Document:

ex_10-1.htm

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT entered into as of the 31st day of August, 2015 (this "Agreement "), by and between the investors identified on Exhibit A hereto (each an “Investor, collectively, the “Investors”), and ULURU INC., a Nevada corporation (the “Company”).

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to each Investor,  and each Investor shall purchase the Investor’s Purchase Shares (as defined below); and

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

CERTAIN DEFINITIONS

 

Section 1.1                      DEFINED TERMS as used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined)

 

"AGREEMENT" shall have the meaning specified in the preamble hereof.

 

"CLAIM NOTICE" shall have the meaning specified in Section 9.3(a).

 

"CLOSING" shall mean the closing of the purchase and sale of the Purchase Shares pursuant to Section 2.3.

 

"CLOSING CERTIFICATE" shall mean the closing certificate of the Company in the form of Exhibit C hereto.

"CLOSING NOTICE" shall mean a written notice, substantially in the form of Exhibit B hereto, to each Investor notifying the Investor that the conditions to Closing are satisfied, or will be satisfied at Closing, and designating a date for Closing of the purchase and sale of the Purchase Shares pursuant to the terms of this Agreement.

 

"COMMON STOCK" shall mean the Company's common stock, $0.001 par value per share.  

"COMPANY" shall have the meaning specified in the preamble to this Agreement.

 

"DAMAGES" shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys' fees and disbursements and costs and expenses of expert witnesses and investigation).

  

"DISPUTE PERIOD" shall have the meaning specified in Section 9.3(a).

"DWAC" shall have the meaning specified in Section 2.3.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“EXCHANGE CAP” shall have the meaning set forth in Section 7.1(c).

"FINRA" shall mean the U.S. Financial Industry Regulatory Authority, Inc.

"INVESTMENT AMOUNT" shall mean, with respect to each Investor, the “Investment Amount” designated on Exhibit A with respect to such Investor.

 

"INDEMNIFIED PARTY" shall have the meaning specified in Section 9.3(a).

 

"INDEMNIFYING PARTY" shall have the meaning specified in Section 9.3(a).

 

"INDEMNITY NOTICE" shall have the meaning specified in Section 9.3(b).

 

"INVESTOR" shall have the meaning specified in the preamble to this Agreement.

 

"MATERIAL ADVERSE EFFECT" shall mean any effect on the business, operations, properties, or financial condition of the Company that is material and adverse to the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to enter into and perform its obligations under any of this Agreement.

 

"PERSON" shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

  

"PRINCIPAL MARKET" shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), or principal quotation systems (i.e. OTCQX, OTCQB, the OTC Bulletin Board), or other principal exchange or recognized quotation system which is at the time the principal trading platform or market for the Common Stock.

 

"PURCHASE PRICE" shall mean $0.38.

 

"PURCHASE SHARES" shall the number of shares of Common Stock, with respect to each Investor, equal to Investment Amount divided by the Purchase Price.

 

"REGISTERED SECURITIES" shall mean the (a) Purchase Shares, and (b) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registered Securities, once issued such securities shall cease to be Registrable Securities when (i) a Registration Statement has been declared effective by the SEC and such Registrable Securities have been disposed of pursuant to a Registration Statement, (ii) such Registrable Securities have been sold under circumstances under which all of the applicable conditions of Rule 144 are met, (iii) such time as such Registrable Securities have been otherwise transferred to holders who may trade such shares without restriction under the Securities Act or (iv) in the opinion of counsel to the Company, such Registrable Securities may be sold without registration under the Securities Act or the need for an exemption from any such registration requirements and without any time, volume or manner limitations pursuant to Rule 144(b)(i) (or any similar provision then in effect) under the Securities Act.

 

"REGISTRATION STATEMENT" shall mean the Company’s effective registration statement on file with the SEC, and any follow up registration statement or amendment thereto.         

 

"REGULATION D" shall mean Regulation D promulgated under the Securities Act.

 

"RULE 144" shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.

 

"SEC" shall mean the United States Securities and Exchange Commission.

 

"SECURITIES ACT" shall mean the United States Securities Act of 1933, as amended, and rules promulgated thereunder.

 

"SEC DOCUMENTS" shall mean, as of a particular date, all reports and other documents filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the Company's then most recently completed and reported fiscal year as of the time in question (provided that if the date in question is within ninety days after the beginning of the Company's fiscal year, the term shall include all documents filed since the beginning of the preceding fiscal year).

 

“SHORT SALES” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

   

"THIRD PARTY CLAIM" shall have the meaning specified in Section 9.3(a).

 

“TRADING DAY” shall mean a day on which the Principal Market shall be open for business.

 

“TRANSACTION DOCUMENTS” shall mean this Agreement and the Registration Rights Agreement.

 

"TRANSFER AGENT" shall mean the transfer agent for the Common Stock (and to any substitute or replacement transfer agent for the Common Stock upon the Company's appointment of any such substitute or replacement transfer agent).

 

ARTICLE II

PURCHASE AND SALE OF COMMON STOCK

 

Section 2.1           AGREEMENT TO PURCHASE

 

(a)          Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), on the Closing Date designated in a Closing Notice, each Investor shall purchase, and the Company shall sell to each such Investor, the Purchase Shares associated with such Investor at a per-share price equal to the Purchase Price, for a total purchase price for each Investor equal to the Investment Amount.

 

	
  

	
Section 2.2           MECHANICS.

 

(a)         CLOSING NOTICE. At any time prior to January 1, 2016, the Company may deliver a Closing Notice, subject to the conditions set forth in Section 7.2. A Closing Notice shall be deemed delivered on (i) the Trading Day it is received by email by the Investor if such notice is received on or prior to 12:00 noon New York time, or (ii) the immediately succeeding Trading Day if it is received by email after 12:00 noon New York time on a Trading Day or at any time on a day which is not a Trading Day.

Section 2.3           CLOSING. With respect to the Closing Notice, the Closing shall occur on the date designated therein as the date for Closing (the “Closing Date”) provided such date is at least three (3) Trading Days following the date the Closing Notice is deemed to have been delivered. Prior to Closing, each Investor shall initiate a DWAC share transfer request through its broker.  At the Closing, the Company shall deliver to each Investor’s brokerage account the Purchase Shares, and each Investor shall pay to the Company the Investment Amount by wire transfer of immediately available funds to an account designated by the Company within five (5) Trading Days 0f the Closing Date. In addition, on or prior to such Closing Date, each of the Company and each Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

Section 2.4           PROMISE TO PAY.  Effective as of Closing and the Company’s issuance of the Purchase Shares to an Investor, such Investor hereby promises to pay to the order of the Company the Investment Amount on the date of such Closing (and in no event later than five (5) Trading Days after the date of such Closing).   The covenant of each Investor in Section 2.3 and 2.4 shall deemed to be a promissory note to the Company with a maturity of five (5) Trading Days following Closing, and the Company shall have all remedies available with respect to any failure of an Investor to pay the Investment Amount on the maturity date, and Investor shall be responsible to reimburse the Company for all costs of collection of the Investment Amount if it is not paid on or before the maturity date.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF EACH INVESTOR

 

Each Investor represents and warrants to the Company that:

 

Section 3.1           INTENT. Investor is entering into this Agreement for its own account and the Investor has no present arrangement (whether or not legally binding) at any time to sell the Registered Securities to or through any person or entity; provided, however, that Investor reserves the right to dispose of the Registered Securities at any time in accordance with federal and state securities laws applicable to such disposition.

 

Section 3.2           NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

Section 3.3           SOPHISTICATED INVESTOR. Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule 501 of Regulation D), and Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Registered Securities.  In addition, Investor is not a U.S. Person (as defined in Regulation S) and was not in the United States at the time Investor was solicited or at any time prior to and through the date of this Agreement.  Investor acknowledges that an investment in the Registered Securities is speculative and involves a high degree of risk.

 

Section 3.4           AUTHORITY. (a) Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the transactions contemplated hereby in accordance with its terms; (b) the execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of Investor or its partners is required; and (c) this Agreement has been duly authorized and validly executed and delivered by Investor and constitutes a valid and binding obligation of Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

  

Section 3.5           NOT AN AFFILIATE. Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company.

 

Section 3.6          ORGANIZATION AND STANDING. Investor is an entity that validly exists in the jurisdiction of organization and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Investor is duly qualified and in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in which the failure so to qualify would not have a material adverse effect on Investor.

 

Section 3.7           ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and any other document or instrument contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Investor, (b) violate any provision of any indenture, instrument or agreement to which Investor is a party or is subject, or by which Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which Investor is subject or to which any of its assets, operations or management may be subject.

 

Section 3.8           DISCLOSURE; ACCESS TO INFORMATION. Investor has received and reviewed copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company.  Investor has relied solely on the SEC Documents with respect to Investor’s decision to execute this Agreement and has not relied upon any oral statement by any officer, director or agent of the Company (or any third party) and agrees that it is not authorized to rely on any representations or warranties other than as set forth herein.

 

Section 3.9           MANNER OF SALE. At no time was Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to each Investor that, except as disclosed in the SEC Documents:

 

Section 4.1           ORGANIZATION OF THE COMPANY. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in which the failure so to qualify would not have a Material Adverse Effect.

 

Section 4.2           AUTHORITY. (a) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Purchase Shares; (b) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required; and (c)  this Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

Section 4.3                      CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 200,000,000 shares of Common Stock, $0.001 par value per share, of which 25,034,026 shares were issued and outstanding as of August 31, 2015. Except as disclosed in the Company’s SEC Filings, there are no outstanding securities which are convertible into shares of Common Stock, whether such conversion is currently exercisable or exercisable only upon some future date or the occurrence of some event in the future. All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.

 

Section 4.4           COMMON STOCK. To its knowledge, the Company is in full compliance with all reporting requirements of the Exchange Act, and the Company has maintained all requirements for the continued listing or quotation of the Common Stock, and such Common Stock is currently listed or quoted on the Principal Market which is presently the OTCQB.

 

Section 4.5           SEC DOCUMENTS. The Company has made available to each Investor true and complete copies of the SEC Documents. To the Company’s knowledge, the Company has not provided to any Investor any material information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates but as modified or corrected by amendments, the SEC Documents, as amended, complied in all material respects with the requirements of the Exchange Act, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

 

Section 4.6           VALID ISSUANCES. When issued and paid for as herein provided, the Purchase Shares will be duly and validly issued, fully paid, and non-assessable. The sale of the Purchase Shares pursuant to this Agreement, and the Company's performance of its obligations hereunder, shall not (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Purchase Shares, or any of the assets of the Company, or (b) entitle the holders of outstanding shares of Common Stock to preemptive or other rights to subscribe to or acquire the Common Stock or other securities of the Company (other than as have been waived or with respect to which the time for exercise has run). The Purchase Shares shall not subject any Investor to personal liability, in excess of the subscription price by reason of the ownership thereof.

 

Section 4.7           NO CONFLICTS. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including without limitation the issuance of the Purchase Shares, do not and will not (a) result in a violation of the Company’s Articles of Incorporation or By-Laws or (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture, instrument or any "lock-up" or similar provision of any underwriting or similar agreement to which the Company is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue and sell the Common Stock in accordance with the terms hereof (other than any SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to the execution hereof,  any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of each Investor herein.

 

Section 4.8           NO MATERIAL ADVERSE CHANGE. Other than events disclosed in the Company’s SEC Filings, since January 1, 2015 no event has occurred that would have a Material Adverse Effect on the Company.

 

Section 4.9           LITIGATION AND OTHER PROCEEDINGS. Except as disclosed in the Company’s SEC Filings, there are no lawsuits or proceedings pending or to the knowledge of the Company threatened, against the Company, nor has the Company received any written or oral notice of any such action, suit, proceeding or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction or decree or award has been issued by or, so far as is known by the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect.

 

Section 4.10         DILUTION. The Company’s executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect. The board of directors of the Company has concluded in its good faith business judgment that such issuance is in the best interests of the Company. The Company specifically acknowledges that its obligation to issue the Purchase Shares is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company.

 

ARTICLE V

COVENANTS OF EACH INVESTOR

 

Section 5.1           COMPLIANCE WITH LAW; TRADING IN SECURITIES. Each Investor's trading activities with respect to shares of the Common Stock will be in compliance with all applicable state and U.S. federal securities laws, rules and regulations, and the rules and regulations of FINRA and the Principal Market on which the Common Stock is listed or quoted.

 

Section 5.2           SHORT SALES AND CONFIDENTIALITY. Neither any Investor nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof to the Closing Date.

 

Other than to other Persons party to this Agreement, each Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

  

ARTICLE VI

COVENANTS OF THE COMPANY

Section 6.1           RESERVATION OF COMMON STOCK. The Company will, from time to time as needed in advance of a Closing Date, reserve and keep available until the consummation of such Closing, free of preemptive rights sufficient shares of Common Stock for the purpose of enabling the Company to satisfy its obligation to issue the Purchase Shares to be issued in connection therewith.

 

Section 6.2           LISTING OF COMMON STOCK. If the Company applies to have the Common Stock traded on any other Principal Market, it shall include in such application the Purchase Shares, and shall take such other action as is necessary or desirable in the reasonable opinion of any Investor to cause the Common Stock to be listed on such other Principal Market as promptly as possible. The Company shall use its commercially reasonable efforts to continue the listing and trading of the Common Stock on the Principal Market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the FINRA and the Principal Market.

 

 

ARTICLE VII

CONDITIONS TO DELIVERY OF

CLOSING NOTICES AND CONDITIONS TO CLOSING

 

Section 7.1           CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND SELL COMMON STOCK. The obligation hereunder of the Company to issue and sell the Purchase Shares to each Investor is subject to the satisfaction of each of the conditions set forth below.

 

(a)   ACCURACY OF INVESTOR'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of such Investor shall be true and correct in all material respects as of the date of this Agreement and as of the date of each such Closing as though made at each such time.

 

(b)          PERFORMANCE BY INVESTOR. Such Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Investor at or prior to such Closing.

 

(c)          PRINCIPAL MARKET REGULATION. The Company shall not issue any Purchase Shares, and each Investor shall no have the right to receive any Purchase Shares, if the issuance of such shares would exceed the aggregate number of shares of Common Stock which the Company may issue without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange Cap”).

 

Section 7.2           CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A CLOSING NOTICE AND THE OBLIGATION OF EACH INVESTOR TO PURCHASE THE PURCHASE SHARES. The right of the Company to deliver a Closing Notice and the obligation of each Investor hereunder to acquire and pay for the Purchase Shares is subject to the satisfaction of each of the following conditions:

 

(a)          EFFECTIVE REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall have been declared effective for the sale by the Investors of the Registered Securities subject to such Closing Notice, and (i) neither the Company nor any Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist. 

 

(b)          ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects (except for representations and warranties specifically made as of a particular date), except for any conditions which have temporarily caused any representations or warranties herein to be incorrect and which have been corrected with no continuing impairment to the Company or Investor.

 

(c)          PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.

 

(d)          NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.

 

(e)          NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Principal Market or the FINRA and the Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market.

 

(f)          PRINCIPAL MARKET REGULATION. The Company shall not issue any Purchase Shares, and each Investor shall not have the right to receive any Purchase Shares, if the issuance of such shares would exceed the Exchange Cap.

(g)          NO VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT. The issuance of shares of Common Stock with respect to the applicable Closing, if any, shall not violate the shareholder approval requirements of the Principal Market.

  

(h)        OTHER. On the date of delivery of the Closing Notice, each Investor shall have received a certificate in substantially the form and substance of Exhibit C hereto, executed by an executive officer of the Company and to the effect that all the conditions to such Closing shall have been satisfied as at the date of each such certificate.

 

ARTICLE VIII

LEGENDS

 

Section 8.1         NO STOCK LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend shall be placed on the share certificates representing the Purchase Shares; provided, however, each Investor represents, warrants and covenants to the Company that all sales of the Purchase Shares shall occur (a) under the Registration Statement and incompliance with the prospectus delivery requirements of the Securities Act, or (b) in compliance with the requirements of Rule 144 under the Securities Act.

 

Section 8.2         INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall affect in any way Investor's obligations under any agreement to comply with all applicable securities laws upon the sale of the Common Stock.

 

ARTICLE IX

NOTICES; INDEMNIFICATION

 

Section 9.1          NOTICES. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (a) personally served, (b) delivered by reputable air courier service with charges prepaid, or (c) transmitted by hand delivery, or email as a PDF, addressed as set forth below or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by email at the address designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

The addresses for such communications shall be:

If to the Company:

ULURU Inc.

4452 Beltway Drive

Addison, TX 75001

Email: kgray@uluruinc.com

If to an Investor:

[As provided on Exhibit A]

 

Either party hereto may from time to time change its address or email for notices under this Section 9.1 by giving at least ten (10) days' prior written notice of such changed address to the other party hereto.

 

Section 9.2           INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from Indemnified Party's failure to perform any covenant or agreement contained in this Agreement or Indemnified Party's negligence, recklessness or bad faith in performing its obligations under this Agreement; provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto, or any preliminary prospectus or final prospectus (as amended or supplemented). 

 

Section 9.3           METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party (as defined below) under Section 9.2 shall be asserted and resolved as follows:

 

(a)          In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a person other than a party hereto or an affiliate thereof (a "THIRD PARTY CLAIM"), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party's claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a "CLAIM NOTICE") with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the "DISPUTE PERIOD") whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.

 

(i)          If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may takeover the control of the defense or settlement of a Third Party Claim at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third Party Claim.

 

(ii)         If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

 

(iii)        If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

(b)          In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an "INDEMNITY NOTICE") with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

(c)          The Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.

 

(d)          The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1         GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Each of the Company and each Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in New York City, New York with respect to any dispute arising under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.

 

Section 10.2         JURY TRIAL WAIVER. The Company and each Investor hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with the Transaction Documents.

 

Section 10.3         ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and each Investor and their respective successors. Neither this Agreement nor any rights of any Investor or the Company hereunder may be assigned by either party to any other person.

 

Section 10.4         THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and the Investors and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section 10.5         TERMINATION. The Company may terminate this Agreement at any time by written notice to the Investors; provided, however, that the provisions of Articles IX, and Sections 10.1 and 10.2 shall survive the termination of this Agreement for a period of twenty four (24) months.

 

Section 10.6         ENTIRE AGREEMENT, AMENDMENT; NO WAIVER. This Agreement and the instruments referenced herein contain the entire understanding of the Company and the Investors with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Investor makes any representation, warranty, covenant or undertaking with respect to such matters. This Agreement may not be amended.

 

Section 10.7         FEES AND EXPENSES. The Company agrees to pay its own expenses in connection with the preparation of this Agreement and performance of its obligations hereunder. The Company shall pay all stamp or other similar taxes and duties levied in connection with issuance of the Purchase Shares pursuant hereto.

 

Section 10.8         COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by email of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.

 

Section 10.9         SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

 

Section 10.10         FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 10.11         NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

Section 10.12         EQUITABLE RELIEF. Each party recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief. Each party therefore agrees that each other party shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

 

Section 10.13         TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.

 

Section 10.14         REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity relied upon for the determination of the Closing Price for the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg Finance L.P. or any successor thereto. The written mutual consent of Investor and the Company shall be required to employ any other reporting entity.

 

[-Signature page follows-]

  

  

  

IN WITNESS WHEREOF, the parties have caused this Securities Purchase Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

COMPANY:

ULURU INC.

By: /s/ Kerry P. Gray                                                      

Name: Kerry Gray

Title: Chief Executive Officer

INVESTORS:

Lang & Schwarz Broker GmbH                                                                           

NAME OF INVESTOR

/s/ Peter Zahn                                                                           

SIGNATURE OF AUTHORIZED SIGNATORY

INVESTMENT AMOUNT: $1,550,225

[-Signature page to Securities Purchase Agreement-]

  

  

  

Exhibit A

Investors and Investment Amount

	
Name of Investor

	
Address and Email

	
Investment Amount

	
Purchase Shares

	
Capital-Forum AG

 

	

Capital-Forum AG

Mr. Thomas Wukonigg

Maximilianstrasse 18

D-80539 München

 

thomas.wukonigg@capital-forum.de

 

	
  $  418,000

	
1,100,000

	

E-Consult Kft

	

(E-CONSULT Tanácsadó Korlátolt Felelősségű Társaság)

Mr. Heinz Matthies

Kálnoki utca 49

HR-9200 Mosonmagyaróvár

 

e.mail: vienna1@chello.at

 

	
$  100,000

$  282,775

	
263,158

744,145

	
Mr. Harald Wengust (Privat)

 

 

	

Hauptstr. 49

AT-2372 Gießhübl

 

e.mail: harry@wengust.com

 

	
$  150,000

	
394,736

	

Lupus Alpha Asset Management AG

 

	

Lupus Alpha Asset Management AG

Mr. Matthias Rosenberger

Speicherstraße 49-51

60327 Frankfurt

 

e.mail: Matthias.rosenberger@lupusalpha.de

 

	
$  190,000

	
500,000

	
Donau Invest Beteiligungs Ges.m.b.H.

 

	
Donau Invest Beteiligungs Ges.m.b.H.

Mrs. Isabella de Krassny

Am Heumarkt 10

1030 Wien

 

e.mail: isabella.krassny@donau-invest.at

 

	
$  76,000

	
200,000

	
Security KAG

 

 

 

	

Security KAG

Mr. Manfred Zöhrer

Burgring 16

8010 Graz-Austria

 

e.mail:manfred.zoehrer@capitalbank.at

 

	
$  333,450

	
877,500

	  	  	  	  
	  	  	
$ 1,550,225

	
4,079,539

  

  

  

EXHIBIT B

 

FORM OF CLOSING NOTICE

 

TO: INVESTORS UNDER SECURITIES PURCHASE AGREEMENT

 

We refer to the Securities Purchase Agreement dated [_______](the “Agreement”) entered into by ULURU Inc. (the “Company”) and the investors party thereof.  Capitalized terms defined in the Agreement shall, unless otherwise defined, have the same meaning when used herein.

We hereby:

1) Certify that, as of the date hereof, to the best of our knowledge, the conditions set forth in Section 7.2 of the Agreement are satisfied.

2) Give you notice that we require you to wire the Investment Amount associated with your name on Exhibit A to the Agreement to the Company on [specific date], which shall be the Closing Date, using the wiring instructions set forth below, for the purchase of the Purchase Shares. The wiring instructions are as follows:

[____________________]

3) Request that you cause your broker to initiate a DWAC share transfer request on the Closing Date.

Date: _____________, 2015

ULURU Inc.

By: ____________________________

Name:

Title:

  

  

  

  

EXHIBIT C

 

FORM OF CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER OF ULURU INC.

 

Pursuant to Section 7.2(h) of that certain Securities Purchase Agreement dated [________] 2015 (the “Agreement”) by and among the Company and the Investors identified therein (the “Investors”), the undersigned, in his capacity as the Chief Executive Officer of ULURU INC. (the “Company”), and not in his individual capacity, hereby certifies, as of the date hereof (such date, the “Condition Satisfaction Date”), the following:

 

1.          The representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular date) with respect to all periods, and as to all events and circumstances occurring or existing from the date of the Agreement to and including the Condition Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or Investor; and

 

2.          All of the Company’s conditions to Closing set forth in Section 7.2 of the Agreement have been satisfied as of the Condition Satisfaction Date.

 

Capitalized terms used herein shall have the meanings set forth in the Agreement unless otherwise defined herein.

 

IN WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the ___ day of ____________, 201_5.

 

By:__________________________

Name:

Title:

e

4821-5993-8852, v.  1Exhibit 4.3

 

NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

ENER-CORE,
INC.

 

WARRANT 

 

	Warrant No.	Original Issue Date: November 26, 2014

 

Ener-Core,
Inc., a Nevada corporation (the "Company"), hereby certifies that, for value received,                                                          or its registered
assigns (the "Holder"), is entitled to purchase from the Company up to a total of                       shares of Common Stock
(each such share, a "Warrant Share" and all such shares, the "Warrant Shares"), at any time
and from time to time from and after November 26, 2014 (the "Commencement Date"), and through and including November
26, 2018 (the "Expiration Date"), and subject to the following terms and conditions:

 

1.            Definitions.
As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.

 

"Affiliate"
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule 144.

 

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

 

"Common
Stock" means the common stock of the Company, $0.0001 par value per share, and any securities into which such common
stock may hereafter be reclassified or for which it may be exchanged as a class.

 

    

     

    

 

"Exchange
Act" means the Securities Exchange Act of 1934, as amended.

 

"Exercise Price" means $0.50, subject to
adjustment in accordance with Section 9.

 

"Fundamental
Transaction" means any of the following: (1) the Company effects any merger or consolidation of the Company with or into
another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,
(3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) 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.

 

"California
Courts" means the state and federal courts sitting in the City of Los Angeles, County of Los Angeles.

 

"Original
Issue Date" means the Original Issue Date first set forth on the first page of this Warrant.

 

"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.

 

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

 

"Securities
Act" means the Securities Act of 1933, as amended.

 

"Subsidiary"
means any "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and
Exchange Commission under the Exchange Act.

 

"Trading
Day" means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not quoted
on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the OTC Markets
Group, Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day.

 

"Trading
Market" means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market, OTC Bulletin Board, or the OTC Markets Group, Inc. OTCQX or OTCQB tier on which the Common
Stock is listed or quoted for trading on the date in question.

 

    	 	2	 

     

    

 

"Warrant
Shares" means the shares of Common Stock issuable upon exercise of this Warrant.

 

2.            Registration
of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

 

3.            Registration
of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender
of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant
(any such new Warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued
to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a Warrant.

 

4.            Exercise
and Duration of Warrants. This Warrant shall be exercisable by the registered Holder at any time and from time to time from
and after the Commencement Date, and through and including the Expiration Date. At 5:30 p.m., New York City time on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call
or redeem any portion of this Warrant without the prior written consent of the affected Holder.

 

5.            Delivery
of Warrant Shares. 

 

(a)             To
effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being exercised. Upon delivery of the Exercise Notice (in the form attached hereto) to the
Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise
Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but
in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate
for the Warrant Shares issuable upon such exercise. The Company shall, upon request of the Holder and subsequent to the date on
which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange
Commission, use its reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust &
Clearing Corporation or another established clearing corporation performing similar functions, if available, provided,
that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant
Shares electronically through the Depository Trust Corporation. A "Date of Exercise" means the date on which
the Holder shall have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to
be purchased.

 

    	 	3	 

     

    

  

(b)             If
by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right
to rescind such exercise.

 

(c)             At
any time following the one year anniversary of the Original Issue Date, if by the fifth Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the
manner required pursuant to Section 5(a), and if after such fifth Trading Day and prior to the receipt of such Warrant Shares,
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "Buy-In"), then
the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number
of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue by (B) the closing
bid price of the Common Stock on the Date of Exercise and (2) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations
hereunder. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In.

 

(d)             The
Company's obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action
to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company's failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant
as required pursuant to the terms hereof

 

6.           Charges,
Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to
the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of
the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates
for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

    	 	4	 

     

    

 

7.          Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity
(which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply
with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe.
If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant
to the Company as a condition precedent to the Company's obligation to issue the New Warrant.

 

8.          Reservation
of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise
of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking
into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.

 

9.          Certain
Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.

 

(a)             Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after
the effective date of such subdivision or combination.

 

    	 	5	 

     

    

 

(b)             Fundamental
Transactions. If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property
as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior
to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant
(the "Alternate Consideration"). For purposes of any such exercise, the determination of the Exercise Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of
this Warrant following such Fundamental Transaction. The Company shall use its reasonable best efforts to ensure that at the Holder's
option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder
a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder's
right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The Company shall use its
reasonable best efforts to ensure that the terms of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and ensuring
that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction.

 

(c)             Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 9, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.

 

(d)            Calculations.
All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(e)             Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable
upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail
the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate
to the Holder and to the Company's Transfer Agent.

 

    	 	6	 

     

    

 

(f)             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 any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up
of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions
of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information
to the Holder) at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold
Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably
necessary in order to ensure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so
as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

10.        Payment
of Exercise Price. The Holder shall pay the Exercise Price by delivery of immediately available funds.

 

11.        Limitations
on Exercise. Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired
by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure
that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such
Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder's
for purposes of Section 13(d) of the Exchange Act, does not exceed 9.99% of the total number of issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order
to determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction
as contemplated in Section 9 of this Warrant. This restriction may not be waived. Notwithstanding anything to the contrary contained
in this Warrant, (a) no term of this Section may be waived by any party, nor amended such that the threshold percentage of ownership
would be directly or indirectly increased, (b) this restriction runs with the Warrant and may not be modified or waived by any
subsequent holder hereof and (c) any attempted waiver, modification or amendment of this Section will be void ab initio.

 

12.        No
Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant.
In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction
multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.

 

13.        Notices.
Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) 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 at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall
be: (i) if to the Company, to 9400 Toledo Way, Irvine, CA 92618, Attn: Chief Executive Officer, or to Facsimile No.: (949) 616-3399
(or such other address as the Company shall indicate in writing in accordance with this Section), or (ii) if to the Holder, to
the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section.

 

    	 	7	 

     

    

 

14.        Warrant
Agent. The Company shall serve as warrant agent under this Warrant. Upon 10 days' notice to the Holder, the Company may appoint
a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company
or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as
shown on the Warrant Register.

 

15.        Miscellaneous.

 

(a)             This
Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed
to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this
Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns. The
foregoing sentence shall be subject to the restrictions on waivers and amendments set forth in Section 11 of this Warrant.

 

(b)             All
questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed
and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant
and the transactions herein contemplated ("Proceedings") (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the California Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the California Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the jurisdiction of any California Court, or that such Proceeding
has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating
to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions
of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney's fees and
other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

    	 	8	 

     

    

 

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

 

(d)             In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision
which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

 

(e)             Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

 

    	 	9	 

     

    

 

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

 

	 	ENER-CORE, INC.
	 	 	 
	 	By:	 
	 	 	Name : Domonic Carney
	 	 	Title: Chief Financial Officer

  

    	 	10	 

     

    

 

EXERCISE
NOTICE

 ENER-CORE, INC.

WARRANT
DATED NOVEMBER 26, 2014

 

The
undersigned Holder hereby irrevocably elects to purchase______________shares of Common Stock pursuant to the above
referenced Warrant. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the
Warrant.

 

	(1)	The undersigned Holder hereby exercises its right to purchase ______________________
Warrant Shares pursuant to the Warrant.

 

	(2)	The holder shall pay the sum of $______________ to
the Company in accordance with the terms of the Warrant.

 

	(3)	Pursuant
to this Exercise Notice, the Company shall deliver to the holder ______________________ Warrant Shares in accordance with the
terms of the Warrant.

 

	(4)	By
                                                                                                                           its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the
                                                                                                                           exercise evidenced hereby the Holder will not beneficially                                          own in excess of the
                                                                                                                           number of shares of Common Stock (determined in accordance with                                          Section 13(d) of the
                                                                                                                           Securities Exchange Act of 1934) permitted to be owned under Section                                          11 of this
                                                                                                                           Warrant to which this notice relates.

 

	Dated:                                 ,
                      	Name of Holder:	 
	 	 	 
	 	(Print)	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant) 

 

    	 	11	 

     

    

Warrant
Shares Exercise Log

 

	Date	 	 	Number of Warrant Shares Available to be Exercised	 	 	 	Number of Warrant Shares Exercised	 	 	 	Number of Warrant Shares Remaining to be Exercised	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

    	 	12	 

     

    

 

ENER-CORE,
INC.

WARRANT
DATED NOVEMBER 26, 2014

WARRANT NO. 2014-11-26-LHA

 

FORM
OF ASSIGNMENT

 

[To
be completed and signed only upon transfer of Warrant]

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________the right
represented by the above-captioned Warrant to purchase
________________ shares of Common Stock to which such Warrant relates and appoints _________________attorney to
transfer said right on the books of the Company with full power of substitution in the
premises.

 

Dated:                      
,                       

 

	 	 
	 	(Signature must conform in all
    respects to name of holder as specified on the face of the Warrant)
	 	 
	 	 
	 	Address of Transferee
	 	 
	 	 
	 	 
	 	 

 

	In the presence of:	 
	 	 
	 	 

  

 

13

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