Document:

exhibit42formofpawarrant

                                                                                  NEITHER  THIS  SECURITY  NOR  THE  SECURITIES  FOR  WHICH  THIS  SECURITY  IS  EXERCISABLE 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.   THIS  SECURITY  AND  THE  SECURITIES  ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION  WITH  A  BONA  FIDE  MARGIN  ACCOUNT  OR  OTHER  LOAN     SECURED  BY  SUCH  SECURITIES.           PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT                            FIBROCELL SCIENCE, INC.   Warrant Shares: _______                         Issue Date:______, 2018                                                   Initial Exercise Date: _______, 2018                                                                             THIS  COMMON  STOCK  PURCHASE  WARRANT  (the  “Warrant”)  certifies  that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms  and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on  or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City  time)  on  ______________  (the  “Termination  Date”)  but  not  thereafter,  to  subscribe  for  and  purchase from Fibrocell Science, Inc., a Delaware corporation (the “Company”), up to ______  shares  (as  subject  to  adjustment hereunder, the  “Warrant  Shares”) of the Company’s common  stock, par value $0.001  per share (the  “Common Stock”). The purchase price of one share of  Common Stock under this  Warrant  shall be equal  to  the Exercise Price, as  defined in  Section  2(b).  This Warrant is being issued pursuant to that certain engagement letter, date as of May 25,  2018, by and between the Company and H.C. Wainwright & Co., LLC.                Section 1.  Definitions.  Capitalized  terms  used  and  not  otherwise  defined        herein  shall  have  the  meanings  set  forth  in  that  certain  Securities  Purchase  Agreement        (the  “Purchase  Agreement”),  dated  May  29,  2018,  among  the  Company  and  the        purchasers signatory thereto.          Section 2.  Exercise.               a)    Exercise of Warrant.  Exercise of the purchase rights represented by this        Warrant  may be made, in  whole or in  part, at  any time or times on or after the  Initial        Exercise Date and on or before the Termination Date by delivery to the Company of a        duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of        the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).  Within the                                         1  \\PH - 036137/000007 - 388602 v1    

 

         earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the        Standard Settlement  Period (as  defined in  Section 2(d)(i) herein)  following the date of        exercise  as  aforesaid,  the  Holder  shall  deliver  the  aggregate  Exercise  Price  for  the        Warrant  Shares  specified  in  the  applicable  Notice  of  Exercise  by  wire  transfer  or        cashier’s  check  drawn  on  a  United  States  bank  unless  the  cashless  exercise  procedure        specified in Section 2(c) below is specified in the applicable Notice of Exercise.  No ink-       original Notice of Exercise shall be required, nor shall any medallion guarantee (or other        type  of  guarantee  or  notarization)  of  any  Notice  of  Exercise  be  required.         Notwithstanding  anything  herein  to  the  contrary,  the  Holder  shall  not  be  required  to        physically surrender this Warrant to the Company until the Holder has purchased all of        the  Warrant  Shares  available  hereunder  and  the  Warrant  has  been  exercised  in  full, in        which  case,  the  Holder  shall  surrender  this  Warrant  to  the  Company  for  cancellation        within  three  (3)  Trading  Days  of  the  date  on  which  the  final  Notice  of  Exercise  is        delivered to the Company. Partial  exercises of this Warrant resulting in purchases of a        portion of the total number of Warrant Shares available hereunder shall have the effect of        lowering the outstanding number of Warrant Shares purchasable hereunder in an amount        equal  to  the  applicable  number  of  Warrant  Shares  purchased.   The  Holder  and  the        Company shall maintain records showing the number of Warrant Shares purchased and        the date of such purchases.  The Company shall deliver any objection to any Notice of        Exercise  within  one  (1)  Trading  Day  of  receipt  of  such  notice.  The  Holder  and  any        assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of        the provisions of this paragraph, following the purchase of a portion of the Warrant        Shares hereunder, the number of Warrant Shares available for purchase hereunder        at any given time may be less than the amount stated on the face hereof.               b)    Exercise Price.  The exercise price per share of Common Stock under this        Warrant shall be $3.679, subject to adjustment hereunder (the “Exercise Price”).               c)    Cashless Exercise. Subject to the Holder’s compliance with Section 4.15        of the Purchase Agreement, if at any time after the six-month anniversary of the  Closing        Date,  there  is  no  effective  registration  statement  registering,  or  no  current  prospectus        available for, the resale of the Warrant Shares by the Holder, then this Warrant may also        be exercised, in whole or in part, at such time by means of a “cashless exercise” in which        the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient        obtained by dividing [(A-B) (X)] by (A), where:               (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the                   date of the applicable Notice of Exercise if such Notice of Exercise is (1)                   both executed and delivered pursuant to Section 2(a) hereof on a day that is                   not a Trading Day or (2) both executed and delivered pursuant to Section                   2(a)  hereof  on  a  Trading  Day  prior  to  the  opening  of  “regular  trading                   hours”  (as  defined  in  Rule  600(b)(64)  of  Regulation  NMS  promulgated                   under the federal securities laws) on such Trading Day, (ii) at the option of                   the  Holder,  either  (y)  the  VWAP  on  the  Trading  Day  immediately                   preceding the date of the applicable Notice of Exercise or (z) the Bid Price                   of  the  Common  Stock  on  the  principal  Trading  Market  as  reported  by                   Bloomberg L.P. as of the time of the Holder’s execution of the applicable                                         2  \\PH - 036137/000007 - 388602 v1    

 

                    Notice of Exercise if such Notice of Exercise is executed during “regular                   trading  hours”  on  a  Trading  Day  and  is  delivered  within  two  (2)  hours                   thereafter (including until two (2) hours after the close of “regular trading                   hours”  on  a  Trading  Day)  pursuant  to  Section  2(a)  hereof  or  (iii)  the                   VWAP on the date of the applicable Notice of Exercise if the date of such                   Notice of Exercise is a Trading Day and such Notice of Exercise is both                   executed  and  delivered  pursuant  to  Section  2(a)  hereof  after  the  close  of                   “regular trading hours” on such Trading Day;                            (B) = the Exercise Price of this Warrant, as adjusted hereunder; and                             (X) = the number of Warrant Shares that would be issuable upon exercise of this                   Warrant in accordance with the terms of this Warrant if such exercise were                   by means of a cash exercise rather than a cashless exercise.                            “Bid Price” 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  bid  price  of  the  Common  Stock  for  the  time  in  question  (or  the  nearest        preceding  date)  on  the  Trading  Market  on  which  the  Common  Stock  is  then  listed  or        quoted  as  reported  by  Bloomberg  L.P.  (based  on  a  Trading  Day  from  9:30  a.m.  (New        York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a        Trading Market, the volume weighted average price of the Common Stock for such date        (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common        Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the        Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group,        Inc. (or a similar organization or agency succeeding to its functions of reporting prices),        the most recent bid price per share of the Common Stock so reported, or (d) in all other        cases,  the  fair  market  value  of  a  share  of  Common  Stock  as  determined  by  an        independent appraiser selected in good faith by the Holders of a majority in interest of the        Securities  then  outstanding  and  reasonably  acceptable  to  the  Company,  the  fees  and        expenses of which shall be paid by the Company.               “VWAP” means, for any date, the price determined by the first of the following        clauses  that  applies:  (a)  if  the  Common  Stock  is  then  listed  or  quoted  on  a  Trading        Market, the daily volume weighted average price of the Common Stock for such date (or        the nearest preceding date) on the Trading Market on which the Common Stock is then        listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.        (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is        not a Trading Market, the volume weighted average price of the Common Stock for such        date  (or  the  nearest  preceding  date)  on  OTCQB  or  OTCQX  as  applicable,  (c)  if  the        Common  Stock  is  not  then  listed  or  quoted  for  trading  on  OTCQB  or  OTCQX  and  if        prices for the Common Stock are then reported in the “Pink Sheets” published by OTC        Markets Group, Inc. (or a similar organization or agency succeeding to its functions of        reporting prices), the most recent bid price per share of the Common Stock so reported,        or (d) in all other cases, the fair market value of a share of Common Stock as determined        by an independent appraiser selected in good faith by the Holders of a majority in interest                                          3  \\PH - 036137/000007 - 388602 v1    

 

         of  the  Securities  then  outstanding  and  reasonably  acceptable  to  the  Company,  the  fees        and expenses of which shall be paid by the Company.               For the avoidance of doubt, if the Holder does not timely provide the Company        with  a  Selling  Stockholder  Questionnaire  pursuant  to  Section  4.15  of  the  Purchase        Agreement, then this Warrant shall not be eligible to be exercised via “cashless exercise”        as set forth above.               If Warrant Shares are issued in such a cashless exercise, the parties acknowledge        and  agree  that  in  accordance  with  Section  3(a)(9)  of  the  Securities  Act,  the  Warrant        Shares shall take on the characteristics of the Warrants being exercised, and the holding        period of the Warrant Shares being issued may be tacked on to the holding period of this        Warrant.  The Company agrees not to take any position contrary to this Section 2(c).               Notwithstanding  anything  herein  to  the  contrary,  on  the  Termination  Date,  this        Warrant  shall be  automatically exercised via  cashless exercise pursuant  to this  Section        2(c).                            d)    Mechanics of Exercise.                          i.   Delivery  of  Warrant  Shares  Upon  Exercise.   The  Company                    shall cause the Warrant Shares purchased hereunder to be transmitted by                    the Transfer Agent to the Holder by crediting the account of the Holder’s                    or  its  designee’s  balance  account  with  The  Depository  Trust  Company                    through its Deposit or Withdrawal at Custodian system (“DWAC”) if the                    Company is  then a participant in  such system  and either (A) there is  an                    effective  registration  statement  permitting  the  issuance  of  the  Warrant                    Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant                    Shares are eligible for resale by the Holder without volume or manner-of-                   sale limitations pursuant to  Rule 144  (assuming cashless  exercise of the                    Warrants), and otherwise by physical delivery of a certificate, registered in                    the Company’s share register in the name of the Holder or its designee, for                    the number of Warrant Shares to which the Holder is entitled pursuant to                    such exercise  to  the  address  specified  by  the  Holder  in  the  Notice  of                    Exercise by the date that is the earliest of (i) two (2) Trading Days after                    the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading                    Day  after  delivery  of  the  aggregate  Exercise  Price  to  the  Company  and                    (iii)  the  number  of  Trading  Days  comprising  the  Standard  Settlement                    Period after the delivery to the Company of the Notice of Exercise (such                    date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of                    Exercise, the Holder shall be deemed for  all corporate purposes  to  have                    become the holder of record of the Warrant Shares with respect to which                    this Warrant has been exercised, irrespective of the date of delivery of the                    Warrant  Shares,  provided  that  payment  of  the aggregate  Exercise  Price                    (other than in the case of a cashless exercise) is received by the Warrant                    Share Delivery Date.  If the Company fails for any reason to deliver to the                    Holder the Warrant Shares subject to a Notice of Exercise by the Warrant                                         4  \\PH - 036137/000007 - 388602 v1    

 

                     Share  Delivery  Date,  the  Company  shall  pay  to  the  Holder,  in  cash,  as                    liquidated  damages  and  not  as  a  penalty,  for  each  $1,000  of  Warrant                    Shares  subject  to  such  exercise  (based  on  the  VWAP  of  the  Common                    Stock on the date of the applicable Notice of Exercise), $10 per Trading                    Day  (increasing  to  $20  per  Trading  Day  on  the  fifth  Trading  Day  after                    such liquidated damages begin to accrue) for each Trading Day after such                    Warrant Share Delivery Date until such Warrant Shares are delivered or                    Holder rescinds such exercise. The Company agrees to maintain a transfer                    agent  that is  a participant in  the FAST  program so  long as  this Warrant                    remains outstanding and exercisable. As used herein, “Standard Settlement                    Period” means  the standard settlement  period, expressed in  a number of                    Trading Days, on the Company’s primary Trading Market with respect to                    the Common Stock as  in  effect  on the date of  delivery of the Notice of                    Exercise.                         ii.  Delivery  of  New  Warrants  Upon  Exercise.   If  this  Warrant                    shall have been exercised in part, the Company shall, at the request of a                    Holder and upon surrender of this Warrant, at the time of delivery of the                    Warrant Shares, deliver to the Holder a new Warrant evidencing the rights                    of the Holder to purchase the unpurchased Warrant Shares called for by                    this  Warrant,  which  new  Warrant  shall  in  all  other  respects  be  identical                    with this Warrant.                        iii.  Rescission Rights.  If the Company fails to cause the Transfer                    Agent  to  transmit  to  the  Holder  the  Warrant  Shares  pursuant  to  Section                    2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the                    right to rescind such exercise.                        iv.   Compensation  for  Buy-In  on  Failure  to  Timely  Deliver                    Warrant Shares Upon Exercise.  In addition to any other rights available to                    the Holder, if the Company fails to cause the Transfer Agent to transmit to                    the  Holder  the  Warrant  Shares  in  accordance  with  the  provisions  of                    Section  2(d)(i)  above  pursuant  to  an  exercise  on  or  before  the  Warrant                    Share Delivery Date, and if after such date the Holder is required by its                    broker  to  purchase  (in  an open  market  transaction  or  otherwise)  or  the                    Holder’s brokerage firm otherwise purchases, shares of Common Stock to                    deliver in satisfaction of a sale by the Holder of the Warrant Shares which                    the Holder anticipated receiving upon such exercise (a “Buy-In”), then the                    Company shall (A) pay in cash to the Holder the amount, if any, by which                    (x) the Holder’s total purchase price (including brokerage commissions, if                    any) for the shares of Common Stock so purchased exceeds (y) the amount                    obtained  by  multiplying (1)  the  number  of  Warrant  Shares  that  the                    Company  was  required  to  deliver  to  the  Holder  in  connection  with  the                    exercise at issue times (2) the price at which the sell order giving rise to                    such  purchase  obligation  was  executed,  and  (B)  at  the  option  of  the                    Holder, either reinstate the portion of the Warrant and equivalent number                    of Warrant Shares for which such exercise was not honored (in which case                                         5  \\PH - 036137/000007 - 388602 v1    

 

                     such  exercise  shall  be  deemed  rescinded)  or  deliver  to  the  Holder  the                    number of shares of Common Stock that would have been issued had the                    Company  timely  complied  with  its  exercise  and  delivery  obligations                    hereunder.  For example, if the Holder purchases Common Stock having a                    total  purchase  price  of  $11,000  to  cover  a  Buy-In  with  respect  to  an                    attempted  exercise of  shares  of  Common  Stock  with  an  aggregate  sale                    price giving rise to such purchase obligation of $10,000, under clause (A)                    of the immediately preceding sentence the Company shall be required to                    pay  the  Holder  $1,000.  The  Holder  shall  provide  the  Company  written                    notice indicating the amounts payable to the Holder in respect of the Buy-                   In and, upon request of the Company, evidence of the amount of such loss.                     Nothing herein shall limit a Holder’s right to pursue any other remedies                    available to it hereunder, at law or in equity including, without limitation,                    a  decree  of  specific  performance  and/or  injunctive  relief  with  respect  to                    the  Company’s  failure  to  timely  deliver  shares  of  Common  Stock  upon                    exercise of the Warrant as required pursuant to the terms hereof.                         v.   No  Fractional  Shares  or  Scrip.   No  fractional  shares  or  scrip                    representing  fractional  shares  shall  be  issued  upon  the  exercise  of  this                    Warrant.  As to any fraction of a share which the Holder would otherwise                    be  entitled  to  purchase  upon  such  exercise,  the  Company  shall,  at  its                    election, either pay a cash adjustment in respect of such final fraction in an                    amount equal to such fraction multiplied by the Exercise Price or round up                    to the next whole share.                        vi.   Charges,  Taxes  and  Expenses.   Issuance  of  Warrant  Shares                    shall be made without charge to the Holder for any issue or transfer tax or                    other incidental expense in respect of the issuance of such Warrant Shares,                    all of which taxes and expenses shall be paid by the Company, and such                    Warrant Shares shall be issued in the name of the Holder or in such name                    or names as may be directed by the Holder; provided, however, that in the                    event that Warrant Shares are to be issued in a name other than the name                    of  the  Holder,  this  Warrant  when  surrendered  for  exercise  shall be                    accompanied by the Assignment Form attached  hereto  duly  executed by                    the  Holder  and  the  Company  may  require,  as  a  condition  thereto,  the                    payment of a sum sufficient to reimburse it for any transfer tax incidental                    thereto.   The  Company  shall  pay  all  Transfer  Agent  fees  required  for                    same-day  processing  of  any  Notice  of  Exercise  and  all  fees  to  the                    Depository  Trust  Company  (or  another  established  clearing  corporation                    performing similar functions) required for same-day electronic delivery of                    the Warrant Shares.                        vii.  Closing of Books.  The Company will not close its stockholder                    books or records in any manner which prevents the timely exercise of this                    Warrant, pursuant to the terms hereof.                                          6  \\PH - 036137/000007 - 388602 v1    

 

               e)    Holder’s  Exercise  Limitations.     The  Company  shall  not  effect  any        exercise of this Warrant, and a Holder shall not have the right to exercise any portion of        this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to        such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder        (together with the Holder’s Affiliates, and any other Persons acting as a group together        with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),        would  beneficially  own  in  excess  of  the  Beneficial  Ownership  Limitation  (as  defined        below).  For purposes of the foregoing sentence, the number of shares of Common Stock        beneficially owned by the Holder and its Affiliates and Attribution Parties shall include        the  number  of  shares  of  Common  Stock  issuable  upon  exercise  of  this  Warrant  with        respect  to  which  such  determination  is  being  made,  but  shall  exclude  the  number  of        shares  of Common Stock which would be issuable upon (i) exercise of  the remaining,        nonexercised  portion  of  this  Warrant  beneficially  owned  by  the  Holder  or  any  of  its        Affiliates  or  Attribution  Parties  and  (ii)  exercise  or  conversion  of  the  unexercised  or        nonconverted  portion  of  any  other  securities  of  the  Company  (including,  without        limitation, any other  Common Stock Equivalents) subject to a limitation on conversion        or exercise analogous to the limitation contained herein beneficially owned by the Holder        or  any  of  its  Affiliates  or  Attribution  Parties.  Except  as  set  forth  in  the  preceding        sentence,  for  purposes  of  this  Section  2(e),  beneficial  ownership  shall be  calculated  in        accordance  with  Section  13(d)  of  the  Exchange  Act  and  the  rules  and  regulations        promulgated thereunder, it being acknowledged by the Holder that the Company is not        representing to the Holder that such calculation is in compliance with Section 13(d) of the        Exchange Act and the Holder is solely responsible for any schedules required to be filed        in accordance therewith.   To the extent that the limitation contained in this Section 2(e)        applies,  the  determination  of  whether  this  Warrant  is  exercisable  (in  relation  to  other        securities owned by the Holder together with any Affiliates and Attribution Parties) and        of  which  portion  of  this  Warrant  is  exercisable  shall  be  in  the  sole  discretion  of  the        Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s        determination of whether this Warrant is exercisable (in relation to other securities owned        by the Holder together with any Affiliates and Attribution Parties) and of which portion        of  this  Warrant  is  exercisable,  in  each  case  subject  to  the  Beneficial  Ownership        Limitation, and the Company shall have no obligation to verify or confirm the accuracy        of  such  determination.    In  addition,  a  determination  as  to  any  group  status  as        contemplated  above  shall  be  determined  in  accordance  with  Section  13(d)  of  the        Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this        Section  2(e),  in  determining  the  number  of  outstanding  shares  of  Common  Stock,  a        Holder may rely on the number of outstanding shares of Common Stock as reflected in        (A) the Company’s most recent periodic or annual report filed with the Commission, as        the case may be, (B) a more recent public announcement by the Company or (C) a more        recent written notice by the Company or the Transfer Agent setting forth the number of        shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the        Company shall within one (1) Trading Day confirm orally and in writing to the Holder        the number of shares  of Common Stock then outstanding.  In any  case, the number of        outstanding  shares  of  Common  Stock  shall  be  determined  after  giving  effect  to  the        conversion  or  exercise  of  securities  of  the  Company,  including  this  Warrant,  by  the        Holder or its Affiliates or Attribution Parties since the date as of which such number of                                          7  \\PH - 036137/000007 - 388602 v1    

 

         outstanding  shares  of  Common  Stock  was  reported.   The  “Beneficial  Ownership        Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding        immediately after giving effect to the issuance of shares of Common Stock issuable upon        exercise  of  this  Warrant.   The  Holder,  upon  notice  to  the  Company,  may  increase  or        decrease the Beneficial  Ownership  Limitation provisions  of this  Section 2(e), provided        that the Beneficial Ownership  Limitation in  no event  exceeds  9.99% of the number of        shares of the Common Stock outstanding immediately after giving effect to the issuance        of shares of Common Stock upon exercise of this Warrant held by the Holder and the        provisions of this Section 2(e) shall continue to apply.  Any increase in  the Beneficial        Ownership Limitation will not be effective until the 61st day after such notice is delivered        to the Company.  The provisions of this paragraph shall be construed and implemented in        a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct        this paragraph (or any portion hereof) which may be defective or inconsistent with the        intended  Beneficial  Ownership  Limitation  herein  contained  or  to  make  changes  or        supplements  necessary  or  desirable  to  properly  give  effect  to  such  limitation.  The        limitations contained in this paragraph shall apply to a successor holder of this Warrant.         Section 3.  Certain Adjustments.               a)    Stock  Dividends  and  Splits.  If  the  Company,  at  any  time  while  this        Warrant  is  outstanding:  (i)  pays a  stock  dividend  or  otherwise  makes  a  distribution  or        distributions  on  shares  of  its  Common  Stock  or  any  other  equity  or  equity  equivalent        securities payable in shares of Common Stock (which, for avoidance of doubt, shall not        include  any  shares  of  Common Stock  issued  by  the  Company  upon  exercise  of  this        Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of        shares,  (iii)  combines  (including  by  way  of  reverse  stock  split)  outstanding  shares  of        Common  Stock  into  a  smaller  number of  shares,  or  (iv)  issues  by  reclassification  of        shares of the Common Stock any shares of capital stock of the Company, then in each        case the Exercise Price shall be multiplied by a fraction of which the numerator shall be        the number of shares of Common Stock (excluding treasury shares, if any) outstanding        immediately  before  such  event  and  of  which  the  denominator  shall  be  the  number  of        shares of Common Stock outstanding immediately after such event, and the number of        shares issuable upon exercise of this Warrant shall be proportionately adjusted such that        the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment        made pursuant to this Section 3(a) shall become effective immediately after the record        date for the determination of stockholders entitled to receive such dividend or distribution        and  shall  become  effective  immediately  after  the  effective  date  in  the  case  of  a        subdivision, combination or re-classification.               b)    Reserved.               c)    Subsequent Rights Offerings.  In addition to any adjustments pursuant to        Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock        Equivalents or rights to purchase stock, warrants, securities or other property pro rata to        the record holders of any class of shares of Common Stock (the “Purchase Rights”), then        the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights,        the aggregate Purchase Rights which the Holder could have acquired if the Holder had                                         8  \\PH - 036137/000007 - 388602 v1    

 

         held the number of shares of Common Stock acquirable upon complete exercise of this        Warrant  (without  regard  to  any  limitations  on  exercise  hereof,  including  without        limitation, the Beneficial Ownership Limitation) immediately before the date on which a        record  is  taken  for  the  grant,  issuance  or  sale  of  such Purchase  Rights,  or,  if  no  such        record is taken, the date as of which the record holders of shares of Common Stock are to        be determined for the grant, issue or sale of such Purchase Rights (provided, however,        that to the extent that the Holder’s right to participate in any such Purchase Right would        result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall        not  be  entitled  to  participate  in  such  Purchase  Right  to  such  extent  (or  beneficial        ownership of such shares of Common Stock as a result of such Purchase Right to such        extent) and such Purchase Right to such extent shall be held in abeyance for the Holder        until such time, if ever, as its right thereto would not result in the Holder exceeding the        Beneficial Ownership Limitation).                d)    Pro Rata Distributions.  During such time as this Warrant is outstanding, if        the Company shall declare or make any dividend (other than cash) or other distribution of        its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of        return of capital or otherwise (including, without limitation, any distribution of stock or        other  securities,  property  or  options  by  way  of  a  dividend,  spin  off,  reclassification,        corporate  rearrangement,  scheme  of  arrangement  or  other  similar  transaction)  (a        “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the        Holder  shall  be  entitled  to  participate  in  such  Distribution  to  the  same  extent  that  the        Holder would have participated therein if the Holder had held the number of shares of        Common Stock acquirable upon complete exercise of this Warrant (without regard to any        limitations  on  exercise  hereof,  including  without  limitation,  the  Beneficial  Ownership        Limitation) immediately before the date of which a record is taken for such Distribution,        or,  if  no  such  record  is  taken,  the  date  as  of  which  the  record  holders  of  shares  of        Common Stock are to be determined for the participation in such Distribution (provided,        however, that to the extent that the Holder's right to participate in any such Distribution        would  result  in  the  Holder  exceeding  the  Beneficial  Ownership  Limitation,  then  the        Holder shall not be entitled to participate in such Distribution to such extent (or in the        beneficial ownership of any shares of Common Stock as a result of such Distribution to        such extent) and the portion of such Distribution shall be held in abeyance for the benefit        of the Holder until such time, if ever, as its right thereto would not result in the Holder        exceeding the Beneficial Ownership Limitation).                 e)    Fundamental  Transaction.  If,  at  any  time  while  this  Warrant  is        outstanding, (i) the Company, directly or indirectly, in one or more related transactions        effects any merger or consolidation of the Company with or into another Person, (ii) the        Company,  directly  or  indirectly,  effects  any  sale,  lease,  license,  assignment,  transfer,        conveyance or other disposition of all or substantially all of its assets in one or a series of        related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange        offer  (whether  by  the  Company  or  another  Person)  is  completed  pursuant  to  which        holders of Common Stock are permitted to sell, tender or exchange their shares for other        securities, cash or property and has been accepted by the holders of 50% or more of the        outstanding  Common  Stock,  (iv)  the  Company,  directly  or  indirectly,  in  one  or  more        related transactions effects any reclassification, reorganization or recapitalization of the                                         9  \\PH - 036137/000007 - 388602 v1    

 

         Common Stock or any compulsory share exchange pursuant to which the Common Stock        is effectively converted into or exchanged for other securities, cash or property, or (v) the        Company, directly or indirectly, in one or more related transactions consummates a stock        or share purchase agreement or other business combination (including, without limitation,        a  reorganization,  recapitalization,  spin-off  or  scheme  of  arrangement)  with  another        Person or group of Persons whereby such other Person or group acquires more than 50%        of the outstanding shares of Common Stock (not including any shares of Common Stock        held by the other Person or other Persons making or party to, or associated or affiliated        with  the  other  Persons  making  or  party  to,  such  stock  or  share  purchase  agreement  or        other  business  combination)  (each  a  “Fundamental  Transaction”),  then,  upon  any        subsequent exercise of this Warrant, the Holder shall have the right to receive, for each        Warrant Share that would have been issuable upon such exercise immediately prior to the        occurrence of such Fundamental Transaction, at the option of the Holder (without regard        to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of        Common Stock of the successor or acquiring corporation or of the Company, if it is the        surviving corporation,  and any additional consideration (the “Alternate Consideration”)        receivable  as  a  result  of  such  Fundamental  Transaction  by  a  holder  of  the  number  of        shares of Common Stock for which this Warrant is exercisable immediately prior to such        Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise        of this Warrant).  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.  Notwithstanding  anything  to  the  contrary,  in  the  event  of  a  Fundamental        Transaction (other than a Fundamental Transaction that was not approved by, or required        to  be  approved  by,  the  board  of  directors  of  the  Company,  in  which  case  the  right  to        receive cash equal to the Black Scholes Value of the remaining unexercised portion of        this Warrant described below shall not apply), the Company or any Successor Entity (as        defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or        within 30 days after, the consummation of the Fundamental Transaction (or, if later, the        date of the public announcement of the applicable Fundamental Transaction), purchase        this  Warrant  from  the Holder by paying to the  Holder an amount of  cash  equal  to  the        Black Scholes Value of the remaining unexercised portion of this Warrant on the date of        the consummation of such Fundamental Transaction.  Notwithstanding anything herein to        the  contrary,  the  Holder  may  not  require  the  Company  or  any  Successor  Entity  to        repurchase  the  Warrants  for  the  Black  Scholes  Value  solely  in  connection  with  a        Fundamental  Transaction  that  solely  is  (i)  not  approved  by  the  Company’s  board  of        directors and (ii) not within the Company’s control.  “Black Scholes Value” means the        value  of  this  Warrant  based  on  the  Black  and  Scholes  Option  Pricing  Model  obtained        from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of        consummation  of  the  applicable  Fundamental  Transaction  for  pricing  purposes  and                                          10  \\PH - 036137/000007 - 388602 v1    

 

         reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period        equal  to  the  time  between  the  date  of  the  public  announcement  of  the  applicable        Fundamental Transaction and the Termination Date, (B) an expected volatility equal to        the  greater  of  100%  and  the  100  day  volatility  obtained  from  the  HVT  function  on        Bloomberg as of the Trading Day immediately following the public announcement of the        applicable  Fundamental  Transaction,  (C)  the  underlying  price  per  share  used  in  such        calculation shall be the sum of the price per share being offered in cash, if any, plus the        value  of  any  non-cash  consideration,  if  any,  being  offered  in  such  Fundamental        Transaction and (D) a remaining option time equal to the time between the date of the        public  announcement  of  the  applicable  Fundamental  Transaction  and  the  Termination        Date.   The  payment  of  the  Black  Scholes  Value  will  be  made  by  wire  transfer  of        immediately available funds (or by delivery of such other consideration, as applicable)        within five Business Days of the Holder’s election (or, if later, on the effective date of the        Fundamental  Transaction).  The  Company  shall  cause  any  successor  entity  in  a        Fundamental Transaction  in  which  the  Company  is  not  the  survivor  (the  “Successor        Entity”) to assume in writing all of the obligations of the Company under this Warrant        and the other Transaction Documents in accordance with the provisions of this Section        3(e) pursuant to written agreements in form and substance reasonably satisfactory to the        Holder  and  approved  by  the  Holder  (without  unreasonable  delay)  prior  to  such        Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in        exchange  for  this  Warrant  a  security  of  the  Successor  Entity  evidenced  by  a  written        instrument  substantially  similar  in  form  and  substance  to  this  Warrant  which  is        exercisable  for  a  corresponding  number  of  shares  of  capital  stock  of  such  Successor        Entity  (or  its  parent entity)  equivalent  to  the  shares  of  Common  Stock  acquirable  and        receivable  upon  exercise  of  this  Warrant  (without  regard  to  any  limitations  on  the        exercise  of  this  Warrant)  prior  to  such  Fundamental  Transaction,  and  with  an  exercise        price  which  applies  the exercise  price  hereunder  to  such  shares  of  capital  stock  (but        taking into account the relative value of the shares of Common Stock pursuant to such        Fundamental Transaction and the value of such shares of capital stock, such number of        shares  of  capital  stock  and  such  exercise  price  being  for  the  purpose  of  protecting  the        economic  value  of  this  Warrant  immediately  prior  to  the  consummation  of  such        Fundamental Transaction), and which is reasonably satisfactory in form and substance to        the  Holder.  Upon  the  occurrence  of  any  such  Fundamental  Transaction,  the  Successor        Entity shall succeed to,  and be substituted for (so that from  and after the date of such        Fundamental  Transaction,  the  provisions  of  this  Warrant  and  the  other  Transaction        Documents referring to the “Company” shall refer instead to the Successor Entity), and        may  exercise  every  right  and  power  of  the  Company  and  shall  assume  all  of  the        obligations  of  the  Company  under  this  Warrant  and  the  other  Transaction  Documents        with the same effect as if such Successor Entity had been named as the Company herein.                f)    Calculations.  All  calculations  under  this  Section  3  shall  be  made  to  the        nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this        Section 3, the number of shares of Common Stock deemed to be issued and outstanding        as of a given date shall be the sum of the number of shares of Common Stock (excluding        treasury shares, if any) issued and outstanding.               g)    Notice to Holder.                                           11  \\PH - 036137/000007 - 388602 v1    

 

                         i.   Adjustment to Exercise Price. Whenever the Exercise Price is                    adjusted pursuant  to  any provision  of this  Section 3, the Company shall                    promptly deliver to the Holder by facsimile or email a notice 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.                          ii.  Notice to Allow Exercise by Holder. If (A) the Company shall                    declare  a  dividend  (or  any  other  distribution  in  whatever  form)  on  the                    Common  Stock,  (B)  the  Company  shall  declare  a  special  nonrecurring                    cash dividend on or a redemption of the Common Stock, (C) the Company                    shall authorize the granting to all holders of the Common Stock rights or                    warrants  to  subscribe  for  or  purchase  any  shares  of  capital  stock  of  any                    class  or  of  any  rights,  (D)  the  approval  of  any  stockholders  of  the                    Company shall be required in connection with any reclassification of the                    Common Stock, any consolidation or merger to which the Company is a                    party,  any  sale  or  transfer  of  all  or  substantially  all  of  the  assets  of  the                    Company, or any compulsory share exchange whereby the Common Stock                    is  converted  into  other  securities,  cash  or  property,  or  (E)  the  Company                    shall  authorize  the  voluntary  or  involuntary  dissolution,  liquidation  or                    winding up of the affairs of the Company, then, in each case, the Company                    shall cause to be delivered by facsimile or email to the Holder at its last                    facsimile  number  or  email  address  as  it  shall  appear  upon  the  Warrant                    Register of the Company, at least 20 calendar days prior to the applicable                    record or effective date hereinafter specified, a notice stating (x) the date                    on  which  a  record  is  to  be  taken  for  the  purpose  of  such  dividend,                    distribution,  redemption,  rights  or  warrants,  or  if  a  record  is  not  to  be                    taken, the date as of which the holders of the Common Stock of record to                    be entitled to such dividend, distributions, redemption, rights or warrants                    are  to  be  determined  or  (y)  the  date  on  which  such  reclassification,                    consolidation,  merger,  sale,  transfer  or  share  exchange  is  expected  to                    become  effective  or  close,  and  the  date  as  of  which  it  is  expected  that                    holders of the Common Stock of record shall be entitled to exchange their                    shares  of  the  Common  Stock  for  securities,  cash  or  other  property                    deliverable upon such reclassification, consolidation, merger, sale, transfer                    or share exchange; provided that the failure to deliver such notice or any                    defect therein or in the delivery thereof shall not affect the validity of the                    corporate action required to be specified in such notice.  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  Current  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  the  effective  date  of  the  event  triggering  such  notice                    except as may otherwise be expressly set forth herein.         Section 4.  Transfer of Warrant.                                         12  \\PH - 036137/000007 - 388602 v1    

 

               a) Transferability.  Pursuant to FINRA a) Rule 5110(g)(1), neither this Warrant        nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred,        assigned,  pledged  or  hypothecated,  or  be  the  subject  of  any  hedging,  short sale,        derivative, put or call transaction that would result in the effective economic disposition        of the securities by any person for a period of 180 days immediately following the date of        effectiveness or commencement of sales of the offering pursuant to which this Warrant is        being issued, except the transfer of any security:                 i.  by operation of law or by reason of reorganization of the Company;                 ii. to any FINRA member firm participating in the offering and the officers         and  partners  thereof,  if  all  securities  so  transferred  remain  subject  to  the  lock-up         restriction in this Section 4(a) for the remainder of the time period;                iii. if  the  aggregate  amount  of  securities  of  the  Company  held  by  the         underwriter and related persons do not exceed 1% of the securities being offered;                iv.  that is beneficially owned on a pro-rata basis by all equity owners of an         investment fund, provided that no participating member manages or otherwise directs         investments by the fund, and participating members in the aggregate do not own more         than 10% of the equity in the fund; or                 v.  the exercise or conversion of any security, if all securities received remain         subject  to  the  lock-up  restriction  in  this  Section  4(a)  for  the  remainder  of  the time         period.               Subject to the foregoing restriction and subject to compliance with any applicable  securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section  4.1  of  the  Purchase  Agreement,  this  Warrant  and  all  rights  hereunder  (including,  without  limitation,  any registration rights) are transferable, in  whole or in  part,  upon surrender of this  Warrant at the principal office of the Company or its designated agent, together with a written  assignment of this Warrant substantially in the form attached hereto duly executed by the Holder  or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of  such transfer.  Upon such surrender and, if required, such payment, the Company shall execute  and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,  and in the denomination or denominations specified in such instrument of assignment, and shall  issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and  this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the  Holder  shall  not  be  required  to  physically  surrender  this  Warrant  to  the  Company  unless  the  Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant  to  the Company  within  two  (2)  Trading  Days  of  the  date  on  which  the  Holder  delivers  an  assignment  form  to  the  Company  assigning  this  Warrant  in  full.  The  Warrant,  if  properly  assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant  Shares without having a new Warrant issued.               b)    New  Warrants.  This  Warrant  may  be  divided  or  combined  with  other        Warrants upon presentation hereof at the aforesaid office of the Company, together with a                                          13  \\PH - 036137/000007 - 388602 v1    

 

         written notice specifying the names and denominations in which new Warrants are to be        issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section        4(a),  as  to  any  transfer  which  may  be  involved  in  such  division  or  combination,  the        Company  shall  execute  and  deliver  a  new  Warrant  or  Warrants  in  exchange  for  the        Warrant  or  Warrants  to  be  divided  or  combined  in  accordance  with  such  notice.  All        Warrants issued on transfers or exchanges shall be dated the Issue Date of this Warrant        and  shall  be  identical  with  this  Warrant  except  as to  the  number  of  Warrant  Shares        issuable pursuant thereto.                c)    Warrant Register. 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.               d)    Transfer  Restrictions.  If,  at  the  time  of  the  surrender  of  this  Warrant  in        connection  with  any  transfer  of  this  Warrant,  the  transfer  of  this  Warrant  shall  not  be        either  (i)  registered  pursuant  to  an  effective  registration  statement  under  the  Securities        Act  and  under  applicable  state  securities  or  blue  sky  laws  or  (ii)  eligible  for  resale        without volume or manner-of-sale restrictions or current public information requirements        pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,        that  the  Holder  or  transferee  of  this  Warrant,  as  the  case  may  be,  comply  with  the        provisions of Section 5.7 of the Purchase Agreement.               e)    Representation  by  the  Holder.   The  Holder,  by  the  acceptance  hereof,        represents and warrants that it is acquiring this Warrant and, upon any exercise hereof,        will acquire the Warrant Shares issuable upon such exercise, for its own account and not        with a view to or for distributing or reselling such Warrant Shares or any part thereof in        violation of the Securities Act or any applicable state securities law, except pursuant to        sales registered or exempted under the Securities Act.         Section 5.  Miscellaneous.               a)    No  Rights  as  Stockholder  Until  Exercise;  No  Settlement  in  Cash.   This        Warrant does not entitle the Holder to any voting rights, dividends or other rights as a        stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i),        except  as  expressly  set  forth  in  Section  3.   Without  limiting  the  rights  of  a  Holder  to        receive  Warrant  Shares  on  a  “cashless  exercise,”  and  to  receive  the  cash  payments        contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be        required to net cash settle a Warrant exercise.                 b)    Loss,  Theft,  Destruction  or  Mutilation  of  Warrant.  The  Company        covenants that upon receipt by the Company of evidence reasonably satisfactory to it of        the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to        the  Warrant  Shares,  and  in  case  of  loss,  theft  or  destruction,  of  indemnity  or  security        reasonably  satisfactory  to  it  (which,  in  the  case  of  the  Warrant,  shall  not  include  the                                          14  \\PH - 036137/000007 - 388602 v1    

 

         posting  of  any  bond),  and  upon  surrender  and  cancellation  of  such  Warrant  or  stock        certificate,  if  mutilated,  the  Company  will  make  and  deliver  a  new  Warrant  or stock        certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock        certificate.               c)    Saturdays,  Sundays,  Holidays,  etc.   If  the  last  or  appointed  day  for  the        taking of any action or the expiration of any right required or granted herein shall not be a        Business Day, then, such action may be taken or such right may be exercised on the next        succeeding Business Day.               d)    Authorized Shares.                             The  Company  covenants  that,  during  the  period  the  Warrant  is              outstanding,  it  will  reserve  from  its  authorized  and  unissued  Common  Stock  a              sufficient  number  of  shares  to  provide  for  the  issuance  of  the  Warrant  Shares              upon  the  exercise  of  any  purchase  rights  under  this  Warrant.   The  Company              further covenants that its issuance of this Warrant shall constitute full authority to              its officers who are charged with the duty of issuing the necessary Warrant Shares              upon the exercise of the purchase rights under this Warrant.  The Company will              take all such reasonable action as may be necessary to assure that such Warrant              Shares may be issued as provided herein without violation of any applicable law              or  regulation,  or  of  any  requirements  of  the  Trading  Market  upon  which  the              Common Stock may be listed.  The Company covenants that all Warrant Shares              which may be issued upon the exercise of the purchase rights represented by this              Warrant  will,  upon  exercise  of  the  purchase  rights  represented  by  this  Warrant              and payment for such Warrant Shares in accordance herewith, be duly authorized,              validly  issued,  fully  paid  and  nonassessable  and  free  from  all  taxes,  liens  and              charges created by the Company in respect of the issue thereof (other than taxes in              respect of any transfer occurring contemporaneously with such issue).                       Except  and  to  the  extent  as  waived  or  consented  to  by  the  Holder,  the              Company  shall  not  by  any  action,  including,  without  limitation,  amending  its              certificate  of  incorporation  or  through  any  reorganization,  transfer  of  assets,              consolidation,  merger,  dissolution,  issue  or  sale  of  securities  or  any  other              voluntary action, avoid or seek to avoid the observance or performance of any of              the terms of this Warrant, but will at all times in good faith assist in the carrying              out of all such terms and in the taking of all such actions as may be necessary or              appropriate  to  protect  the  rights  of  Holder  as  set  forth  in  this  Warrant  against              impairment.  Without limiting the generality of the foregoing, the Company will              (i) not  increase the par  value of any Warrant  Shares  above the amount payable              therefor upon such exercise immediately prior to such increase in par value, (ii)              take all such action as may be necessary or appropriate in order that the Company              may validly and legally issue fully paid and nonassessable Warrant Shares upon              the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain              all such authorizations, exemptions or consents from any public regulatory body              having  jurisdiction  thereof,  as  may  be,  necessary  to  enable  the  Company  to              perform its obligations under this Warrant.                                         15  \\PH - 036137/000007 - 388602 v1    

 

                     Before  taking  any  action  which  would  result  in  an  adjustment  in  the              number of Warrant Shares for which this Warrant is exercisable or in the Exercise              Price, the Company shall obtain all such authorizations or exemptions thereof, or              consents thereto, as may be necessary from any public regulatory body or bodies              having jurisdiction thereof.               e)    Jurisdiction.  All  questions  concerning  the  construction,  validity,        enforcement and interpretation of this Warrant shall be determined in accordance with the        provisions of the Purchase Agreement.                 f)    Restrictions.  The Holder acknowledges that the Warrant Shares acquired        upon  the  exercise  of  this  Warrant,  if  not  registered,  and  the  Holder  does  not  utilize        cashless  exercise,  will  have  restrictions  upon  resale  imposed  by  state  and  federal        securities laws.               g)    Nonwaiver and Expenses.  No course of dealing or any delay or failure to        exercise any right hereunder on the part of Holder shall operate as a waiver of such right        or  otherwise  prejudice  the  Holder’s  rights,  powers  or  remedies.   Without  limiting  any        other provision of this Warrant or the Purchase Agreement, if the Company willfully and        knowingly  fails  to  comply  with  any  provision  of  this  Warrant,  which  results  in  any        material damages to the Holder, the Company shall pay to the Holder such amounts as        shall  be  sufficient  to  cover  any  costs  and  expenses  including,  but  not  limited  to,        reasonable  attorneys’  fees,  including  those  of  appellate  proceedings,  incurred  by  the        Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its        rights, powers or remedies hereunder.               h)    Notices.  Any notice, request or other document required or permitted to        be given or delivered to the Holder by the Company shall be delivered to the address for        the Holder in the Warrant Register.               i)    Limitation  of  Liability.   No  provision  hereof,  in  the  absence  of  any        affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and        no  enumeration  herein  of  the  rights  or  privileges  of  the  Holder,  shall  give  rise  to  any        liability of the Holder for the purchase price of any Common Stock or as a stockholder of        the Company, whether such liability is asserted by the Company or by creditors of the        Company.               j)    Remedies.  The Holder, in addition to being entitled to exercise all rights        granted by law, including recovery of damages, will be entitled to specific performance        of its rights under this Warrant.  The Company agrees that monetary damages would not        be  adequate  compensation  for  any  loss  incurred  by  reason  of  a  breach  by  it  of  the        provisions of this Warrant and hereby agrees to waive and not to assert the defense in any        action for specific performance that a remedy at law would be adequate.               k)    Successors  and  Assigns.   Subject  to  applicable  securities  laws,  this        Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and        be binding upon the successors and permitted assigns of the Company and the successors                                          16  \\PH - 036137/000007 - 388602 v1    

 

         and permitted assigns of Holder.  The provisions of this Warrant are intended to be for        the benefit of any Holder from time to time of this Warrant and shall be enforceable by        the Holder or holder of Warrant Shares.               l)    Amendment.  This Warrant may be modified or amended or the provisions        hereof waived with the written consent of the Company and the Holder.               m)    Severability.  Wherever possible, each provision of this Warrant shall be        interpreted in such manner as to be effective and valid under applicable law, but if any        provision  of  this  Warrant  shall  be  prohibited  by  or  invalid  under  applicable  law,  such        provision  shall  be  ineffective  to  the  extent  of  such  prohibition  or  invalidity,  without        invalidating the remainder of such provisions or the remaining provisions of this Warrant.               n)    Headings.  The headings used in this Warrant are for the convenience of        reference only and shall not, for any purpose, be deemed a part of this Warrant.                                  ********************                                                                       (Signature Page Follows)                                                               17  \\PH - 036137/000007 - 388602 v1    

 

                 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed  by its officer thereunto duly authorized as of the date first above indicated.                                                                        FIBROCELL SCIENCE, INC.                                                                                                      By:__________________________________________                                       Name:                                       Title:                                                                            18  \\PH - 036137/000007 - 388602 v1    

 

                                           NOTICE OF EXERCISE    TO:   FIBROCELL SCIENCE, INC.                (1) The  undersigned  hereby  elects  to  purchase  ________  Warrant Shares  of  the  Company  pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the  exercise price in full, together with all applicable transfer taxes, if any.               (2) Payment shall take the form of (check applicable box):                     [  ] in lawful money of the United States; or                     [  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in                    accordance with the formula set forth in subsection 2(c), to exercise this Warrant with                    respect  to  the  maximum  number  of  Warrant  Shares  purchasable  pursuant  to  the                    cashless exercise procedure set forth in subsection 2(c).               (3) Please issue said Warrant Shares in the name of the undersigned or in such other name as  is specified below:                     _______________________________                        The Warrant Shares shall be delivered to the following DWAC Account Number:                      _______________________________                                        _______________________________                                        _______________________________                  (4)   Accredited  Investor.   The  undersigned  is  an  “accredited investor”  as  defined  in  Regulation D promulgated under the Securities Act of 1933, as amended.    [SIGNATURE OF HOLDER]          Name of Investing Entity: ________________________________________________________________________  Signature of Authorized Signatory of Investing Entity: _________________________________________________  Name of Authorized Signatory: ___________________________________________________________________  Title of Authorized Signatory: ____________________________________________________________________  Date: ________________________________________________________________________________________                                    \\PH - 036137/000007 - 388602 v1    

 

                                                                     EXHIBIT B                                        ASSIGNMENT FORM    (To assign the foregoing Warrant, execute this form and supply required information.  Do not use this  form to purchase shares.)   FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to  Name:                                                                                                                   (Please Print)   Address:                                                                                                                (Please Print)   Phone Number:                           ______________________________________   Email Address:                          ______________________________________   Dated: _______________ __, ______          Holder’s Signature:                        Holder’s Address:                                     \\PH - 036137/000007 - 388602 v1exhibit101spa

                                                                   Exhibit 10.1                        SECURITIES PURCHASE AGREEMENT         This  Securities  Purchase  Agreement  (this  “Agreement”)  is  dated  as  of  May  29,  2018,  between Fibrocell Science, Inc., a Delaware corporation (the “Company”), and each purchaser  identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”  and collectively the “Purchasers”).         WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant  to  (i)  an  effective  registration  statement  under  the  Securities  Act  of  1933,  as  amended  (the  “Securities Act”) as  to  the Shares  and (ii) an exemption  from  the registration requirements  of  Section  5  of  the  Securities  Act  contained  in  Section  4(a)(2)  thereof  and/or  Regulation  D  thereunder as to the Warrants, the Company desires to issue and sell to each Purchaser, and each  Purchaser,  severally  and  not  jointly,  desires  to  purchase  from  the  Company,  securities  of  the  Company as more fully described in this Agreement.         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this  Agreement, and for other good and valuable consideration the receipt and adequacy of which are  hereby acknowledged, the Company and each Purchaser agree as follows:                                    ARTICLE I.                                  DEFINITIONS         1.1    Definitions.  In addition to the terms defined elsewhere in this Agreement, for all  purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:               “Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.               “Action” shall have the meaning ascribed to such term in Section 3.1(j).               “Affiliate”  means  any  Person  that,  directly  or  indirectly  through  one  or  more        intermediaries, controls or is controlled by or is under common control with a Person as        such terms are used in and construed under Rule 405 under the Securities Act.                 “Board of Directors” means the board of directors of the Company.               “Business Day” means any day except any Saturday, any Sunday, any day which        is a federal legal holiday in the United States or any day on which banking institutions in        the State of New York are authorized or required by law or other governmental action to        close.               “Closing” means the closing of the purchase and sale of the Securities pursuant to        Section 2.1.               “Closing  Date”  means  the Trading  Day  on  which  all  of  the  Transaction        Documents have been executed and delivered by the applicable parties  thereto, and all        conditions precedent to  (i) the Purchasers’ obligations to pay the Subscription Amount        and  (ii)  the  Company’s  obligations  to  deliver  the  Securities,  in  each  case,  have  been                         

 

      satisfied or waived, but in no event later than the second (2nd) Trading Day following the        date hereof.               “Commission” means the United States Securities and Exchange Commission.               “Common Stock” means the common stock of the Company, par value $0.001 per        share,  and  any  other  class  of  securities  into  which  such  securities  may  hereafter  be        reclassified or changed.                “Common  Stock  Equivalents”  means  any  securities  of  the  Company  or  the        Subsidiaries which  would  entitle  the  holder  thereof  to  acquire  at  any  time  Common        Stock, including, without limitation, any debt, preferred stock, right, option, warrant or        other instrument that is at any time convertible into or exercisable or exchangeable for, or        otherwise entitles the holder thereof to receive, Common Stock.               “Company Counsel” means Hogan Lovells US LLP, with offices located at 1735        Market Street, 23rd Floor Philadelphia, PA 19103.                “Disclosure  Schedules”  means  the  Disclosure  Schedules  of  the  Company        delivered concurrently herewith.               “Disclosure Time” means, (i) if this Agreement is signed on any day that is not a        Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York        City  time)  on  any  Trading  Day,  9:01  a.m.  (New  York  City  time)  on  the  Trading  Day        immediately following the date hereof, unless otherwise instructed to an earlier time by        the Placement Agent (ii) if this Agreement is signed between midnight (New York City        time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m.        (New York City time) on the date hereof, unless otherwise instructed to an earlier time by        the Placement Agent.               “Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).                “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the        rules and regulations promulgated thereunder.                            “Exempt Issuance” means the issuance of (a) shares of Common Stock or options        to employees, officers or directors of the Company pursuant to any stock or option plan        duly adopted for such purpose, by a majority of the non-employee members of the Board        of  Directors  or  a  majority  of  the  members  of  a  committee  of  non-employee  directors        established for such purpose for services rendered to the Company, (b) securities upon        the exercise or exchange of or conversion of any Securities issued hereunder and/or other        securities exercisable or exchangeable for or convertible into shares of Common Stock        issued and outstanding on the date of this Agreement, provided that such securities have        not  been  amended  since  the  date  of  this  Agreement  to  increase  the  number  of  such        securities or to decrease the exercise price, exchange price or conversion price of such        securities (other than in  connection with  stock splits  or combinations) or to  extend the        term  of  such  securities,  and  (c)  securities  issued  pursuant  to  acquisitions  or  strategic        transactions  approved  by  a  majority  of  the  disinterested  directors  of  the  Company,                                         2  \\PH - 036137/000007 - 388262 v8    

 

      provided that such securities are issued as “restricted securities” (as defined in Rule 144)        and  carry  no  registration  rights  that  require  or  permit  the  filing  of  any  registration        statement in connection therewith during the prohibition period in Section 4.12(a) herein,        and provided that any such issuance shall only be to a Person (or to the equityholders of a        Person) which is, itself or through its subsidiaries, an operating company or an owner of        an asset in a business synergistic with the business of the Company and shall provide to        the  Company  additional  benefits  in  addition  to  the  investment  of  funds,  but  shall  not        include a transaction in which the Company is issuing securities primarily for the purpose        of raising capital or to an entity whose primary business is investing in securities.                “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.               “FDA” shall have the meaning ascribed to such term in Section 3.1(hh).               “FDCA” shall have the meaning ascribed to such term in Section 3.1(hh).               “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).               “Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).               “Intellectual  Property  Rights”  shall  have  the  meaning  ascribed  to  such  term  in        Section 3.1(p).               “Legend Removal Date” shall have the meaning ascribed to such term in Section        4.1(c).               “Liens” means a lien, charge, pledge, security interest, encumbrance, right of first        refusal, preemptive right or other restriction.               “Material  Adverse  Effect”  shall  have  the  meaning  assigned  to  such  term  in        Section 3.1(b).               “Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).               “Per Share Purchase Price” equals $2.94375, subject to adjustment for reverse and        forward stock splits, stock dividends, stock combinations and other similar transactions        of the Common Stock that occur after the date of this Agreement.               “Person”  means  an  individual  or  corporation,  partnership,  trust,  incorporated  or        unincorporated association, joint venture, limited liability company, joint stock company,        government (or an agency or subdivision thereof) or other entity of any kind.               “Pharmaceutical Product” shall have the meaning ascribed to such term in Section        3.1(hh).                “Placement Agent” means H.C. Wainwright & Co., LLC.                                          3  \\PH - 036137/000007 - 388262 v8    

 

            “Proceeding” means an action, claim, suit, investigation or proceeding (including,        without limitation, an informal investigation or partial proceeding, such as a deposition),        whether commenced or threatened.               “Prospectus” means the final base prospectus filed for the Registration Statement.               “Prospectus  Supplement”  means  the  supplement  to  the  Prospectus  complying        with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by        the Company to each Purchaser at the Closing.               “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.               “Registration Statement” means the effective registration statement on Form S-3        filed with Commission (File No. 333-209077) which registers the sale of the Shares.               “Required  Approvals”  shall  have  the  meaning  ascribed  to  such  term  in  Section        3.1(e).               “Rule  144”  means  Rule  144  promulgated  by  the  Commission  pursuant  to  the        Securities Act, as such Rule may be amended or interpreted from time to time, or any        similar rule or regulation hereafter adopted by the Commission having substantially the        same purpose and effect as such Rule.                “Rule  424”  means  Rule  424  promulgated  by  the  Commission  pursuant  to  the        Securities Act, as such Rule may be amended or interpreted from time to time, or any        similar rule or regulation hereafter adopted by the Commission having substantially the        same purpose and effect as such Rule.               “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).               “Securities” means the Shares, the Warrants and the Warrant Shares.                “Securities Act” means the Securities Act of 1933, as amended, and the rules and        regulations promulgated thereunder.               “Shares” means the shares of Common Stock issued or issuable to each Purchaser        pursuant to this Agreement.               “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO        under the Exchange Act (but shall not be deemed to include locating and/or borrowing        shares of Common Stock).                “Subscription Amount” means, as to each Purchaser, the aggregate amount to be        paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s        name  on  the  signature  page  of  this  Agreement  and  next  to  the  heading  “Subscription        Amount,” in United States dollars and in immediately available funds.                                          4  \\PH - 036137/000007 - 388262 v8    

 

             “Subsidiary”  means  any  subsidiary  of  the  Company  as  set  forth  on Schedule        3.1(a), and shall, where applicable, also include any direct or indirect subsidiary of the        Company formed or acquired after the date hereof.               “Trading Day” means a day on which the principal Trading Market is open for        trading.               “Trading Market” means any of the following markets or exchanges on which the        Common  Stock  is  listed  or  quoted  for  trading  on  the  date  in  question:  the  NYSE        American,  the  Nasdaq  Capital  Market,  the  Nasdaq  Global  Market,  the  Nasdaq  Global        Select  Market  or  the  New  York  Stock  Exchange  (or  any  successors  to  any  of  the        foregoing).               “Transaction Documents” means  this  Agreement, the Warrants,  all exhibits  and        schedules  thereto  and  hereto  and any  other  documents  or  agreements  executed  in        connection with the transactions contemplated hereunder.               “Transfer Agent” means Broadridge Corporate Issuer Solutions, Inc., the current        transfer agent of the Company, with a mailing address of 1717 Arch Street, Suite 1300,        Philadelphia, PA 19103, and any successor transfer agent of the Company.               “Variable  Rate  Transaction”  shall  have  the  meaning  ascribed  to  such  term  in        Section 4.12(b).               “VWAP” means, for any date, the price determined by the first of the following        clauses  that  applies:  (a)  if  the  Common  Stock  is  then  listed  or  quoted  on  a  Trading        Market, the daily volume weighted average price of the Common Stock for such date (or        the nearest preceding date) on the Trading Market on which the Common Stock is then        listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.        (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is        not a Trading Market, the volume weighted average price of the Common Stock for such        date  (or  the  nearest  preceding  date)  on  OTCQB  or  OTCQX  as  applicable,  (c)  if  the        Common  Stock  is  not  then  listed  or  quoted  for  trading  on  OTCQB  or  OTCQX  and  if        prices for the Common Stock are then reported in the “Pink Sheets” published by OTC        Markets Group, Inc. (or a similar organization or agency succeeding to its functions of        reporting prices), the most recent bid price per share of the Common Stock so reported,        or (d) in all other cases, the fair market value of a share of Common Stock as determined        by  an  independent  appraiser  selected  in  good  faith  by  the  Purchasers  of  a  majority  in        interest of the Securities then outstanding and reasonably acceptable to the Company, the        fees and expenses of which shall be paid by the Company.               “Warrants” means, collectively, the Common Stock purchase warrants delivered        to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants        shall be exercisable commencing immediately on the date of issuance and have a term of        exercise equal to 5.5 years, in the form of Exhibit A attached hereto.               “Warrant Shares” means the shares of Common Stock issuable upon exercise of        the Warrants.                                         5  \\PH - 036137/000007 - 388262 v8    

 

                                 ARTICLE II.                              PURCHASE AND SALE         2.1   Closing.  On the Closing Date, upon the terms and subject to the conditions set  forth herein, the Company agrees to sell, and the Purchasers, severally and not jointly,  agree to  purchase,  up  to  an  aggregate  of  approximately  $6.0  million  of  Shares  and  Warrants.   Each  Purchaser’s  Subscription  Amount  as  set  forth  on  the  signature  page  hereto  executed  by such  Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company  or  its  designees.  The  Company  shall  deliver  to  each  Purchaser  its  respective  Shares  and  a  Warrant  as  determined  pursuant  to  Section 2.2(a), and the Company and each Purchaser shall  deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of  the  covenants  and  conditions  set  forth  in  Sections  2.2  and  2.3,  the  Closing  shall  occur  at  the  offices of the Placement Agent or such other location as the parties shall mutually agree.  Unless  otherwise directed by the Placement Agent, settlement of the Shares shall occur via “Delivery  Versus  Payment”  (“DVP”) (i.e.,  on  the  Closing  Date,  the  Company  shall  issue  the  Shares  registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to  the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares,  the  Placement  Agent  shall  promptly  electronically  deliver  such  Shares  to  the applicable  Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing firm) by  wire transfer to the Company).  Notwithstanding anything herein to the contrary, at the election  of a Purchaser in the amount set forth on the signature page hereto, a Purchaser may elect to have  an  additional  Subscription  Amount  immediately  following  the  Closing  and  receive  additional  Shares  and  Warrants  to  the  extent,  and  only  to  the  extent,  that  such  Purchaser’s  Beneficial  Ownership  would  not  exceed 9.99%  of  the  issued  and  outstanding  shares  of  Common  Stock  immediately prior to the initial Closing or immediately following the initial Closing or at any  time (“Additional Securities”).  “Beneficial Ownership” shall have the meaning ascribed to such  term in  Section  13(d)  of  the  Exchange  Act  and  the  rules  and  regulations  promulgated  thereunder.  Such  closing  for  such  additional  Shares  and  Warrants  shall  occur  by  separate  settlement immediately following the issuance in full of the Shares and Warrants issued at the  Closing, and shall be conditioned upon, and shall only occur to the extent that, such Additional  Securities  do  not  cause  the  Purchaser’s  Beneficial  Ownership  from  exceeding  9.99%  of  the  issued  and  outstanding  shares  of  Common  Stock  immediately  prior  to  the  initial  Closing  or  immediately following the initial Closing or at any time.  The provisions relating to the issuance  of the Additional Securities shall be construed and implemented in a manner otherwise than in  strict  conformity  with  such  proviso to  correct  the  provisions  related  to  the  issuance  of  the  Additional  Securities  (or  any  portion  hereof)  which  may  be  defective  or  inconsistent  with  the  intended  limitation  on  Beneficial  Ownership  herein  contained  or  to  make  changes  or  supplements  necessary or  desirable  to  properly  give  effect  to  such  limitation  on  Beneficial  Ownership.         2.2   Deliveries.               (a)   On or prior to the Closing Date, the Company shall deliver or cause to be        delivered to each Purchaser the following:                     (i)   this Agreement duly executed by the Company;                                          6  \\PH - 036137/000007 - 388262 v8    

 

                  (ii)  a  legal  opinion  of  Company  Counsel,  in  a  form  reasonably              acceptable to the Placement Agent and Purchasers;                      (iii) the  Company  shall  have  provided  each  Purchaser  with  the              Company’s wire instructions, on Company letterhead and executed by the Chief              Executive Officer or Chief Financial Officer;                     (iv)  subject to the last sentence of Section 2.1, a copy of the irrevocable              instructions to the Transfer Agent instructing the Transfer Agent to deliver on an              expedited  basis  via  The  Depository  Trust  Company  Deposit  or  Withdrawal at              Custodian  system  (“DWAC”)  Shares  equal  to  such  Purchaser’s  Subscription              Amount divided by the Per Share Purchase Price, registered in the name of such              Purchaser;                     (v)   a Warrant registered in the name of such Purchaser to purchase up              to a number of shares of Common Stock equal to 75% of such Purchaser’s Shares,              with an exercise price equal to $2.86, subject to adjustment therein (such Warrant              certificate may be delivered within three Trading Days of the Closing Date); and                     (vi)  the  Prospectus  and  Prospectus  Supplement  (which  may  be              delivered in accordance with Rule 172 under the Securities Act).               (b)   On or prior to the Closing Date, each Purchaser shall deliver or cause to be        delivered to the Company the following:                     (i)   this Agreement duly executed by such Purchaser; and                     (ii)  such Purchaser’s  Subscription  Amount,  which  shall  be  made              available  for  “Delivery  Versus  Payment”  settlement  with  the  Company  or  its              designees.         2.3   Closing Conditions.                (a)   The obligations of the Company hereunder in connection with the Closing        are subject to the following conditions being met:                     (i)   the  accuracy  in  all  material  respects (or,  to  the  extent              representations  or  warranties  are  qualified  by  materiality  or  Material  Adverse              Effect, in all respects) when made and on the Closing Date of the representations              and  warranties  of  the  Purchasers  contained  herein  (unless  as  of  a  specific  date              therein in which case they shall be accurate as of such date);                      (ii)  all  obligations,  covenants  and  agreements  of  each  Purchaser              required  to  be  performed  at  or  prior  to  the  Closing  Date shall  have  been              performed; and                     (iii) the  delivery  by  each  Purchaser  of  the  items  set  forth  in  Section              2.2(b) of this Agreement.                                         7  \\PH - 036137/000007 - 388262 v8    

 

            (b)   The respective obligations of the Purchasers hereunder in connection with        the Closing are subject to the following conditions being met:                     (i)   the  accuracy  in  all  material  respects (or,  to  the  extent              representations  or  warranties  are  qualified  by  materiality  or  Material  Adverse              Effect, in all respects) when made and on the Closing Date of the representations              and  warranties  of  the  Company  contained  herein  (unless  as  of  a  specific  date              therein in which case they shall be accurate as of such date);                     (ii)  all obligations, covenants and agreements of the Company required              to be performed at or prior to the Closing Date shall have been performed;                      (iii) the  delivery  by  the  Company  of  the  items  set  forth  in  Section              2.2(a) of this Agreement;                      (iv)  there shall have been no Material Adverse Effect  with  respect  to              the Company since the date hereof; and                     (v)   from the date hereof to the Closing Date, trading in the Common              Stock  shall  not  have  been  suspended  by  the  Commission  or  the  Company’s              principal Trading Market, and, at any time prior to the Closing Date, trading in              securities generally as reported by Bloomberg L.P. shall not have been suspended              or limited, or minimum prices shall not have been established on securities whose              trades are reported by such service, or on any Trading Market, nor shall a banking              moratorium  have  been  declared  either  by  the  United  States  or  New  York  State              authorities  nor  shall  there  have  occurred  any material  outbreak  or  escalation  of              hostilities  or  other  national  or  international  calamity  of  such  magnitude  in  its              effect on, or any material adverse change in, any financial market which, in each              case,  in  the  reasonable  judgment  of  such  Purchaser,  makes it  impracticable  or              inadvisable to purchase the Securities at the Closing.                                   ARTICLE III.                      REPRESENTATIONS AND WARRANTIES         3.1   Representations  and  Warranties  of  the  Company.   Except  as  set  forth  in  the  Disclosure  Schedules,  which  Disclosure  Schedules  shall  be  deemed  a  part  hereof  and  shall  qualify any representation or otherwise made herein to the extent of the disclosure contained in  the corresponding section of the Disclosure Schedules, the Company hereby makes the following  representations and warranties to each Purchaser:               (a)   Subsidiaries.  All of the direct and indirect subsidiaries of the Company        are  set  forth  on Schedule  3.1(a).  The  Company  owns,  directly  or  indirectly,  all  of  the        capital stock or other equity interests of each Subsidiary free and clear of any Liens, and        all of the issued and outstanding shares  of capital  stock of each Subsidiary  are validly        issued  and  are  fully  paid,  non-assessable  and  free  of  preemptive  and  similar  rights  to        subscribe  for  or  purchase  securities.   If  the  Company  has  no  subsidiaries,  all  other        references  to  the  Subsidiaries  or  any  of  them  in  the  Transaction  Documents  shall  be        disregarded.                                         8  \\PH - 036137/000007 - 388262 v8    

 

            (b)   Organization  and  Qualification.   The  Company  and  each  of  the        Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in        good standing  (or  its  foreign  equivalent)  under  the  laws  of  the  jurisdiction  of  its        incorporation or organization, with the requisite power and authority to own and use its        properties  and  assets  and  to  carry  on  its  business  as  currently  conducted.   Neither  the        Company nor any Subsidiary is  in  violation nor default of any of the provisions  of its        respective  certificate  or  articles  of  incorporation,  bylaws  or  other  organizational  or        charter  documents.   Each  of  the  Company  and  the  Subsidiaries  is  duly  qualified  to        conduct  business  and  is  in  good  standing  (or  its  foreign  equivalent)  as  a  foreign        corporation  or  other  entity  in  each  jurisdiction  in  which  the  nature  of  the  business        conducted or property owned by it makes such qualification necessary, except where the        failure  to  be  so  qualified  or  in  good  standing,  as  the  case  may  be,  could  not  have  or        reasonably be expected to result in: (i) a material adverse effect on the legality, validity or        enforceability of any Transaction Document, (ii) a material adverse effect on the results        of  operations,  assets,  business,  prospects  or  condition  (financial  or  otherwise)  of  the        Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the        Company’s  ability  to  perform  in  any  material  respect  on  a  timely  basis  its  obligations        under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and        no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing        or seeking to revoke, limit or curtail such power and authority or qualification.               (c)   Authorization;  Enforcement.   The  Company  has  the  requisite  corporate        power and authority to  enter into and to  consummate the transactions contemplated by        this Agreement and each of the other Transaction Documents and otherwise to carry out        its obligations hereunder and thereunder.  The execution and delivery of this Agreement        and each of the other Transaction Documents by the Company and the consummation by        it of the transactions contemplated hereby and thereby have been duly authorized by all        necessary corporate action on the part of the Company and no further action is required        by the Company, the Board of Directors or the Company’s stockholders  in  connection        herewith  or  therewith  other  than  in  connection  with  the  Required Approvals.   This        Agreement and each other Transaction Document to which it is a party has been (or upon        delivery  will  have  been)  duly  executed  by  the  Company  and,  when  delivered  in        accordance  with  the  terms  hereof  and  thereof,  will  constitute  the  valid  and  binding        obligation  of  the  Company  enforceable  against  the  Company  in  accordance  with  its        terms,  except  (i)  as  limited  by  general  equitable  principles  and  applicable  bankruptcy,        insolvency,  reorganization,  moratorium  and  other  laws  of  general  application affecting        enforcement  of  creditors’  rights  generally,  (ii)  as  limited  by  laws  relating  to  the        availability of specific performance, injunctive relief or other equitable remedies and (iii)        insofar as indemnification and contribution provisions may be limited by applicable law.               (d)   No Conflicts.  The execution, delivery and performance by the Company        of  this  Agreement  and  the  other  Transaction  Documents  to  which  it  is  a  party,  the        issuance  and  sale  of  the  Securities  and  the  consummation  by  it  of  the  transactions        contemplated  hereby  and  thereby  do  not  and  will  not  (i)  conflict  with  or  violate  any        provision of the Company’s or any Subsidiary’s certificate or articles of incorporation,        bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a        default (or an event that with notice or lapse of time or both would become a default)                                         9  \\PH - 036137/000007 - 388262 v8    

 

      under,  result  in  the  creation  of  any  Lien  upon  any  of  the  properties  or  assets  of  the        Company or any Subsidiary, or give to others any rights of termination, amendment, anti-       dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse        of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a        Company or Subsidiary debt or otherwise) or other understanding to which the Company        or any Subsidiary is a party or by which any property or asset of the Company or any        Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with        or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or        other  restriction  of  any  court  or  governmental  authority  to  which  the  Company  or  a        Subsidiary is subject (including federal and state securities laws and regulations), or by        which any property or asset of the Company or a Subsidiary is bound or affected; except        in  the  case  of  each  of  clauses  (ii)  and  (iii),  such  as  could  not  have  or  reasonably  be        expected to result in a Material Adverse Effect.               (e)   Filings, Consents and Approvals.  The Company is not required to obtain        any consent, waiver, authorization or order of, give any notice to, or make any filing or        registration with, any court or other federal, state, local or other governmental authority        or  other  Person  in  connection  with  the  execution,  delivery  and  performance  by  the        Company of the Transaction Documents, other than: (i) the filings required pursuant to        Section  4.4  of  this  Agreement,  (ii)  the  filing  with  the  Commission  of  the  Prospectus        Supplement, (iii) application(s) to each applicable Trading Market for the listing of the        Shares and Warrant Shares for trading thereon in the time and manner required thereby,        (iv) the filing of Form D with the Commission and (v) such filings as are required to be        made under applicable state securities laws (collectively, the “Required Approvals”).               (f)   Issuance  of  the  Securities;  Registration.   The  Securities  are  duly        authorized and, when issued and paid for in accordance with the applicable Transaction        Documents, will be duly and validly issued, fully paid and nonassessable, free and clear        of all Liens imposed by the Company.  The Warrant Shares, when issued in accordance        with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free        and clear of  all  Liens  imposed by the Company.  The Company has reserved from  its        duly authorized capital stock the maximum number of shares of Common Stock issuable        pursuant to this Agreement and the Warrants. The Company has prepared and filed the        Registration Statement in conformity with the requirements of the Securities Act, which        became effective on February 9, 2016 (the “Effective Date”), including the Prospectus,        and such amendments and supplements thereto as may have been required to the date of        this Agreement.  The Company was at the time of the filing of the Registration Statement        eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities        Act and it meets the transaction requirements with respect to the aggregate market value        of  the  Shares  being  sold  pursuant  to  this  offering  and  during  the twelve  calendar  (12)        months prior to this offering, as set forth in General Instruction I.B.6 of Form S-3.  The        Registration Statement is effective under the Securities Act and no stop order preventing        or suspending the effectiveness of the Registration Statement or suspending or preventing        the use of the Prospectus has been issued by the Commission and no proceedings for that        purpose have been instituted or, to the knowledge of the Company, are threatened by the        Commission.  The Company, if required by the rules and regulations of the Commission,        shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b).  At                                         10  \\PH - 036137/000007 - 388262 v8    

 

      the time the Registration Statement and any amendments thereto became effective, at the        date  of  this  Agreement  and  at  the  Closing  Date,  the  Registration  Statement  and  any        amendments  thereto  conformed  and  will  conform  in  all  material  respects  to  the        requirements of the Securities Act and did not and 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  not  misleading;  and  the  Prospectus  and  any        amendments  or  supplements  thereto,  at  the  time  the  Prospectus  or  any  amendment  or        supplement thereto was issued and at the Closing Date, conformed and will conform in        all material respects to the requirements of the Securities Act and did not and will not        contain an untrue statement of a material fact or omit to state a material fact necessary in        order to make the statements therein, in the light of the circumstances under which they        were made, not misleading.               (g)   Capitalization.   The  capitalization  of  the  Company  is  as  set  forth  on        Schedule 3.1(g). The Company has not issued any capital stock since its most recently        filed  periodic  report under  the  Exchange  Act, other  than  pursuant  to  the  exercise  of        employee stock options under the Company’s stock option plans, the issuance of shares        of  Common  Stock  to  employees  pursuant  to  the  Company’s  employee  stock  purchase        plans  and  pursuant  to  the  conversion  and/or  exercise  of  Common  Stock  Equivalents        outstanding as of the date of the most recently filed periodic report under the Exchange        Act.  No Person has any right of first refusal, preemptive right, right of participation, or        any  similar  right  to participate  in  the  transactions  contemplated  by  the  Transaction        Documents.  Except as a result of the purchase and sale of the Securities and as disclosed        on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe        to, calls or commitments of any character whatsoever relating to, or securities, rights or        obligations convertible into or exercisable or exchangeable for, or giving any Person any        right to subscribe for or acquire, any shares of Common Stock or the capital stock of any        Subsidiary,  or  contracts,  commitments,  understandings  or  arrangements  by  which  the        Company  or  any  Subsidiary  is  or  may  become  bound  to  issue  additional  shares  of        Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.  The        issuance and sale of the Securities will not obligate the Company or any Subsidiary to        issue  shares  of  Common  Stock  or  other  securities  to  any  Person  (other  than  the        Purchasers) and will not result in a right of any holder of Company securities to adjust the        exercise, conversion, exchange or reset price under any of such securities. There are no        outstanding securities or instruments of the Company or any Subsidiary that contain any        redemption  or  similar  provisions,  and  there  are  no  contracts,  commitments,        understandings  or  arrangements  by  which  the  Company  or  any  Subsidiary  is  or  may        become bound to redeem a security of the Company or such Subsidiary. The Company        does not have any stock appreciation rights or “phantom stock” plans or agreements or        any  similar  plan  or  agreement.  All  of  the  outstanding  shares  of  capital  stock  of  the        Company  are  duly  authorized,  validly  issued,  fully  paid  and  nonassessable,  have  been        issued  in  compliance  with  all  federal  and  state  securities  laws,  and  none  of  such        outstanding shares was issued in violation of any preemptive rights or similar rights to        subscribe  for  or  purchase  securities.   No  further  approval  or  authorization  of  any        stockholder, the Board of Directors or others is required for the issuance and sale of the        Securities.   There  are  no  stockholders  agreements,  voting  agreements  or  other  similar        agreements with respect to the Company’s capital stock to which the Company is a party                                         11  \\PH - 036137/000007 - 388262 v8    

 

      or,  to  the  knowledge  of  the  Company,  between  or  among  any  of  the  Company’s        stockholders.               (h)   SEC  Reports; Financial Statements.  The Company has  filed all reports,        schedules, forms, statements and other documents required to be filed by the Company        under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or        15(d) thereof, for the two years preceding the date hereof (or such shorter period as the        Company  was  required  by  law  or  regulation  to  file  such  material)  (the  foregoing        materials, including the exhibits thereto and documents incorporated by reference therein,        together with the Prospectus and the Prospectus Supplement, being collectively referred        to herein as the “SEC Reports”) on a timely basis or has received a valid extension of        such time of filing and has filed any such SEC Reports prior to the expiration of any such        extension.  As of their respective dates, the SEC Reports complied in all material respects        with  the  requirements  of  the  Securities  Act  and  the  Exchange  Act,  as  applicable,  and        none of the SEC Reports, when filed, contained any untrue statement of a material fact or        omitted to state a material fact required to be stated therein or necessary in order to make        the statements therein, in the light of the circumstances under which they were made, not        misleading.  The  Company  has  never  been  an  issuer  subject  to  Rule  144(i)  under  the        Securities  Act.  The  financial  statements  of  the  Company  included  in  the  SEC  Reports        comply in all material respects with applicable accounting requirements and the rules and        regulations of the Commission with respect thereto as in effect at the time of filing.  Such        financial  statements  have  been  prepared  in  accordance  with  United  States  generally        accepted accounting principles applied on a consistent basis during the periods involved        (“GAAP”), except as may be otherwise specified in such financial statements or the notes        thereto  and  except  that  unaudited  financial  statements  may  not  contain  all  footnotes        required by GAAP, and fairly present in all material respects the financial position of the        Company and its consolidated Subsidiaries as of and for the dates thereof and the results        of operations and cash flows for the periods then ended, subject, in the case of unaudited        statements, to normal, immaterial, year-end audit adjustments.               (i)   Material  Changes;  Undisclosed  Events,  Liabilities  or  Developments.         Since the date of the latest audited financial statements included within the SEC Reports,        except  as  specifically  disclosed  on Schedule  3.1(i),  (i)  there  has  been  no  event,        occurrence or development that has had or that could reasonably be expected to result in        a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or        otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary        course  of  business  consistent  with  past  practice  and  (B)  liabilities  not  required  to  be        reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings        made with the Commission, (iii) the Company has not altered its method of accounting,        (iv) the Company has not declared or made any dividend or distribution of cash or other        property to its stockholders or purchased, redeemed or made any agreements to purchase        or redeem any shares of its capital stock and (v) the Company has not issued any equity        securities to any officer, director or Affiliate, except pursuant to existing Company stock        option plans.  The Company does not have pending before the Commission any request        for  confidential  treatment  of  information.   Except  for  the  issuance  of  the  Securities        contemplated  by  this  Agreement,  no  event,  liability,  fact,  circumstance,  occurrence  or        development  has  occurred  or  exists  or  is  reasonably  expected  to  occur  or  exist  with                                         12  \\PH - 036137/000007 - 388262 v8    

 

      respect  to  the  Company  or  its  Subsidiaries  or  their  respective  businesses,  prospects,        properties, operations, assets or financial condition that would be required to be disclosed        by the Company under applicable securities laws at the time this representation is made        or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the        date that this representation is made.               (j)   Litigation.  There is no action, suit, inquiry, notice of violation, proceeding        or  investigation  pending  or,  to  the  knowledge  of  the  Company,  threatened  against  or        affecting the Company, any Subsidiary or any of their respective properties before or by        any  court,  arbitrator,  governmental  or  administrative  agency  or  regulatory  authority        (federal,  state,  county,  local  or  foreign)  (collectively,  an  “Action”)  which  (i)  adversely        affects  or  challenges  the  legality,  validity  or  enforceability  of  any  of  the Transaction        Documents or the Securities or (ii) could, if there were an unfavorable decision, have or        reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor        any  Subsidiary,  nor  any  director  or  officer  thereof,  is  or  has  been  the  subject  of  any        Action involving a claim of violation of or liability under federal or state securities laws        or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the        Company,  there  is  not  pending  or  contemplated,  any  investigation  by  the  Commission        involving the Company or any current or former director or officer of the Company.  The        Commission has not issued any stop order or other order suspending the effectiveness of        any registration statement filed by the Company or any Subsidiary under the Exchange        Act or the Securities Act.                 (k)   Labor  Relations.   No  labor  dispute  exists  or,  to  the  knowledge  of  the        Company,  is  imminent  with  respect  to  any  of  the  employees  of  the  Company,  which        could  reasonably  be  expected  to  result  in a  Material  Adverse  Effect.   None  of  the        Company’s  or  its  Subsidiaries’  employees  is  a  member  of  a  union  that  relates  to  such        employee’s relationship with the Company or such Subsidiary, and neither the Company        nor  any  of  its  Subsidiaries  is  a  party  to  a  collective  bargaining  agreement,  and  the        Company  and  its  Subsidiaries  believe  that  their  relationships  with  their  employees  are        good.  To the knowledge of the Company, no executive officer of the Company or any        Subsidiary,  is,  or  is  now  expected  to  be,  in  violation  of  any  material  term  of  any        employment contract, confidentiality, disclosure or proprietary information agreement or        non-competition  agreement,  or  any  other  contract  or  agreement  or  any  restrictive        covenant  in  favor  of  any  third  party,  and  the  continued  employment  of  each  such        executive officer does not subject the Company or any of its Subsidiaries to any liability        with respect to any of the foregoing matters.  The Company and its Subsidiaries are in        compliance with all applicable U.S. federal, state, local and foreign laws and regulations        relating to employment and employment practices, terms and conditions of employment        and wages and hours, except where the failure to be in compliance could not, individually        or in the aggregate, reasonably be expected to have a Material Adverse Effect.               (l)   Compliance.   Neither  the  Company  nor  any  Subsidiary:  (i)  is  in  default        under or in violation of (and no event has occurred that has not been waived that, with        notice  or  lapse  of  time  or  both,  would  result  in  a  default  by  the  Company  or  any        Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that        it is in default under or that it is in violation of, any indenture, loan or credit agreement or                                         13  \\PH - 036137/000007 - 388262 v8    

 

      any  other  agreement  or  instrument  to  which  it is  a  party  or  by  which  it  or  any  of  its        properties is bound (whether or not such default or violation has been waived), (ii) is in        violation of any judgment, decree or order of any court, arbitrator or other governmental        authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of        any  governmental  authority,  including  without  limitation  all  foreign,  federal,  state  and        local  laws  relating  to  taxes,  environmental  protection,  occupational  health  and  safety,        product  quality  and  safety  and  employment  and  labor  matters,  except  in  each  case  as        could not have or reasonably be expected to result in a Material Adverse Effect.               (m)   Environmental Laws. The  Company  and  its  Subsidiaries  (i)  are  in        compliance  with  all  federal,  state,  local  and foreign  laws  relating  to  pollution  or        protection  of  human  health  or  the  environment  (including  ambient  air,  surface  water,        groundwater,  land  surface  or  subsurface  strata),  including  laws  relating  to  emissions,        discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic        or  hazardous  substances  or  wastes  (collectively,  “Hazardous  Materials”)  into  the        environment,  or  otherwise  relating  to  the  manufacture,  processing,  distribution,  use,        treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all        authorizations,  codes,  decrees,  demands,  or  demand  letters,  injunctions,  judgments,        licenses,  notices  or notice letters,  orders, permits, plans or regulations,  issued, entered,        promulgated  or  approved  thereunder  (“Environmental  Laws”);  (ii)  have  received  all        permits  licenses  or  other  approvals  required  of  them  under  applicable  Environmental        Laws to conduct their respective businesses; and (iii) are in compliance with all terms and        conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),        the  failure  to  so  comply  could  be  reasonably  expected  to  have,  individually  or  in  the        aggregate, a Material Adverse Effect.               (n)   Regulatory  Permits.   The  Company  and  the  Subsidiaries  possess  all        certificates, authorizations and permits issued by the appropriate federal, state, local or        foreign  regulatory  authorities  necessary  to  conduct  their  respective  businesses  as        described in the SEC Reports, except where the failure to possess such permits could not        reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and        neither the Company nor any Subsidiary has received any notice of proceedings relating        to the revocation or modification of any Material Permit.               (o)   Title  to  Assets.   The  Company  and  the  Subsidiaries  have  good  and        marketable  title  in  fee  simple  to  all  real  property  owned  by  them  and  good  and        marketable title in all personal property owned by them that is material to the business of        the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i)        Liens  as  do  not  materially  affect  the  value  of  such  property  and  do  not  materially        interfere with the use made and proposed to be made of such property by the Company        and the Subsidiaries, and (ii) Liens for the payment of federal, state or other taxes, for        which appropriate reserves have been made therefor in accordance with GAAP and, the        payment of which is neither delinquent nor subject to penalties.  Any real property and        facilities held under lease by the Company and the Subsidiaries are held by them under        valid, subsisting and enforceable leases with which the Company and the Subsidiaries are        in compliance.                                         14  \\PH - 036137/000007 - 388262 v8    

 

            (p)   Intellectual  Property.   The  Company  and  the  Subsidiaries  have,  or  have        rights to use, all patents, patent applications, trademarks, trademark applications, service        marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual        property rights and similar rights necessary or required for use in connection with their        respective businesses as described in the SEC Reports and which the failure to so have        could  have a Material  Adverse Effect  (collectively, the “Intellectual Property Rights”).         None of, and neither the Company nor any Subsidiary has received a notice (written or        otherwise) that any of, the Intellectual Property Rights has expired, terminated or been        abandoned, or is expected to expire or terminate or be abandoned, within two (2) years        from the date of this Agreement.  Neither the Company nor any Subsidiary has received,        since the date of the latest audited financial statements included within the SEC Reports,        a written notice of a claim or otherwise has any knowledge that the Intellectual Property        Rights  violate  or  infringe  upon  the  rights  of  any  Person,  except  as  could  not  have  or        reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the        Company, all such Intellectual Property Rights are enforceable and there is no existing        infringement by another Person of any of the Intellectual Property Rights.  The Company        and  its  Subsidiaries  have  taken  reasonable  security  measures  to  protect  the  secrecy,        confidentiality and value of all of their intellectual properties, except where failure to do        so could not, individually or in the aggregate, reasonably be expected to have a Material        Adverse Effect.                (q)   Insurance.  The Company and the Subsidiaries are insured by insurers of        recognized financial responsibility against such losses and risks and in such amounts as        are prudent and customary in the businesses in which the Company and the Subsidiaries        are  engaged, including,  but  not  limited to,  directors and officers insurance coverage  at        least  equal  to  the  aggregate  Subscription  Amount.   Neither  the  Company  nor  any        Subsidiary  has  been  notified  that  it will  not  be  able  to  renew  its  existing  insurance        coverage as and when such coverage expires or to obtain similar coverage from similar        insurers  as  may  be  necessary  to  continue  its  business  without  a  significant  increase  in        cost.               (r)   Transactions  With  Affiliates  and  Employees.   Except  as  set  forth  on        Schedule 3.1(r), none of the officers or directors of the Company or any Subsidiary and,        to  the  knowledge  of  the  Company,  none  of  the  employees  of  the  Company  or  any        Subsidiary is presently a party to any transaction with the Company or any Subsidiary        (other  than  for  services  as  employees,  officers  and  directors),  including  any  contract,        agreement  or  other  arrangement  providing  for  the  furnishing  of  services  to  or  by,        providing for rental of real or personal property to or from, providing for the borrowing        of money from or lending of money to or otherwise requiring payments to or from any        officer, director or such employee or, to  the knowledge of the Company, any entity in        which  any  officer,  director,  or  any  such  employee  has  a  substantial  interest  or  is  an        officer,  director,  trustee,  stockholder,  member  or  partner,  in  each  case  in  excess  of        $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii)        reimbursement for expenses incurred on behalf of the Company and (iii) other employee        benefits, including stock option agreements under any stock option plan of the Company.                                          15  \\PH - 036137/000007 - 388262 v8    

 

            (s)   Sarbanes-Oxley;  Internal  Accounting  Controls.   The  Company  and  the        Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-       Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules        and regulations promulgated by the Commission thereunder that are effective as of the        date hereof and as of the Closing Date.  The Company and the Subsidiaries maintain a        system of internal accounting controls sufficient to provide reasonable assurance that: (i)        transactions  are  executed  in  accordance  with  management’s  general  or  specific        authorizations,  (ii)  transactions  are  recorded  as  necessary  to  permit  preparation  of        financial statements in conformity with GAAP and to maintain asset accountability, (iii)        access to assets is permitted only in accordance with management’s general or specific        authorization,  and  (iv)  the  recorded accountability  for  assets  is  compared  with  the        existing assets at reasonable intervals and appropriate action is taken with respect to any        differences. The Company and the Subsidiaries have established disclosure controls and        procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company        and the Subsidiaries and designed such disclosure controls and procedures to ensure that        information  required  to  be  disclosed  by  the  Company  in  the  reports  it files  or  submits        under the Exchange Act is recorded, processed, summarized and reported, within the time        periods  specified  in  the  Commission’s  rules  and  forms.   The  Company’s  certifying        officers have evaluated the effectiveness of the disclosure controls and procedures of the        Company and the Subsidiaries as of the end of the period covered by the most recently        filed  periodic  report  under  the  Exchange  Act  (such  date,  the  “Evaluation  Date”).   The        Company presented in its most recently filed periodic report under the Exchange Act the        conclusions  of the  certifying  officers  about  the  effectiveness  of  the  disclosure  controls        and  procedures  based  on  their  evaluations  as  of  the  Evaluation  Date.   Since  the        Evaluation  Date,  there  have  been  no  changes  in  the  internal  control  over  financial        reporting  (as  such term  is  defined  in  the  Exchange  Act)  of  the  Company  and  its        Subsidiaries that have materially affected, or is reasonably likely to materially affect, the        internal control over financial reporting of the Company and its Subsidiaries.               (t)   Certain  Fees.   Except as  set  forth  in  the  Prospectus  Supplement,  no        brokerage or finder’s fees or commissions are or will be payable by the Company or any        Subsidiary  to  any  broker,  financial  advisor  or  consultant,  finder,  placement  agent,        investment banker, bank or other Person with respect to the transactions contemplated by        the Transaction Documents.  The Purchasers shall have no obligation with respect to any        fees or with respect to any claims made by or on behalf of other Persons for fees of a type        contemplated  in  this  Section  that  may  be  due  in  connection  with  the  transactions        contemplated by the Transaction Documents.               (u)   Investment Company. The Company is not, and is not an Affiliate of, and        immediately after receipt of payment for the Securities, will not be or be an Affiliate of,        an “investment company” within the meaning of the Investment Company Act of 1940,        as  amended.   The  Company  shall  conduct  its  business  in  a  manner  so  that  it  will  not        become an “investment company” subject to registration under the Investment Company        Act of 1940, as amended.                                          16  \\PH - 036137/000007 - 388262 v8    

 

            (v)   Registration Rights.  Except as set forth on Schedule 3.1(v), no Person has        any  right  to  cause  the  Company  or  any  Subsidiary  to  effect  the  registration  under  the        Securities Act of any securities of the Company or any Subsidiary.               (w)   Listing and Maintenance Requirements.  The Common Stock is registered        pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no        action designed to, or which to its knowledge is likely to have the effect of, terminating        the  registration  of  the  Common  Stock  under  the  Exchange  Act  nor  has  the  Company        received  any  notification  that  the  Commission  is  contemplating  terminating  such        registration.   Except  as  set  forth  on Schedule  3.1(w),  the  Company  has  not,  in  the  12        months preceding the date hereof, received notice from any Trading Market on which the        Common Stock is or has been listed or quoted to the effect that the Company is not in        compliance  with  the  listing  or  maintenance  requirements  of  such  Trading  Market.  The        Common Stock is currently eligible for electronic transfer through the Depository Trust        Company  or  another  established  clearing  corporation  and  the  Company  is  current  in        payment of the fees to the Depository Trust Company (or such other established clearing        corporation) in connection with such electronic transfer.               (x)   Application  of  Takeover  Protections.   The  Company  and  the  Board  of        Directors  have  taken  all  necessary  action,  if  any,  in  order  to  render  inapplicable  any        control  share  acquisition,  business  combination,  poison  pill  (including  any  distribution        under a rights agreement) or other similar anti-takeover provision under the Company’s        certificate  of  incorporation  (or  similar  charter  documents)  or  the  laws  of  its  state  of        incorporation  that  is  or  could  become  applicable  to  the Purchasers  as  a  result  of  the        Purchasers and the Company fulfilling their obligations or exercising their rights under        the  Transaction  Documents,  including  without  limitation  as  a  result  of  the  Company’s        issuance of the Securities and the Purchasers’ ownership of the Securities.               (y)   Disclosure.  Except  with respect  to  the material  terms  and conditions  of        the transactions contemplated by the Transaction Documents, the Company confirms that        neither it nor any other Person acting on its behalf has provided any of the Purchasers or        their  agents  or  counsel  with  any  information  that  it  believes  constitutes  or  might        constitute  material,  non-public  information  which  is  not  otherwise  disclosed  in  the        Prospectus  Supplement.    The  Company  understands  and  confirms  that  the Purchasers        will  rely  on  the  foregoing  representation  in  effecting  transactions  in  securities  of  the        Company.   All  of  the  disclosure  furnished  by  or  on  behalf  of  the  Company  to  the        Purchasers regarding the Company and its Subsidiaries, their respective businesses and        the  transactions  contemplated  hereby,  including  the  Disclosure  Schedules  to  this        Agreement, is true and correct and does not contain any untrue statement of a material        fact  or omit  to  state any material  fact  necessary  in  order to  make the statements  made        therein, in the light of the circumstances under which they were made, not misleading.        The press releases disseminated by the Company during the twelve months preceding the        date of this Agreement taken as a whole do not contain any untrue statement of a material        fact or omit to state a material fact required to be stated therein or necessary in order to        make  the  statements  therein,  in  the  light  of  the  circumstances  under  which  they  were        made and when made, not misleading.  The Company acknowledges and agrees that no        Purchaser  makes  or  has  made  any  representations  or  warranties  with  respect  to  the                                         17  \\PH - 036137/000007 - 388262 v8    

 

      transactions  contemplated  hereby  other  than  those  specifically  set  forth  in  Section  3.2        hereof.               (z)   No  Integrated  Offering.  Assuming  the  accuracy  of  the  Purchasers’        representations and warranties set forth in Section 3.2, neither the Company, nor any of        its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made        any  offers  or  sales  of  any  security  or  solicited  any  offers  to  buy  any  security,  under        circumstances that would cause this offering of the Securities to be integrated with prior        offerings by the Company for purposes of (i) the Securities Act which would require the        registration  of  the  Warrants  or  Warrant  Shares  under  the  Securities  Act,  or  (ii)  any        applicable shareholder approval provisions of any Trading Market on which any of the        securities of the Company are listed or designated.               (aa)  Solvency.  Based on the consolidated financial condition of the Company        as of the Closing Date, after giving effect to the receipt by the Company of the proceeds        from the sale of the Securities hereunder, to the knowledge of the Company, (i) the fair        saleable value of the Company’s assets exceeds  the amount that will be required to be        paid  on or  in  respect  of  the  Company’s  existing  debts  and  other  liabilities  (including        known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute        unreasonably small capital to carry on its business as now conducted and as proposed to        be  conducted  including  its  capital  needs  taking  into  account  the  particular  capital        requirements  of  the  business  conducted  by  the  Company,  consolidated  and  projected        capital requirements and capital availability thereof, and (iii) the current cash on hand of        the Company, together with the proceeds the Company would receive, were it to liquidate        all  of  its  assets,  after  taking  into  account  all  anticipated  uses  of  the  cash,  would  be        sufficient  to  pay  all  amounts  on  or  in  respect  of  its  liabilities  when  such amounts  are        required to be paid.  The Company does not intend to incur debts beyond its ability to pay        such  debts  as  they  mature  (taking  into  account  the  timing  and  amounts  of  cash  to  be        payable on or in respect of its debt).  The Company has no knowledge of any facts or        circumstances  which lead it to  believe that it will file for reorganization or liquidation        under the bankruptcy or reorganization laws of any jurisdiction within one year from the        Closing Date.  Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured        and  unsecured  Indebtedness  of  the  Company  or  any  Subsidiary,  or  for  which  the        Company  or  any  Subsidiary  has  commitments.   For  the  purposes  of  this  Agreement,        “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess        of  $50,000  (other  than  trade  accounts  payable  incurred  in  the  ordinary  course  of        business), (y) all guaranties, endorsements and other contingent obligations in respect of        indebtedness  of  others,  whether  or  not  the  same  are  or  should  be  reflected  in  the        Company’s  consolidated  balance  sheet  (or  the  notes  thereto),  except  guaranties  by        endorsement of negotiable instruments for deposit or collection or similar transactions in        the ordinary course of business; and (z) the present value of any lease payments in excess        of  $50,000  due  under  leases  required  to  be  capitalized  in  accordance  with  GAAP.         Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.               (bb)  Tax  Status.   Except  for  matters  that  would  not,  individually  or in  the        aggregate,  have  or  reasonably  be  expected  to  result  in  a  Material  Adverse  Effect,  the        Company and its Subsidiaries each (i) has made or filed all United States federal, state                                         18  \\PH - 036137/000007 - 388262 v8    

 

      and  local  income  and  all  foreign  income  and  franchise  tax  returns,  reports and        declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and        other  governmental  assessments  and  charges  that  are  material  in  amount,  shown  or        determined to be due on such returns, reports and declarations and (iii) has set aside on its        books  provision  reasonably  adequate  for  the  payment  of  all  material  taxes  for  periods        subsequent to the periods to which such returns, reports or declarations apply.  There are        no unpaid taxes in any material amount claimed to be due by the taxing authority of any        jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for        any such claim.               (cc)  Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor        to the knowledge of the Company or any Subsidiary, any agent or other person acting on        behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for        unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign        or  domestic  political  activity,  (ii)  made  any  unlawful  payment  to  foreign  or  domestic        government  officials  or  employees  or  to  any  foreign  or  domestic  political  parties  or        campaigns from corporate funds, (iii) failed to disclose fully any contribution made by        the Company or any Subsidiary (or made by any person acting on its behalf of which the        Company is aware) which is in violation of law, or (iv) violated in any material respect        any provision of FCPA.               (dd)  Accountants.   The  Company’s  independent  registered  public  accounting        firm  is  PricewaterhouseCoopers LLP.   To  the  knowledge  and  belief  of  the  Company,        such  accounting  firm  (i)  is  a  registered  public  accounting  firm  as  required  by  the        Exchange Act and (ii) shall express its opinion with respect to the financial statements to        be included in the Company’s  Annual  Report  for the fiscal  year  ending December 31,        2018.                (ee)   Acknowledgment  Regarding  Purchasers’  Purchase  of  Securities.   The        Company  acknowledges  and  agrees  that  each  of  the  Purchasers  is  acting  solely  in  the        capacity of an arm’s length purchaser with respect to the Transaction Documents and the        transactions  contemplated  thereby.   The  Company  further  acknowledges  that  no        Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar        capacity) with respect to the Transaction Documents and the transactions contemplated        thereby and any advice given by any Purchaser or any of their respective representatives        or  agents  in  connection  with  the  Transaction  Documents  and  the  transactions        contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.         The Company further represents to each Purchaser that the Company’s decision to enter        into this Agreement and the other Transaction Documents has been based solely on the        independent evaluation of the transactions contemplated hereby by the Company and its        representatives.               (ff)  Acknowledgment  Regarding  Purchaser’s  Trading  Activity.   Anything  in        this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections        3.2(e) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none        of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed,        to  desist  from  purchasing  or  selling,  long  and/or  short,  securities  of  the  Company,  or                                         19  \\PH - 036137/000007 - 388262 v8    

 

      “derivative”  securities  based  on  securities  issued  by  the  Company  or  to  hold  the        Securities for any specified term; (ii) past or future open market or other transactions by        any  Purchaser,  specifically  including,  without  limitation,  Short  Sales  or  “derivative”        transactions, before or after the closing of this or future private placement transactions,        may negatively impact the market price of the Company’s publicly-traded securities; (iii)        any  Purchaser,  and  counter-parties  in  “derivative”  transactions  to  which  any  such        Purchaser is a party, directly or indirectly, presently may have a “short” position in the        Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with        or  control  over  any  arm’s  length  counter-party  in  any  “derivative”  transaction.  The        Company  further  understands  and  acknowledges  that  (y)  one  or  more  Purchasers  may        engage  in  hedging  activities  at  various  times during  the  period  that  the  Securities  are        outstanding,  including,  without  limitation,  during  the  periods  that  the  value  of  the        Warrant Shares deliverable with respect to Securities are being determined, and (z) such        hedging  activities  (if  any)  could  reduce  the  value  of  the  existing  stockholders'  equity        interests  in  the  Company  at  and  after  the  time  that  the  hedging  activities  are  being        conducted.  The Company acknowledges that such aforementioned hedging activities do        not constitute a breach of any of the Transaction Documents.               (gg)  Regulation M Compliance.  The Company has not, and to its knowledge        no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to        cause or to result in the stabilization or manipulation of the price of any security of the        Company  to  facilitate  the  sale  or  resale  of  any  of  the  Securities,  (ii)  sold,  bid  for,        purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or        (iii)  paid  or  agreed  to  pay  to  any  Person  any  compensation for  soliciting  another  to        purchase any other securities of the Company, other than, in the case of clauses (ii) and        (iii),  compensation  paid  to  the  Company’s  placement  agent  in  connection  with  the        placement of the Securities.               (hh)  FDA.  As to each product subject to the jurisdiction of the U.S. Food and        Drug  Administration  (“FDA”)  under  the  Federal  Food,  Drug  and  Cosmetic  Act,  as        amended,  and  the  regulations  thereunder  (“FDCA”)  that  is  manufactured,  packaged,        labeled,  tested,  distributed,  sold,  and/or  marketed  by  the  Company  or  any  of  its        Subsidiaries  (each  such  product,  a  “Pharmaceutical  Product”),  such  Pharmaceutical        Product  is  being  manufactured,  packaged,  labeled,  tested,  distributed,  sold  and/or        marketed by the Company in compliance with all applicable requirements under FDCA        and  similar  laws,  rules  and  regulations  relating  to  registration,  investigational  use,        premarket  clearance,  licensure,  or  application  approval,  good  manufacturing  practices,        good  laboratory  practices,  good  clinical  practices,  product  listing,  quotas,  labeling,        advertising,  record  keeping  and  filing  of  reports,  except  where  the  failure  to  be  in        compliance would not have a Material Adverse Effect.  There is no pending, completed        or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or        legal  or  administrative  or  regulatory  proceeding,  charge,  complaint,  or  investigation)        against the Company or any of its Subsidiaries, and none of the Company or any of its        Subsidiaries  has  received  any  notice,  warning  letter  or  other  communication  from  the        FDA  or  any  other  governmental  entity,  which  (i)  contests  the  premarket  clearance,        licensure, registration, or approval of, the uses of, the distribution of, the manufacturing        or  packaging  of,  the  testing  of,  the  sale  of,  or  the  labeling  and  promotion  of  any                                         20  \\PH - 036137/000007 - 388262 v8    

 

      Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or        seizure  of,  or  withdraws  or  orders  the  withdrawal  of  advertising  or  sales  promotional        materials  relating  to,  any  Pharmaceutical  Product,  (iii)  imposes  a  clinical  hold  on  any        clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production        at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter        into  a  consent  decree  of  permanent  injunction  with  the  Company  or  any  of  its        Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by        the  Company  or  any  of  its  Subsidiaries,  and  which,  either  individually  or  in  the        aggregate, would have a Material Adverse Effect.  The properties, business and operations        of the Company have been and are being conducted in all material respects in accordance        with  all  applicable  laws,  rules  and  regulations  of  the  FDA.  The  Company  has  not  been        informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the        United  States  of  any  product  proposed  to  be  developed,  produced  or  marketed  by  the        Company nor has the FDA expressed any concern as to approving or clearing for marketing        any product being developed or proposed to be developed by the Company.                (ii)  Stock Option Plans. Each stock option granted by the Company under the        Company’s  stock  option  plan  was  granted  (i)  in  accordance  with  the  terms  of  the        Company’s stock option plan and (ii) with an exercise price at least equal to the fair market        value  of  the Common Stock  on  the  date  such  stock  option  would  be  considered  granted        under  GAAP  and  applicable  law.  No  stock  option  granted  under  the  Company’s  stock        option plan has been backdated.  The Company has not knowingly granted, and there is no        and has been no Company policy or practice to knowingly grant, stock options prior to, or        otherwise knowingly coordinate the grant of stock options with, the release or other public        announcement of material information regarding the Company or its Subsidiaries or their        financial results or prospects.               (jj)  Office of Foreign Assets Control.  Neither the Company nor any Subsidiary        nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the        Company or any Subsidiary is currently subject to any U.S. sanctions administered by the        Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).               (kk)  U.S. Real Property Holding Corporation.  The Company is not and has never        been  a  U.S.  real  property  holding  corporation  within  the  meaning  of  Section  897  of  the        Internal  Revenue  Code  of  1986,  as  amended,  and  the  Company  shall  so  certify  upon        Purchaser’s request.               (ll)  Bank  Holding  Company  Act.   Neither  the  Company  nor  any  of  its        Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended        (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System        (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns        or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any        class of voting securities or twenty-five percent or more of the total equity of a bank or any        entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the        Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the        management or policies of a bank or any entity that is subject to the BHCA and to regulation        by the Federal Reserve.                                         21  \\PH - 036137/000007 - 388262 v8    

 

            (mm)  Money Laundering.  The operations of the Company and its Subsidiaries are        and have been conducted at all times in compliance with applicable financial record-keeping        and  reporting  requirements  of  the  Currency  and  Foreign  Transactions  Reporting  Act  of        1970,  as  amended,  applicable  money  laundering statutes  and  applicable  rules  and        regulations  thereunder  (collectively,  the  “Money  Laundering  Laws”),  and  no  Action  or        Proceeding  by  or  before  any  court  or  governmental  agency,  authority  or  body  or  any        arbitrator involving the Company or any Subsidiary with respect to the Money Laundering        Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.               (nn)  Private  Placement.   Assuming  the  accuracy  of  the  Purchasers’        representations and warranties set forth in Section 3.2, no registration under the Securities        Act is required for the offer and sale of the Warrants or the Warrant Shares by the Company        to the Purchasers as contemplated hereby.               (oo)  No  General  Solicitation.   Neither  the  Company  nor  any  Person  acting  on        behalf of the Company has offered or sold any of the Warrant or Warrant Shares by any        form of general solicitation or general advertising.  The Company has offered the Warrants        and Warrant Shares for sale only to the Purchasers and certain other “accredited investors”        within the meaning of Rule 501 under the Securities Act.               (pp)  No Disqualification Events.  With respect to the Warrant and Warrant Shares        to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of        the Company, any of its predecessors, any affiliated issuer, any director, executive officer,        other officer of the Company participating in the offering hereunder, any beneficial owner of        20% or more of the Company’s outstanding voting equity securities, calculated on the basis        of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities        Act)  connected  with  the  Company  in  any  capacity  at  the  time  of  sale  (each,  an  “Issuer        Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule        506(d)(1)(i)  to  (viii)  under  the  Securities  Act  (a  “Disqualification  Event”),  except  for  a        Disqualification  Event  covered  by  Rule  506(d)(2)  or  (d)(3).  The  Company  has  exercised        reasonable  care  to  determine  whether  any  Issuer  Covered  Person  is  subject  to  a        Disqualification  Event.  The  Company  has  complied,  to  the  extent  applicable,  with  its        disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any        disclosures provided thereunder.               (qq)  Other Covered Persons.  Other than the Placement Agent, the Company is        not aware of any person (other than any Issuer Covered Person) that has been or will be paid        (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale        of any Securities.               (rr)  Notice of Disqualification Events.  The Company will notify the Purchasers        in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer        Covered  Person  and  (ii)  any  event  that  would,  with  the  passage  of  time,  reasonably  be        expected to become a Disqualification Event relating to any Issuer Covered Person, in each        case of which it is aware.                                          22  \\PH - 036137/000007 - 388262 v8    

 

      3.2   Representations and Warranties of the Purchasers.  Each Purchaser, for itself and  for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing  Date to the Company as follows (unless as of a specific date therein, in which case they shall be  accurate as of such date):               (a)   Organization;  Authority.   Such  Purchaser  is  either  an  individual  or  an     entity duly incorporated or formed, validly existing and in good standing under the laws of     the  jurisdiction  of  its  incorporation  or  formation  with  full  right,  corporate,  partnership,     limited liability company or similar power and authority to enter into and to consummate the     transactions  contemplated  by  the  Transaction  Documents  and  otherwise  to  carry  out  its     obligations  hereunder  and  thereunder.  The  execution  and  delivery  of  the  Transaction     Documents  and  performance  by  such  Purchaser  of  the  transactions  contemplated  by  the     Transaction Documents have been duly authorized by all necessary corporate, partnership,     limited  liability  company  or  similar  action,  as  applicable,  on  the  part  of  such  Purchaser.      Each Transaction Document to which it is a party has been duly executed by such Purchaser,     and when delivered by such Purchaser in accordance with the terms hereof, will constitute     the  valid  and  legally  binding  obligation  of  such  Purchaser,  enforceable  against  it  in     accordance  with  its  terms,  except:  (i)  as  limited  by  general  equitable  principles  and     applicable  bankruptcy,  insolvency,  reorganization,  moratorium  and  other  laws  of  general     application  affecting  enforcement  of  creditors’  rights  generally,  (ii)  as  limited  by  laws     relating  to  the  availability  of  specific  performance,  injunctive  relief  or  other  equitable     remedies and (iii) insofar as indemnification and contribution provisions may be limited by     applicable law.            (b) Understandings or Arrangements.  Such Purchaser is acquiring the Securities as     principal for its  own account  and has  no direct  or indirect  arrangement or understandings     with  any  other  persons  to  distribute  or  regarding  the  distribution  of  such  Securities  (this     representation  and  warranty  not  limiting  such  Purchaser’s  right  to  sell  the  Securities     pursuant  to  the Registration  Statement or otherwise in  compliance with  applicable federal     and  state  securities  laws).   Such  Purchaser  is  acquiring  the  Securities  hereunder  in  the     ordinary  course  of  its  business.  Such  Purchaser  understands  that  the  Warrants  and  the     Warrant Shares are “restricted securities” and have not been registered under the Securities     Act or any applicable state securities law and is acquiring such Securities as principal for     his,  her  or  its  own  account  and  not  with  a  view  to  or  for  distributing  or  reselling  such     Securities  or  any  part  thereof in  violation  of  the  Securities  Act  or  any  applicable  state     securities law, has no present intention of distributing any of such Securities in violation of     the  Securities  Act  or  any  applicable  state  securities  law  and  has  no  direct  or  indirect     arrangement  or  understandings  with  any  other  persons  to  distribute  or  regarding  the     distribution  of  such  Securities  in  violation  of  the  Securities  Act  or  any  applicable  state     securities law (this  representation  and warranty  not  limiting such Purchaser’s  right  to  sell     such  Securities  pursuant  to  a  registration  statement  or  otherwise  in  compliance  with     applicable federal and state securities laws).               (c)   Purchaser Status.  At the time such Purchaser was offered the Securities, it     was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it     will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7)                                         23  \\PH - 036137/000007 - 388262 v8    

 

   or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule     144A(a) under the Securities Act.                (d)   Experience of Such Purchaser.  Such Purchaser, either alone or together     with its representatives, has such knowledge, sophistication and experience in business and     financial matters so as to be capable of evaluating the merits and risks  of the prospective     investment in the Securities, and has so evaluated the merits and risks of such investment.      Such Purchaser is able to bear the economic risk of an investment in the Securities and, at     the present time, is able to afford a complete loss of such investment.               (e)   Access to  Information. Such Purchaser acknowledges that it has had the     opportunity  to  review  the  Transaction  Documents  (including  all  exhibits  and  schedules     thereto)  and  the  SEC  Reports  and  has  been  afforded,  (i)  the  opportunity  to  ask  such     questions as it has deemed necessary of, and to receive answers from, representatives of the     Company  concerning  the  terms  and  conditions  of  the  offering  of  the  Securities  and  the     merits and risks of investing in the Securities; (ii) access to information about the Company     and  its  financial  condition,  results  of  operations,  business,  properties,  management  and     prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain     such additional information that the Company possesses or can acquire without unreasonable     effort or expense that is necessary to make an informed investment decision with respect to     the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent     nor any Affiliate of the Placement Agent has provided such Purchaser with any information     or  advice  with  respect  to  the  Securities  nor  is  such  information  or  advice  necessary  or     desired.  Neither  the  Placement  Agent  nor  any  Affiliate  has  made  or  makes  any     representation as to the Company or the quality of the Securities and the Placement Agent     and any Affiliate may have acquired non-public information with respect to the Company     which such Purchaser agrees need not be provided to it.  In connection with the issuance of     the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has     acted as a financial advisor or fiduciary to such Purchaser.               (f)   Certain  Transactions  and  Confidentiality.   Other  than  consummating  the     transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on     behalf  of  or  pursuant  to  any  understanding  with  such  Purchaser,  directly  or  indirectly     executed  any  purchases  or  sales,  including  Short  Sales, of  the  securities  of  the  Company     during the period commencing as of the time that such Purchaser first received a term sheet     (written or oral) from the Company or any other Person representing the Company setting     forth the material terms of the transactions contemplated hereunder and ending immediately     prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that     is  a  multi-managed  investment  vehicle  whereby  separate  portfolio  managers  manage     separate  portions  of  such  Purchaser’s  assets  and  the  portfolio  managers  have  no  direct     knowledge  of  the  investment  decisions  made  by  the  portfolio  managers  managing  other     portions of such Purchaser’s assets, the representation set forth above shall only apply with     respect to the portion of assets managed by the portfolio manager that made the investment     decision to purchase the Securities covered by this Agreement.  Other than to other Persons     party to this Agreement or to such Purchaser’s representatives, including, without limitation,     its  officers, directors, partners, legal  and other advisors, employees,  agents  and Affiliates,     such Purchaser has maintained the confidentiality of all disclosures made to it in connection                                         24  \\PH - 036137/000007 - 388262 v8    

 

   with this transaction (including the existence and terms of this transaction). Notwithstanding     the  foregoing,  for  the  avoidance  of  doubt,  nothing  contained  herein  shall  constitute  a     representation  or warranty, or preclude any actions,  with  respect  to  locating or borrowing     shares in order to effect Short Sales or similar transactions in the future.               (g)   General Solicitation.  Such Purchaser is not purchasing the Securities as a     result of any advertisement, article, notice or other communication regarding the Securities     published in any newspaper, magazine or similar media or broadcast over television or radio     or  presented  at  any  seminar  or,  to  the  knowledge  of  such  Purchaser,  any  other  general     solicitation or general advertisement.      The Company acknowledges and agrees that the representations contained in this Section 3.2  shall  not  modify,  amend  or  affect  such  Purchaser’s  right  to  rely  on  the  Company’s  representations and warranties contained in this Agreement or any representations and warranties  contained  in  any  other  Transaction  Document  or  any other  document  or  instrument  executed  and/or  delivered  in  connection  with  this  Agreement  or  the  consummation  of  the  transactions  contemplated  hereby.  Notwithstanding  the  foregoing,  for  the  avoidance  of  doubt,  nothing  contained  herein  shall  constitute  a  representation  or  warranty,  or  preclude  any  actions,  with  respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the  future.                                   ARTICLE IV.                      OTHER AGREEMENTS OF THE PARTIES         4.1   Removal of Legends.               (a)   The Warrants and Warrant Shares may only be disposed of in compliance        with  state  and  federal  securities  laws.   In  connection  with  any  transfer  of  Warrants  or        Warrant Shares other than pursuant to an effective registration statement or Rule 144, to        the  Company  or  to  an  Affiliate  of  a  Purchaser or  in  connection  with  a  pledge  as        contemplated  in  Section  4.1(b),  the  Company  may  require  the  transferor  thereof  to        provide to the Company an opinion of counsel selected by the transferor and reasonably        acceptable to the Company, the form and substance of which opinion shall be reasonably        satisfactory to the Company, to the effect that such transfer does not require registration        of such transferred Warrant under the Securities Act.                (b)    The  Purchasers  agree  to  the  imprinting,  so  long  as  is  required  by  this        Section 4.1, of a legend on any of the Warrants or Warrant Shares in the following form:         NEITHER  THIS  SECURITY  NOR  THE  SECURITIES  INTO  WHICH  THIS        SECURITY IS EXERCISABLE HAS 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                                         25  \\PH - 036137/000007 - 388262 v8    

 

      NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES        ACT  AND  IN  ACCORDANCE  WITH  APPLICABLE  STATE  SECURITIES  LAWS.        THIS SECURITY AND THE SECURITIES  ISSUABLE UPON EXERCISE OF THIS        SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN        ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A        FINANCIAL  INSTITUTION  THAT  IS  AN  “ACCREDITED  INVESTOR”  AS        DEFINED  IN  RULE  501(a)  UNDER  THE  SECURITIES  ACT  OR  OTHER  LOAN        SECURED BY SUCH SECURITIES.               (c)   The Company acknowledges and agrees that a Purchaser may from time to        time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or        grant a security interest in some or all of the Warrants or Warrant Shares to a financial        institution that is an “accredited investor” as defined in Rule 501(a) under the Securities        Act and, if required under the terms of such arrangement, such Purchaser may transfer        pledged or secured Warrants or Warrant Shares to the pledgees or secured parties.  Such a        pledge or transfer would not be subject to approval of the Company and no legal opinion        of legal counsel of the pledgee, secured party or pledgor shall be required in connection        therewith.   Further,  no  notice  shall  be  required  of  such  pledge.   At  the  appropriate        Purchaser’s  expense,  the  Company  will  execute  and  deliver  such  reasonable        documentation  as  a  pledgee  or  secured  party  of  Warrants  and  Warrant  Shares  may        reasonably  request  in  connection  with  a  pledge  or  transfer  of  the  Warrants  or  Warrant        Shares.               (d)   Certificates  evidencing  the  Warrant  Shares  shall  not  contain  any  legend        (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement        covering the resale of such security is effective under the Securities Act, or (ii) following        any sale of such Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the        Warrants), or (iii) if such Warrant Shares are eligible for sale under Rule 144 (assuming        cashless exercise of the Warrants), or (iv) if such legend is not required under applicable        requirements of the Securities Act (including judicial interpretations and pronouncements        issued by the staff of the Commission). The Company shall cause its counsel to issue a        legal opinion to the Transfer Agent promptly if required by the Transfer Agent to effect        the removal of the legend hereunder.  If all or any portion of a Warrant is exercised at a        time when there is an effective registration statement to cover the resale of the Warrant        Shares,  or  if  such  Warrant  Shares  may  be  sold  under  Rule  144  (assuming  cashless        exercise  of  the  Warrants)  or  if  such  legend  is  not  otherwise  required  under  applicable        requirements of the Securities Act (including judicial interpretations and pronouncements        issued by the staff of the Commission) then such Warrant Shares shall be issued free of        all legends.  The Company agrees that following such time as such legend is no longer        required under this Section 4.1(c), the Company will, no later than the earlier of (i) two        (2)  Trading  Days  and  (ii)  the  number  of  Trading  Days  comprising  the  Standard        Settlement  Period  (as  defined  below)  following  the  delivery  by  a  Purchaser  to  the        Company  or  the  Transfer  Agent  of  a  certificate  representing  Warrant  Shares,  as        applicable,  issued  with  a  restrictive legend  (such  date,  the  “Legend  Removal  Date”),        deliver or cause to be delivered to such Purchaser a certificate representing such shares        that  is  free  from  all  restrictive  and  other  legends.   The  Company  may  not  make  any        notation  on  its  records  or  give  instructions  to  the  Transfer  Agent  that  enlarge  the                                         26  \\PH - 036137/000007 - 388262 v8    

 

      restrictions  on  transfer  set  forth  in  this  Section  4.   Warrant  Shares  subject  to  legend        removal  hereunder  shall  be  transmitted  by  the  Transfer  Agent  to  the  Purchaser  by        crediting the account of the Purchaser’s prime broker with the Depository Trust Company        System  as  directed  by  such  Purchaser.   As  used  herein,  “Standard  Settlement  Period”        means  the  standard  settlement  period,  expressed  in  a  number  of  Trading  Days,  on  the        Company’s primary Trading Market with respect to the Common Stock as in effect on        the date of delivery of a certificate representing Warrant Shares issued with a restrictive        legend.               (e)   In  addition  to  such  Purchaser’s  other  available  remedies,  the  Company        shall pay to a Purchaser, in cash, (i) as partial liquidated damages and not as a penalty, for        each $1,000 of Warrant Shares (based on the VWAP of the Common Stock on the date        such  Securities  are  submitted  to  the  Transfer  Agent)  delivered  for  removal  of  the        restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20        per  Trading  Day  five  (5)  Trading  Days  after  such  damages  have  begun  to  accrue)  for        each  Trading  Day  after  the  Legend  Removal  Date  until  such  certificate  is  delivered        without a legend  and (ii) if the Company fails  to (a) issue and deliver (or cause to  be        delivered)  to  a  Purchaser  by  the  Legend  Removal  Date  a  certificate  representing  the        Securities so delivered to the Company by such Purchaser that is free from all restrictive        and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in        an  open  market  transaction  or  otherwise)  shares  of  Common  Stock  to  deliver  in        satisfaction of a sale by such Purchaser of all or any portion of the number of shares of        Common Stock, or a sale of a number of shares of Common Stock equal to all or any        portion  of  the  number  of  shares  of  Common  Stock,  that  such  Purchaser  anticipated        receiving from the Company without any restrictive legend, then an amount equal to the        excess  of  such  Purchaser’s  total  purchase  price  (including  brokerage  commissions  and        other  out-of-pocket  expenses,  if  any)  for  the  shares  of  Common  Stock  so  purchased        (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In        Price”) over the product of (A) such number of Warrant Shares that the Company was        required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the        lowest closing sale price of the Common Stock on any Trading Day during the period        commencing  on  the  date  of  the  delivery  by  such  Purchaser  to  the  Company  of  the        applicable Warrant Shares (as the case may be) and ending on the date of such delivery        and payment under this Section 4.1(d).                 (f)   The Shares shall be issued free of legends.         4.2   Furnishing of Information.                 (a)   Until the earlier of the time that (i) no Purchaser owns Securities and (ii)        the Warrants have expired, the Company covenants to timely file (or obtain extensions in        respect thereof and file within the applicable grace period) all reports required to be filed        by the Company after the date hereof pursuant to the Exchange Act even if the Company        is not then subject to the reporting requirements of the Exchange Act.                 (b)   At  any  time  during  the  period  commencing  from  the  six  (6)  month        anniversary  of  the  date  hereof  and  ending  at  such  time  that  all  of  the  Warrant  Shares                                         27  \\PH - 036137/000007 - 388262 v8    

 

      (assuming cashless exercise) may be sold without the requirement for the Company to be        in  compliance  with  Rule  144(c)(1)  and  otherwise  without  restriction  or  limitation        pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current        public  information  requirement  under  Rule  144(c)  or  (ii)  has  ever  been  an  issuer        described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall        fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)        then, in addition to such Purchaser’s other available remedies, the Company shall pay to a        Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any        such  delay in  or  reduction  of  its  ability  to  sell  the  Warrant  Shares,  an  amount  in  cash        equal to two percent (2.0%) of the aggregate Exercise Price of such Purchaser’s Warrants        on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for        periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public        Information Failure is cured and (b) such time that such public information is no longer        required  for the Purchasers to transfer the Warrant Shares pursuant to  Rule 144.  The        payments  to  which  a  Purchaser  shall  be  entitled  pursuant  to  this  Section  4.2(b)  are        referred to herein as “Public Information Failure Payments.”  Public Information Failure        Payments  shall  be  paid  on  the  earlier  of  (i)  the  last  day  of  the calendar  month  during        which  such  Public  Information  Failure  Payments  are  incurred  and  (ii)  the  third  (3rd)        Business  Day  after  the  event  or  failure  giving  rise  to  the  Public  Information  Failure        Payments is cured.  In the event the Company fails to make Public Information Failure        Payments  in  a  timely  manner,  such  Public  Information  Failure  Payments  shall  bear        interest  at  the  rate  of  1.5%  per  month  (prorated  for  partial  months)  until  paid  in  full.        Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public        Information  Failure,  and  such  Purchaser  shall  have  the  right  to  pursue  all  remedies        available  to  it  at  law  or  in  equity  including,  without  limitation,  a  decree  of  specific        performance and/or injunctive relief.         4.3 Integration.   The Company  shall  not  sell,  offer  for  sale  or  solicit  offers  to  buy  or  otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that  would be integrated with the offer or sale of the Securities in a manner that would require the  registration under the Securities Act of the sale of the Warrants or Warrant Shares or that would  be integrated with the offer or sale of the Securities for purposes of the rules and regulations of  any Trading Market such that it would require shareholder approval prior to the closing of such  other transaction unless shareholder approval is obtained before the closing of such subsequent  transaction.          4.4   Securities Laws Disclosure; Publicity.  The Company shall (a) by the Disclosure  Time, issue a press release disclosing the material terms of the transactions contemplated hereby,  and  (b)  file  a  Current  Report  on  Form  8-K,  including  the  Transaction  Documents  as  exhibits  thereto, with the Commission within the time required by the Exchange Act.  From and after the  issuance  of  such  press  release,  the  Company  represents  to  the  Purchasers  that  it  shall  have  publicly disclosed all material, non-public information delivered to any of the Purchasers by the  Company or any of its Subsidiaries, or any of their respective officers, directors, employees or  agents  in  connection  with  the  transactions  contemplated  by  the  Transaction  Documents.   In  addition,  effective  upon  the  issuance  of  such  press  release,  the  Company  acknowledges  and  agrees  that  any  and  all  confidentiality  or  similar  obligations  under  any  agreement,  whether  written or oral, between the Company, any of its Subsidiaries or any of their respective officers,                                         28  \\PH - 036137/000007 - 388262 v8    

 

directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of  their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult  with each other in issuing any other press releases with respect to the transactions contemplated  hereby,  and  neither  the  Company  nor  any  Purchaser  shall  issue  any such  press  release  nor  otherwise  make  any  such  public  statement  without  the  prior  consent  of  the  Company,  with  respect  to  any press  release of any Purchaser, or without the prior consent  of each Purchaser,  with  respect  to  any  press  release  of  the  Company, which  consent  shall  not  unreasonably  be  withheld or delayed, except if such disclosure is required by law, in which case the disclosing  party  shall  promptly  provide  the  other  party  with  prior  notice  of  such  public  statement  or  communication.   Notwithstanding  the  foregoing,  the  Company  shall  not  publicly  disclose  the  name of any Purchaser, or include the name of any Purchaser in any filing with the Commission  or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,  except (a) as required by federal securities law in connection with the filing of final Transaction  Documents  with  the  Commission  and  (b)  to  the  extent  such  disclosure  is  required  by  law  or  Trading Market regulations, in which case the Company shall provide the Purchasers with prior  notice of such disclosure permitted under this clause (b).         4.5   Shareholder Rights Plan.  No claim will be made or enforced by the Company or,  with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person”  under any control share acquisition, business combination, poison pill (including any distribution  under  a  rights  agreement)  or  similar  anti-takeover  plan  or  arrangement  in  effect  or  hereafter  adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any  such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or  under any other agreement between the Company and the Purchasers.         4.6   Non-Public Information.  Except with respect to the material terms and conditions  of  the  transactions  contemplated  by  the  Transaction  Documents,  which  shall  be  disclosed  pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person  acting on its behalf will provide any Purchaser or its agents or counsel with any information that  constitutes,  or  the  Company  reasonably  believes  constitutes,  material  non-public  information,  unless prior thereto such Purchaser shall have consented to the receipt of such information and  agreed with the Company to keep such information confidential.  The Company understands and  confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions  in securities of the Company.  To the extent that the Company delivers any material, non-public  information  to  a  Purchaser  without  such  Purchaser’s  consent,  the  Company  hereby  covenants  and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of  its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a  duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents,  employees  or  Affiliates  not  to  trade  on  the  basis  of,  such  material,  non-public  information,  provided that the Purchaser shall remain subject to applicable law. To the extent that any notice  provided  pursuant  to  any  Transaction  Document  constitutes,  or  contains,  material,  non-public  information regarding the Company or any Subsidiaries, the Company shall simultaneously file  such  notice  with  the  Commission  pursuant  to  a  Current  Report  on  Form  8-K.   The  Company  understands  and  confirms  that  each  Purchaser  shall  be  relying  on  the  foregoing  covenant  in  effecting transactions in securities of the Company.                                          29  \\PH - 036137/000007 - 388262 v8    

 

      4.7   Use  of  Proceeds.   Except  as  set  forth  on Schedule  4.7 attached  hereto,  the  Company shall use the net proceeds from the sale of the Securities hereunder for working capital  purposes  and  shall  not  use  such  proceeds:  (a)  for  the  satisfaction  of  any  portion  of  the  Company’s debt (other than payment of trade payables in the ordinary course of the Company’s  business and prior practices), (b) for the redemption of any Common Stock or Common Stock  Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or  OFAC regulations.         4.8   Indemnification of Purchasers.   Subject to the provisions of this Section 4.8, the  Company  will  indemnify  and  hold  each  Purchaser  and  its  directors,  officers,  shareholders,  members, partners, employees and agents (and any other Persons with a functionally equivalent  role of a Person holding such titles notwithstanding a lack of such title or any other title), each  Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and  Section  20  of the  Exchange  Act),  and  the  directors,  officers,  shareholders,  agents,  members,  partners  or  employees  (and  any  other  Persons  with  a  functionally  equivalent  role  of  a  Person  holding  such  titles  notwithstanding  a  lack  of  such  title  or  any  other  title)  of  such controlling  persons  (each,  a  “Purchaser  Party”)  harmless  from  any  and  all  losses,  liabilities,  obligations,  claims,  contingencies,  damages,  costs  and  expenses,  including  all  judgments,  amounts  paid  in  settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such  Purchaser  Party  may  suffer  or  incur  as  a  result  of  or  relating  to  (a)  any  breach  of  any  of  the  representations, warranties, covenants or agreements made by the Company in this Agreement or  in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in  any capacity, or any of them or their respective Affiliates, by any stockholder of the Company  who  is  not  an  Affiliate  of  such  Purchaser  Party,  with  respect  to  any  of  the  transactions  contemplated by the Transaction Documents (unless such action is based upon a breach of such  Purchaser Party’s representations, warranties or covenants under the Transaction Documents or  any agreements or understandings such Purchaser Party may have with any such stockholder or  any violations by such Purchaser Party of state or federal securities laws or any conduct by such  Purchaser  Party  which  is  finally  judicially  determined  to  constitute  fraud,  gross  negligence  or  willful  misconduct) or  (c)  in  connection  with  any  registration  statement  of  the  Company  providing  for  the  resale  by  the  Purchasers  of  the  Warrant  Shares  issued  and  issuable  upon  exercise of the Warrants, the Company will indemnify each Purchaser Party, to the fullest extent  permitted  by  applicable  law,  from  and  against  any  and  all  losses,  claims,  damages,  liabilities,  costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred, arising  out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such  registration  statement,  any  prospectus  or  any  form  of  prospectus  or  in  any  amendment  or  supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission  or  alleged  omission  of  a  material  fact  required  to  be  stated  therein  or  necessary  to  make  the  statements  therein  (in  the  case  of  any  prospectus  or  supplement  thereto,  in  the  light  of  the  circumstances under which they were made) not misleading, except to the extent, but only to the  extent,  that  such untrue  statements  or  omissions  are  based  solely  upon  information  regarding  such Purchaser Party furnished in writing to the Company by such Purchaser Party expressly for  use therein, or (ii) any violation or alleged violation by the Company of the Securities Act, the  Exchange  Act  or  any  state  securities  law,  or  any  rule  or  regulation  thereunder  in  connection  therewith.  If  any  action  shall  be  brought  against  any  Purchaser  Party  in  respect  of  which  indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify  the Company in  writing, and the Company shall have the right  to  assume the defense thereof                                         30  \\PH - 036137/000007 - 388262 v8    

 

with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser  Party shall have the right to employ separate counsel in any such action and participate in the  defense  thereof,  but  the  fees  and  expenses  of  such  counsel  shall  be  at  the  expense  of  such  Purchaser  Party  except  to  the  extent  that  (x)  the  employment  thereof  has  been  specifically  authorized by the Company in writing, (y) the Company has failed after a reasonable period of  time  to  assume  such  defense  and  to  employ  counsel  or  (z)  in  such  action  there  is,  in  the  reasonable opinion of counsel, a material conflict on any material issue between the position of  the  Company  and  the  position  of  such  Purchaser  Party,  in  which  case  the  Company  shall  be  responsible for the reasonable fees and expenses of no more than one such separate counsel.  The  Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement  by a Purchaser Party effected without the Company’s prior written consent, which shall not be  unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim,  damage or liability is attributable to any Purchaser Party’s breach of any of the representations,  warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the  other Transaction Documents. The indemnification required by this Section 4.8 shall be made by  periodic payments of the amount thereof during the course of the investigation or defense, as and  when bills are received or are incurred. The indemnity agreements contained herein shall be in  addition to any cause of action or similar right of any Purchaser Party against the Company or  others and any liabilities the Company may be subject to pursuant to law.         4.9   Reservation of Common Stock. As of the date hereof, the Company has reserved  and the Company shall continue to reserve and keep available at all times, free of preemptive  rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company  to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the  Warrants.         4.10  Listing  of  Common  Stock.  The  Company hereby  agrees  to  use  commercially  reasonable best efforts to maintain the listing or quotation of the Common Stock on the Trading  Market  on  which  it  is  currently  listed,  and  concurrently  with  the  Closing,  the  Company  shall  apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly  secure the listing of all of the Shares and Warrant Shares on such Trading Market. The Company  further agrees, if the Company applies to have the Common Stock traded on any other Trading  Market, it will then include in such application all of the Shares and Warrant Shares, and will  take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or  quoted on such other Trading Market as promptly as possible.  The Company will then take all  action  reasonably  necessary  to  continue  the  listing  and  trading  of  its  Common  Stock  on  a  Trading Market and will comply in all respects with the Company’s reporting, filing and other  obligations under the bylaws or rules of the Trading Market.  The Company agrees to maintain  the  eligibility  of  the  Common  Stock  for  electronic  transfer  through  the  Depository  Trust  Company  or  another  established  clearing  corporation,  including,  without  limitation,  by  timely  payment of fees to the Depository Trust Company or such other established clearing corporation  in connection with such electronic transfer.         4.11  Reserved.           4.12  Subsequent Equity Sales.                                            31  \\PH - 036137/000007 - 388262 v8    

 

            (a)   From  the  date  hereof  until  30  days  after  the  Closing  Date,  neither  the        Company nor any Subsidiary shall issue, enter into any agreement to issue or announce        the  issuance  or  proposed  issuance  of  any  shares  of  Common  Stock  or Common  Stock        Equivalents.               (b)   From the date hereof until the one year anniversary of the Closing Date,        the Company shall be prohibited from effecting or entering into an agreement to effect        any issuance by the Company or any of its Subsidiaries of Common Stock or Common        Stock  Equivalents  (or  a  combination  of  units  thereof)  involving  a  Variable  Rate        Transaction.  “Variable Rate Transaction” means a transaction in which the Company (i)        issues  or  sells  any  debt  or  equity  securities  that  are  convertible  into,  exchangeable  or        exercisable for, or include the right to receive additional shares of Common Stock either        (A) at a conversion price, exercise price or exchange rate or other price that is based upon        and/or varies with the trading prices of or quotations for the shares of Common Stock at        any  time  after  the  initial  issuance  of  such  debt  or  equity  securities,  or  (B)  with  a        conversion, exercise or exchange price that is subject to being reset at some future date        after  the  initial  issuance  of  such  debt  or  equity  security  or  upon  the  occurrence  of        specified  or  contingent  events  directly  or  indirectly  related  to  the  business  of  the        Company or the market for the Common Stock or (ii) enters into, or effects a transaction        under, any agreement, including, but not limited to, an equity line of credit, whereby the        Company  may  issue  securities  at  a  future  determined  price.   Any  Purchaser  shall  be        entitled to  obtain injunctive relief against the Company to  preclude any  such issuance,        which remedy shall be in addition to any right to collect damages.               (c)   Notwithstanding the foregoing, this Section 4.12 shall not apply in respect        of  an  Exempt  Issuance,  except  that  no  Variable  Rate  Transaction  shall  be  an  Exempt        Issuance.         4.13  Equal Treatment of Purchasers.  No consideration (including any modification of  any  Transaction  Document)  shall  be  offered  or  paid  to  any  Person  to  amend  or  consent  to  a  waiver  or  modification  of any  provision  of  the  Transaction  Documents  unless  the  same  consideration  is  also  offered  to  all  of  the  parties  to  such  Transaction  Documents.   For  clarification purposes, this provision constitutes a separate right granted to each Purchaser by the  Company and negotiated separately by each Purchaser, and is intended for the Company to treat  the  Purchasers  as  a  class  and  shall  not  in  any  way  be  construed  as  the  Purchasers  acting  in  concert  or  as  a  group  with  respect  to  the  purchase,  disposition  or  voting  of Securities  or  otherwise.          4.14  Certain  Transactions  and  Confidentiality.  Each  Purchaser,  severally  and  not  jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or  pursuant to any understanding with it will execute any purchases or sales, including Short Sales  of  any  of  the  Company’s  securities  during  the  period  commencing  with  the  execution  of  this  Agreement  and  ending  at  such  time  that  the  transactions  contemplated  by  this  Agreement  are  first publicly announced pursuant to the initial press release as described in Section 4.4.  Each  Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as  the  transactions  contemplated  by  this  Agreement  are  publicly  disclosed  by  the  Company  pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the                                         32  \\PH - 036137/000007 - 388262 v8    

 

confidentiality of the existence and terms of this transaction and the information included in the  Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained  in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no  Purchaser  makes  any  representation,  warranty  or  covenant  hereby  that  it  will  not  engage  in  effecting  transactions  in  any  securities  of  the  Company  after  the  time  that  the  transactions  contemplated by this Agreement are first publicly announced pursuant to the initial press release  as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any  transactions in any securities of the Company in accordance with applicable securities laws from  and  after  the  time  that  the  transactions  contemplated  by  this  Agreement  are  first  publicly  announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser  shall have any duty of confidentiality or duty not to trade in the securities of the Company to the  Company or its Subsidiaries after the issuance of the initial press release as described in Section  4.4.  Notwithstanding  the  foregoing,  in  the  case  of  a  Purchaser  that  is  a  multi-managed  investment  vehicle  whereby  separate  portfolio  managers  manage  separate  portions  of  such  Purchaser’s  assets  and  the  portfolio  managers  have  no  direct  knowledge  of  the  investment  decisions made by the portfolio managers managing other portions of such Purchaser’s assets,  the covenant set forth above shall only apply with respect to the portion of assets managed by the  portfolio manager that made the investment decision to purchase the Securities covered by this  Agreement.         4.15  Registration Statement. Each Purchaser shall furnish the Company a questionnaire  in  the form  attached hereto  as Exhibit  B (the “Selling Stockholder Questionnaire”)  within ten  (10) Business Days after the Company notifies such Purchaser of its intent to file a registration  statement providing for the resale by such Purchaser of the Warrant Shares issued and issuable  upon exercise of the Warrants, provided that, following such initial notification to the Purchaser  from  the  Company,  the Company  shall  deliver  follow  up  notifications  to  the  Purchaser  every  three (3) Business Days during the ten (10) Business Day period set forth herein.         4.16  Exercise Procedures.  The form of Notice of Exercise included in the Warrants set  forth the totality of the procedures required of the Purchasers in order to exercise the Warrants.   No additional legal opinion, other information or instructions shall be required of the Purchasers  to exercise their Warrants.  Without limiting the preceding sentences, no ink-original Notice of  Exercise  shall  be  required,  nor  shall  any  medallion  guarantee  (or  other  type  of  guarantee  or  notarization) of any Notice of Exercise form be required in order to exercise the Warrants.  The  Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance  with the terms, conditions and time periods set forth in the Transaction Documents.         4.17  Form D; Blue Sky Filings.  The Company agrees to timely file a Form D with  respect to the Warrant and Warrant Shares as required under Regulation D and to provide a copy  thereof,  promptly  upon  request  of  any  Purchaser.  The  Company  shall  take  such  action  as  the  Company  shall  reasonably  determine  is  necessary  in  order  to  obtain  an  exemption  for,  or  to  qualify  the  Warrant  and  Warrant Shares  for,  sale  to  the  Purchasers  at  the  Closing  under  applicable  securities  or  “Blue  Sky”  laws  of  the  states  of  the  United  States,  and  shall  provide  evidence of such actions promptly upon request of any Purchaser.                                          33  \\PH - 036137/000007 - 388262 v8    

 

                                 ARTICLE V.                                MISCELLANEOUS         5.1   Termination.  This  Agreement  may  be  terminated  by  any  Purchaser,  as  to  such  Purchaser’s  obligations  hereunder  only  and  without  any  effect  whatsoever  on  the  obligations  between  the  Company  and  the  other  Purchasers,  by  written  notice  to  the  other  parties,  if  the  Closing has not been consummated on or before the fifth (5th) Trading Day following the date  hereof; provided, however, that no such termination will affect the right of any party to sue for  any breach by any other party (or parties).         5.2 Fees and Expenses.  Except as expressly set forth in the Transaction Documents to  the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and  other experts, if any, and all other expenses incurred by such party incident to the negotiation,  preparation, execution, delivery and performance of this Agreement.  The Company shall pay all  Transfer Agent fees (including, without limitation, any fees required for same-day processing of  any  instruction  letter  delivered  by  the  Company  and  any  exercise  notice  delivered by  a  Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any  Securities to the Purchasers.         5.3   Entire  Agreement.   The  Transaction  Documents,  together  with  the  exhibits  and  schedules  thereto,  the  Prospectus  and  the  Prospectus  Supplement,  contain  the  entire  understanding of the parties with respect to the subject matter hereof and thereof and supersede  all prior agreements and understandings, oral or written, with respect to such matters, which the  parties acknowledge have been merged into such documents, exhibits and schedules.         5.4   Notices.  Any and all notices or other communications or deliveries required or  permitted to be provided hereunder shall be in writing and shall be deemed given and effective  on the earliest of: (a) the date of transmission, if such notice or communication is delivered via  facsimile at the facsimile number or email  attachment at the email address as set  forth on the  signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,  (b)  the  next  Trading  Day  after  the  date  of  transmission,  if  such  notice  or  communication  is  delivered via facsimile at the facsimile number or email attachment at the email address as set  forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30  p.m. (New York City time) on any Trading Day, (c) the second (2nd)Trading Day following the  date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual  receipt by the party to whom such notice is required to be given.  The address for such notices  and communications shall be as set forth on the signature pages attached hereto. To the extent  that any notice provided pursuant to any Transaction Document constitutes, or contains, material,  non-public  information  regarding  the  Company  or  any  Subsidiaries,  the  Company  shall  simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.         5.5   Amendments;  Waivers.   No  provision  of  this  Agreement  may  be  waived,  modified,  supplemented  or  amended  except  in  a  written  instrument  signed,  in  the  case  of  an  amendment,  by  the  Company  and  Purchasers  which  purchased  at  least  67%  in  interest  of  the  Shares based on the initial Subscription Amounts hereunder 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  a  Purchaser  (or                                         34  \\PH - 036137/000007 - 388262 v8    

 

group  of  Purchasers),  the  consent  of  such  disproportionately  impacted  Purchaser  (or  group  of  Purchasers)  shall  also  be  required.   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. Any proposed amendment or waiver that  disproportionately, materially and adversely affects the rights and obligations of any Purchaser  relative to the comparable rights and obligations of the other Purchasers shall require the prior  written  consent  of  such  adversely  affected  Purchaser.  Any  amendment  effected  in  accordance  with  this  Section  5.5  shall  be  binding  upon  each  Purchaser  and  holder  of  Securities  and  the  Company.         5.6   Headings.  The headings herein are for convenience only, do not constitute a part  of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.         5.7   Successors and Assigns.  This Agreement shall be binding upon and inure to the  benefit of the parties and their successors and permitted assigns.  The Company may not assign  this Agreement or any rights or obligations hereunder without the prior written consent of each  Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this  Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided  that such transferee agrees in writing to be bound, with respect to the transferred Securities, by  the provisions of the Transaction Documents that apply to the “Purchasers.”         5.8   No  Third-Party  Beneficiaries.   The  Placement  Agent  shall  be  the  third  party  beneficiary  of the  representations  and  warranties  of  the  Company  in  Section  3.1  and  the  representations and warranties of the Purchasers in Section 3.2.  This Agreement is intended for  the benefit of the parties hereto and their respective successors and permitted assigns and is not  for  the  benefit  of,  nor  may  any  provision  hereof  be  enforced  by,  any  other  Person,  except  as  otherwise set forth in Section 4.8 and this Section 5.8.         5.9   Governing Law.  All questions concerning the construction, validity, enforcement  and  interpretation  of  the  Transaction  Documents  shall  be  governed  by  and  construed  and  enforced in accordance with the internal laws of the State of New York, without regard to the  principles of conflicts of law thereof.  Each party agrees that all legal Proceedings concerning the  interpretations, enforcement and defense of the transactions contemplated by this Agreement and  any  other  Transaction  Documents  (whether  brought  against  a  party  hereto  or  its  respective  affiliates,  directors,  officers,  shareholders,  partners,  members,  employees  or  agents)  shall  be  commenced exclusively in the state and federal  courts sitting in the City of New York.  Each  party  hereby  irrevocably  submits  to  the  exclusive  jurisdiction  of  the  state  and  federal  courts  sitting  in  the  City  of  New York,  Borough  of  Manhattan  for  the  adjudication  of  any  dispute  hereunder or in connection herewith or with any transaction contemplated hereby or discussed  herein  (including  with  respect  to  the  enforcement  of  any  of  the  Transaction  Documents),  and  hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it  is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is  improper  or  is  an  inconvenient  venue  for  such  Proceeding.   Each  party  hereby  irrevocably  waives personal service of process and consents to process being served in any such Action or  Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with                                         35  \\PH - 036137/000007 - 388262 v8    

 

evidence of delivery) to such party at the address in effect for notices to it under this Agreement  and agrees  that such service shall constitute good and sufficient  service of process  and notice  thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process  in any other manner permitted by law.   If any party shall commence an Action or Proceeding to  enforce any provisions of the Transaction Documents, then, in addition to the obligations of the  Company  under  Section  4.8,  the  prevailing  party  in  such  Action  or  Proceeding  shall  be  reimbursed  by  the  non-prevailing  party  for  its  reasonable  attorneys’  fees  and  other  costs  and  expenses  incurred  with  the  investigation,  preparation  and  prosecution  of  such  Action  or  Proceeding.         5.10  Survival.  The representations and warranties contained herein shall survive the  Closing and the delivery of the Securities.         5.11  Execution.  This Agreement may be executed in two or more counterparts, all of  which when taken together shall be considered one and the same agreement and shall become  effective when counterparts have been signed by each party and delivered to each other party, it  being  understood  that  the  parties  need  not  sign  the  same  counterpart.   In  the  event  that  any  signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file,  such signature shall create a valid and binding obligation of the party executing (or on whose  behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”  signature page were an original thereof.         5.12  Severability.  If any term, provision, covenant or restriction of this Agreement is  held  by  a  court  of  competent  jurisdiction  to  be  invalid,  illegal,  void  or  unenforceable,  the  remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full  force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto  shall  use  their  commercially  reasonable  efforts  to  find  and  employ  an  alternative  means  to  achieve the same or substantially the same result as that contemplated by such term, provision,  covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that  they  would have  executed the remaining terms,  provisions, covenants and restrictions  without  including any of such that may be hereafter declared invalid, illegal, void or unenforceable.         5.13  Rescission  and  Withdrawal  Right.   Notwithstanding  anything  to  the  contrary  contained  in  (and  without  limiting  any  similar  provisions  of)  any  of  the  other  Transaction  Documents,  whenever  any  Purchaser  exercises  a  right,  election,  demand  or  option  under  a  Transaction Document and the Company does not timely perform its related obligations within  the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion  from time to time upon written notice to the Company, any relevant notice, demand or election in  whole or in part without prejudice to its future actions and rights; provided, however, that in the  case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to  return any shares of Common Stock subject to any such rescinded exercise notice concurrently  with the return to such Purchaser of the aggregate exercise price paid to the Company for such  shares  and  the  restoration  of  such  Purchaser’s  right  to  acquire  such  shares  pursuant  to  such  Purchaser’s  Warrant  (including,  issuance  of  a  replacement  warrant  certificate  evidencing  such  restored right).                                          36  \\PH - 036137/000007 - 388262 v8    

 

      5.14  Replacement  of  Securities.   If  any  certificate  or  instrument evidencing  any  Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in  exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu  of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence  reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a  new certificate or instrument under such circumstances shall also pay any reasonable third-party  costs (including  customary  indemnity)  associated  with  the  issuance  of  such  replacement  Securities.         5.15  Remedies.  In addition to being entitled to exercise all rights provided herein or  granted by law, including recovery of damages, each of the Purchasers and the Company will be  entitled  to  specific  performance  under  the  Transaction  Documents.   The  parties  agree  that  monetary damages  may  not  be adequate compensation for any loss incurred by  reason  of  any  breach of obligations contained in the Transaction Documents and hereby agree to waive and not  to assert in any Action for specific performance of any such obligation the defense that a remedy  at law would be adequate.         5.16  Payment  Set  Aside.   To  the  extent  that  the  Company  makes  a  payment  or  payments  to  any  Purchaser  pursuant  to  any  Transaction  Document  or  a  Purchaser  enforces  or  exercises  its  rights  thereunder,  and  such  payment  or  payments  or  the  proceeds  of  such  enforcement  or  exercise  or  any  part  thereof  are  subsequently  invalidated,  declared  to  be  fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded,  repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any  law  (including,  without  limitation,  any  bankruptcy  law,  state  or  federal  law,  common  law  or  equitable cause of action), then to the extent of any such restoration the obligation or part thereof  originally intended to  be satisfied shall be revived and continued in  full force and effect  as  if  such payment had not been made or such enforcement or setoff had not occurred.         5.17  Independent  Nature  of  Purchasers’  Obligations  and  Rights.   The  obligations  of  each Purchaser under any Transaction Document are several and not joint with the obligations of  any other Purchaser, and no Purchaser shall be responsible in any way for the performance or  non-performance  of  the  obligations  of  any  other  Purchaser  under  any  Transaction  Document.   Nothing  contained  herein  or  in  any  other  Transaction  Document,  and  no  action  taken  by  any  Purchaser  pursuant  hereto  or thereto,  shall  be  deemed  to  constitute  the  Purchasers  as  a  partnership, an association, a joint venture or any other kind of entity, or create a presumption  that the Purchasers are in any way acting in concert or as a group with respect to such obligations  or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled  to independently protect and enforce its rights including, without limitation, the rights arising out  of this Agreement or out of the other Transaction Documents, and it shall not be necessary for  any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each  Purchaser has been represented by its own separate legal counsel in its review and negotiation of  the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and  its respective counsel have chosen to communicate with the Company through the legal counsel  of the Placement Agent. The legal counsel of the Placement Agent does not represent any of the  Purchasers and only represents the Placement Agent.  The Company has elected to provide all  Purchasers with the same terms and Transaction Documents for the convenience of the Company  and not because it was required or requested to do so by any of the Purchasers.  It is expressly                                         37  \\PH - 036137/000007 - 388262 v8    

 

understood  and  agreed  that  each  provision  contained  in  this  Agreement  and  in  each  other  Transaction  Document  is  between  the  Company  and  a  Purchaser,  solely,  and  not  between  the  Company and the Purchasers collectively and not between and among the Purchasers.         5.18  Liquidated  Damages.   The  Company’s  obligations  to  pay  any  partial  liquidated  damages or other amounts owing under the Transaction Documents is a continuing obligation of  the  Company  and  shall  not  terminate  until  all  unpaid partial  liquidated  damages  and  other  amounts  have  been  paid  notwithstanding  the  fact  that  the  instrument  or  security  pursuant  to  which  such  partial  liquidated  damages  or  other  amounts  are  due  and  payable  shall  have  been  canceled.         5.19  Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of  any action or the expiration of any right required or granted herein shall not be a Business Day,  then such action may be taken or such right may be exercised on the next succeeding Business  Day.         5.20  Construction. The parties agree that each of them and/or their respective counsel  have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the  normal  rule  of  construction  to  the  effect  that  any  ambiguities  are  to  be  resolved  against  the  drafting party shall not be employed in the interpretation of the Transaction Documents or any  amendments thereto. In addition, each and every reference to share prices and shares of Common  Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock  splits, stock dividends, stock combinations and other similar transactions of the Common Stock  that occur after the date of this Agreement.         5.21  WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING  IN  ANY  JURISDICTION    BROUGHT  BY  ANY  PARTY  AGAINST  ANY  OTHER  PARTY,  THE  PARTIES  EACH  KNOWINGLY  AND  INTENTIONALLY,  TO  THE  GREATEST     EXTENT     PERMITTED      BY    APPLICABLE      LAW,    HEREBY  ABSOLUTELY,  UNCONDITIONALLY,  IRREVOCABLY  AND  EXPRESSLY  WAIVES  FOREVER TRIAL BY JURY.                                   (Signature Pages Follow)                                          38  \\PH - 036137/000007 - 388262 v8    

 

            IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase  Agreement  to  be  duly  executed  by  their  respective  authorized  signatories  as  of  the  date  first  indicated above.     FIBROCELL SCIENCE, INC.                         Address for Notice:                                                                                                    405 Eagleview Blvd.                                                  Exton, Pennsylvania 19341  By:__________________________________________          Name: John M. Maslowski                           Title: President and Chief Executive Officer Fax:                                                  E-mail:    With a copy to (which shall not constitute notice):                                                      Hogan Lovells US LLP  1735 Market Street, Floor 23  Philadelphia, PA 19103  Telephone: (267)-675-4600  Facsimile: (267)-675-4601  Attention: Steven J. Abrams                                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK                  SIGNATURE PAGE FOR PURCHASER FOLLOWS]                                          39  \\PH - 036137/000007 - 388262 v8    

 

       [PURCHASER SIGNATURE PAGES TO FCSC SECURITIES PURCHASE AGREEMENT]          IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to  be duly executed by their respective authorized signatories as of the date first indicated above.  Name of Purchaser: ______________________________________________________   Signature of Authorized Signatory of Purchaser: _________________________________   Name of Authorized Signatory: _______________________________________________   Title of Authorized Signatory: ________________________________________________   Email Address of Authorized Signatory:_________________________________________   Facsimile Number of Authorized Signatory: __________________________________________   Address for Notice to Purchaser:    Address for Delivery of Warrants to Purchaser (if not same as address for notice):    DWAC for Shares:    Subscription Amount: $_________________    Shares: _________________    Warrant Shares: __________________    Lesser of maximum amount permitted pursuant to Section 2.1 and the limitation on Beneficial Ownership and  $____________      (for purposes of clarity, the amount set forth on the immediately above line of this signature page is included in  such Purchaser’s “Subscription Amount” for purposes of this Agreement and the Transaction Documents)    EIN Number: ____________________      Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of  the above-signed to purchase the securities set forth in this Agreement to be purchased from the Company by the  above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional  and all conditions to Closing shall be disregarded, (ii) the Closing shall occur on or by the second (2nd) Trading Day  following the date of this Agreement and (iii) any condition to Closing contemplated by this Agreement (but prior to  being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement,  instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be  an  unconditional  obligation  of  the  Company  or  the  above-signed  (as  applicable)  to  deliver  such  agreement,  instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.                           [SIGNATURE PAGES CONTINUE]                                          40  \\PH - 036137/000007 - 388262 v8    

 

                                                                                                                                              Schedule 3.1(a)                                                    Fibrocell Technologies, Inc., a Delaware corporation (wholly owned by Fibrocell Science, Inc.)    Isolagen International, S.A., a company organized under the laws of Switzerland (wholly owned by Fibrocell  Technologies, Inc.)                                                    1  \\PH - 036137/000007 - 388261 v6    

 

                                            Schedule 3.1(g)*                                                    Common Stock (as of May 24, 2018):    150,000,000 shares authorized    5,675,171 shares issued and outstanding    Preferred Stock (as of May 24, 2018):    5,000,000 shares authorized    8,000 shares issued and outstanding    Securities Exercisable or Convertible Into Common Stock (as of May 24, 2018)    1,123,971 shares of common stock issuable upon the conversion of outstanding convertible promissory notes,  including accrued interest thereon, payable in shares of common stock;   720,000 shares of common stock issuable upon the conversion of Series A Convertible Preferred Stock, par value  $0.001 per share, including accrued dividends thereon, payable in shares of common stock;   266,561 shares of common stock issuable upon the exercise of stock options, at a weighted average exercise price of  $49.90 per share, of which stock options to purchase 161,413 shares of common stock were exercisable; and   4,965,792 shares of common stock issuable upon the exercise of warrants at a weighted average exercise price of  $12.42 per share, all of which warrants were then exercisable.    Securities Reserved for Future Issuance (as of May 24, 2018)    An aggregate of 235,845 shares of common stock reserved for future grants of stock options (or other similar equity  instruments) under the Fibrocell Science, Inc. 2009 Equity Incentive Plan, as amended.               * On May 24, 2018, Fibrocell Science, Inc. (the “Company”) filed a Certificate of Amendment (“Certificate of  Amendment”) to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a  reverse stock split of the Company's outstanding shares of common stock, par value $0.001 at a ratio of one-for-five  (the “Reverse Stock Split”). Pursuant to the Certificate of Amendment, effective as of 5:00 p.m. Eastern Time on  May 24, 2018, each outstanding share of common stock automatically combined into 1/5 of a share of common  stock. No fractional shares were issued as a result of the Reverse Stock Split. Any fractional shares that would have  otherwise resulted from the Reverse Stock Split will be rounded up to the next whole number of shares. All share  and per share data in these schedules (including Schedule 3.1(g) and Schedule 3.1(r)) gives effect to the Reverse  Stock Split, prior to the rounding up of fractional shares.                                                      2  \\PH - 036137/000007 - 388261 v6    

 

                                                                                       Schedule 3.1(i)                                                                                                     None.                                                                                                                                                                                                                                                                   3  \\PH - 036137/000007 - 388261 v6    

 

                                             Schedule 3.1(r)                                                    Exclusive Channel Collaboration Agreements    The Company is party to two separate exclusive channel collaboration agreements with Precigen, Inc. (“Precigen”),  a wholly owned subsidiary of Intrexon Corporation (“Intrexon”), pursuant to which the Company is Precigen’s  exclusive channel collaborator in the development and commercialization of products within certain specified fields.  The Company engages Precigen for support services for the research and development of product candidates  covered under these agreements and reimburses Precigen for its cost for time and materials for such work.    The first exclusive channel collaboration agreement with Precigen (the “2012 ECC”) was entered into in October  2012, and was subsequently amended in June 2013 and January 2014. FCX-007 and FCX-013, the Company’s gene- therapy product candidates for the treatment of recessive dystrophic epidermolysis bullosa and linear scleroderma,  respectively, are being developed under the 2012 ECC. The Company incurred research and development expenses  of approximately $3.7 million and $5.7 million during 2016 and 2017, respectively under the 2012 ECC.    In December 2015, the Company entered into its second exclusive channel collaboration agreement (the “2015  ECC”). The Company is currently in the research phase for a gene-therapy product for arthritis and related  conditions under the 2015 ECC. In 2016 the Company paid Intrexon $10.0 million related to an up-front technology  fee due under the 2015 ECC. The Company did not incur any research and development expenses under the 2015  ECC during 2016 or 2017.    Randal J. Kirk is the chairman of the board of directors and chief executive officer of Intrexon. Together with his  affiliates, Mr. Kirk owns more than 50% of Intrexon’s common stock and approximately 29% of the Company’s  common stock. Two of the Company’s directors, Julian Kirk (who is the son of Randal J. Kirk) and Marcus E.  Smith, are officers of Third Security, which is owned by Randal J. Kirk.    Participation in 2016 Private Placement    On September 7, 2016, the Company issued an aggregate of approximately $18.1 million in principal of convertible  promissory notes (each a “Note” and collectively, the “Notes”) and accompanying warrants to purchase an  aggregate of approximately 1,205,835 shares of common stock (the “Private Placement Warrants”) in a private  placement (the “2016 Private Placement”) to institutional and accredited investors. The Notes bear interest at 4% per  annum and have a stated maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty (180)  days after the date on which the Company’s product candidate, FCX-007, is approved by the U.S. Food and Drug  Administration for the treatment of recessive dystrophic epidermolysis bullosa. The Notes bear interest at four  percent (4%) per annum which the Company may elect to pay in cash or accrue. Commencing September 8, 2016,  the Company has elected to accrue interest. Each individual Note holder has the right to require the Company to  repay all or any portion of the unpaid principal from time to time on or after September 7, 2021. With respect to  accrued and unpaid interest on the Note, each Note holder may elect, at any time and from time to time, to have any  accrued and unpaid interest converted into shares of the Company’s common stock. In addition, each Note holder  may elect to accelerate the repayment of all unpaid principal and accrued interest under such holder’s Note upon  consummation of a specified change of control transaction or occurrence of certain events of default as specified in  the Notes.    In addition, upon an event of default, the base interest rate (excluding any additional interest) for the Notes  automatically increases to twelve percent (12%) per annum. Subject to any applicable cure period set forth in the  Notes, all amounts outstanding with respect to the Notes (principal and accrued interest) would become due and  payable immediately upon an event of default. The conversion price of the Notes, the exercise price of the  accompanying warrants and the number of shares of the Company’s common stock issuable upon conversion of the  Notes and exercise of the accompanying warrants are each subject to adjustment upon certain corporate events,  including stock dividends, stock splits and distributions of cash or other assets to the Company’s stockholders.                                                      4  \\PH - 036137/000007 - 388261 v6    

 

   Affiliates of Randal J. Kirk (including Intrexon) participated in the 2016 Private Placement, and were issued an  aggregate of $6,762,500 in principal of Notes (all of which remains outstanding as of March 31, 2018) and 2016  Private Placement Warrants to purchase an aggregate of approximately 450,835 shares of common stock.    Participation in Series A Preferred Stock Offering    On March 7, 2017, the Company entered into a securities purchase agreement with certain of its existing investors  pursuant to which the Company issued and sold a total of 8,000 units (each a “Unit”, collectively the “Units”) for a  purchase price of $1,000 per Unit, with each Unit consisting of (i) one share of the Company’s Series A Convertible  Preferred Stock (the “Series A Preferred Stock”) convertible into approximately 86 shares of the Company’s  common stock and (ii) an accompanying warrant to purchase up to a number of shares of common stock equal to  100% of the conversion shares issuable on March 7, 2017 pursuant to the shares of Series A Preferred Stock  purchased by each investor (collectively, the “Series A Preferred Stock Offering”).  Affiliates of Randal J. Kirk  (including Intrexon) participated in the Series A Preferred Stock Offering, and were issued an aggregate of 3,016  shares of Series A Convertible Preferred Stock and accompanying warrants to purchase 259,176 shares of common  stock for aggregate gross proceeds of $3,016,000.    Participation in December 2017 Offering     Affiliates of Randal J. Kirk (including Intrexon) participated in the Company’s December 2017 public offering, and  were issued an aggregate of approximately 545,456 shares of common stock and accompanying warrants to  purchase approximately 545,456 shares of common stock.                                                                                                                                    5  \\PH - 036137/000007 - 388261 v6    

 

                                            Schedule 3.1(v)                                                                                                            Registration Rights Agreement, dated October 5, 2012, between Fibrocell Science, Inc. and each of the         several purchasers signatory thereto.             Registration Rights Agreement, dated September 7, 2016, by and among Fibrocell Science, Inc. and each of         the several holders of Registrable Shares signatory thereto.                                                                                          6  \\PH - 036137/000007 - 388261 v6    

 

                                            Schedule 3.1(w)                                                      On January 23, 2018, the Company received notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”)  that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the  Company’s common stock has been below $1.00 per share for 30 consecutive business days. The Notice has no  immediate effect on the listing of the Company’s common stock, which will continue to trade at this time on the  Nasdaq Capital Market under the symbol “FCSC.”    In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until  July 23, 2018, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid  price of the Company’s common stock must meet or exceed $1.00 per share for at least ten consecutive business  days during this 180 calendar day period. In the event the Company does not regain compliance by July 23, 2018,  the Company may be eligible for an additional 180 calendar day grace period if it meets the continued listing  requirement for market value of publicly held shares ($1 million) and all other initial listing standards for the  Nasdaq Capital Market, with the exception of the minimum bid price, and provides written notice to Nasdaq of its  intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.  If the Company does not regain compliance within the allotted compliance period(s), Nasdaq will provide notice that  the Company’s common stock will be subject to delisting from the Nasdaq Capital Market. In that event, the  Company may appeal such delisting determination to a hearings panel.    On May 24, 2018, the Company announced that it effected a one-for-five Reverse Stock Split of its common stock,  effective at 5:00 p.m. on May 24, 2018. Beginning with the opening of trading on May 25, 2018, the Company’s  common stock began trading on Nasdaq on a split-adjusted basis. The Reverse Stock Split was intended to increase  the per share trading price of the Company’s common stock to permit the Company to regain compliance with the  continued listing requirement of Nasdaq. As of May 29, 2018, the Company has not yet received notification from  Nasdaq that it has regained compliance with the minimum bid price requirement.                                                                                                                                                                                                                                                                                                                                                                                               7  \\PH - 036137/000007 - 388261 v6    

 

                                            Schedule 3.1(aa)                                                    As of May 29, 2017, the Company has outstanding principal of $18,002,500 ,as well as accrued interest of  $1,157,125, under the Notes.                                                                                                                                        8  \\PH - 036137/000007 - 388261 v6    

 

                                              Schedule 4.7                                                                                                      The Company intends to use the net proceeds from the sale of Securities under the Securities Purchase Agreement to  continue to fund the clinical and pre-clinical development of FCX-007 and FCX-013, and for other general  corporate purposes.                                                    9  \\PH - 036137/000007 - 388261 v6    

 

                                                                                                                                                                                                                                                                                          EXHIBIT A                                                                                                                                                                                       WARRANTS                                                                                                                                                                                      1  \\PH - 036137/000007 - 388261 v6    

 

   NEITHER  THIS  SECURITY  NOR  THE  SECURITIES  FOR  WHICH  THIS  SECURITY  IS  EXERCISABLE 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.   THIS  SECURITY  AND  THE  SECURITIES  ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION  WITH  A  BONA  FIDE  MARGIN  ACCOUNT  OR  OTHER  LOAN  SECURED  BY  SUCH  SECURITIES.                      COMMON STOCK PURCHASE WARRANT                            FIBROCELL SCIENCE, INC.   Warrant Shares: _______                         Issue Date:______, 2018                                                   Initial Exercise Date: _______, 2018                                                                             THIS  COMMON  STOCK  PURCHASE  WARRANT  (the  “Warrant”)  certifies  that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms  and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on  or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City  time)  on  ______________  (the  “Termination  Date”)  but  not  thereafter,  to  subscribe  for  and  purchase from Fibrocell Science, Inc., a Delaware corporation (the “Company”), up to ______  shares  (as  subject  to  adjustment hereunder, the  “Warrant  Shares”) of the Company’s common  stock, par value $0.001  per share (the  “Common Stock”). The purchase price of one share of  Common Stock under this  Warrant  shall be equal  to  the Exercise Price, as  defined in  Section  2(b).                 Section 1.  Definitions.  Capitalized terms  used  and  not  otherwise  defined        herein  shall  have  the  meanings  set  forth  in  that  certain  Securities  Purchase  Agreement        (the  “Purchase  Agreement”),  dated  May  29,  2018,  among  the  Company  and  the        purchasers signatory thereto.          Section 2.  Exercise.               a)    Exercise of Warrant.  Exercise of the purchase rights represented by this        Warrant  may be made, in  whole or in  part, at  any time or times on or after the  Initial        Exercise Date and on or before the Termination Date by delivery to the Company of a        duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of        the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).  Within the        earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the        Standard Settlement  Period (as  defined in  Section 2(d)(i) herein)  following the date of                                         2  \\PH - 036137/000007 - 388261 v6    

 

         exercise  as  aforesaid,  the  Holder  shall  deliver  the  aggregate  Exercise  Price  for  the        Warrant  Shares  specified  in  the  applicable  Notice  of  Exercise  by  wire  transfer  or        cashier’s  check  drawn  on  a  United  States  bank  unless  the  cashless  exercise  procedure        specified in Section 2(c) below is specified in the applicable Notice of Exercise.  No ink-       original Notice of Exercise shall be required, nor shall any medallion guarantee (or other        type  of  guarantee  or  notarization)  of  any  Notice  of  Exercise  be  required.         Notwithstanding  anything  herein  to  the  contrary,  the  Holder  shall  not  be  required  to        physically surrender this Warrant to the Company until the Holder has purchased all of        the  Warrant  Shares  available  hereunder  and  the  Warrant  has  been  exercised  in  full,  in        which  case,  the  Holder  shall  surrender  this  Warrant  to  the  Company  for  cancellation        within  three  (3)  Trading  Days  of  the  date  on  which  the  final  Notice  of  Exercise  is        delivered to the Company. Partial  exercises of this Warrant resulting in purchases of a        portion of the total number of Warrant Shares available hereunder shall have the effect of        lowering the outstanding number of Warrant Shares purchasable hereunder in an amount        equal  to  the  applicable  number  of  Warrant  Shares  purchased.   The  Holder  and  the        Company shall maintain records showing the number of Warrant Shares purchased and        the date of such purchases.  The Company shall deliver any objection to any Notice of        Exercise  within  one  (1)  Trading  Day  of  receipt  of  such  notice.  The  Holder  and  any        assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of        the provisions of this paragraph, following the purchase of a portion of the Warrant        Shares hereunder, the number of Warrant Shares available for purchase hereunder        at any given time may be less than the amount stated on the face hereof.               b)    Exercise Price.  The exercise price per share of Common Stock under this        Warrant shall be $2.86, subject to adjustment hereunder (the “Exercise Price”).               c)    Cashless Exercise. Subject to the Holder’s compliance with Section 4.15        of the Purchase Agreement, if at any time after the six-month anniversary of the  Closing        Date,  there  is  no  effective  registration  statement  registering,  or  no  current  prospectus        available for, the resale of the Warrant Shares by the Holder, then this Warrant may also        be exercised, in whole or in part, at such time by means of a “cashless exercise” in which        the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient        obtained by dividing [(A-B) (X)] by (A), where:               (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the                   date of the applicable Notice of Exercise if such Notice of Exercise is (1)                   both executed and delivered pursuant to Section 2(a) hereof on a day that is                   not a Trading Day or (2) both executed and delivered pursuant to Section                   2(a)  hereof  on  a  Trading  Day  prior  to  the  opening  of  “regular  trading                   hours”  (as  defined  in  Rule  600(b)(64)  of  Regulation  NMS  promulgated                   under the federal securities laws) on such Trading Day, (ii) at the option of                   the  Holder,  either  (y)  the  VWAP  on  the  Trading  Day  immediately                   preceding the date of the applicable Notice of Exercise or (z) the Bid Price                   of  the  Common  Stock  on  the  principal  Trading  Market  as  reported  by                   Bloomberg L.P. as of the time of the Holder’s execution of the applicable                   Notice of Exercise if such Notice of Exercise is executed during “regular                   trading  hours”  on  a  Trading  Day  and  is  delivered  within  two  (2)  hours                                         3  \\PH - 036137/000007 - 388261 v6    

 

                    thereafter (including until two (2) hours after the close of “regular trading                   hours”  on  a  Trading  Day)  pursuant  to  Section  2(a)  hereof  or  (iii)  the                   VWAP on the date of the applicable Notice of Exercise if the date of such                   Notice of Exercise is a Trading Day and such Notice of Exercise is both                   executed  and  delivered  pursuant  to  Section  2(a)  hereof  after  the  close  of                   “regular trading hours” on such Trading Day;                            (B) = the Exercise Price of this Warrant, as adjusted hereunder; and                             (X) = the number of Warrant Shares that would be issuable upon exercise of this                   Warrant in accordance with the terms of this Warrant if such exercise were                   by means of a cash exercise rather than a cashless exercise.                            “Bid Price” 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  bid  price  of  the  Common  Stock  for  the  time  in  question  (or  the  nearest        preceding  date)  on  the  Trading  Market  on  which  the  Common  Stock  is  then  listed  or        quoted  as  reported  by  Bloomberg  L.P.  (based  on  a  Trading  Day  from  9:30  a.m.  (New        York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a        Trading Market, the volume weighted average price of the Common Stock for such date        (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common        Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the        Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group,        Inc. (or a similar organization or agency succeeding to its functions of reporting prices),        the most recent bid price per share of the Common Stock so reported, or (d) in all other        cases,  the  fair  market  value  of  a  share  of  Common Stock  as  determined  by  an        independent appraiser selected in good faith by the Holders of a majority in interest of the        Securities  then  outstanding  and  reasonably  acceptable  to  the  Company,  the  fees  and        expenses of which shall be paid by the Company.               “VWAP” means, for any date, the price determined by the first of the following        clauses  that  applies:  (a)  if  the  Common  Stock  is  then  listed  or  quoted  on  a  Trading        Market, the daily volume weighted average price of the Common Stock for such date (or        the nearest preceding date) on the Trading Market on which the Common Stock is then        listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.        (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is        not a Trading Market, the volume weighted average price of the Common Stock for such        date  (or  the  nearest  preceding  date)  on  OTCQB  or  OTCQX  as  applicable,  (c)  if  the        Common  Stock  is  not  then  listed  or  quoted  for  trading  on  OTCQB  or  OTCQX  and  if        prices for the Common Stock are then reported in the “Pink Sheets” published by OTC        Markets Group, Inc. (or a similar organization or agency succeeding to its functions of        reporting prices), the most recent bid price per share of the Common Stock so reported,        or (d) in all other cases, the fair market value of a share of Common Stock as determined        by an independent appraiser selected in good faith by the Holders of a majority in interest        of  the  Securities  then  outstanding  and  reasonably  acceptable  to  the  Company,  the  fees        and expenses of which shall be paid by the Company.                                          4  \\PH - 036137/000007 - 388261 v6    

 

               For the avoidance of doubt, if the Holder does not timely provide the Company        with  a  Selling  Stockholder  Questionnaire  pursuant  to  Section  4.15  of  the  Purchase        Agreement, then this Warrant shall not be eligible to be exercised via “cashless exercise”        as set forth above.               If Warrant Shares are issued in such a cashless exercise, the parties acknowledge        and  agree  that  in  accordance  with  Section  3(a)(9)  of  the  Securities  Act,  the  Warrant        Shares shall take on the characteristics of the Warrants being exercised, and the holding        period of the Warrant Shares being issued may be tacked on to the holding period of this        Warrant.  The Company agrees not to take any position contrary to this Section 2(c).               Notwithstanding  anything herein  to  the  contrary,  on  the  Termination  Date,  this        Warrant  shall be  automatically  exercised via  cashless exercise pursuant  to this  Section        2(c).                            d)    Mechanics of Exercise.                   i. Delivery of Warrant Shares Upon Exercise.  The Company shall cause the                    Warrant Shares  purchased  hereunder  to  be  transmitted  by  the  Transfer                    Agent  to  the  Holder  by  crediting  the  account  of  the  Holder’s  or  its                    designee’s balance account with The Depository Trust Company through                    its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company                    is  then  a  participant  in  such  system  and  either  (A)  there  is  an  effective                    registration statement permitting the issuance of the Warrant Shares to or                    resale of the Warrant Shares by the Holder or (B) the Warrant Shares are                    eligible  for  resale  by the  Holder  without  volume  or  manner-of-sale                    limitations  pursuant  to  Rule  144  (assuming  cashless  exercise  of  the                    Warrants), and otherwise by physical delivery of a certificate, registered in                    the Company’s share register in the name of the Holder or its designee, for                    the number of Warrant Shares to which the Holder is entitled pursuant to                    such  exercise  to  the  address  specified  by  the  Holder  in  the  Notice  of                    Exercise by the date that is the earliest of (i) two (2) Trading Days after                    the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading                    Day  after  delivery  of  the  aggregate  Exercise  Price  to  the  Company  and                    (iii)  the  number  of  Trading  Days  comprising  the  Standard  Settlement                    Period after the delivery to the Company of the Notice of Exercise (such                    date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of                    Exercise, the Holder shall be deemed for  all corporate purposes  to  have                    become the holder of record of the Warrant Shares with respect to which                    this Warrant has been exercised, irrespective of the date of delivery of the                    Warrant  Shares,  provided  that  payment  of  the  aggregate  Exercise  Price                    (other than in the case of a cashless exercise) is received by the Warrant                    Share Delivery Date.  If the Company fails for any reason to deliver to the                    Holder the Warrant Shares subject to a Notice of Exercise by the Warrant                    Share  Delivery  Date,  the  Company  shall  pay  to  the  Holder,  in  cash,  as                    liquidated  damages  and  not  as  a  penalty,  for  each  $1,000  of  Warrant                    Shares  subject  to  such  exercise  (based  on  the  VWAP  of  the  Common                                         5  \\PH - 036137/000007 - 388261 v6    

 

                     Stock on the date of the applicable Notice of Exercise), $10 per Trading                    Day  (increasing  to  $20  per  Trading  Day  on  the  fifth  Trading  Day  after                    such liquidated damages begin to accrue) for each Trading Day after such                    Warrant Share Delivery Date until such Warrant Shares are delivered or                    Holder rescinds such exercise. The Company agrees to maintain a transfer                    agent  that is  a participant in  the FAST  program so  long as  this Warrant                    remains outstanding and exercisable. As used herein, “Standard Settlement                    Period” means  the standard settlement  period, expressed in  a number of                    Trading Days, on the Company’s primary Trading Market with respect to                    the Common Stock as  in  effect  on the date of  delivery of the Notice of                    Exercise.                 ii. Delivery of New Warrants Upon Exercise.  If this Warrant shall have been                    exercised in part, the Company shall, at the request of a Holder and upon                    surrender of this Warrant, at the time of delivery of the Warrant Shares,                    deliver to the Holder a new Warrant evidencing the rights of the Holder to                    purchase  the unpurchased  Warrant  Shares  called  for  by  this  Warrant,                    which  new  Warrant  shall  in  all  other  respects  be  identical  with  this                    Warrant.                 iii. Rescission  Rights.   If the Company fails  to  cause the Transfer Agent  to                    transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by                    the Warrant  Share Delivery Date, then the Holder will have the right  to                    rescind such exercise.                 iv. Compensation  for  Buy-In  on  Failure  to  Timely  Deliver  Warrant  Shares                    Upon Exercise.  In addition to any other rights available to the Holder, if                    the Company fails to cause the Transfer Agent to transmit to the Holder                    the  Warrant  Shares  in  accordance  with  the  provisions  of  Section  2(d)(i)                    above  pursuant  to  an  exercise  on  or  before  the  Warrant  Share  Delivery                    Date, and if after such date the Holder is required by its broker to purchase                    (in  an  open  market  transaction  or  otherwise)  or  the  Holder’s  brokerage                    firm  otherwise  purchases,  shares  of  Common  Stock  to  deliver  in                    satisfaction  of  a  sale  by  the  Holder  of the  Warrant  Shares  which  the                    Holder  anticipated  receiving  upon  such  exercise  (a  “Buy-In”),  then  the                    Company shall (A) pay in cash to the Holder the amount, if any, by which                    (x) the Holder’s total purchase price (including brokerage commissions, if                    any) for the shares of Common Stock so purchased exceeds (y) the amount                    obtained  by  multiplying  (1)  the  number  of  Warrant  Shares  that  the                    Company  was  required  to  deliver  to  the  Holder  in  connection  with  the                    exercise at issue times (2) the price at which the sell order giving rise to                    such  purchase  obligation  was  executed,  and  (B)  at  the  option  of  the                    Holder, either reinstate the portion of the Warrant and equivalent number                    of Warrant Shares for which such exercise was not honored (in which case                    such  exercise  shall  be  deemed  rescinded)  or  deliver  to  the  Holder  the                    number of shares of Common Stock that would have been issued had the                    Company  timely  complied  with  its  exercise  and  delivery  obligations                                         6  \\PH - 036137/000007 - 388261 v6    

 

                     hereunder.  For example, if the Holder purchases Common Stock having a                    total  purchase  price  of  $11,000  to  cover  a  Buy-In  with  respect  to  an                    attempted  exercise  of  shares  of  Common  Stock  with  an  aggregate  sale                    price giving rise to such purchase obligation of $10,000, under clause (A)                    of the immediately preceding sentence the Company shall be required to                    pay  the  Holder  $1,000.  The  Holder  shall  provide  the  Company  written                    notice indicating the amounts payable to the Holder in respect of the Buy-                   In and, upon request of the Company, evidence of the amount of such loss.                     Nothing herein shall limit a Holder’s right to pursue any other remedies                    available to it hereunder, at law or in equity including, without limitation,                    a  decree  of  specific  performance  and/or  injunctive  relief  with  respect  to                    the  Company’s  failure  to  timely  deliver  shares  of  Common  Stock  upon                    exercise of the Warrant as required pursuant to the terms hereof.                  v. No Fractional Shares or Scrip.  No fractional shares or scrip representing                    fractional shares shall be issued upon the exercise of this Warrant.  As to                    any fraction of a share  which the Holder would otherwise be entitled to                    purchase upon such exercise, the Company shall, at its election, either pay                    a cash adjustment in respect of such final fraction in an amount equal to                    such  fraction  multiplied  by  the  Exercise  Price  or  round  up  to  the  next                    whole share.                 vi. Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made                    without  charge  to  the  Holder  for  any  issue  or  transfer  tax  or  other                    incidental expense in respect of the issuance of such Warrant Shares, all of                    which  taxes  and  expenses  shall  be  paid  by  the  Company,  and  such                    Warrant Shares shall be issued in the name of the Holder or in such name                    or names as may be directed by the Holder; provided, however, that in the                    event that Warrant Shares are to be issued in a name other than the name                    of  the  Holder,  this  Warrant  when  surrendered  for  exercise  shall  be                    accompanied by the Assignment Form attached  hereto  duly  executed by                    the  Holder  and  the  Company  may  require,  as  a  condition  thereto,  the                    payment of a sum sufficient to reimburse it for any transfer tax incidental                    thereto.   The  Company  shall  pay  all  Transfer  Agent  fees  required  for                    same-day  processing  of  any  Notice  of  Exercise  and  all  fees  to  the                    Depository  Trust  Company  (or  another  established  clearing  corporation                    performing similar functions) required for same-day electronic delivery of                    the Warrant Shares.                vii. Closing of Books.  The Company will not close its stockholder books or                    records in any manner which prevents the timely exercise of this Warrant,                    pursuant to the terms hereof.               e)    Holder’s  Exercise  Limitations.     The  Company  shall  not  effect  any        exercise of this Warrant, and a Holder shall not have the right to exercise any portion of        this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to        such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder                                         7  \\PH - 036137/000007 - 388261 v6    

 

         (together with the Holder’s Affiliates, and any other Persons acting as a group together        with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),        would  beneficially  own  in  excess  of  the  Beneficial  Ownership  Limitation  (as  defined        below).  For purposes of the foregoing sentence, the number of shares of Common Stock        beneficially owned by the Holder and its Affiliates and Attribution Parties shall include        the  number  of  shares  of  Common  Stock  issuable  upon  exercise  of  this  Warrant  with        respect  to  which  such  determination  is  being  made,  but  shall  exclude  the  number  of        shares  of Common Stock which would be issuable upon (i) exercise of  the remaining,        nonexercised  portion  of  this  Warrant  beneficially  owned  by  the  Holder  or  any  of  its        Affiliates  or  Attribution  Parties  and  (ii)  exercise  or  conversion  of  the  unexercised  or        nonconverted  portion  of  any  other  securities  of  the  Company  (including, without        limitation, any other  Common Stock Equivalents) subject to a limitation on conversion        or exercise analogous to the limitation contained herein beneficially owned by the Holder        or  any  of  its  Affiliates  or  Attribution  Parties.  Except  as  set  forth in  the  preceding        sentence,  for  purposes  of  this  Section  2(e),  beneficial  ownership  shall  be  calculated  in        accordance  with  Section  13(d)  of  the  Exchange  Act  and  the  rules  and  regulations        promulgated thereunder, it being acknowledged by the Holder that the Company is not        representing to the Holder that such calculation is in compliance with Section 13(d) of the        Exchange Act and the Holder is solely responsible for any schedules required to be filed        in accordance therewith.   To the extent that the limitation contained in this Section 2(e)        applies,  the  determination  of  whether  this  Warrant  is  exercisable  (in  relation  to  other        securities owned by the Holder together with any Affiliates and Attribution Parties) and        of  which  portion  of  this  Warrant  is  exercisable shall  be  in  the  sole  discretion  of  the        Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s        determination of whether this Warrant is exercisable (in relation to other securities owned        by the Holder together with any Affiliates and Attribution Parties) and of which portion        of  this  Warrant  is  exercisable,  in  each  case  subject  to  the  Beneficial  Ownership        Limitation, and the Company shall have no obligation to verify or confirm the accuracy        of  such  determination.    In  addition, a  determination  as  to  any  group  status  as        contemplated  above  shall  be  determined  in  accordance  with  Section  13(d)  of  the        Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this        Section  2(e),  in  determining  the  number  of  outstanding  shares  of  Common  Stock,  a        Holder may rely on the number of outstanding shares of Common Stock as reflected in        (A) the Company’s most recent periodic or annual report filed with the Commission, as        the case may be, (B) a more recent public announcement by the Company or (C) a more        recent written notice by the Company or the Transfer Agent setting forth the number of        shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the        Company shall within one (1) Trading Day confirm orally and in writing to the Holder        the number of shares  of Common Stock then outstanding.  In any  case, the number of        outstanding  shares  of  Common  Stock  shall  be  determined  after  giving  effect  to  the        conversion  or  exercise  of  securities  of  the  Company,  including  this  Warrant,  by  the        Holder or its Affiliates or Attribution Parties since the date as of which such number of        outstanding  shares  of  Common  Stock  was  reported.   The  “Beneficial  Ownership        Limitation”  shall  be  [4.99%/9.99%]  of  the  number  of  shares  of the  Common  Stock        outstanding immediately after giving effect to the issuance of shares of Common Stock        issuable upon exercise of this Warrant.  The Holder, upon notice to the Company, may                                          8  \\PH - 036137/000007 - 388261 v6    

 

         increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e),        provided  that  the  Beneficial  Ownership  Limitation  in  no  event  exceeds  9.99%  of  the        number of shares of the Common Stock outstanding immediately after giving effect to        the  issuance  of  shares  of  Common  Stock  upon  exercise  of  this  Warrant  held  by  the        Holder and the provisions of this Section 2(e) shall continue to apply.  Any increase in        the  Beneficial  Ownership  Limitation  will  not  be  effective  until  the  61st day  after  such        notice is delivered to the Company.  The provisions of this paragraph shall be construed        and implemented in a manner otherwise than in strict conformity with the terms of this        Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or        inconsistent  with  the  intended  Beneficial  Ownership  Limitation  herein  contained  or  to        make  changes  or  supplements  necessary  or  desirable  to  properly  give  effect  to  such        limitation. The limitations contained in this paragraph shall apply to a successor holder of        this Warrant.         Section 3.  Certain Adjustments.               a) Stock Dividends and Splits. If the Company, at any time while this Warrant is        outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions        on shares of its Common Stock or any other equity or equity equivalent securities payable        in shares of Common Stock (which, for avoidance of doubt, shall not include any shares        of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides        outstanding  shares  of  Common  Stock  into  a  larger  number  of  shares,  (iii)  combines        (including  by  way  of  reverse  stock  split)  outstanding  shares  of  Common  Stock  into  a        smaller  number  of  shares,  or  (iv)  issues  by  reclassification  of  shares  of  the  Common        Stock any shares of capital stock of the Company, then in each case the Exercise Price        shall be multiplied by a fraction of which the numerator shall be the number of shares of        Common Stock (excluding treasury shares, if any) outstanding immediately before such        event  and  of  which  the  denominator  shall  be  the  number  of  shares  of  Common  Stock        outstanding  immediately  after  such  event,  and  the  number  of  shares  issuable  upon        exercise  of  this  Warrant  shall  be  proportionately  adjusted  such  that  the  aggregate        Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant        to  this  Section  3(a)  shall  become  effective  immediately  after  the  record  date  for  the        determination of stockholders entitled to receive such dividend or distribution and shall        become  effective  immediately  after  the  effective  date  in  the  case  of  a  subdivision,        combination or re-classification.               b) Reserved.               c) Subsequent  Rights  Offerings.  In  addition  to  any  adjustments  pursuant  to        Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock        Equivalents or rights to purchase stock, warrants, securities or other property pro rata to        the record holders of any class of shares of Common Stock (the “Purchase Rights”), then        the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights,        the aggregate Purchase Rights which the Holder could have acquired if the Holder had        held the number of shares of Common Stock acquirable upon complete exercise of this        Warrant  (without  regard  to  any  limitations  on  exercise  hereof,  including  without        limitation, the Beneficial Ownership Limitation) immediately before the date on which a                                         9  \\PH - 036137/000007 - 388261 v6    

 

         record  is  taken  for  the  grant,  issuance  or  sale  of  such  Purchase  Rights,  or,  if  no  such        record is taken, the date as of which the record holders of shares of Common Stock are to        be determined for the grant, issue or sale of such Purchase Rights (provided, however,        that to the extent that the Holder’s right to participate in any such Purchase Right would        result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall        not  be  entitled  to  participate  in  such  Purchase  Right  to  such  extent  (or  beneficial        ownership of such shares of Common Stock as a result of such Purchase Right to such        extent) and such Purchase Right to such extent shall be held in abeyance for the Holder        until such time, if ever, as its right thereto would not result in the Holder exceeding the        Beneficial Ownership Limitation).                d) Pro Rata Distributions.  During such time as this Warrant is outstanding, if the        Company shall declare or make any dividend or other distribution of its assets (or rights        to acquire its assets) to holders of shares of Common Stock, by way of return of capital or        otherwise  (including,  without  limitation,  any  distribution  of  cash,  stock  or  other        securities, property or options by way of a dividend, spin off, reclassification, corporate        rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at        any time after the issuance of this Warrant, then, in each such case, the Holder shall be        entitled to participate in such Distribution to the same extent that the Holder would have        participated  therein  if  the  Holder  had  held  the  number  of  shares  of  Common  Stock        acquirable upon complete exercise of this Warrant (without regard to any limitations on        exercise  hereof,  including  without  limitation,  the  Beneficial  Ownership  Limitation)        immediately before the  date of which a record is  taken for such Distribution, or, if no        such record is taken, the date as of which the record holders of shares of Common Stock        are to be determined for the participation in such Distribution (provided, however, that to        the extent that the Holder's right to participate in any such Distribution would result in the        Holder  exceeding  the  Beneficial  Ownership  Limitation,  then  the  Holder  shall  not  be        entitled to participate in such Distribution to such extent (or in the beneficial ownership        of any shares of Common Stock as a result of such Distribution to such extent) and the        portion of such Distribution shall be held in abeyance for the benefit of the Holder until        such  time,  if  ever,  as  its  right  thereto  would  not  result  in  the  Holder  exceeding  the        Beneficial Ownership Limitation).                 e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i)        the  Company,  directly  or  indirectly,  in  one  or  more  related  transactions  effects  any        merger or consolidation of the Company with or into another Person, (ii) the Company,        directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or        other  disposition  of  all  or  substantially  all  of  its assets  in  one  or  a  series  of  related        transactions,  (iii)  any,  direct  or  indirect,  purchase  offer,  tender  offer  or  exchange  offer        (whether by the Company or another Person) is completed pursuant to which holders of        Common Stock are permitted to sell, tender or exchange their shares for other securities,        cash or property and has been accepted by the holders of 50% or more of the outstanding        Common  Stock,  (iv)  the  Company,  directly  or  indirectly,  in  one  or  more  related        transactions effects any reclassification, reorganization or recapitalization of the Common        Stock  or  any  compulsory  share  exchange  pursuant  to  which  the  Common  Stock  is        effectively converted into or exchanged for other securities, cash or property, or (v) the        Company, directly or indirectly, in one or more related transactions consummates a stock                                         10  \\PH - 036137/000007 - 388261 v6    

 

         or share purchase agreement or other business combination (including, without limitation,        a  reorganization,  recapitalization,  spin-off  or  scheme  of  arrangement)  with  another        Person or group of Persons whereby such other Person or group acquires more than 50%        of the outstanding shares of Common Stock (not including any shares of Common Stock        held by the other Person or other Persons making or party to, or associated or affiliated        with  the  other  Persons  making  or  party  to,  such  stock  or  share  purchase  agreement  or        other  business  combination)  (each  a  “Fundamental  Transaction”),  then,  upon  any        subsequent exercise of this Warrant, the Holder shall have the right to receive, for each        Warrant Share that would have been issuable upon such exercise immediately prior to the        occurrence of such Fundamental Transaction, at the option of the Holder (without regard        to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of        Common Stock of the successor or acquiring corporation or of the Company, if it is the        surviving corporation, and any additional consideration (the “Alternate Consideration”)        receivable  as  a  result  of  such  Fundamental  Transaction  by  a  holder  of  the  number  of        shares of Common Stock for which this Warrant is exercisable immediately prior to such        Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise        of this Warrant).  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.  Notwithstanding  anything  to  the  contrary,  in  the  event  of  a  Fundamental        Transaction (other than a Fundamental Transaction that was not approved by, or required        to  be  approved  by,  the  board  of  directors  of  the  Company,  in  which  case  the  right  to        receive cash equal to the Black Scholes Value of the remaining unexercised portion of        this Warrant described below shall not apply), the Company or any Successor Entity (as        defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or        within 30 days after, the consummation of the Fundamental Transaction (or, if later, the        date of the public announcement of the applicable Fundamental Transaction), purchase        this  Warrant  from  the Holder by paying to the  Holder an amount of  cash  equal  to  the        Black Scholes Value of the remaining unexercised portion of this Warrant on the date of        the consummation of such Fundamental Transaction.  Notwithstanding anything herein to        the  contrary,  the  Holder  may  not  require  the  Company  or  any  Successor  Entity  to        repurchase  the  Warrants  for  the  Black  Scholes  Value  solely  in  connection  with  a        Fundamental  Transaction  that  solely  is  (i)  not  approved  by  the  Company’s  board  of        directors and (ii) not within the Company’s control.  “Black Scholes Value” means the        value  of  this  Warrant  based  on  the  Black  and  Scholes  Option  Pricing  Model  obtained        from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of        consummation  of  the  applicable  Fundamental  Transaction  for  pricing  purposes  and        reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period        equal  to  the  time  between  the  date  of  the  public  announcement  of  the  applicable        Fundamental Transaction and the Termination Date, (B) an expected volatility equal to                                          11  \\PH - 036137/000007 - 388261 v6    

 

         the  greater  of  100%  and  the  100  day  volatility  obtained  from  the  HVT  function  on        Bloomberg as of the Trading Day immediately following the public announcement of the        applicable  Fundamental  Transaction,  (C)  the  underlying  price  per  share  used  in  such        calculation shall be the sum of the price per share being offered in cash, if any, plus the        value  of  any  non-cash  consideration,  if  any,  being  offered  in  such  Fundamental        Transaction and (D) a remaining option time equal to the time between the date of the        public  announcement  of  the  applicable  Fundamental  Transaction  and  the  Termination        Date.   The  payment  of  the  Black  Scholes  Value  will  be  made  by  wire  transfer  of        immediately available funds (or by delivery of such other consideration, as applicable)        within five Business Days of the Holder’s election (or, if later, on the effective date of the        Fundamental  Transaction).  The  Company  shall  cause  any  successor  entity  in  a        Fundamental  Transaction  in  which  the  Company  is  not  the  survivor  (the  “Successor        Entity”) to assume in writing all of the obligations of the Company under this Warrant        and the other Transaction Documents in accordance with the provisions of this Section        3(e) pursuant to written agreements in form and substance reasonably satisfactory to the        Holder  and  approved  by  the  Holder  (without  unreasonable  delay)  prior  to  such        Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in        exchange  for  this  Warrant  a  security  of  the  Successor  Entity  evidenced  by  a  written        instrument  substantially  similar  in  form  and  substance  to  this  Warrant  which  is        exercisable  for  a corresponding  number  of  shares  of  capital  stock  of  such  Successor        Entity  (or  its  parent  entity)  equivalent  to  the  shares  of  Common  Stock  acquirable  and        receivable  upon  exercise  of  this  Warrant  (without  regard  to  any  limitations  on  the        exercise  of  this  Warrant)  prior  to  such  Fundamental  Transaction,  and  with  an  exercise        price  which  applies  the  exercise  price  hereunder  to  such  shares  of  capital  stock  (but        taking into account the relative value of the shares of Common Stock pursuant to such        Fundamental Transaction and the value of such shares of capital stock, such number of        shares  of  capital  stock  and  such  exercise  price  being  for  the  purpose  of  protecting  the        economic  value  of  this  Warrant  immediately  prior  to  the  consummation  of  such        Fundamental Transaction), and which is reasonably satisfactory in form and substance to        the  Holder.  Upon  the  occurrence  of  any  such  Fundamental  Transaction,  the  Successor        Entity shall succeed to,  and be substituted for (so that from  and after the date of such        Fundamental  Transaction,  the  provisions  of  this  Warrant  and  the  other  Transaction        Documents referring to the “Company” shall refer instead to the Successor Entity), and        may  exercise  every  right  and  power  of  the  Company  and  shall  assume  all  of  the        obligations  of  the  Company  under  this  Warrant  and  the  other  Transaction  Documents        with the same effect as if such Successor Entity had been named as the Company herein.                f) Calculations. All calculations under this Section 3 shall be made to the nearest        cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3,        the  number  of  shares  of  Common  Stock  deemed  to  be  issued  and  outstanding  as  of  a        given  date  shall  be  the  sum  of  the  number  of  shares  of  Common  Stock  (excluding        treasury shares, if any) issued and outstanding.               g) Notice to Holder.                           i. Adjustment  to  Exercise  Price.  Whenever  the  Exercise  Price  is                    adjusted pursuant  to  any provision  of this  Section 3, the Company shall                                         12  \\PH - 036137/000007 - 388261 v6    

 

                     promptly deliver to the Holder by facsimile or email a notice 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.                          ii. Notice to  Allow Exercise by Holder.  If (A) the  Company shall                    declare  a  dividend  (or  any  other  distribution  in  whatever  form)  on  the                    Common  Stock,  (B)  the  Company  shall  declare  a  special  nonrecurring                    cash dividend on or a redemption of the Common Stock, (C) the Company                    shall authorize the granting to all holders of the Common Stock rights or                    warrants  to  subscribe  for  or  purchase  any  shares  of  capital  stock  of  any                    class  or  of  any  rights,  (D)  the  approval  of  any  stockholders  of  the                    Company shall be required in connection with any reclassification of the                    Common Stock, any consolidation or merger to which the Company is a                    party,  any  sale  or  transfer  of  all  or  substantially  all  of  the  assets  of  the                    Company, or any compulsory share exchange whereby the Common Stock                    is  converted  into  other  securities,  cash  or  property,  or  (E)  the  Company                    shall  authorize  the  voluntary  or  involuntary  dissolution,  liquidation  or                    winding up of the affairs of the Company, then, in each case, the Company                    shall cause to be delivered by facsimile or email to the Holder at its last                    facsimile  number  or  email  address  as  it  shall  appear  upon  the  Warrant                    Register of the Company, at least 20 calendar days prior to the applicable                    record or effective date hereinafter specified, a notice stating (x) the date                    on  which  a  record  is  to  be  taken  for  the  purpose  of  such  dividend,                    distribution,  redemption,  rights  or  warrants,  or  if  a  record  is  not  to  be                    taken, the date as of which the holders of the Common Stock of record to                    be entitled to such dividend, distributions, redemption, rights or warrants                    are  to  be  determined  or  (y)  the  date  on  which  such reclassification,                    consolidation,  merger,  sale,  transfer  or  share  exchange  is  expected  to                    become  effective  or  close,  and  the  date  as  of  which  it  is  expected  that                    holders of the Common Stock of record shall be entitled to exchange their                    shares  of  the  Common Stock  for  securities,  cash  or  other  property                    deliverable upon such reclassification, consolidation, merger, sale, transfer                    or share exchange; provided that the failure to deliver such notice or any                    defect therein or in the delivery thereof shall not affect the validity of the                    corporate action required to be specified in such notice.  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  Current  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  the  effective  date  of  the  event  triggering  such  notice                    except as may otherwise be expressly set forth herein.         Section 4.  Transfer of Warrant.                                          13  \\PH - 036137/000007 - 388261 v6    

 

               a) Transferability.  Subject to compliance with any applicable securities laws and        the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the        Purchase Agreement, this Warrant and all rights hereunder (including, without limitation,        any  registration  rights)  are  transferable,  in  whole  or  in  part,  upon  surrender  of  this        Warrant at the principal office of the Company or its designated agent, together with a        written  assignment  of  this  Warrant  substantially  in  the  form  attached  hereto  duly        executed by the Holder or its agent or attorney and funds sufficient to pay any transfer        taxes payable upon the making of such transfer.  Upon such surrender and, if required,        such payment, the Company shall execute and deliver a new Warrant or Warrants in the        name  of  the  assignee  or  assignees,  as  applicable,  and  in  the  denomination  or        denominations specified in such instrument of assignment, and shall issue to the assignor        a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant        shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder        shall  not  be  required  to  physically  surrender  this  Warrant  to  the  Company  unless  the        Holder has assigned this Warrant in full, in which case, the Holder shall surrender this        Warrant to the Company within two (2) Trading Days of the date on which the Holder        delivers an assignment form to the Company assigning this Warrant in full.  The Warrant,        if properly assigned in accordance herewith, may be exercised by a new holder for the        purchase of Warrant Shares without having a new Warrant issued.                 b) New  Warrants.  This  Warrant  may  be  divided  or  combined  with  other        Warrants upon presentation hereof at the aforesaid office of the Company, together with a        written notice specifying the names and denominations in which new Warrants are to be        issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section        4(a),  as  to  any  transfer  which  may  be  involved  in  such  division  or  combination,  the        Company  shall  execute  and deliver  a  new  Warrant  or  Warrants  in  exchange  for  the        Warrant  or  Warrants  to  be  divided  or  combined  in  accordance  with  such  notice.  All        Warrants issued on transfers or exchanges shall be dated the Issue Date of this Warrant        and  shall  be  identical  with  this  Warrant  except  as  to  the  number  of  Warrant  Shares        issuable pursuant thereto.                c) Warrant Register. 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.               d) Transfer  Restrictions.  If,  at  the  time  of  the  surrender  of  this  Warrant  in        connection  with  any  transfer  of  this  Warrant,  the  transfer  of  this  Warrant  shall  not  be        either  (i)  registered  pursuant  to  an  effective  registration  statement  under  the Securities        Act  and  under  applicable  state  securities  or  blue  sky  laws  or  (ii)  eligible  for  resale        without volume or manner-of-sale restrictions or current public information requirements        pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,        that  the  Holder  or  transferee  of  this  Warrant,  as  the  case  may  be,  comply  with  the        provisions of Section 5.7 of the Purchase Agreement.                                          14  \\PH - 036137/000007 - 388261 v6    

 

               e) Representation  by  the  Holder.   The  Holder,  by  the  acceptance  hereof,        represents and warrants that it is acquiring this Warrant and, upon any exercise hereof,        will acquire the Warrant Shares issuable upon such exercise, for its own account and not        with a view to or for distributing or reselling such Warrant Shares or any part thereof in        violation of the Securities Act or any applicable state securities law, except pursuant to        sales registered or exempted under the Securities Act.         Section 5.  Miscellaneous.               a) No  Rights  as  Stockholder  Until  Exercise;  No  Settlement  in  Cash.   This        Warrant does not entitle the Holder to any voting rights, dividends or other rights as a        stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i),        except  as  expressly  set  forth  in  Section  3.   Without  limiting  the  rights  of  a  Holder  to        receive  Warrant  Shares  on  a  “cashless  exercise,”  and  to  receive  the  cash  payments        contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be        required to net cash settle a Warrant exercise.                 b) Loss,  Theft, Destruction or Mutilation  of Warrant. The Company  covenants        that upon receipt by the Company of evidence reasonably satisfactory to it of the loss,        theft,  destruction  or  mutilation  of  this  Warrant  or  any  stock  certificate  relating  to  the        Warrant  Shares,  and  in case  of  loss,  theft  or  destruction,  of  indemnity  or  security        reasonably  satisfactory  to  it  (which,  in  the  case  of  the  Warrant,  shall  not  include  the        posting  of  any  bond),  and  upon  surrender  and  cancellation  of  such  Warrant  or  stock        certificate,  if  mutilated,  the  Company  will  make  and  deliver  a  new  Warrant  or  stock        certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock        certificate.               c) Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking        of  any  action  or  the  expiration  of  any  right  required  or  granted  herein  shall  not  be  a        Business Day, then, such action may be taken or such right may be exercised on the next        succeeding Business Day.               d) Authorized Shares.                             The  Company  covenants  that,  during  the  period  the  Warrant  is              outstanding,  it  will  reserve  from  its  authorized  and  unissued  Common  Stock  a              sufficient  number  of  shares  to  provide  for  the  issuance  of  the  Warrant  Shares              upon  the  exercise  of  any  purchase  rights  under  this  Warrant.   The  Company              further covenants that its issuance of this Warrant shall constitute full authority to              its officers who are charged with the duty of issuing the necessary Warrant Shares              upon the exercise of the purchase rights under this Warrant.  The Company will              take all such reasonable action as may be necessary to assure that such Warrant              Shares may be issued as provided herein without violation of any applicable law              or  regulation,  or  of  any  requirements  of  the  Trading  Market  upon  which  the              Common Stock may be listed.  The Company covenants that all Warrant Shares              which may be issued upon the exercise of the purchase rights represented by this              Warrant  will,  upon  exercise  of  the  purchase  rights  represented  by  this  Warrant                                          15  \\PH - 036137/000007 - 388261 v6    

 

               and payment for such Warrant Shares in accordance herewith, be duly authorized,              validly  issued,  fully  paid  and  nonassessable  and  free  from  all  taxes,  liens  and              charges created by the Company in respect of the issue thereof (other than taxes in              respect of any transfer occurring contemporaneously with such issue).                       Except  and  to  the  extent  as  waived  or  consented  to  by  the  Holder,  the              Company  shall  not  by  any  action,  including,  without  limitation,  amending  its              certificate  of  incorporation  or  through  any  reorganization,  transfer  of  assets,              consolidation,  merger,  dissolution,  issue  or  sale  of  securities  or  any  other              voluntary action, avoid or seek to avoid the observance or performance of any of              the terms of this Warrant, but will at all times in good faith assist in the carrying              out of all such terms and in the taking of all such actions as may be necessary or              appropriate  to  protect  the  rights  of  Holder  as  set  forth  in  this  Warrant  against              impairment.  Without limiting the generality of the foregoing, the Company will              (i) not  increase the par  value of any Warrant  Shares above the amount payable              therefor upon such exercise immediately prior to such increase in par value, (ii)              take all such action as may be necessary or appropriate in order that the Company              may validly and legally issue fully paid and nonassessable Warrant Shares upon              the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain              all such authorizations, exemptions or consents from any public regulatory body              having  jurisdiction  thereof,  as  may  be,  necessary  to  enable  the  Company  to              perform its obligations under this Warrant.                     Before  taking  any  action  which  would  result  in  an  adjustment  in  the              number of Warrant Shares for which this Warrant is exercisable or in the Exercise              Price, the Company shall obtain all such authorizations or exemptions thereof, or              consents thereto, as may be necessary from any public regulatory body or bodies              having jurisdiction thereof.               e) Jurisdiction. All questions concerning the construction, validity, enforcement        and interpretation of this Warrant shall be determined in accordance with the provisions        of the Purchase Agreement.                 f) Restrictions.   The  Holder  acknowledges  that  the  Warrant  Shares  acquired        upon  the  exercise  of  this  Warrant,  if  not  registered,  and  the  Holder  does  not  utilize        cashless  exercise,  will  have  restrictions  upon  resale  imposed  by  state  and  federal        securities laws.               g) Nonwaiver  and  Expenses.   No  course  of  dealing  or  any  delay  or  failure  to        exercise any right hereunder on the part of Holder shall operate as a waiver of such right        or  otherwise  prejudice the  Holder’s  rights,  powers  or  remedies.   Without  limiting  any        other provision of this Warrant or the Purchase Agreement, if the Company willfully and        knowingly  fails  to  comply  with  any  provision  of  this  Warrant,  which  results  in  any        material damages to the Holder, the Company shall pay to the Holder such amounts as        shall  be  sufficient  to  cover  any  costs  and  expenses  including,  but  not  limited  to,        reasonable  attorneys’  fees,  including  those  of  appellate  proceedings,  incurred  by  the                                          16  \\PH - 036137/000007 - 388261 v6    

 

         Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its        rights, powers or remedies hereunder.               h) Notices.  Any notice, request or other document required or permitted to be        given or delivered to the Holder by the Company shall be delivered in accordance with        the notice provisions of the Purchase Agreement.               i) Limitation of Liability.  No provision hereof, in the absence of any affirmative        action  by  the  Holder  to  exercise  this  Warrant  to  purchase  Warrant  Shares,  and  no        enumeration herein of the rights or privileges of the Holder, shall give rise to any liability        of the Holder for the purchase price of  any Common Stock or as  a stockholder of the        Company,  whether  such  liability  is  asserted  by  the  Company  or  by  creditors  of  the        Company.               j) Remedies.   The  Holder, in  addition  to  being  entitled  to  exercise  all  rights        granted by law, including recovery of damages, will be entitled to specific performance        of its rights under this Warrant.  The Company agrees that monetary damages would not        be  adequate  compensation  for any  loss  incurred  by  reason  of  a  breach  by  it  of  the        provisions of this Warrant and hereby agrees to waive and not to assert the defense in any        action for specific performance that a remedy at law would be adequate.               k) Successors and Assigns.  Subject  to  applicable securities laws,  this  Warrant        and  the  rights  and  obligations  evidenced  hereby  shall  inure  to  the  benefit  of  and  be        binding upon the successors and permitted assigns  of the Company and the successors        and permitted assigns of Holder.  The provisions of this Warrant are intended to be for        the benefit of any Holder from time to time of this Warrant and shall be enforceable by        the Holder or holder of Warrant Shares.               l) Amendment.   This  Warrant  may  be  modified  or  amended  or  the  provisions        hereof waived with the written consent of the Company and the Holder.               m) Severability.   Wherever  possible,  each  provision  of  this  Warrant  shall  be        interpreted in such manner as to be effective and valid under applicable law, but if any        provision  of  this  Warrant  shall  be  prohibited  by  or  invalid  under  applicable  law,  such        provision  shall  be  ineffective  to  the  extent  of  such  prohibition  or  invalidity,  without        invalidating the remainder of such provisions or the remaining provisions of this Warrant.               n) Headings.   The  headings  used  in this  Warrant  are  for  the  convenience  of        reference only and shall not, for any purpose, be deemed a part of this Warrant.                                  ********************                                                                       (Signature Page Follows)                                                               17  \\PH - 036137/000007 - 388261 v6    

 

                 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed  by its officer thereunto duly authorized as of the date first above indicated.                                                                        FIBROCELL SCIENCE, INC.                                                                                                      By:__________________________________________                                       Name:                                       Title:                                                                            18  \\PH - 036137/000007 - 388261 v6    

 

                                       NOTICE OF EXERCISE    TO:   FIBROCELL SCIENCE, INC.                (1) The undersigned hereby elects to purchase ________ Warrant Shares of the  Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders  herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.               (2) Payment shall take the form of (check applicable box):                     [  ] in lawful money of the United States; or                     [  ] if permitted the cancellation of such number of Warrant Shares as is                    necessary, in accordance with the formula set forth in subsection 2(c), to                    exercise  this  Warrant  with  respect  to  the  maximum  number  of  Warrant                    Shares purchasable pursuant to the cashless exercise procedure set forth in                    subsection 2(c).               (3) Please issue said Warrant Shares in the name of the undersigned or in  such  other name as is specified below:                     _______________________________                        The Warrant Shares shall be delivered to the following DWAC Account Number:                      _______________________________                                        _______________________________                                        _______________________________                  (4)  Accredited Investor.  The undersigned is an “accredited investor” as defined  in Regulation D promulgated under the Securities Act of 1933, as amended.    [SIGNATURE OF HOLDER]          Name                      of                     Investing                    Entity:  ________________________________________________________________________  Signature      of      Authorized       Signatory      of       Investing     Entity:  _________________________________________________  Name                    of                    Authorized                   Signatory:  ___________________________________________________________________  Title                   of                    Authorized                   Signatory:  ____________________________________________________________________    \\PH - 036137/000007 - 388262 v8    

 

   Date:  ____________________________________________________________________________________ ____                                    \\PH - 036137/000007 - 388262 v8    

 

                                                                      EXHIBIT B                                   ASSIGNMENT FORM    (To assign the foregoing Warrant, execute this form and supply required information.  Do not  use this form to purchase shares.)   FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby  assigned to  Name:                                                                                                                  (Please Print)   Address:                                                                                                               (Please Print)   Phone Number:                          ______________________________________   Email Address:                         ______________________________________   Dated: _______________ __, ______         Holder’s Signature:                       Holder’s Address:                                                                                            \\PH - 036137/000007 - 388262 v8    

 

                                    EXHIBIT B                                                            SELLING STOCKHOLDER QUESTIONNAIRE                                      \\PH - 036137/000007 - 388262 v8    

 

                                     Selling Stockholder Questionnaire                                                                                  SELLING STOCKHOLDER QUESTIONNAIRE                   Fibrocell Science, Inc., a Delaware corporation (the “Company”), intends to file with the Securities and  Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) to register under  Rule 415 of the Securities Act of 1933, as amended, the resale of                  shares of common stock, par value  $0.001 per share, of the Company (the “Registrable Securities”) issuable upon exercise of a warrant issued by the  Company to                . The form of prospectus that forms a part of the Registration Statement is referred to herein as  the “Prospectus.”                   In order to sell or otherwise dispose of any Registrable Securities pursuant to the Registration Statement,  the holder of Registrable Securities will be required to be named as a selling stockholder in the Prospectus and  deliver a Prospectus to each purchaser of the Registrable Securities.                   In order for us to file the Registration Statement and include the Registrable Securities beneficially  owned by you therein, you must complete, sign and deliver this Selling Stockholder Questionnaire (this  “Questionnaire”) to the Company at the address set forth below. If you fail to do so, you will not be named as  a selling stockholder in the Registration Statement and may not be able to use the Prospectus forming a part  thereof to resell the Registrable Securities that you hold.                   If there is insufficient room on this Questionnaire for you to answer any question, please continue your  answer on a separate page and attach it to this Questionnaire or write on the back of the page. For your protection  and the protection of the Company, it is important that all of your answers be as accurate and as complete as  possible and that you notify the Company promptly if you become aware that an answer to this  Questionnaire is no longer correct. PLEASE PROVIDE A RESPONSE TO EVERY QUESTION, indicating  “None” or “Not Applicable” where appropriate.                   Please be aware that various legal consequences arise from being named as a selling stockholder in the  Registration Statement and the Prospectus. We strongly advise you to consult your own securities law counsel  regarding the consequences of being named or not being named as a selling stockholder in the Registration  Statement and the Prospectus.                   Please complete, sign and return the Questionnaire NO LATER THAN               by mail and email to:                                            Hogan Lovells US LLP                                         1735 Market Street, Floor 23                                         Philadelphia, PA 19103                                         Attention: John Siemann                                         john.siemann@hoganlovells.com                                              \\PH - 036137/000007 - 388262 v8    

 

                                                                                                                                                       ELECTION            The undersigned (the “Selling Stockholder”) hereby elects to include in the Registration Statement the  Registrable Securities beneficially owned by such holder and listed below in Item 2(b). By signing and returning this  Questionnaire, the undersigned agrees to be bound with respect to such Registrable Securities by the terms and  conditions of this Questionnaire.                   The Selling Stockholder hereby agrees to deliver to the Company the Notice of Transfer set forth in  Exhibit 1 to this Questionnaire following any sale of Registrable Securities pursuant to the Registration  Statement.                   The Selling Stockholder hereby provides the following information to the Company and represents and  warrants that such information is accurate and complete:                                                   QUESTIONNAIRE     1.  (a) Full legal name of the Selling Stockholder:                                    (b) Full legal name of the registered holder (if not the same as in (a) above) of the Registrable Securities listed            in Item 2(a) below:                                             (c)  Brief description of Selling Stockholder’s business:                                   2. Beneficial ownership of securities of the Company:           Except as set forth below in this Item 2, the undersigned Selling Stockholder does not beneficially own any       securities of the Company.               State any exceptions here:                                       Definition of “Beneficial Owner.” A “Beneficial Owner” of a security includes any person who, directly or       indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (1)       voting power which includes the power to vote, or to direct the voting of, such security; and/or (2) investment       power which includes the power to dispose, or direct the disposition of, such security. .  You are also the       beneficial owner of a security if you, directly or indirectly, create or use a trust, proxy, power of attorney,       pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting       yourself of beneficial ownership of a security or preventing the vesting of such beneficial ownership.  Finally,       you are deemed to be the beneficial owner of a security if you have the right to acquire beneficial ownership       of such security at any time within sixty (60) days, including, but not limited to, any right to acquire the       security (a) through the exercise of any option, warrant or right, (b) through the conversion of a security, (c)    \\PH - 036137/000007 - 388262 v8    

 

        pursuant to the power to revoke a trust, discretionary account or similar arrangement, or (d) pursuant to the       automatic termination of a trust, discretionary account or similar arrangement. Please note that either voting       power or investment power, or both, is sufficient for you to be considered the beneficial owner of shares.                                                            (a) Number of Registrable Securities beneficially owned by the Selling Stockholder:                        (b) Number of Registrable Securities which the undersigned wishes to be included in the Registration            Statement:                      Of such Registrable Securities:            Shares as to which the Selling Stockholder has sole voting power:                              Shares as to which the Selling Stockholder has shared voting power:                              Shares as to which the Selling Stockholder has sole investment power:                              Shares as to which the Selling Stockholder has shared investment power:                              Shares subject to options or warrants:                         If any of the Registrable Securities have been pledged or otherwise deposited as collateral or are the           subject matter of any voting trust or other similar agreement or of any contract providing for the sale or           other disposition of such securities, please describe the details thereof below:                                                                    (c) Number of securities of the Company other than Registrable Securities beneficially owned by the Selling            Stockholder:                   Of such other securities:            Shares as to which the Selling Stockholder has sole voting power:                              Shares as to which the Selling Stockholder has shared voting power:                              Shares as to which the Selling Stockholder has sole investment power:                         \\PH - 036137/000007 - 388262 v8    

 

          Shares as to which the Selling Stockholder has shared investment power:                              Shares subject to options or warrants:                                       If any of such other securities have been pledged or otherwise deposited as collateral or are the subject           matter of any voting trust or other similar agreement or of any contract providing for the sale or other           disposition of such securities, please describe the details thereof below:                                                                                                             (d) Does the Selling Stockholder wish to disclaim beneficial ownership of any securities of the Company that           it beneficially owns?                              ☐ Yes          ☐ No               If the answer is “Yes,” please furnish the following information with respect to the person or persons who           should be shown as the beneficial owners of the securities in question:            Name and address of Beneficial    Relationship of Such Person to    Number of Shares Beneficially                    Owner                      Selling Stockholder                   Owned                                                                                                                                                                   (e) Does the Selling Stockholder have any present plans to otherwise acquire, dispose of or transfer any           securities of the Company prior to the anticipated filing date of the Registration Statement?                          ☐ Yes          ☐ No          3. Broker-Dealer Status:           Is the Selling Stockholder a registered broker dealer?                  ☐ Yes          ☐ No                 If “Yes,” did the Selling Stockholder receive any securities of the Company that it beneficially owns as       compensation for investment banking or similar services?                     ☐ Yes          ☐ No           Note that in general the Company will be required to identify any registered broker-dealer as an underwriter       in the Prospectus.                                                          4. Affiliation with Broker-Dealers:           Is the Selling Stockholder an affiliate 1 of a registered broker-dealer?    \\PH - 036137/000007 - 388262 v8    

 

             ☐ Yes          ☐ No          If “Yes,” please answer the remaining questions in this Item (4).         (a) Please describe the affiliation between the Selling Stockholder and any registered broker-dealers:                                                            (b) If the Registrable Securities were purchased by the Selling Stockholder other than in the ordinary course of            business, please describe the circumstances:                                                                                                         (c) If the Selling Stockholder, at the time of receipt of the Registrable Securities, has had any agreements or         understandings, directly or indirectly, with any person to distribute the Registrable Securities, please         describe such agreements or understandings:                                                                   Note that if the Selling Stockholder is an affiliate of a broker-dealer and did not purchase the Registrable       Securities in the ordinary course of business or at the time of the purchase had any agreements or       understandings, directly or indirectly, to distribute the securities, the Company must identify the Selling       Stockholder as an underwriter in the Prospectus.                                                                                                           1 An “affiliate” of a specified person or entity means a person or entity that directly, or indirectly through one or   more intermediaries, controls or is controlled by, or is under common control with, the person or entity specified.                                                                                                           5. Making a Market in the Registrable Securities:               Does the Selling Stockholder plan to make a market in the Registrable Securities?                   ☐ Yes          ☐ No               If “Yes,” does the Selling Stockholder plan to use the Prospectus as a market making prospectus?                   ☐ Yes          ☐ No    \\PH - 036137/000007 - 388262 v8    

 

       6. Beneficial Ownership by Natural Persons:            If the Selling Stockholder is an entity, does any natural person have voting or investment power over the       Registrable Securities held by the Selling Stockholder?                   ☐ Yes          ☐ No               If so, please state that person’s or persons’ name(s):                      7. Relationships with the Company:           Except as set forth below, neither the Selling Stockholder nor any of its affiliates, officers, directors or       principal equity holders (5% or more) has held any position or office or has had any other material       relationship with the Company (or their respective predecessors or affiliates) during the past three years.               State any exceptions here:                         8. Plan of distribution:           Except as set forth below, the undersigned Selling Stockholder intends to distribute the Registrable Securities       listed above in Item (2) only as set forth in Exhibit 2 to this Questionnaire.          State any exceptions here:                  2 Please answer “Yes” if any natural person, directly or indirectly, through any contract, arrangement,   understanding, relationship, or otherwise has or shares: (a) voting power which includes the power to vote, or to   direct the voting of, such security; and/or (b) investment power which includes the power to dispose, or to direct   the disposition of, the Registrable Securities held by the Selling Stockholder.                                                               By signing below, the undersigned consents to the disclosure of the information contained herein and the  inclusion of such information in the Registration Statement and the Prospectus and any amendments or supplements  thereto. The undersigned understands that such information will be relied upon by the Company and its legal  counsel in connection with the preparation or amendment of the Registration Statement and the Prospectus.                   If the Selling Stockholder transfers all or any portion of its Registrable Securities after the date on which  the information in this Questionnaire is provided to the Company, the undersigned hereby agrees to notify the  transferee(s) at the time of transfer of its rights and obligations hereunder.                   By signing below, the undersigned represents that the information provided herein is accurate and  complete. The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the  information provided herein that may occur subsequent to the date hereof and prior to the filing of the Registration  Statement and completion of the offering and resale of the Registrable Securities thereunder.    \\PH - 036137/000007 - 388262 v8    

 

             Once this Questionnaire is executed by the Selling Stockholder and received by the Company, the terms of  this Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the  benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the  Company and the Selling Stockholder (with respect to the Registrable Securities beneficially owned by such Selling  Stockholder and listed in Item (2) above). This document shall be governed in all respects by the laws of the State of  Delaware without regard to conflicts of laws principles of such State.                   IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Questionnaire to be  executed and delivered either in person or by its duly authorized agent.                                                                                             [                                                                                ]   Date                                                                                                                                                                                                                            By:                                                                                           Name:                                                                                     Title:                                                                                          \\PH - 036137/000007 - 388262 v8

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