCE
OF WARRANT SHARES. The Warrant Shares shall be deemed by the
Company to be issued to the Warrantholder as the record holder of
the Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the
Warrant Shares as aforesaid. Within two (2) Business Days following
the exercise of this Warrant as provided above, the Company shall
cause its transfer agent to issue the Warrant Shares through the
facilities of its transfer agent for the account of the
Warrantholder.

 

1.4.           LIMITATION
ON EXERCISE. If this Warrant is not exercised prior to the
Expiration Date or is terminated pursuant to Section 6, this Warrant shall
cease to be exercisable and shall become void, and all rights of
the Warrantholder hereunder shall cease.

 

1.5.           PAYMENT
OF TAXES. The issuance of certificates for any Warrant Shares that
are certificated shall be made without charge to the Warrantholder
for any Share transfer or other issuance tax in respect
thereto.

 

SECTION
2.                                 

RESERVATION OF
SHARES.

 

All
Warrant Shares issued upon the exercise of the rights represented
by this Warrant shall, upon issuance and payment of the Exercise
Price in cash, be validly issued, fully paid and non-assessable and
free from all taxes, liens, security interests, charges and other
encumbrances with respect to the issuance thereof other than taxes
in respect of any transfer occurring contemporaneously with such
issuance and restrictions under applicable state and federal
securities Laws. During the period within which this Warrant may be
exercised, the Company shall at all times have authorized and
reserved, and keep available and free from preemptive or similar
rights, a sufficient number of Shares to provide for the exercise
of this Warrant.

 

SECTION
3.                                 

EXCHANGE, LOSS OR
DESTRUCTION OF WARRANT.

 

Upon
receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant and, if
requested by the Company, an agreement to indemnify the Company for
any loss resulting from the replacement of this Warrant, the
Company will execute and deliver a new Warrant of like
tenor.

 

SECTION
4.                                 

OWNERSHIP OF
WARRANT.

 

The
Company may deem and treat the person or entity in whose name this
Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made
by anyone other than the Company) for all purposes and shall not be
affected by any notice to the contrary.

 

SECTION
5.                                 

ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF SHARES. The Exercise Price and the
number of Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 5.

 

5.1.           SUBDIVISION
OR COMBINATION OF SHARES. In case the Company shall at any time
subdivide its outstanding Shares into a greater number of Shares,
the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the
outstanding Shares of the Company shall be combined into a smaller
number of Shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased.

 

5.2.           NO
VOTING RIGHTS. Nothing contained in this Warrant shall be construed
as conferring upon the holder hereof the right to vote or to
consent to receive notice as a shareholder of the Company on any
other matters or any rights whatsoever as a shareholder of the
Company.

 

2.3.           NOTICE
OF ADJUSTMENT. When the Exercise Price is adjusted pursuant to any
provision of this Section
5, the Company shall promptly (i) deliver a notice to the
Warrantholder, and (ii) file with the transfer agent for the
Warrants a certificate of an officer of the Company, in each case,
setting forth the Exercise Price after such adjustment and any
resulting adjustment to the number of Warrant Shares, and setting
forth a brief statement of the facts requiring such adjustment and
a computation thereof. To the extent that any notice provided in
this Warrant constitutes, or contains, material, non-public
information regarding the Company, the Company shall simultaneously
file such notice with the Commission pursuant to a Report on Form
8-K. The Warrantholder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to
the effective date of the event triggering such notice except as
may otherwise be expressly set forth herein.

 

5.4.           CERTAIN
EVENTS. If any change in the outstanding Shares of the Company or
any other event occurs as to which the other provisions of this
Section 5 are not
strictly applicable or if strictly applicable would not fairly
effect the adjustments to this Warrant in accordance with the
essential intent and principles of such provisions, then the
Company shall make in good faith an adjustment in the number and
class of Shares issuable under this Warrant, the Exercise Price
and/or the application of such provisions, in accordance with such
essential intent and principles, so as to protect such purchase
rights as aforesaid. The adjustment shall be such as will give the
Warrantholder, upon exercise for the same aggregate Exercise Price,
the total number, class and kind of Shares as the Warrantholder
would have owned had this Warrant been exercised prior to the event
and had the Warrantholder continued to hold such Shares until after
the event requiring adjustment.

 

SECTION
6.                                 

NOTICE OF CORPORATE
EVENTS. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of
its Common Stock, including without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock
of the Company or of any rights, (ii) enters into any agreement
contemplating or solicits stockholder approval for any Fundamental
Transaction, or (iii) authorizes the dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the
Company shall cause to be delivered to the Warrantholder at least
twenty (20) calendar days prior to the applicable record or
effective date on which a Person would be required to hold Common
Stock in order to participate in or vote with respect to such event
or transaction a written notice stating the date on which a record
is to be taken for the purpose of such event or transaction, or if
a record is not to be taken, the date as of which the holders of
the Common Stock to be entitled to participate or vote in event or
transaction are to be determined. To the extent that any notice
provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Report on Form 8-K. The Holder
shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to 5:00 P.M. Eastern Time on
the Business Day immediately preceding the effective date of the
event triggering such notice (the “Corporate Event Exercise
Date”) in order to participate in or vote with respect
to such event or transaction except as may otherwise be expressly
set forth herein; provided, however, that upon the
consummation or occurrence of an event described in either clause
(ii) or (iii) above, this Warrant will terminate as of the
Corporate Event Exercise Date.

 

SECTION
7.                                 

CALL PROVISION.
If at any
time commencing twelve (12) months from the date of this Warrant,
but before the Expiration Date, the Volume Weighted Average Pricing
(“VWAP”)
of the Company’s Common Stock exceeds $11.00 (subject to
adjustment for forward and reverse stock splits, recapitalizations,
stock dividends and the like as set forth in 
Section 5) for each of thirty
consecutive trading days (the “Measurement
Period”), then the
Company may, at any time in its sole discretion, call for the
exercise of this Warrant, in its entirety
(“Call
Right”). To exercise
the Call Right, the Company must deliver to the Warrantholder an
irrevocable written notice (a “Call
Notice) indicating that the
provisions of this Section of the Warrant have been satisfied, and
that the Warrantholder accordingly must exercise all, or a portion,
of this Warrant prior to the Call Date, as defined below. Such Call
Notice shall include language notifying the Warrantholder that the
failure to comply with the Call Notice shall result in the
forfeiture and cancellation of any unexercised Warrant Shares
granted to Warrantholder hereunder. If the conditions set forth
above for such Call Notice are met and the Warrantholder has not
exercised all of the Shares exercisable under this Warrant by
delivering an Exercise Notice and payment therefor to the Company
within thirty (30) trading days after the date the Call Notice is
received by the Warrantholder (such date and time, the
“Call
Date”), then the
Warrants for which a Exercise Notice shall not have been received
by the Call Date will be cancelled at 5:00 p.m. (Eastern Time) on
the Call Date. In furtherance thereof, the Company covenants and
agrees that it will honor all Exercise Notices with respect to the
Warrant Shares subject to a Call Notice that are tendered through
5:00 p.m. (Eastern Time) on the Call Date. Notwithstanding anything
to the contrary set forth in this Warrant, provided that
the Warrantholder shall have furnished
to the Company, within ten (10) calendar days after the
Warrantholder’s receipt of written notice from the Company,
such information regarding the Warrantholder, the Warrant Shares
held by it, and the intended method of disposition of such
securities as is reasonably required to effect the registration of
such Warrantholder’s Warrant Shares and is set forth in
reasonable detail in such written notice, the Company may not
deliver a Call Notice or require the cancellation of this Warrant
(and any such Call Notice shall be void), unless the Company shall
have filed a registration
statement (“Registration
Statement”) under the
Securities Act of 1933, as amended, covering the Warrant Shares and
such Registration Statement has been declared effective by the
United States Securities and Exchange
Commission.

 

SECTION
8.                                 

COMPLIANCE WITH
SECURITIES ACT; TRANSFERABILITY OF WARRANT; DISPOSITION OF WARRANT
SHARES AND COMMON STOCK.

 

8.1.           COMPLIANCE
WITH SECURITIES ACT. The Warrantholder, by acceptance hereof,
agrees that this Warrant, the Warrant Shares and the shares of
Common Stock issuable upon conversion of the Warrant Shares are
being acquired for investment and that it shall not offer, sell or
otherwise dispose of this Warrant, any Warrant Shares or any shares
of Common Stock issuable upon conversion of the Warrant Shares
except under circumstances which will not result in a violation of
the Act or any applicable state securities laws. This Warrant, the
Warrant Shares and the shares of Common Stock issuable upon
conversion of the Warrant Shares (unless registered under the Act)
shall be stamped or imprinted with a legend in substantially the
following form:

 

“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE
SECURITIES OR BLUE SKY LAWS OF ANY STATE. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO
RULE 144 OF THE ACT.

 

8.2           ACCREDITED
INVESTOR; ACCESS TO INFORMATION; PRE-EXISTING RELATIONSHIP.
Warrantholder presently qualifies and will as of any exercise of
this Warrant qualify as an “accredited investor” within
the meaning of Regulation D of the rules and regulations
promulgated under the Act. Warrantholder has had the opportunity to
ask questions of, and to receive answers from, appropriate
executive officers of the Company with respect to the terms and
conditions of the transactions contemplated hereby and with respect
to the business, affairs, financial condition and results of
operations of the Company. Warrantholder has had access to such
financial and other information as is necessary in order for
Warrantholder to make a fully informed decision as to investment in
the Company, and has had the opportunity to obtain any additional
information necessary to verify any of such information to which
Warrantholder has had access. Warrantholder further represents and
warrants that the Warrantholder has either (a) a pre-existing
relationship with the Company or one or more of its officers or
directors consisting of personal or business contacts of a nature
and duration which enable the Warrantholder to be aware of the
character, business acumen and general business and financial
circumstances of the Company or the officer or director with whom
such relationship exists or (b) such business or financial
expertise as to be able to protect the Warrantholder’s own
interests in connection with the purchase of the Warrant
Shares.

 

8.3           WARRANT
NOT TRANSFERABLE. The Warrant Shares, if and when issued, may be
transferred or sold only in compliance with applicable United
States federal and state securities laws or of any requirements of the Trading Market
upon which the Common Stock may be quoted or listed.
Any instrument purporting to make an
assignment in contravention of this Section 8.3
shall be void.

 

8.4           DISPOSITION
OF WARRANT SHARES. With respect to any offer, sale, or other
disposition of any Warrant Shares prior to registration of such
shares, the Warrantholder and each subsequent Warrantholder agrees
to give written notice to the Company prior thereto, describing
briefly the manner thereof, together with a written opinion of such
Warrantholder’s counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition
may be effected without registration or qualification (under the
Act as then in effect or any federal or state law then in effect)
of such Warrant Shares and indicating whether or not under the Act
certificates for such Warrant Shares to be sold or otherwise
disposed of require any restrictive legend as to applicable
restrictions on transferability. Promptly upon receiving such
written notice and opinion, the Company, as promptly as
practicable, shall notify such Warrantholder that such
Warrantholder may sell or otherwise dispose of such Warrant Shares
all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this Section
8.4 that the opinion of the counsel for the Warrantholder is not
reasonably satisfactory to the Company, the Company shall so notify
the Warrantholder promptly after such determination has been made.
Notwithstanding the foregoing, such Warrant Shares may be offered,
sold or otherwise disposed of in accordance with Rule 144 under the
Act, provided that the Company shall have been furnished with such
information as the Company may request to provide reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Warrant Shares thus transferred
(except a transfer pursuant to Rule 144) shall bear a legend as to
the applicable restrictions on transferability in order to insure
compliance with the Act, unless in the aforesaid opinion of counsel
for the Warrantholder, such legend is not required in order to
insure compliance with the Act. The Company may issue stop transfer
instructions to its transfer agent in connection with such
restrictions.

 

8.5           MARKET
STANDOFF. The Warrantholder hereby agrees that it will not, without
the prior written consent of the managing underwriter, during the
period commencing on the date of the final prospectus relating to a
registered public offering of the Company and ending on the date
specified by the Company and the managing underwriter (such period
not to exceed one hundred eighty (180) days) (i) lend, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any Warrant Shares, or (ii)
enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership
of the Warrant Shares, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of
securities, in cash or otherwise. The underwriters in connection
with a registered public offering of the Company are intended third
party beneficiaries of this Section and shall have the right, power
and authority to enforce the provisions hereof as though they were
a party hereto. Warrantholder further agrees to execute such
agreements as may be reasonably requested by the underwriters or
the Company in a registered public offering of the Company that are
consistent with this Section 8.5 or that are
necessary to give further effect thereto.

 

In
order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to shares of the
Company’s capital stock acquired through the exercise of this
Warrant until the end of such period. The Warrantholder agrees that
a legend reading substantially as follows shall be placed on all
certificates representing all shares of the Warrantholder (and the
shares or securities of every other person subject to the
restriction contained in this Section 8.5):

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP
PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION
STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE
SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S
PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF
THESE SHARES.”

 

SECTION
9.                                 

CASHLESS EXERCISE.
In the event that, at the time of the exercise of this Warrant by
the Warrantholder, there is not an effective Registration Statement
covering the sale by the Warrantholder of the Warrant Shares to be
issued upon such exercise, the Warrantholder, in lieu of exercising
this Warrant by the cash payment of the Exercise Price pursuant to
Section 1.2, may
elect, at any time on or before the Expiration Date, to surrender
this Warrant and receive that number of shares of Common Stock
computed using the following formula:

 

 

Where: X = the
number of shares of Common Stock to be issued to the
Warrantholder.

 

Y 

= 

the number of
shares of Common Stock that Warrantholder would otherwise have been
entitled to purchase hereunder pursuant to Section 1.2 (or such lesser
number of shares as the Warrantholder may designate in the case of
a partial exercise of this Warrant).

 

A 

= 

the Market Price at
the time such exercise

 

B 

= 

the Exercise Price
then in effect.

 

Election
to exercise under this Section 9 may be made by
delivering a signed form of subscription to the Company via
facsimile, to be followed by delivery of this Warrant.

 

SECTION
10.                                 

MISCELLANEOUS.

 

10.1.           ENTIRE
AGREEMENT. This Agreement and the documents referred to herein
constitute the entire agreement among the parties and supersede any
prior agreements or understandings regarding the subject matter
hereof.

 

10.2.           SUCCESSORS
AND ASSIGNS. The terms and conditions of this Warrant shall inure
to the benefit of and be binding upon the parties’ respective
successors and assigns. Nothing in this Warrant, express or
implied, is intended to confer upon any party, other than the
parties hereto or their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of
this Warrant, except as expressly provided in this
Warrant.

 

10.3.           AMENDMENTS
AND WAIVERS. No failure on the part of either party to exercise and
no delay in exercising any power or right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of
any power or right preclude any other or further exercise thereof
or the exercise of any other power or right. The remedies herein
and in any other instrument, document or agreement delivered or to
be delivered by either party hereunder or in connection herewith
are cumulative and not exclusive of any remedies provided by law.
No notice to or demand on a party not required hereunder shall in
any event entitle such party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of
the right of the other party to any other or further action in any
circumstances without notice or demand. No amendment, modification
or waiver of any provision of this Warrant or consent to any
departure by either party therefrom shall be effective unless the
same shall be in writing and signed by the Company and the
Warrantholder.

 

10.4.           SECTION
AND OTHER HEADINGS. The titles and subtitles used in this Warrant
are used for convenience only and are not to be considered in
construing or interpreting this Warrant.

 

10.5.           NOTICES.
All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to
the party to be notified; (ii) when sent by confirmed electronic
mail or facsimile if sent during normal business hours of the
recipient, if not, then on the next Business Day; (iii) five (5)
days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All
communications shall be sent to the address as set forth in the
Warrantholder’s signature page to the Purchase Agreement or
at such other address as such party may designate by ten (10)
days’ advance written notice to the other parties
hereto.

 

10.6.           SEVERABILITY.
If one or more provisions of this Warrant are held to be
unenforceable under applicable law, such provision shall be
excluded from this Warrant and the balance of this Warrant shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.

 

11.7.           FRACTIONAL
SHARES. No fractional Shares or scrip representing fractional
Shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a Share called for upon any exercise
hereof, the Company shall round up to the nearest whole
Share.

 

10.8           DELIVERY
OF NEW WARRANT. Unless the purchase rights represented by this
Warrant shall have expired or shall have been fully exercised, the
Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Shares being issued in
accordance herewith, deliver to the Warrantholder a new warrant
evidencing the rights of the Warrantholder to purchase the
unexpired and unexercised Warrant Shares called for by this
Warrant. Such new warrant shall in all other respects be identical
to this Warrant.

 

10.9.           GOVERNING
LAW. This Warrant shall be governed by and construed under the
substantive laws of New York without regard to the conflicts of law
provisions thereof. The federal courts in New York, New York shall
have exclusive jurisdiction of any and all actions or suits
commenced by either party arising under or with respect to this
Warrant.

 

 

 

 

 

(Signature Page Follows)

287710

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to be signed by its duly authorized officer as
of the first date written above.

 

	

SCIENTIFIC
INDUSTRIES, INC.

 

 

By:
_______________________________

       Name:

       Title:

	
 

Signature Page to
Warrant

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Warrant to be signed by its duly authorized officer as
of the first date written above.

 

	

WARRANTHOLDER:

 

If an individual:

 

 

_______________________________

Name:

 

 

	

If an entity:

 

Name of
entity:

 

 

By:
_______________________________

       Name:

       Title:

 

 

 

 

 

 

Signature Page to Warrant

 

SCIENTIFIC INDUSTRIES, INC.

 

WARRANT EXERCISE FORM

 

(To be
executed upon exercise of Warrant)

 

 

The
undersigned, the record holder of the Warrant, hereby irrevocably
elects to exercise the right, represented by this Warrant, to
[check applicable subsection]:

 

_________ (a) 

Purchase __________ shares of Common Stock of Scientific
Industries, Inc., pursuant to the terms of the attached Warrant and
herewith pays the Exercise Price in accordance with the terms of
the Warrant by tendering cash payment for such Warrant
Shares;

OR

 

_________ (b) 

Exercise the attached Warrant for [all of the shares] [________of
the shares] [cross out inapplicable phrase] purchasable under the
Warrant pursuant to the cashless exercise provisions of Section 9
of such Warrant.

 

The
undersigned hereby represents and warrants that (i) the undersigned
is acquiring such shares for its own account for investment
purposes only, and not for resale or with a view to distribution of
such shares or any part thereof and (ii) the undersigned is an “accredited
investor” as defined in Regulation D under the Securities Act
of 1933, as amended, and a “sophisticated investor” in
accordance with the exemption from registration under such Act in
accordance with Section 4(a)(2) thereof.

 

 

WARRANTHOLDER

 

 

 

By:                                                       

 

Name:

 

 

 

Address:                                                       

 

 

 

 

 

Date:                                                       

 

Name in
which shares should be registered:

 

 

[_______________________]

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