Document:

Exhibit 10.4

 

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (as may be amended, modified, or supplemented from time to time, this “Agreement”) is made and entered into as of May 29, 2018, by and between BeyondSpring Inc., an exempt company with limited liability organized under the laws of the Cayman Islands (the “Company”) and Tianyi HongKong Development Ltd. (the “Purchaser”).

WHEREAS, the Company has prepared and filed with the Securities and Exchange Commission (the “SEC”), in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), and the applicable rules and regulations thereunder, a registration statement on Form F-3 (File No. 333-224437), including a prospectus, relating to the shares to be issued and sold pursuant to this Agreement. The term “Registration Statement” as used herein refers to such registration statement (including all financial schedules and exhibits), as amended or as supplemented and includes information contained or incorporated by reference in the prospectus filed with the Registration Statement (the “Prospectus”) and any supplement thereto (a “Prospectus Supplement”), in each case, filed with the SEC pursuant to Rule 424(b) of the rules under the Securities Act and deemed to be part thereof at the time of effectiveness (the “Effective Date”) pursuant to Rule 430B of the rules under the Securities Act.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions herein contained, the parties hereby agree as follows:

ARTICLE I

PURCHASE AND SALE

1.1 Closing. The Purchaser agrees to purchase from the Company, and the Company agrees to issue and sell to the Purchaser, 554,323 shares (the “Shares”) of the Company’s common stock (the “Common Stock”), at a purchase price of $27.06 per share, for an aggregate purchase price of $15,000,000 (the “Purchase Price”).  Upon satisfaction of the conditions set forth in Section 1.2, the closing of the purchase and sale of the Shares (the “Closing Date”) shall occur at the offices of Skadden, Arps, Slate, Meagher & Flom LLP on May 31, 2018, or at such other place or on such other date as the parties shall mutually agree. Unless otherwise agreed upon by the Company and the Purchaser, settlement of the Shares shall occur via “Delivery Free of Payment” (i.e., the Purchaser shall make payment for the Shares purchased by it by wire transfer to the Company on the Closing Date, upon confirmation of receipt of the wire, the Company shall issue the Shares registered in the Purchaser’s name and address, which shall be released by the Transfer Agent (as defined herein) directly to the account of the Purchaser).

 

1.2  Closing Conditions.

(a) As a condition to the Purchaser’s obligation to consummate the transactions contemplated hereby, at the Closing, the Company shall have satisfied or the Purchaser shall waive each of the conditions set forth below or shall deliver or cause to be delivered to the Purchaser the items set forth below, as appropriate:

 

(i) a copy of this Agreement duly executed by the Company;

(ii) (a) a copy of the irrevocable instructions to Continental Stock Transfer & Trust (the “Transfer Agent”) instructing the Transfer Agent to deliver on an expedited basis the Shares, registered in the name of the Purchaser and (b) Company has released the Shares for delivery to the Purchaser;

 (iii) the representations and warranties made by the Company herein shall be true and correct in all material respects on the date hereof and on the date of the Closing;

(iv) all covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of the Closing shall have been performed or complied with in all material respects; and

(v) no statute, regulation, executive order, decree, ruling or injunction shall have been enacted, promulgated, endorsed or threatened or is pending by or before any governmental authority of competent jurisdiction which prohibits or threatens to prohibit the consummation of the transaction contemplated by this Agreement.

(vi) a copy of the filed notification form listing the Shares on the Nasdaq Stock Market.

(vii) the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

(viii) there shall have been no Material Adverse Effect (as defined below) with respect to the Company since the date hereof.

(ix) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the SEC or the NASDAQ Stock 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, makes it impracticable or inadvisable to purchase the Shares at the Closing.

(b) As a condition to the Company’s obligation to consummate the transactions contemplated hereby, at the Closing, the Purchaser shall have satisfied each of the conditions set forth below or shall deliver or cause to be delivered to the Company the items set forth below, as appropriate:

 

(i) a copy of this Agreement duly executed by the Purchaser;

(ii) the Purchase Price is paid by wire transfer of immediately available funds to the account of the Company set forth below:

Bank: China Merchants Bank, New York Branch

Swift Code: CMBCUS33

Beneficiary Name: BeyondSpring Inc.

Beneficiary Account Number: 1016130015

Fedwire ABA: 026014559

(iii) the representations and warranties made by the Purchaser herein shall be true and correct in all material respects on the date hereof and on the date of the Closing;

(iv) the Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or before the Closing; and

(v) no statute, regulation, executive order, decree, ruling or injunction shall have been enacted, promulgated, endorsed or threatened or is pending by or before any governmental authority of competent jurisdiction which prohibits or threatens to prohibit the consummation of the transaction contemplated by this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Company. Except as set forth in the Company’s filings under the Securities Exchange Act of 1934, as amended, the Company hereby makes the following representations and warranties as of the date hereof and as of the date of the Closing to the Purchaser:

(a) The Company has the requisite corporate power and authority and legal capacity to enter into, and to carry out its obligations under, this Agreement.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company.

(b) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar law of general application affecting rights of creditors and general principles of equity.

(c) Assuming the accuracy of the representations made by the Purchaser in Section 2.2 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for any filings which have been made or will be made in a timely manner.

 

(d) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated thereby will not result in any violation of or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under the provisions of its organizational documents, or any instrument, judgment, order, writ, decree, contract or agreement of the Company or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company; except in each case as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, financial condition, property, or results of operations of the Company and its subsidiaries, taken as a whole.

(e) The Registration Statement relating to the Shares has (i) been prepared by the Company in conformity with the requirements of the Securities Act, and the rules and regulations of the SEC thereunder; (ii) been filed with the SEC under the Securities Act; (iii) become effective under the Securities Act and (iv) no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus or Prospectus Supplement has been issued by the SEC and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the SEC.

(f) The Registration Statement conformed and will conform in all material respects on the Effective Date and on the Closing Date to the requirements of the Securities Act and the rules and regulations thereunder. The Prospectus conformed, and the Prospectus Supplement will conform, in all material respects when filed with the SEC pursuant to Rule 424(b) under the Securities Act and on the Closing Date to the requirements of the Securities Act and the rules and regulations thereunder. The documents incorporated by reference in the Registration Statement conformed in all material respects to the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the Securities Act, as applicable, and the rules and regulations thereunder.

(g) The Registration Statement did not, as of the Effective Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The documents incorporated by reference in the Registration Statement did not, and any further documents filed and incorporated by reference therein will not, as of the respective filing dates of each document, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(h) The Prospectus does not, and the Prospectus Supplement will not, in each case, as of its date or as of the Closing Date, 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.

 

(i) The Company and each of its subsidiaries has been duly organized, is validly existing and in good standing (where such concept is applicable) as a corporation or other business entity under the laws of its jurisdiction of organization and is duly qualified to do business and in good standing (where such concept is applicable) as a foreign corporation or other business entity in each jurisdiction in which its ownership or lease of property or the conduct of its businesses requires such qualification, except where the failure to be so qualified or in good standing could not, in the aggregate, reasonably be expected to have a material adverse effect on the condition (financial or otherwise), results of operations, shareholders’ equity, properties, business or prospects of the Company and its subsidiary taken as a whole (a “Material Adverse Effect”). The Company and its subsidiary have all power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged.

(j) The Shares to be issued and sold by the Company to the Purchaser hereunder have been duly authorized and, upon payment and delivery in accordance with this Agreement, will be validly issued, fully paid and non-assessable, will conform in all material respects to the description thereof contained in the Prospectus and the Prospectus Supplement, will be issued in compliance with U.S. federal and state securities laws, and will be free of statutory and contractual preemptive rights, rights of first refusal and any other similar rights of any share holder.

(k) Ernst & Young Hua Ming LLP, who have certified certain financial statements of the Company and its consolidated subsidiary, whose report appears in the Prospectus and the Prospectus Supplement or is incorporated by reference therein, are independent public accountants as required by the Securities Act and the rules and regulations thereunder.

(l) Neither the Company nor its subsidiary is, and as of the Closing Date and after giving effect to the offer and sale of the Shares and the application of the proceeds therefrom as described under “Use of Proceeds” in the Prospectus and the Prospectus Supplement, none of them will be, (i) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules and regulations of the SEC thereunder, or (ii) a “business development company” (as defined in Section 2(a)(48) of the Investment Company Act).

(m)  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 hereby. To the knowledge of the Company, the Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this section that may be due in connection with the transactions contemplated hereby.

2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of the date of the Closing to the Company as follows:

 

(a) The Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, limited liability or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Purchaser.

(b) This Agreement has been duly executed and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar law of general application affecting rights of creditors and general principles of equity.

(c) The Purchaser and its advisors, if any, have been furnished with all publicly available materials relating to the business, finances and operations of the Company and such other publicly available materials relating to the offer and sale of the Shares as have been requested by the Purchaser. The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company. The Purchaser understands that its investment in the Shares involves a high degree of risk. The Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Shares.  Other than to the Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and affiliates, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

(d) The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares, nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

(e) From and after the date the Purchaser received any information about the sale of Shares to be sold pursuant to this Agreement, the Purchaser has not offered, pledged, sold, contracted to sell, sold any option or contract to purchase, purchased any option or contract to sell, granted any option, right or warrant to purchase, loaned, or otherwise transferred or disposed of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, entered into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, or directly or indirectly, through related parties, affiliates or otherwise sold “short” or “short against the box” (as those terms are generally understood) any equity security of the Company. The Purchaser covenants that it will not, nor will it authorize or permit any person acting on its behalf to, engage in any such transactions until the expiration of the Lock-Up Period (as defined below).

ARTICLE III

MISCELLANEOUS

 

3.1 Lock-Up. For a period commencing on the date hereof and ending on the sixtieth (60th) day after the date hereof (the “Lock-Up Period”), the Purchaser agrees not to, directly or indirectly, (A) offer for sale, sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any Shares or securities convertible into or exercisable or exchangeable for Shares or sell or grant options, rights or warrants with respect to any Shares or securities convertible into or exchangeable for Shares, (B) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such Shares, whether any such transaction described in clause (A) or (B) above is to be settled by delivery of Shares or other securities, in cash or otherwise, or (C) publicly disclose the intention to do any of the foregoing, in each case without the prior written consent of the Company.

 

3.2 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

 

3.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto relating to the subject matter hereof and supersedes all prior contracts, agreements, discussions and understandings between them.  No course of prior dealings between the parties shall be relevant to supplement or explain any term used in this Agreement.

 

3.4 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 prior to 6:30 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 on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the 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 is set forth on the Company and the Purchaser signature pages attached hereto, as applicable. For purposes of this Agreement, “Trading Day” shall mean a day on which the Company’s Common Stock is traded on the Nasdaq Stock Market, or, if the Company’s Common Stock is not eligible for trading on the Nasdaq Stock Market, any day except Saturday, Sunday and any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

3.5 Amendments and Waivers. No provision of this Agreement may be amended, terminated or waived except by a written instrument referring specifically to this Agreement and signed by all parties hereto or their authorized representatives. 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 either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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

 

3.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Neither Company nor the Purchaser may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party.

 

3.8 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to conflict of laws principles.

 

3.9 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing and delivery of the Shares.

 

3.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, 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 signature page were an original thereof.

 

3.11 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

3.12   Termination.  This Agreement may be terminated by either party by written notice to the other party, if the Closing has not been consummated on or before June 1, 2018.

 

3.13    Waiver of Jury Trial.   The Company and the Purchaser hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

3.14          Submission to Jurisdiction, Etc. The Company hereby submits to the non-exclusive jurisdiction of the U.S. federal and New York state courts in the Borough of Manhattan, The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding in such courts, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 

*     *     *     *     *

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties hereto on the date first above written.

 

		
BeyondSpring Inc.

	 	 	 
	 	By:	
/s/ Lan Huang

	 	 	
Name: Lan Huang

		 	
Title:   CEO

	 	 	 
	
Address for Notice:

	 	 
	
BeyondSpring Inc.

	 	 
	
28 Liberty Street, 39th Floor

	 	 
	
New York, New York 10005

	 	 
	
Tel: +1 (646) 305-6387

	 	 
	
Attention: Lan Huang, CEO

	 	 

 

[Signature Page to Securities Purchase Agreement]

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties hereto on the date first above written.

 

		 	
Tianyi HongKong Development Ltd.

	 	 	 
	 	By: 	
/s/ Di Wu

	 	 	
Name: Di Wu

	 	 	
Title:  Chairman

		 	 
	
Address for Notice:

	 	 
	 	 	 
	
Tianyi HongKong Development Ltd.

	 	 
	
21E, W 1 Austin Road

	 	 
	
Kowloon, HongKong

	 	 
	
Tel: +86-159-3012-2222

	 	 
	
Attention: Di Wu, Chairman

	 	 

 

[Signature Page to Securities Purchase Agreement]Exhibit 10.1

 

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise
Agreement (this “Agreement”), dated as of May 24, 2018, is by and between Stellar Biotechnologies, Inc., a British
Columbia corporation (the “Company”), and the undersigned holder (each, a “Holder” and, collectively,
the “Holders”) of warrants to purchase shares of the Company’s common stock, no par value per share (the
“Common Stock”), issued by the Company, which warrants are exercisable at an exercise price of $2.65 per share
(the “Original Warrants”).

 

WHEREAS, the Holder’s
Original Warrants are exercisable into a number of shares of Common Stock as set forth on the Holder’s signature page hereto
(the “Warrant Shares”) and were issued pursuant to a registration statement on Form S-1 (File No. 333-224314)
(the “Registration Statement”) and Securities Purchase Agreement, dated as of May 11, 2018 by and among the
Company and the purchasers signatory thereto (the “Purchase Agreement”);

 

WHEREAS, the Holder
wishes to exercise all or a portion of such Original Warrants as set forth herein and, immediately prior to such exercise and in
consideration of the Holder’s exercise of such Original Warrants, the Company has agreed to issue the Holder, in addition
to the shares of Common Stock to which such exercising Holder is entitled, new warrants in the form of the Original Warrants (the
“New Warrants”); provided that such New Warrants shall not be registered and shall include the legend set forth
in Section 2.2(a). The shares of Common Stock underlying the New Warrants are referred to herein as the “New Warrant Shares”
and collectively with the New Warrants, the “Securities”. The number of shares of Common Stock underlying the
New Warrants shall be as determined pursuant to Section 2.1(c).

 

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

 

ARTICLE I

DEFINITIONS

 

Section 1.1          
Definitions. Capitalized terms not defined in this Agreement shall have the meanings ascribed to such terms in the Purchase
Agreement and the Original Warrants.

 

ARTICLE II

EXERCISE OF EXISTING WARRANT

 

Section 2.1           Exercise
of Original Warrants.

 

(a)          The
Company and the Holder hereby agree that the Holder shall immediately exercise the Original Warrants with respect to the number
of Warrant Shares set forth on the Holder's signature page hereto at the exercise price per share equal to $2.65, pursuant to the
terms of the Original Warrants (the “Warrant Exercise”). Notwithstanding anything herein to the contrary, in
the event that the Warrant Exercise would otherwise cause the Holder to exceed the beneficial ownership limitation (the “Beneficial
Ownership Limitation”) in the Original Warrants, the Company shall only issue such number of Warrant Shares to the Holder
(as instructed in writing by the Holder) that would not cause such Holder to exceed the maximum number of Warrant Shares permitted
thereunder with the balance to be held in abeyance until the balance (or portion thereof) may be issued in compliance with such
beneficial ownership limitations. Holder shall provide written notice to the Company promptly when any additional Warrant Shares
may be issued in compliance with the Beneficial Ownership Limitation. The balance of the Warrant Shares shall promptly be issued
when the Holder provides notice that the Holder holds less than the Beneficial Ownership Limitation.

 

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(b)         The
Holder shall execute and deliver the aggregate cash exercise price for such exercise of the Original Warrants to the bank account
set forth on the Company’s signature page hereto within two business days after notice from the Company that the conditions
set forth in Section 2.3 have been met and the Company shall deliver the Warrant Shares to the Holder via the Depository Trust
Company Deposit or Withdrawal at Custodian system pursuant to the terms of the Original Warrants, but pursuant to instructions
set forth on the Holder’s signature page hereto. The date of the closing of the exercise of the Original Warrants shall be
referred to as the “Closing Date”.

 

(c)         On
the Closing Date, the Company shall issue to the Holder New Warrants to purchase
such number of New Warrant Shares as follows:

 

(i)          a
Common Stock purchase warrant exercisable into a number of shares of Common Stock equal to 100% of the number of Warrant Shares
received by the Holder upon such applicable exercise of the Original Warrants with an exercise price equal to $2.65, a term of
exercise equal to 5 years and otherwise in the form of the Original Warrant; and

 

(ii)         a
Common Stock purchase warrant exercisable into a number of shares of Common Stock equal to 200% of the number of Warrant Shares
received by the Holder upon such applicable exercise of the Original Warrants with an exercise price equal to $2.65, a term of
exercise equal to 7 months and otherwise in the form of the Original Warrant.

 

Section 2.2          Legends;
Restricted Securities.

 

(a)        The
Holder understands that the New Warrants and the New Warrant Shares are not, and will not be, registered under the Securities Act
of 1933, as amended (the “Securities Act”), or the securities laws of any state and, accordingly, each certificate,
if any, representing such securities shall bear a legend substantially similar to the following:

 

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“THIS SECURITY HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. THIS SECURITY 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.”

 

(b)        Certificates
evidencing the New Warrant Shares shall not contain any legend (including the legend set forth in Section 2.2(a) hereof), (i) while
a registration statement covering the resale of such New Warrant Shares is effective under the Securities Act, (ii) following any
sale of such New Warrant Shares pursuant to Rule 144, (iii) if such New Warrant Shares are eligible for sale under Rule 144, 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). In such event, the Company shall cause its counsel to issue a legal opinion
to the Transfer Agent if required by the Transfer Agent to effect the removal of the legend hereunder. If all or any portion of
a New Warrant is exercised at a time when there is an effective registration statement to cover the resale of the New Warrant Shares,
or if such New Warrant Shares may be sold under Rule 144 and the Company is then in compliance with the current public information
required under Rule 144, or if the New Warrant Shares may be sold under Rule 144 without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to such New Warrant Shares 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 New Warrant Shares shall be issued free of all legends. The Company agrees that at such
time as such legend is no longer required under this Section 2.2(b), it will, no later than two (2) Trading Days following the
delivery by the Holder to the Company or the Transfer Agent of a certificate representing New Warrant Shares, as the case may be,
issued with a restrictive legend (such Trading Day, the “Legend Removal Date”), deliver or cause to be delivered
to the Holder a certificate representing such shares that is free from all restrictive and other legends. The Company may not make
any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this
Section 2.2(b). Certificates for securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company System as directed by the
Holder.

 

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(c)          In
addition to the Holder’s other available remedies, the Company shall pay to the Holder, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of New Warrant Shares (based on the VWAP of the Common Stock on the date such New
Warrant Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend, $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 the Holder by the Legend Removal Date a certificate representing the New Warrant Shares so delivered to the Company
by the Holder that is free from all restrictive and other legends and (B) if after the Legend Removal Date the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of 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 the Holder anticipated receiving from the Company without any restrictive legend,
then, an amount equal to the excess of the Holder’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) over the product of (1) such number of New Warrant Shares that the Company was required to deliver to the Holder by the
Legend Removal Date multiplied by (2) the price at which the sell order giving rise to such purchase obligation was executed.

 

Section 2.3           Issuance
of Press Release. Prior to 3:30 p.m. (New York City time) on the date hereof, the Company shall issue a press release disclosing
the material terms of the transactions contemplated hereby and within the time required by the laws file a Current Report on Form
8-K with the Commission, which shall include this Agreement (the “8-K Filing”). From and after the issuance
of the press release, the Company represents to the Holder that it shall not be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents that is
not disclosed in press release. In addition, effective upon the issuance of the press release, the Company acknowledges and agrees
that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any
of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Holder
or any of its affiliates, on the other hand, shall terminate.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1           Representations
and Warranties of the Company. The Company hereby makes the representations and warranties set forth below to the Holder that
as of the date of its execution of this Agreement:

 

    4 

     

    

 

(a)         Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action
on the part of such Company and no further action is required by such Company, its board of directors or its stockholders in connection
therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof 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.

 

(b)       Organization.
The Company is a duly organized and validly existing corporation in good standing under the laws of the British Columbia.

 

(c)        Registration
Statement. The Warrant Shares are registered for issuance to the Holder on the Registration Statement, and the Company knows
of no reasons why such Registration Statement shall not remain available for the issuance of such Warrant Shares for the foreseeable
future. The Company shall use commercially reasonable efforts to keep the Registration Statement effective and available for use
by the Holder until all Warrant Shares are issued to the Holder.

 

(d)        No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien
upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which the Company is a party or by which any property
or asset of the Company is bound or affected, or (iii) 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 is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected.

 

(e)       Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms
that neither it nor any other Person acting on its behalf has provided the Holder or any of its agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the
Holder 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 Holder regarding the Company and its Subsidiaries, their respective businesses
and the transactions contemplated hereby, including but not limited to the disclosure set forth in the SEC Reports, is true and
correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not misleading. As used herein, “SEC
Reports” means all reports, schedules, forms, statements and other documents required to be filed by the Company with
the Commission pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended, including all exhibits
included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein.

 

    5 

     

    

 

(f)        Issuance
of Securities. The issuance of the New Warrants is duly authorized and, upon issuance in accordance with the terms of this
Agreement, the New Warrants shall be validly issued and free from all preemptive or similar rights (except for those which have
been validly waived prior to the date hereof), taxes, liens and charges and other encumbrances with respect to the issue thereof.
As of the Closing Date, a number of shares of Common Stock shall have been duly authorized and reserved for issuance which equals
or exceeds the maximum number of New Warrant Shares issuable upon exercise of the New Warrants (without taking into account any
limitations on the exercise of the New Warrants set forth therein). Upon exercise of the New Warrant in accordance with the terms
of the New Warrant, the New Warrant Shares when issued will be validly issued, fully paid and nonassessable and free from all preemptive
or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations and warranties set forth
in Section 3.2 of this Agreement, the offer and issuance by the Company of the New Warrant is exempt from registration under the
Securities Act.

 

(g)        No
General Solicitation. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection
with the offer or sale of the New Warrants.

 

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

 

    6 

     

    

 

Section 3.2         Representations
and Warranties of the Holder. The Holder hereby makes the representations and warranties set forth below to the Company that
as of the date of its execution of this Agreement:

 

(a)         Due
Authorization. The Holder represents and warrants that (i) the execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on its behalf and
(ii) this Agreement has been duly executed and delivered by the Holder and constitutes the valid and binding obligation of
the Holder, enforceable against it in accordance with its terms.

 

(b)        No
Conflicts. The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the
transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Holder’s organizational
or charter documents, or (ii) conflict with or result in a violation of any agreement, law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority which would interfere with the ability of the Holder
to perform its obligations under this Agreement.

 

(c)         Access
to Information. The Holder acknowledges that it has had the opportunity to review this Agreement 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 exercise of the Original Warrants and issuance of the New Warrants and
the merits and risks of investing in the Warrant Shares underlying the Original Warrants; (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.
The Holder acknowledges and agrees that neither H.C. Wainwright & Co., LLC (the “Agent”) nor any Affiliate
of the Agent has provided the Holder with any information or advice with respect to the Original Warrants, the Warrant Shares
or the Securities nor is such information or advice necessary or desired. Neither the Agent nor any Affiliate of the Agent has
made or makes any representation as to the Company or the quality of the Original Warrants, the Warrant Shares or the Securities,
and the Agent and any Affiliate of the Agent may have acquired non-public information with respect to the Company which the Holder
agrees need not be provided to it. In connection with the issuance of the Warrant Shares and the Securities to the Holder, neither
the Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to the Holder.

 

(d)        Holder
Status. The Holder is an “accredited investor” as defined in Rule 501 under the Securities Act.

 

    7 

     

    

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1          Subsequent
Equity Sales.

 

(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)          Notwithstanding
the foregoing, this Section 4.1 shall not apply in respect of any Exempt Issuance (as defined in the Purchase Agreement).

 

Section 4.2           The
Company covenants and agrees that it has not entered into a warrant exercise agreement with any other holder of Original Warrants
(each, an “Other Holder”) for any material amendments, modifications or exchanges to the terms of such Original
Warrants (or settlement or exchange of such Original Warrants for other material consideration) (each a “More Favorable
Agreement”), that is more favorable to such Other Holder than those of the Holder pursuant to this Agreement. If the
Company enters into a More Favorable Agreement with terms that are materially different from this Agreement (“material”
shall be in the reasonable determination of the Holder), then (i) the Company shall provide written notice thereof to the Holder
promptly following the occurrence thereof and (ii) the terms and conditions of this Agreement that shall be, without any further
action by the Holder or the Company, automatically and retroactively to the date hereof, amended and modified in an economically
and legally equivalent manner such that the Holder shall receive the benefit of such more favorable material terms and/or conditions
(as the case may be) set forth in such More Favorable Agreement, provided that upon written notice to the Company within five business
days of such Company’s written notice, the Holder may elect not to accept the benefit of any such amended or modified material
term or condition, in which event the material term or condition contained in this Agreement shall continue to apply to the Holder
as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with
respect to the Holder.  The provisions of this paragraph shall apply similarly and equally to each More Favorable Agreement
and shall be effective whether or not the Holder holds Exchange Shares at such time. The Company shall not enter into any More
Favorable Agreement that would obligate the Company (after taking into consideration this clause a)) to issue to the Holder and
the Other Holders, in the aggregate, a number of shares of Common Stock that would exceed 19.9% of the total number of shares of
Common Stock issued and outstanding as of the date hereof. The Company will notify the Holder any time it enters into any agreement
with any Other Holder relating to the Warrants and, at the request of the Holder, provide the Holder with such agreement for its
review.

 

Section 4.3           The
Company acknowledges and agrees that the obligations of the Holder under this Agreement are several and not joint with the obligations
of any Other Holder under any other agreement related to the exercise of such Original Warrants (“Other Warrant Exercise
Agreement”), and the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder
or under any such Other Warrant Exercise Agreement. Nothing contained in this letter agreement, and no action taken by the Holder
pursuant hereto, shall be deemed to constitute the Holder and the Other Holders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert or
as a group with respect to such obligations or the transactions contemplated by this letter agreement and the Company acknowledges
that the Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions
contemplated by this letter agreement or any Other Warrant Exercise Agreement. The Company and the Holder confirms that the Holder
has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and
advisors. The Holder shall be entitled to independently protect and enforce their rights, including, without limitation, the rights
arising out of this Agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding
for such purpose.

 

    8 

     

    

 

Section 4.5         Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be made by email
to the email address of Holders set forth on Holders’ signature page.

 

Section 4.6          Survival.
All warranties and representations (as of the date such warranties and representations were made) made herein or in any certificate
or other instrument delivered by any party hereto or on its behalf under this Agreement shall be considered to have been relied
upon by the parties hereto and shall survive the issuance of the Warrant Shares. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties; provided, however, that no party may assign this
Agreement or the obligations and rights of such party hereunder without the prior written consent of the other parties hereto.

 

Section 4.7         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 the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission,
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 signature page were an original thereof.

 

Section 4.8          Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.

 

Section 4.9          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
pursuant to the Governing Law provision in Section 10 of the Original Warrants.

 

Section 4.10
      Entire Agreement. The Agreement, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the subject matter hereof 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.

 

    9 

     

    

 

Section 4.11          Construction.
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. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

Section 4.12          Fees
and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Warrant Shares.

 

Section 4.13         Registration
Obligations. The Company shall prepare and file with the Commission a registration statement relating to the resale of the
New Warrant Shares by the holders of the New Warrants under the Securities Act and use commercially reasonable best efforts to
cause such registration statement to be declared effective by the Commission as soon as practical.

 

Section 4.14         Beneficial
Ownership Limitation. The parties hereby agree that the Beneficial Ownership Limitation for the Original Warrant for purposes
of this agreement is 9.99%.

 

*******************

    10 

     

    

 

 

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

 

	COMPANY:	 
	 	 
	STELLAR BIOTECHNOLOGIES, INC.	 
	 	 
	By: 	                     	 
	Name: 	 	 
	Title:	 	 
	 	 
	 	 
	Bank Account and Wire Instructions	 

 

    11 

     

    

 

[HOLDER SIGNATURE PAGES TO SBOT

WARRANT EXERCISE AGREEMENT] 

 

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

 

	Name of Holder:	 

 

	Signature of Authorized Signatory of Holder:	 

 

	Name of Authorized Signatory:	 

 

	Title of Authorized Signatory:	 

 

	 	 
	Email Address of Holder:	 

 

	Number of Warrant Shares underlying Original Warrants to be exercised:	 

 

 

	Aggregate Exercise Price of  Original Warrant to be Exercised:	
        $ 

 

	New Warrant Shares underlying New Warrants:	 

 

	DWAC Instructions for Warrant Shares to be issued upon exercise of Original Warrants:_________________

 

	Deliver address of New Warrants:	 

 

    12

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