Document:

Blueprint

 

 Exhibit
4.1

 

THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED
HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL,
TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT OR
CAUSE IT TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE,
PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE
ECONOMIC DISPOSITION OF THE PURCHASE WARRANT BY ANY PERSON FOR A
PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE
DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) ALEXANDER CAPITAL,
L.P. OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II)
A BONA FIDE OFFICER OR PARTNER OF ALEXANDER CAPITAL, L.P. OR OF ANY
SELECTED DEALER AND IN ACCORDANCE WITH FINRA RULE
5110(G)(2).

 

THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO MAY 13, 2020. VOID
AFTER 5:00 P.M., EASTERN TIME, MAY 13, 2024.

 

COMMON STOCK PURCHASE WARRANT

 

For the
Purchase of [ ] Shares of Common Stock

 

of

 

AZURRX
BIOPHARMA, INC.

 

1. Purchase Warrant. THIS
CERTIFIES THAT, in consideration of funds duly paid by or on behalf
of [__________] (“Holder”), as registered owner of
this Purchase Warrant, to AxurRx BioPharma, Inc., a Delaware
corporation (the “Company”), Holder is entitled, at
any time or from time to time from May 13, 2020 (the
“Commencement
Date”), and at or before 5:00 p.m., Eastern time May
13, 2024 (the “Expiration
Date”), but not thereafter, to subscribe for, purchase
and receive, in whole or in part, up to [●] shares of common
stock of the Company, par value $0.0001 per share (the
“Shares”),
subject to adjustment as provided in Section 5 hereof. If the
Expiration Date is a day on which banking institutions are
authorized by law to close, then this Purchase Warrant may be
exercised on the next succeeding day which is not such a day in
accordance with the terms herein. During the period ending on the
Expiration Date, the Company agrees not to take any action that
would terminate this Purchase Warrant. This Purchase Warrant is
initially exercisable at $2.82 per Share; provided, however, that
upon the occurrence of any of the events specified in Section 5
hereof, the rights granted by this Purchase Warrant, including the
exercise price per Share and the number of Shares to be received
upon such exercise, shall be adjusted as therein specified. This
Warrant is being issued pursuant to the certain Selling Agent
Agreement (the “Selling Agent
Agreement”), dated May 9, 2019, by and among the
Company and the Holder, providing for the public offering (the
“Offering”) of
shares of common stock, par value $0.001 per share, of the Company.
The term “Effective
Date” shall mean the effective date of the Offering.
The term “Exercise
Price” shall mean the initial exercise price or the
adjusted exercise price, depending on the context.

 

 

-1-

 

 

1. Exercise.

 

1.1 Exercise
Form. In order to exercise this
Purchase Warrant, the exercise form attached hereto must be duly
executed and completed and delivered to the Company, together with
this Purchase Warrant and payment of the Exercise Price for the
Shares being purchased payable in cash by wire transfer of
immediately available funds to an account designated by the Company
or by certified check or official bank check. If the subscription
rights represented hereby shall not be exercised at or before 5:00
p.m., Eastern time, on the Expiration Date, this Purchase Warrant
shall become and be void without further force or effect, and all
rights represented hereby shall cease and
expire.

 

1.2 Cashless
Exercise. If at any time after
the Commencement Date there is no effective registration statement
registering, or no current prospectus available for, the resale of
the Shares by the Holder, then in lieu of exercising this Purchase
Warrant by payment of cash or check payable to the order of the
Company pursuant to Section 1.1 above, Holder may elect to receive
the number of Shares equal to the value of this Purchase Warrant
(or the portion thereof being exercised), by surrender of this
Purchase Warrant to the Company, together with the exercise form
attached hereto, in which event the Company shall issue to Holder,
Shares in accordance with the following
formula:

 

	

X
=  

	

Y(A-B)

	

    A

 Where,

X = The
number of Shares to be issued to Holder;

Y = The
number of Shares for which the Purchase Warrant is being
exercised;

A = The
fair market value of one Share; and

B = The
Exercise Price.

 

For
purposes of this Section 1.2, the fair market value of a Share is
defined as follows:

 

(i) if
the Company’s common stock is traded on a securities
exchange, the fair market value shall be deemed to be the closing
price on such exchange on the trading day immediately prior to the
date the exercise form is submitted to the Company in connection
with the exercise of the Purchase Warrant; or

 

(ii) if
the Company’s common stock is actively traded
over-the-counter, the fair market value shall be deemed to be the
closing bid price on the trading day immediately prior to the date
the exercise form is submitted to the Company in connection with
the exercise of the Purchase Warrant; or

 

(iii) if
there is no active public market, the value shall be the fair
market value thereof, as determined in good faith by the
Company’s Board of Directors.

 

1.3 Legend.
Each certificate for the securities purchased under this Purchase
Warrant shall bear a legend as follows unless such securities have
been registered under the Securities Act of 1933, as amended (the
“Act”):

 

“The
securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the
“Act”), or
applicable state law. Neither the securities nor any interest
therein may be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from registration under
the Securities Act and applicable state law which, in the opinion
of counsel to the Company, is available.”

 

1.4           No
Obligation to Net Cash Settle. Notwithstanding anything to
the contrary contained in this Purchase Warrant, in no event will
the Company be required to net cash settle the exercise of the
Purchase Warrant. The holder of the Purchase Warrant will not be
entitled to exercise the Purchase Option unless it exercises such
Purchase Warrant pursuant to the cashless exercise right or a
registration statement is effective, or an exemption from the
registration requirements is available at such time and, if the
Holder is not able to exercise the Purchase Warrant, the Purchase
Warrant will expire worthless.

 

 

 

-2-

 

 

2. Transfer.

 

2.1 General
Restrictions. The registered
Holder of this Purchase Warrant agrees by his, her or its
acceptance hereof, that such Holder will not: (a) sell, transfer,
assign, pledge or hypothecate this Purchase Warrant for a period of
one hundred eighty (180) days following the Effective Date to
anyone other than: (i) Alexander Capital L.P.
(“Alexander
Capital”) or another
selected dealer participating in the Offering, or (ii) a bona fide
officer or partner of Alexander Capital or of any such underwriter
or selected dealer, in each case in accordance with FINRA Conduct
Rule 5110(g)(1), or (b) cause this Purchase Warrant or the
securities issuable hereunder to be the subject of any hedging,
short sale, derivative, put or call transaction that would result
in the effective economic disposition of this Purchase Warrant or
the securities hereunder, except as provided for in FINRA Rule
5110(g)(2). On and after one (1) year after the Effective Date,
transfers to others may be made subject to compliance with or
exemptions from applicable securities laws. In order to make any
permitted assignment, the Holder must deliver to the Company the
assignment form attached hereto duly executed and completed,
together with the Purchase Warrant and payment of all transfer
taxes, if any, payable in connection therewith. The Company shall
within five (5) Business Days transfer this Purchase Warrant on the
books of the Company and shall execute and deliver a new Purchase
Warrant or Purchase Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the
aggregate number of Shares purchasable hereunder or such portion of
such number as shall be contemplated by any such
assignment.

 

2.2 Restrictions
Imposed by the Securities Act.
The securities evidenced by this Purchase Warrant shall not be
transferred unless and until: (i) the Company has received the
opinion of counsel for the Holder that the securities may be
transferred pursuant to an exemption from registration under the
Securities Act and applicable state securities laws, the
availability of which is established to the reasonable satisfaction
of the Company (the Company hereby agreeing that the opinion of
Cozen O’Connor shall be deemed satisfactory evidence of the
availability of an exemption), or (ii) a registration statement or
a post-effective amendment to the Registration Statement relating
to the offer and sale of such securities has been filed by the
Company and declared effective by the U.S. Securities and Exchange
Commission (the “Commission”) and compliance with
applicable state securities law has been
established.

 

3. Registration
Rights.

 

3.1 “Piggy-Back”
Registration.

 

3.1.1 Grant
of Right. The Holder shall have
the right, for a period of no more than seven (7) years from the
Effective Date in accordance with FINRA Rule 5110(f)(2)(G)(v), to
include any portion of the Shares underlying the Purchase Warrants
(collectively, the “Registrable
Securities”) as part of
any other registration of securities filed by the Company (other
than in connection with a transaction contemplated by Rule 145(a)
promulgated under the Securities Act or pursuant to Form S-8 or any
equivalent form); provided,
however,
that if, solely in connection with any primary underwritten public
offering for the account of the Company, the managing
underwriter(s) thereof shall, in its reasonable discretion, impose
a limitation on the number of shares of common stock which may be
included in the Registration Statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distribution,
then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities
with respect to which the Holder requested inclusion hereunder as
the underwriter shall reasonably permit. Any exclusion of
Registrable Securities shall be made pro rata among the Holders
seeking to include Registrable Securities in proportion to the
number of Registrable Securities sought to be included by such
Holders; provided,
however,
that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities,
the holders of which are not entitled to inclusion of such
securities in such Registration Statement or are not entitled to
pro rata inclusion with the Registrable
Securities.

 

 

 

-3-

 

 

3.1.2 Terms.
The Company shall bear all fees and expenses attendant to
registering the Registrable Securities pursuant to Section 3.1.1
hereof, but the Holders shall pay any and all underwriting
commissions and the expenses of any legal counsel selected by the
Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed
registration, the Company shall furnish the then Holders of
outstanding Registrable Securities with not less than thirty (30)
days written notice prior to the proposed date of filing of such
registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company
until such time as all of the Registrable Securities have been sold
by the Holder. The holders of the Registrable Securities shall
exercise the “piggy-back” rights provided for herein by
giving written notice within ten (10) days of the receipt of the
Company’s notice of its intention to file a registration
statement. Except as otherwise provided in this Purchase Warrant,
there shall be no limit on the number of times the Holder may
request registration under this Section 3.1.2; provided,
however,
that such registration rights shall terminate upon on the sixth
anniversary of the Commencement Date.

 

3.2 General
Terms.

 

3.2.1 Indemnification.
The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Holders within
the meaning of Section 15 of the Securities Act or Section 20(a) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), against all loss, claim, damage, expense
or liability (including all reasonable attorneys’ fees and
other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement but only to the
same extent and with the same effect as the provisions pursuant to
which the Company has agreed to indemnify the Selling Agent
contained in Section 6.1 of the Selling Agent Agreement between the
Selling Agent and the Company, dated as of May 8, 2019. The
Holder(s) of the Registrable Securities to be sold pursuant to such
registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company and its
affiliates, against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses
reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject
under the Securities Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or
their successors or assigns, in writing, for specific inclusion in
such registration statement to the same extent and with the same
effect as the provisions contained in Section 6.2 of the Selling
Agent Agreement pursuant to which the Selling Agent has agreed to
indemnify the Company.

 

3.2.2 Exercise
of Purchase Warrants. Nothing
contained in this Purchase Warrant shall be construed as requiring
the Holder(s) to exercise their Purchase Warrants prior to or after
the initial filing of any registration statement or the
effectiveness thereof.

 

3.2.3 Documents
Delivered to Holders. The
Company shall furnish to each Holder participating in any
underwritten offerings and to each underwriter of any such
offering, a signed counterpart, addressed to such Holder and
underwriter, of: (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and an opinion
dated the date of the closing under any underwriting agreement
related thereto), and (ii) a “cold comfort” letter
dated the effective date of such registration statement (and a
letter dated the date of the closing under the underwriting
agreement) signed by the independent registered public accounting
firm which has issued a report on the Company’s financial
statements included in such registration statement, in each case
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of such accountants’ letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer’s counsel and in
accountants’ letters delivered to underwriters in
underwritten public offerings of securities. The Company shall also
deliver promptly to each Holder participating in the underwritten
offering requesting the correspondence and memoranda described
below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and
all memoranda relating to discussions with the Commission or its
staff with respect to the registration statement and permit each
Holder and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of FINRA. Such
investigation shall include access to books, records and properties
and opportunities to discuss the business of the Company with its
officers and independent auditors, all to such reasonable extent
and at such reasonable times as any such Holder shall reasonably
request.

 

 

 

-4-

 

 

3.2.4 Underwriting
Agreement. In the event the
Company shall enter into an underwriting agreement with any
managing underwriter(s), if any, selected by the Company with
respect to the Registrable Securities that are being registered
pursuant to this Section 3, which managing underwriter shall be
reasonably satisfactory to the Majority Holders. Such agreement
shall be reasonably satisfactory in form and substance to the
Company and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type
used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of
their Registrable Securities and may, at their option, require that
any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be
made to and for the benefit of such Holders. Such Holders shall not
be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may
relate to such Holders, their Shares and their intended methods of
distribution.

 

3.2.5 Documents
to be Delivered by Holder(s).
Each of the Holder(s) participating in any of the foregoing
offerings shall furnish to the Company a completed and executed
questionnaire provided by the Company requesting information
customarily sought of selling security holders.

 

3.2.6 Damages.
Should the registration or the effectiveness thereof required by
Section 3.1 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Holder(s)
shall, in addition to any other legal or other relief available to
the Holder(s), be entitled to seek specific performance or other
equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach,
without the necessity of proving actual damages and without the
necessity of posting bond or other security.

 

4. New
Purchase Warrants to be Issued.

 

4.1 Partial
Exercise or Transfer. Subject
to the restrictions in Section 2 hereof, this Purchase Warrant may
be exercised or assigned in whole or in part. In the event of the
exercise or assignment hereof in part only, upon surrender of this
Purchase Warrant for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any
Exercise Price and/or transfer tax if exercised pursuant to Section
1.1 hereto, the Company shall cause to be delivered to the Holder
without charge a new Purchase Warrant of like tenor to this
Purchase Warrant in the name of the Holder evidencing the right of
the Holder to purchase the number of Shares purchasable hereunder
as to which this Purchase Warrant has not been exercised or
assigned.

 

4.2 Lost
Certificate. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Purchase Warrant and of
reasonably satisfactory indemnification or the posting of a bond,
the Company shall execute and deliver a new Purchase Warrant of
like tenor and date. Any such new Purchase Warrant executed and
delivered as a result of such loss, theft, mutilation or
destruction shall constitute a substitute contractual obligation on
the part of the Company.

 

5. Adjustments.

 

5.1 Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares
underlying the Purchase Warrant shall be subject to adjustment from
time to time as hereinafter set forth:

 

5.1.1 Share
Dividends; Split Ups. If, after
the date hereof, and subject to the provisions of Section 5.3
below, the number of outstanding Shares is increased by a stock
dividend payable in Shares or by a split up of Shares or other
similar event, then, on the effective day thereof, the number of
Shares purchasable hereunder shall be increased in proportion to
such increase in outstanding Shares, and the Exercise Price shall
be proportionately decreased.

 

5.1.2 Aggregation
of Shares. If, after the date
hereof, and subject to the provisions of Section 5.3 below, the
number of outstanding Shares is decreased by a consolidation,
combination or reclassification of Shares or other similar event,
then, on the effective date thereof, the number of Shares
purchasable hereunder shall be decreased in proportion to such
decrease in outstanding Shares, and the Exercise Price shall be
proportionately increased.

 

 

 

-5-

 

 

5.1.3 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding Shares other than a change
covered by Section 5.1.1 or 5.1.2 hereof or that solely affects the
par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation of the Company with
or into another corporation or other entity (other than a
consolidation or share reconstruction or amalgamation in which the
Company is the continuing corporation and that does not result in
any reclassification or reorganization of the outstanding Shares),
or in the case of any sale or conveyance to another corporation or
entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company
is dissolved, the Holder of this Purchase Warrant shall have the
right thereafter (until the expiration of the right of exercise of
this Purchase Warrant) to receive upon the exercise hereof, for the
same aggregate Exercise Price payable hereunder immediately prior
to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such
reclassification, reorganization, share reconstruction or
amalgamation, or consolidation, or upon a dissolution following any
such sale or transfer, by a Holder of the number of Shares of the
Company obtainable upon exercise of this Purchase Warrant
immediately prior to such event; and if any reclassification also
results in a change in Shares covered by Section 5.1.1 or 5.1.2,
then such adjustment shall be made pursuant to Sections 5.1.1,
5.1.2 and this Section 5.1.3. The provisions of this Section 5.1.3
shall similarly apply to successive reclassifications,
reorganizations, share reconstructions or amalgamations, or
consolidations, sales or other transfers.

 

5.1.4 Changes
in Form of Purchase Warrant.
This form of Purchase Warrant need not be changed because of any
change pursuant to this Section 5.1, and Purchase Warrants issued
after such change may state the same Exercise Price and the same
number of Shares as are stated in the Purchase Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of
the issuance of new Purchase Warrants reflecting a required or
permissive change shall not be deemed to waive any rights to an
adjustment occurring after the Commencement Date or the computation
thereof.

 

5.2 Substitute
Purchase Warrant. In case of
any consolidation of the Company with, or share reconstruction or
amalgamation of the Company with or into, another corporation or
other entity (other than a consolidation or share reconstruction or
amalgamation which does not result in any reclassification or
change of the outstanding Shares), the corporation or other entity
formed by such consolidation or share reconstruction or
amalgamation shall execute and deliver to the Holder a supplemental
Purchase Warrant providing that the holder of each Purchase Warrant
then outstanding or to be outstanding shall have the right
thereafter (until the stated expiration of such Purchase Warrant)
to receive, upon exercise of such Purchase Warrant, the kind and
amount of shares of stock and other securities and property
receivable upon such consolidation or share reconstruction or
amalgamation, by a holder of the number of Shares of the Company
for which such Purchase Warrant might have been exercised
immediately prior to such consolidation, share reconstruction or
amalgamation, sale or transfer. Such supplemental Purchase Warrant
shall provide for adjustments which shall be identical to the
adjustments provided for in this Section 5. The above provision of
this Section shall similarly apply to successive consolidations or
share reconstructions or amalgamations.

 

5.3 Elimination
of Fractional Interests. The
Company shall not be required to issue certificates representing
fractions of Shares upon the exercise of the Purchase Warrant, nor
shall it be required to issue scrip or pay cash in lieu of any
fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction
up or down, as the case may be, to the nearest whole number of
Shares or other securities, properties or
rights.

 

 

 

-6-

 

 

6. Reservation
and Listing. The Company shall
at all times reserve and keep available out of its authorized
Shares, solely for the purpose of issuance upon exercise of the
Purchase Warrants, such number of Shares or other securities,
properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of
the Purchase Warrants and payment of the Exercise Price therefor,
in accordance with the terms hereby, all Shares and other
securities issuable upon such exercise shall be duly and validly
issued, fully paid and non-assessable and not subject to preemptive
rights of any shareholder. The Company further covenants and agrees
that upon exercise of the Purchase Warrants and payment of the
exercise price therefor, all Shares and other securities issuable
upon such exercise shall be duly and validly issued, fully paid and
non-assessable and not subject to preemptive rights of any
shareholder. As long as the Purchase Warrants shall be outstanding,
the Company shall use its commercially reasonable efforts to cause
all Shares issuable upon exercise of the Purchase Warrants to be
listed (subject to official notice of issuance) on all national
securities exchanges (or, if applicable, on the OTC Bulletin Board
or any successor trading market) on which the Shares issued to the
public in the Offering may then be listed and/or
quoted.

 

7. Certain
Notice Requirements.

 

7.1 Holder’s
Right to Receive Notice.
Nothing herein shall be construed as conferring upon the Holders
the right to vote or consent or to receive notice as a shareholder
for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. If, however, at
any time prior to the expiration of the Purchase Warrants and their
exercise, any of the events described in Section 7.2 shall occur,
then, in one or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date
fixed as a record date or the date of closing the transfer books
for the determination of the shareholders entitled to such
dividend, distribution, conversion or exchange of securities or
subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer
books, as the case may be. Notwithstanding the foregoing, the
Company shall deliver to each Holder a copy of each notice given to
the other shareholders of the Company at the same time and in the
same manner that such notice is given to the
shareholders.

 

7.2 Events
Requiring Notice. The Company
shall be required to give the notice described in this Section 7
upon one or more of the following events: (i) if the Company shall
take a record of the holders of its Shares for the purpose of
entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books
of the Company, (ii) the Company shall offer to all the holders of
its Shares any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or share
reconstruction or amalgamation) or a sale of all or substantially
all of its property, assets and business shall be
proposed.

 

7.3 Notice
of Change in Exercise Price.
The Company shall, promptly after an event requiring a change in
the Exercise Price pursuant to Section 5 hereof, send notice to the
Holders of such event and change (“Price Notice”). The Price Notice shall describe the
event causing the change and the method of calculating same and
shall be certified as being true and accurate by the
Company’s Chief Financial Officer.

 

 

 

-7-

 

 

7.4 Transmittal
of Notices. All notices,
requests, consents and other communications under this Purchase
Warrant shall be in writing and shall be deemed to have been duly
made when hand delivered, or mailed by express mail or private
courier service: (i) if to the registered Holder of the Purchase
Warrant, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, to following address or to such
other address as the Company may designate by notice to the
Holders:

 

If to
the Holder:

____________

____________

____________

Attn:
[●] 

Email:

 

With a copy (which
shall not constitute notice) to:

 

Cozen
O’Connor 

33 South
6th
Street, Suite 3800 

Minneapolis,
Minnesota 55402 

Attn: Christopher
J. Bellini, Esq. 

Email: 

 

If to the
Company:

 

AzurRx BioPharma,
Inc. 

760 Parkside
Avenue 

Downstate
Biotechnology Incubator, Suite 304 

Brooklyn, New York
11226 

Attn: Chief
Executive Officer 

Email:

 

with a copy (which
shall not constitute notice) to:

 

Disclosure Law Group

655 West
Broadway Suite 870

San Diego, CA 92101

             
Attn: Jessica R. Sudweeks, Esq.

             
Email:

 

8. Miscellaneous.

 

8.1 Amendments.
The Company and Alexander Capital may from time to time supplement
or amend this Purchase Warrant without the approval of any of the
Holders in order to cure any ambiguity, to correct or supplement
any provision contained herein that may be defective or
inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder that
the Company and Alexander Capital may deem necessary or desirable
and that the Company and Alexander Capital deem shall not adversely
affect the interest of the Holders. All other modifications or
amendments shall require the written consent of and be signed by
the party against whom enforcement of the modification or amendment
is sought.

 

8.2 Headings.
The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of
this Purchase Warrant.

 

 

 

-8-

 

 

8.3 Entire
Agreement. This Purchase
Warrant (together with the other agreements and documents being
delivered pursuant to or in connection with this Purchase Warrant)
constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof, and supersedes all prior agreements
and understandings of the parties, oral and written, with respect
to the subject matter hereof.

 

8.4 Binding
Effect. This Purchase Warrant
shall inure solely to the benefit of and shall be binding upon, the
Holder and the Company and their permitted assignees, respective
successors, legal representative and assigns, and no other person
shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this
Purchase Warrant or any provisions herein
contained.

 

8.5 Governing
Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of
New York, without giving effect to conflict of laws principles
thereof. The Company hereby agrees that any action, proceeding or
claim against it arising out of, or relating in any way to this
Purchase Warrant shall be brought and enforced in the New York
Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an
inconvenient forum. Any process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered
or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 7 hereof. Such
mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The
Company and the Holder agree that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies)
all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and the Holder 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.

 

8.6 Waiver,
etc. The failure of the Company
or the Holder to at any time enforce any of the provisions of this
Purchase Warrant shall not be deemed or construed to be a waiver of
any such provision, nor to in any way affect the validity of this
Purchase Warrant or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every
provision of this Purchase Warrant. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this
Purchase Warrant shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such
breach, non-compliance or non-fulfillment shall be construed or
deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.

 

8.7 Execution
in Counterparts. This Purchase
Warrant may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of
the parties hereto and delivered to each of the other parties
hereto. Such counterparts may be delivered by facsimile
transmission or other electronic transmission.

 

[Signature
Page Follows]

 

 

 

-9-

 

 

IN
WITNESS WHEREOF, the Company has caused this Purchase Warrant to be
signed by its duly authorized officer as of the ______ day of
________________, 2019.

 

 

AZURRX
BIOPHARMA, INC.

 

By:                                                                

Name:

Title:

 

 

 

-10-

 

 

[Form
to be used to exercise Purchase Warrant]

 

Date:
_______________, 20___

 

 

The
undersigned hereby elects irrevocably to exercise the Purchase
Warrant for  shares of common stock,
par value $0.0001 per share (the “Shares”), of AzurRx BioPharma,
Inc., a Delaware corporation (the “Company”), and hereby makes
payment of $  (at the rate of $2.82 per Share) in payment of
the Exercise Price pursuant thereto. Please issue the Shares as to
which this Purchase Warrant is exercised in accordance with the
instructions given below and, if applicable, a new Purchase Warrant
representing the number of Shares for which this Purchase Warrant
has not been exercised.

 

or

 

The
undersigned hereby elects irrevocably to convert its right to
purchase ___ Shares of the Company under the Purchase Warrant for
______ Shares, as determined in accordance with the following
formula:

 

	

X
=   

	

Y(A-B)

	

    A

Where,

X = The
number of Shares to be issued to Holder;

Y = The
number of Shares for which the Purchase Warrant is being
exercised;

A = The
fair market value of one Share which is equal to $_____;
and

B = The
Exercise Price which is equal to $2.82 per share

 

The
undersigned agrees and acknowledges that the calculation set forth
above is subject to confirmation by the Company and any
disagreement with respect to the calculation shall be resolved by
the Company in its sole discretion.

 

Please
issue the Shares as to which this Purchase Warrant is exercised in
accordance with the instructions given below and, if applicable, a
new Purchase Warrant representing the number of Shares for which
this Purchase Warrant has not been converted.

 

 

Signature

 

Signature
Guaranteed

 

 

 

-11-

 

 

INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

 

Name:

 

(Print
in Block Letters)

 

Address:                                                                            

 

 

 

 

 

 

NOTICE:
The signature to this form must correspond with the name as written
upon the face of the Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm
having membership on a registered national securities
exchange.

 

 

-12-

 

 

[Form
to be used to assign Purchase Warrant]

 

ASSIGNMENT

 

 

(To be
executed by the registered Holder to effect a transfer of the
within Purchase Warrant):

 

FOR
VALUE RECEIVED, __________________ does hereby sell, assign and
transfer unto the right to purchase shares of common stock, par
value $0.0001 per share, of AzurRx BioPharma, Inc., a Delaware
corporation (the “Company”), evidenced by the
Purchase Warrant and does hereby authorize the Company to transfer
such right on the books of the Company.

 

Dated:
__________, 20__

 

Signature

 

Signature
Guaranteed                                                                                                 

 

NOTICE:
The signature to this form must correspond with the name as written
upon the face of the within Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm
having membership on a registered national securities
exchange.

 

 

 

-13-exhibit 10.1

 

Exhibit 10.1

 

AZURRX BIOPHARMA, INC.

 

SELLING
AGENT AGREEMENT

 

May 9,
2019

 

Alexander
Capital L.P.

As the
“Selling Agent”

17
State Street, 5th Floor

New
York, NY 10004

 

Ladies
and Gentlemen:

 

AzurRx
Biopharma, Inc., a corporation organized and existing under the
laws of State of Delaware (the “Company”), proposes to issue and
sell to the purchasers identified on Schedule A (each a
“Purchaser” and
collectively, the “Purchasers”), pursuant to the
terms and conditions of this Selling Agent Agreement (this
“Agreement”), up
to an aggregate of $2,883,842.00 in shares (the “Shares”) of common stock, par
value $0.0001, of the Company (“Common Stock”). The Company hereby
confirms its agreement with Alexander Capital L.P. (the
“Selling Agent”)
to act as Selling Agent in accordance with the terms and conditions
hereof.

 

The
offering and sale of the Shares contemplated by this Agreement is
referred to herein as the “Offering.”

 

1. Registration
Statement and Prospectus.

 

The
Company has prepared and filed with the Securities and Exchange
Commission (the “Commission”) a registration
statement on Form S-3 (File No. 333- 226065) under the Securities
Act of 1933, as amended (the “Securities Act”) and the rules and
regulations (the “Rules and
Regulations”) of the Commission thereunder, and such
amendments to such registration statement (including post effective
amendments) as may have been required to the date of this Agreement
and a preliminary prospectus supplement or “red
herring” pursuant to Rule 424(b) under the Securities Act.
Such registration statement, as amended (including any post
effective amendments), has been declared effective by the
Commission. Such registration statement, including amendments
thereto (including any post effective amendments thereto) at the
time of effectiveness thereof (the “Effective Date”), the exhibits and
any schedules thereto at the Effective Date or thereafter during
the period of effectiveness and the documents and information
otherwise deemed to be a part thereof or included therein by the
Securities Act or otherwise pursuant to the Rules and Regulations
at the Effective Date or thereafter during the period of
effectiveness, is herein called the “Registration Statement.” If the
Company has filed or files an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the
“Rule 462 Registration
Statement”), then any reference herein to the term
Registration Statement shall include such Rule 462 Registration
Statement.

 

The
Company is filing with the Commission pursuant to Rule 424 under
the Securities Act a final prospectus supplement relating to the
Shares to a form of prospectus included in the Registration
Statement. The form of prospectus included in the Registration
Statement at the time it was declared effective, as it may have
been amended, modified or supplemented and filed with the
Commission after such effective date and prior to the date hereof
pursuant to Rule 424(b), is hereinafter called the
“Base
Prospectus,” and such final prospectus supplement, as
filed, along with the Base Prospectus, is hereinafter called the
“Final
Prospectus.” Such Final Prospectus and any preliminary
prospectus supplement or “red herring” relating to the
Shares in the form in which they shall be filed with the Commission
pursuant to Rule 424(b) under the Securities Act (including the
Base Prospectus as so supplemented) is hereinafter called a
“Prospectus.”
For purposes of this Agreement, “Applicable Time”, as used in the
Act, means 8:00 a.m., New York City time, on the date of this
Agreement.

 

 

-1-

 

 

For
purposes of this Agreement, all references to the Registration
Statement, the Rule 462 Registration Statement, the Base
Prospectus, the Final Prospectus, the Prospectus or any amendment
or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Interactive Data
Electronic Applications system. All references to a Prospectus
shall include all documents and information otherwise deemed to be
a part thereof or included therein by the Securities Act or
otherwise pursuant to the Rules and Regulations. All references in
this Agreement to amendments or supplements to the Registration
Statement, the Rule 462 Registration Statement, the Base
Prospectus, the Final Prospectus or the Prospectus shall be deemed
to mean and include the subsequent filing of any document under the
Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
that is deemed to be incorporated by reference therein or otherwise
deemed by the Rules and Regulations to be a part
thereof.

 

2. Selling Agent.

 

2.1 Appointment
of Selling Agent.

 

(a) The Company hereby
authorizes the Selling Agent to act as its exclusive agent to
solicit offers on a best efforts basis for the purchase of all or
part of the Shares from the Company in connection with the proposed
Offering of the Shares. Until the Closing Date (as defined below)
or earlier upon termination of this Agreement pursuant to
Section 8.2, the Company shall not,
without the prior written consent of the Selling Agent, solicit or
accept offers to purchase the Shares otherwise than through the
Selling Agent.

 

(b) The Company hereby
acknowledges that the Selling Agent has agreed, as agent of the
Company, to use its reasonable and best efforts to solicit offers
to purchase the Shares from the Company on the terms and subject to
the conditions set forth in the Prospectus (as defined below). The
Selling Agent shall use reasonable efforts to assist the Company in
obtaining performance by each Purchaser whose offer to purchase
Shares has been solicited by the Selling Agent and accepted by the
Company, but the Selling Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity
of any potential purchaser or have any liability to the Company in
the event any such purchase is not consummated for any reason.
Under no circumstances will the Selling Agent be obligated to
underwrite or purchase any Shares for its own account and, in
soliciting purchases of the Shares, the Selling Agent shall act
solely as the Company’s agent and not as
principal.

 

(c) Subject to the
provisions of this Section 2, offers for the purchase
of the Shares may be solicited by the Selling Agent as agent for
the Company at such times and in such amounts as the Selling Agent
deems advisable. The Selling Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase
Shares received by it as agent of the Company. The Company shall
have the sole right to accept offers to purchase Shares and may
reject any such offer, in whole or in part. The Selling Agent shall
have the right, in its discretion reasonably exercised, without
notice to the Company, to reject any offer to purchase Shares
received by it, in whole or in part, and any such rejection shall
not be deemed a breach of this Agreement.

 

2.2 Share
Payment and Compensation.

 

(a) The Shares are
being sold to the Purchasers at the following offering price: $2.35
per share of Common Stock (the “Purchase Price”).

 

 

 

-2-

 

 

(b) No Shares which the
Company has agreed to sell pursuant to this Agreement shall be
deemed to have been purchased and paid for, or sold by the Company,
until such Shares shall have been delivered to the Purchaser
thereof against payment by such Purchaser. If the Company shall
default in its obligations to deliver Shares to a Purchaser whose
offer it has accepted, the Company shall indemnify and hold the
Selling Agent harmless against any loss, claim, damage or expense
arising from or as a result of such default by the Company in
accordance with the procedures set forth in this
Agreement.

 

(c) As compensation for
services rendered, on the Closing Date (as defined in Section 2.3 hereof), the Company
shall pay to the Selling Agent by wire transfer of immediately
available funds to an account or accounts designated by the Selling
Agent, a cash fee (the “Selling Fee”) in an aggregate
amount equal to seven percent (7%) of the gross proceeds received
by the Company from the sale of the Shares on such Closing Date.
The Selling Agent may retain other brokers or dealers to act as
sub-agents on its behalf in connection with the Offering, the fees
of which shall be paid out of the Selling Fee. The Selling Fee
shall be contingent upon the successful completion and closing of
the Offering.

 

(d) The Company also
hereby agrees to issue and sell to the Selling Agent (and/or its
designee) on the Closing Date an option (“Selling Agent’s Warrants”)
for the purchase of an aggregate of 36,815 shares of Common Stock,
representing 3% of the Shares, for an aggregate purchase price of
$100.00. The Selling Agent’s Warrant agreement, in the form
attached hereto as Exhibit
A (the “Selling
Agent’s Warrant Agreement”), shall be
exercisable, in whole or in part, commencing on a date which is one
(1) year after the Effective Date and expiring on the five-year
anniversary of the Effective Date at an initial exercise price per
share of Common Stock of $2.82, which is equal to 120% of price at
which the Shares are convertible to Common Stock. The Selling Agent
understands and agrees that there are significant restrictions
pursuant to FINRA Rule 5110 against transferring the Selling
Agent’s Warrant Agreement and the underlying shares of Common
Stock during the one hundred eighty (180) days after the Effective
Date and by its acceptance thereof shall agree that it will not
sell, transfer, assign, pledge or hypothecate the Selling
Agent’s Warrant Agreement, or any portion thereof, or be the
subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition
of such securities for a period of one hundred eighty (180) days
following the Effective Date to anyone other than (i) a selected
dealer in connection with the Offering, or (ii) a bona fide officer
or partner of the Selling Agent or of any such selected dealer; and
only if any such transferee agrees to the foregoing lock-up
restrictions.

 

(e) Delivery of the
Selling Agent’s Warrant Agreement shall be made on the
Closing Date and shall be issued in the name or names and in such
authorized denominations as the Selling Agent may request in
writing.

 

(f) The Company agrees
that the Selling Agent and the Selling Agent’s affiliates
shall have a right, but not an obligation, to purchase shares of
Common Stock for their own account, and that any such purchase
shall not constitute a conflict of interest for purposes of the
Selling Agent’s engagement.

 

2.3 Delivery and
Payment.. The Shares shall
be delivered to such persons, through the facilities of DTC or by
delivery of a certificate. Prior to the completion of the purchase
and sale of the Shares pursuant to this Agreement, each Purchaser
shall deliver by wire transfer of immediately available funds, to
an account designated in writing by the Company, an amount equal to
the product of (x) the number of Shares such Purchaser has agreed
to purchase and (y) the Purchase Price. On the Closing Date, upon
satisfaction or waiver of all of the conditions to Closing, the
Company shall cause the Shares to be delivered to the Purchasers
through the facilities of DTC or by irrevocably instructing the
Transfer Agent (as defined below) to issue certificates
representing such Shares. Such date of delivery is hereinafter
referred to as the “Closing
Date”.

 

 

 

-3-

 

 

3. Representations
and Warranties of the Company

 

. The
Company represents and warrants, as of the date hereof and as of
the Closing Date (as defined below), to the following:

 

3.1 Filing
of Registration Statement.

 

3.1.1 Form
S-3. The Company has filed the Registration Statement under
the Securities Act and the Rules and Regulations of the Commission
thereunder, and such amendments to such Registration Statement
(including post effective amendments) as may have been required to
the date of this Agreement and a preliminary prospectus supplement
or “red herring” pursuant to Rule 424(b) under the
Securities Act. Such Registration Statement, as amended (including
any post effective amendments), has been declared effective by the
Commission. All of the Shares have been registered under the
Securities Act pursuant to the Registration Statement or, if any
Rule 462(b) Registration Statement is filed, will be duly
registered under the Securities Act with the filing of such Rule
462(b) Registration Statement. The Registration Statement has been
declared effective by the Commission, except for any Rule 462(b)
Registration Statement, which will be effective upon
filing.

 

3.1.2 Registration
under the Exchange Act and Stock Exchange Listing. The
Company has filed with the Commission a Form 8-A12B (File Number
001- 38148), as amended, providing for the registration under the
Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
of the Common Stock. The registration of the Shares under the
Exchange Act is effective. The Common Stock is registered pursuant
to Section 12(b) of the Exchange Act and has been approved for
listing on The NASDAQ Capital Market (“NASDAQ”), subject to official
notice of issuance and evidence of satisfactory distribution, and
the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under
the Exchange Act or delisting the Common Stock from NASDAQ, nor has
the Company received any notification that the Commission or NASDAQ
is contemplating terminating such registration or listing except as
described in the Registration Statement and
Prospectus.

 

3.2 No
Stop Orders, etc. Neither the
Commission nor, to the Company’s knowledge, any state
regulatory authority has issued any order preventing or suspending
the use of any Prospectus or the Registration Statement or has
instituted or, to the Company’s knowledge, threatened to
institute any proceedings with respect to such an
order.

 

3.3 Disclosures
in Registration Statement.

 

3.3.1 10b-5 Representation. At the
time of effectiveness of the Registration Statement (or at the
effective time of any post-effective amendment to the Registration
Statement) and at all times subsequent thereto up to the Closing
Date, the Registration Statement and the Prospectus contained or
will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and did or
will, in all material respects, conform to the requirements of the
Act and the Regulations. On the Effective Date, the Registration
Statement did 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 not misleading.
As of the Closing Date, the Prospectus (together with any
supplement thereto) did not and will not include any 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. As of
the Applicable Time, the Prospectus did not include any 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. The
representations and warranties made in this Section 3.3.1 do not apply to
statements made or statements omitted in reliance upon and in
conformity with written information furnished to the Company with
respect to the Selling Agent by the Selling Agent expressly for use
in the Registration Statement or Prospectus or any amendment
thereof or supplement thereto, which information, it is agreed,
shall consist solely of (i) the names of the Selling Agent
appearing under “Plan of Distribution” and (ii)
information under “Electronic Offer, Sale and Distribution of
Common Stock” (“Selling
Agent’s Information”).

 

 

 

-4-

 

 

3.3.2 Disclosure
of Agreements. The agreements and documents described in the
Registration Statement and the Prospectus conform to the
descriptions thereof contained therein and there are no agreements
or other documents required to be described in the Registration
Statement or the Prospectus or to be filed with the Commission as
exhibits to the Registration Statement, that have not been so
described or filed. Each agreement or other instrument (however
characterized or described) to which the Company is a party or by
which its property or business is or may be bound or affected and
(i) that is referred to in the Registration Statement or attached
as an exhibit thereto, or (ii) is material to the Company’s
business, has been duly and validly executed by the Company, is in
full force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the
other parties thereto, in accordance with its terms, except (x) as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought, and none of such
agreements or instruments has been assigned by the Company, and
neither the Company nor, to the Company’s knowledge, any
other party is in material breach or default thereunder and, to the
Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a
material breach or default thereunder. To the Company’s
knowledge, performance by the Company of the material provisions of
such agreements or instruments will not result in a material
violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of
its assets or businesses, including, without limitation, those
relating to environmental laws and regulations.

 

3.3.3 Form
S-3. The Company satisfies all of the requirements of the
Act for use of Form S-3 for the offering of Common Stock
contemplated hereby. The aggregate market value of securities sold
by or on behalf of the Company under the Registration Statement
during the 12 month period immediately prior to, and including, the
sale of the Shares pursuant to this Agreement is no more than
one-third of the aggregate market value of the voting and
non-voting common equity held by non-affiliates of the Company, as
determined pursuant to General Instruction I.B.6 of Form
S-3.

 

3.3.4 Regulations.
The disclosures in the Registration Statement and the Prospectus
concerning the effects of Federal, state and local regulation on
the Company’s business as currently contemplated fairly
summarize, to the Company’s knowledge, such effects and do
not omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading.

 

3.3.5 Issuer
Free Writing Prospectuses. The Company has not made any
offer relating to the Shares that would constitute an “issuer
free writing prospectus” (as defined in Rule 433 of the
Regulations) or that would otherwise constitute a “free
writing prospectus,” or a portion thereof, required to be
filed by the Company with the Commission or retained by the Company
under Rule 433 of the Regulations.

 

3.3.6 Forward-Looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the Act and Section 21E of the Exchange Act)
contained in the Registration Statement and the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.

 

 

 

-5-

 

 

3.4 Changes
after Dates in Registration Statement.

 

3.4.1 No
Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise specifically stated therein: (i)
there has been no material adverse change in the condition,
financial or otherwise, of the Company (a “Material Adverse Effect”); (ii)
there have been no material transactions entered into by the
Company, other than as contemplated pursuant to this Agreement;
(iii) no member of the Company’s board of directors or
management has resigned from any position with the Company; and
(iv) no event or occurrence has taken place which materially
impairs, or would likely materially impair, with the passage of
time, the ability of the members of the Company’s board of
directors or management to act in their capacities with the Company
as described in the Registration Statement and the
Prospectus.

 

3.4.2 Recent Securities Transactions,
etc. Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not: (i) issued any
securities (other than shares of Common Stock that may be issued
upon conversion of the Company’s outstanding indebtedness) or
incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made any
other distribution on or in respect to its capital
stock.

 

3.5 Independent
Accountants. To the knowledge
of the Company, Mazars USA LLP (“Mazars”), whose report is filed
with the Commission as part of the Registration Statement and the
Prospectus, are independent registered public accountants as
required by the Act and the Regulations. To the knowledge of the
Company, Mazars is registered with and in good standing with the
PCAOB. Except for the preparation of federal tax returns, Mazars
has not, during the periods covered by the financial statements
included in the Registration Statement and the Prospectus, provided
to the Company any non-audit services, as such term is used in
Section 10A(g) of the Exchange Act.

 

3.6 Financial
Statements, Statistical Data.

 

3.6.1 Financial
Statements. Excluding any pro forma information and the
notes and assumptions thereto, the financial statements, including
the notes thereto and supporting schedules, if any, included in the
Registration Statement and the Prospectus fairly present in all
material respects the financial position and the results of
operations of the Company at the dates and for the periods to which
they apply; and such financial statements have been prepared in
conformity with United States generally accepted accounting
principles (“GAAP”), consistently applied
throughout the periods involved. The Registration Statement and the
Prospectus disclose all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and
other relationships of the Company with unconsolidated entities or
other persons that may have a material current effect on the
Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or
expenses. Except as disclosed in the Registration Statement and the
Prospectus, (a) the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into
any material transactions, other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or
made any distribution of any kind with respect to its capital
stock, except as disclosed in Section 3.4.2, (c) there has not
been any change in the capital stock of the Company or any material
additional grants under any stock compensation plan and, (d) there
has not been any material adverse change in the Company’s
long-term or short-term debt.

 

 

 

-6-

 

 

3.6.2 Statistical
Data. The statistical, industry-related and market-related
data included in the Registration Statement and the Prospectus are
based on or derived from sources which the Company reasonably and
in good faith believes are reliable and accurate, and such data
agree with the sources from which they are derived.

 

3.7 Authorized
Capital; Options, etc

. The
Company had at the date or dates indicated in each of the
Registration Statement and the Prospectus, as the case may be, duly
authorized, issued and outstanding capitalization as set forth
therein. Based on the assumptions stated in the Registration
Statement and the Prospectus, the Company will have on the Closing
Date the adjusted stock capitalization set forth therein. Other
than as disclosed in the Registration Statement and the Prospectus
on the Effective Date and the Closing Date, there will be no
material increase in the options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued Common
Stock of the Company or any security convertible into Common Stock
of the Company, or any contracts or commitments to issue or sell
Common Stock or any such options, warrants, rights or convertible
securities.
 

3.8 Valid
Issuance of Securities, etc.

 

3.8.1 Outstanding
Securities. All issued and outstanding securities of the
Company issued prior to the transactions contemplated by this
Agreement have been duly authorized and validly issued and, with
respect to all issued and outstanding shares of capital stock of
the Company, are fully paid and non-assessable; to the
Company’s knowledge, the holders thereof have no rights of
rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such
securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual
rights granted by the Company. The authorized shares of Common
Stock conform in all material respects to all statements relating
thereto contained in the Registration Statement and the Prospectus.
The offers and sales of the outstanding securities were at all
relevant times either registered under the Act and the applicable
state securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers of such
securities, exempt from such registration
requirements.

 

3.8.2 Shares
Sold Pursuant to this Agreement. The Shares have been duly
authorized and reserved for issuance and when issued and paid for
in accordance with this Agreement, will be validly issued, fully
paid and non-assessable; the holders thereof are not and will not
be subject to personal liability by reason of being such holders;
the Shares are not and will not be subject to the preemptive rights
of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action
required to be taken for the authorization, issuance and sale of
the Shares has been duly and validly taken. The Shares conform in
all material respects to all statements with respect thereto
contained in the Registration Statement and the Prospectus, as the
case may be.

 

3.8.3 No
Integration. Neither the Company nor any of its affiliates
has, prior to the date hereof, made any offer or sale of any
securities which are required to be “integrated”
pursuant to the Act or the Regulations with the offer and sale of
the Shares pursuant to the Registration Statement.

 

3.9 Registration
Rights of Third Parties

. Except as set
forth in the Registration Statement or the Prospectus or as to
which a registration statement has been filed under the Act, no
holders of any securities of the Company or any rights exercisable
for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such
securities of the Company under the Act or to include any such
securities in a registration statement to be filed by the
Company.

 

 

 

-7-

 

 

3.10 Validity
and Binding Effect of Agreements. This Agreement
has been duly and validly authorized by the Company, and, when
executed and delivered by the Company and the other parties
thereto, will constitute, the valid and binding agreements of the
Company, enforceable against the Company in accordance with their
respective terms, except: (i) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any
indemnification or contribution provision may be limited under the
federal and state securities laws; and (iii) that the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefore may
be brought.

 

3.11 No
Conflicts, etc. The execution,
delivery, and performance by the Company of this Agreement, the
consummation by the Company of the transactions herein and therein
contemplated and the compliance by the Company with the terms
hereof and thereof do not and will not, with or without the giving
of notice or the lapse of time or both: (i) result in a material
breach of, or conflict with any of the terms and provisions of, or
constitute a material default under, or result in the creation,
modification, termination or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to
the terms of any agreement or instrument to which the Company is a
party; (ii) result in any violation of the provisions of the
Company’s Certificate of Incorporation (as the same may be
amended from time to time, the “Certificate of Incorporation”); or
(iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or body or
court, domestic or foreign, having jurisdiction over the Company or
any of its properties or business constituted as of the date
hereof.

 

3.12 No
Defaults; Violations. No material
default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any
other agreement or instrument evidencing an obligation for borrowed
money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which
any of the properties or assets of the Company is subject. The
Company is not in material violation of any term or provision of
its Certificate of Incorporation, or in material violation of any
franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any governmental agency or body or court,
domestic or foreign, having jurisdiction over the Company or any of
its properties or businesses.

 

3.13 Corporate
Power; Licenses; Consents

 

3.13.1 Conduct of Business. The
Company has all requisite corporate power and authority, and has
all necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory
officials and bodies that it needs as of the date hereof to conduct
its business purpose as described in the Registration Statement and
the Prospectus (the “Authorization”), except where the
absence of the Authorization would not have a Material Adverse
Effect. To the knowledge of the Company, the disclosures in the
Registration Statement and the Prospectus concerning the effects of
foreign, federal, state and local regulation on this Offering and
the Company’s business purpose as currently contemplated are
correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

 

 

-8-

 

 

3.13.2 Transactions
Contemplated Herein. The Company has all corporate power and
authority to enter into this Agreement and to carry out the
provisions and conditions hereof and thereof, and all consents,
authorizations, approvals and orders required in connection
therewith have been obtained. No consent, authorization or order
of, and no filing with, any court, government agency or other body
is required for the valid issuance, sale and delivery of the Shares
and the consummation of the transactions and agreements
contemplated by this Agreement except with respect to applicable
federal and state securities laws and the rules and regulations of
the Financial Industry Regulatory Authority, Inc.
(“FINRA”).

 

3.14 D&O
Questionnaires. To the knowledge
of the Company, all information contained in the questionnaires
(the “Questionnaires”) completed by each
of the Company’s directors and officers and 5% and greater
shareholders (the “Insiders”) is true and correct in
all material respects, and the Company has not become aware of any
information which would cause the information disclosed in the
Questionnaires completed by each Insider to become inaccurate and
incorrect. To the extent that information in the Registration
Statement and the Prospectus differs from the information provided
in a Questionnaire, the information in the Registration Statement
and the Prospectus will be deemed to supersede and replace the
information in the Questionnaires.

 

3.15 Litigation;
Governmental Proceedings. There is no
action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the
Company’s knowledge, threatened against, or involving the
Company or, to the Company’s knowledge, any Insider which has
not been disclosed in the Registration Statement and the
Prospectus. There is no proceeding, inquiry or investigation, other
than the listing application of the Company, pending, or, to the
Company’s knowledge, threatened against or involving the
Company or, to the Company’s knowledge, any
Insider.

 

3.16 Good
Standing. The Company has
been duly organized and is validly existing as a corporation and is
in good standing under the laws of the State of Delaware as of the
date hereof, and is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification,
except where the failure to qualify would not have a Material
Adverse Effect on the assets, business or operations of the
Company.

 

3.17 Transactions
Affecting Disclosure to FINRA.

3.17.1 Finder’s
Fees. Except as described in the Registration Statement and
the Prospectus, there are no claims, payments, arrangements,
agreements or understandings relating to the payment of a
finder’s, consulting or origination fee by the Company or any
Insider with respect to the sale of the Shares hereunder or any
other arrangements, agreements or understandings of the Company or,
to the Company’s knowledge, any of its stockholders that may
affect the Selling Agents’ compensation, as determined by
FINRA.

 

3.17.2 Payments
Within 180 Days. Except as described in the Registration
Statement and the Prospectus, the Company has not made any direct
or indirect payments (in cash, securities or otherwise) to: (i) any
person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital
to the Company; (ii) to any FINRA member; or (iii) to the knowledge
of the Company, to any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within
the 180-day period prior to the initial filing of the Registration
Statement, other than, in each case, payments to the Selling Agent.
Except as described in the Registration Statement and the
Prospectus, no officer, director, or beneficial owner of 5% or more
of any class of the Company’s securities (whether debt or
equity, registered or unregistered, regardless of the time acquired
or the source from which derived) (any such individual or entity, a
“Company
Affiliate”) is a member, a person associated, or
affiliated with a member of FINRA. For purposes of the meaning of
“beneficial owner” as used in this Section, the
definition of Rule 13d-3, promulgated by the SEC under the Exchange
Act shall apply.

 

 

 

-9-

 

 

3.17.3 Company
Affiliate Membership. Except as described in the
Registration Statement and the Prospectus, to the knowledge of the
Company, no Company Affiliate is an owner (of record or
beneficially) of stock or other securities of any member of FINRA
(other than securities purchased on the open market).

 

3.17.4 Subordinated
Loans. Except as described in the Registration Statement and
the Prospectus, to the knowledge of the Company, no Company
Affiliate has made a subordinated loan to any member of
FINRA.

 

3.17.5 Use
of Proceeds. Except as described in the Registration
Statement and the Prospectus, no proceeds from the sale of the
Shares will be paid to any FINRA member or to any persons
associated or affiliated with a member of FINRA, except as
specifically authorized herein.

 

3.17.6 No
other Options, etc. The Company has not issued any warrants
or other securities, or granted any options, directly or indirectly
to anyone who is a potential selected dealer in the Offering or a
related person (as defined by FINRA rules) of such selected dealer
within the 180-day period prior to the date of the
Prospectus.

 

3.17.7 FINRA
Relationship. Except as described in the Registration
Statement and the Prospectus, to the knowledge of the Company, no
person to whom securities of the Company have been privately issued
within the 180-day period prior to the initial filing date of the
Registration Statement has any relationship or affiliation or
association with any member of FINRA, other than such issuances to
the Selling Agent.

 

3.17.8 FINRA
Conflicts. Except as described in the Registration Statement
and the Prospectus, no FINRA member intending to participate in the
Offering has a conflict of interest with the Company. For this
purpose, a “conflict of interest” exists when a member
of FINRA and its associated persons, parent or affiliates in the
aggregate beneficially own 10% or more of the Company’s
outstanding subordinated debt or common equity, or 10% or more of
the Company’s preferred equity. “Members participating
in the Offering” include managing agents, syndicate group
members and all dealers which are members of FINRA.

 

3.17.9 Other
Arrangements. Except as described in the Registration
Statement and the Prospectus and except with respect to the Selling
Agent in connection with the Offering, the Company has not entered
into any agreement or arrangement (including, without limitation,
any consulting agreement or any other type of agreement) during the
180-day period prior to the initial filing date of the Registration
Statement, which arrangement or agreement provides for the receipt
of any item of value and/or the transfer of any warrants, options,
or other securities from the Company to a FINRA member or, the
knowledge of the Company, any person associated with a member (as
defined by FINRA rules), any potential selected dealer in the
Offering and any related persons, other than such arrangements with
the Selling Agent.

 

3.18 Foreign
Corrupt Practices Act. Neither the
Company, nor to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company, is aware of
or has taken any action directly or indirectly, that would result
in a material violation by such persons of the FCPA (as defined
below), including, without limitation, making use of the mails or
any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA and the Company has conducted its business in compliance in
all material respects with the FCPA and instituted and maintained
policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance in
all material respects therewith. “FCPA” means the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder.

 

 

 

-10-

 

 

3.19 Money
Laundering Laws. Neither the
Company nor to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company has made any payment of
funds of the Company or received or retained any funds in violation
of any law, rule or regulation relating to the “know your
customer” and anti-money laundering laws of any United States
or non-United States jurisdiction (collectively, the
“Money Laundering
Laws”) and no action, suit or proceeding by or before
any governmental agency or body involving the Company with respect
to the Money Laundering Laws is pending or, to the Company’s
knowledge, threatened.

 

3.20 OFAC.
Neither the Company nor to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company is
currently the target of or reasonably likely to become the target
of any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the Offering, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently the
target of any U.S. sanctions administered by OFAC.

 

3.21 Officers’
Certificate. Any certificate
signed by any duly authorized officer of the Company and delivered
to you shall be deemed a representation and warranty by the Company
to the Selling Agents as to the matters covered
thereby.

 

3.22 Lock-Up
Period. At the Closing
Date, each of the Company’s officers and directors and each
beneficial owner of the Company’s outstanding Common Stock
(or securities convertible into Common Stock at any time) listed on
Schedule B
(together the “Lock-Up
Parties”) will have agreed pursuant to executed
Lock-Up Agreements (in the form of Exhibit B) that for a period of
one hundred and twenty (120) days from the date of this Agreement
(the “Lock-Up
Period”) which may be extended under certain
circumstances as set forth in the Lock-Up Agreement, such persons
and their affiliated parties shall not offer, pledge, sell,
contract to sell, grant, lend or otherwise transfer or dispose of,
directly or indirectly, any Common Stock, or any securities
convertible into or exercisable or exchangeable for Common Stock,
without the consent of the Selling Agent, except for the exercise
or conversion of currently outstanding warrants, options and
convertible debentures, as applicable and the exercise of options
under an acceptable stock incentive plan. The Selling Agent may
consent to an early release from the applicable Lock-Up Period. The
Company will cause each of the Lock-Up Parties to deliver to the
Selling Agent the agreements of each of the Lock-Up Parties to the
foregoing effect prior to the Closing Date.

 

3.23 Subsidiaries.
Except as described in the Registration Statement and Prospectus,
the Company does not have any significant direct or indirect
subsidiary.

 

3.24 Related
Party Transactions. There is no
relationship, direct or indirect, exists between or among any of
the Company or any Company Affiliate, on the one hand, and any
director, officer, shareholder, customer or supplier of the Company
or any Company Affiliate, on the other hand, which is required by
the Act, the Exchange Act or the Regulations to be described in the
Registration Statement and the Prospectus that is not so described
and described as required. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary
course of business), credit arrangements, or guarantees of
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of their respective
family members.

 

 

 

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3.25 Board
of Directors. The Board of
Directors of the Company is comprised of the persons set forth in
the Prospectus. The qualifications of the persons serving as board
members and the overall composition of the board comply with the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
applicable to the Company and the rules of NASDAQ. At least one
member of the Board of Directors of the Company qualifies as a
“financial expert” as such term is defined under the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and
the rules of NASDAQ. In addition, at least a majority of the
persons serving on the Board of Directors qualify as
“independent” as defined under the rules of
NASDAQ.

 

3.26 Sarbanes-Oxley
Compliance.

3.26.1 Disclosure Controls. The
Company has developed and currently maintains disclosure controls
and procedures that will comply with Rule 13a-15 or 15d-15 of the
Exchange Act, and such controls and procedures are effective to
ensure that all material information concerning the Company will be
made known on a timely basis to the individuals responsible for the
preparation of the Company’s Exchange Act filings and other
public disclosure documents.

 

3.26.2 Compliance. The Company is, or
on the Effective Date will be, in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 applicable to it, and
has implemented or will implement such programs and taken
reasonable steps to ensure the Company’s future compliance
(not later than the relevant statutory and regulatory deadlines
therefore) with all the provisions of the Sarbanes-Oxley Act of
2002.

 

3.27 No
Investment Company Status. The Company is
not and, after giving effect to the Offering and sale of the Shares
and the application of the proceeds thereof, will not be, an
“investment company” as defined in the Investment
Company Act of 1940, as amended.

 

3.28 No
Labor Disputes. No labor dispute
with the employees of the Company exists or, to the knowledge of
the Company, is imminent.

 

3.29 Employment
Laws Compliance. The Company has
not violated, or received notice of any violation with respect to,
any law, rule, regulation, order, decree or judgment applicable to
it and its business, including those relating to transactions with
affiliates, environmental, safety or similar laws, federal or state
laws relating to discrimination in the hiring, promotion or pay of
employees, federal or state wages and hours law, the Employee
Retirement Income Security Act of 1974, as amended, or the rules
and regulations promulgated thereunder, except for those violations
that would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

 

 

 

-12-

 

 

3.30 Intellectual
Property. Except as
described in the Registration Statement and the Prospectus, none of
the Intellectual Property (defined below) necessary for the conduct
of the business of the Company as currently carried on and as
contemplated by the Company, as described in the Registration
Statement and the Prospectus, are in dispute or are in any conflict
with the rights of any other person or entity. The Company (i) owns
or has the right to use, free and clear of all liens, charges,
claims, encumbrances, pledges, security interests, defects or other
restrictions or equities of any kind whatsoever, all of its
Intellectual Property and the licenses and rights with respect to
the foregoing, used in the conduct of the business of the Company
as currently carried on and contemplated by the Company, as
described in the Registration Statement and the Prospectus, without
infringing upon or otherwise acting adversely to the right or
claimed right of any person, corporation or other entity under or
with respect to any of the foregoing, and (ii) except as provided
in the material license agreements filed as exhibits to the
Registration Statement, is not obligated or under any liability
whatsoever to make any payment by way of royalties, fees or
otherwise to any owner or licensee of, or other claimant to, any
Intellectual Property with respect to the use thereof or in
connection therewith for the conduct of its business or otherwise.
For the purposes of this Section and this Agreement, the term
“Intellectual
Property” means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations in part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in
connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development,
know how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings,
diagrams, specifications, customer and supplier lists, catalogs,
pricing and cost information, and business and marketing plans and
proposals), (f) all computer software (including data and related
documentation) (whether purchased or internally developed), (g) all
information systems and management procedures, (h) all other
proprietary rights, and (h) all copies and tangible embodiments
thereof (in whatever form or medium).

 

3.31 Trade
Secrets, etc. The Company owns
or has the right to use all trade secrets, know-how (including all
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), inventions, designs,
processes, works of authorship, computer programs and technical
data and information that are material to the development,
manufacture, operation and sale of all products and services sold
or proposed to be sold by the Company, free and clear of and
without violating any right, lien, or claim of others, including
without limitation, former employers of its employees.

 

3.32 Taxes.
The Company has filed all returns (as hereinafter defined) required
to be filed with taxing authorities prior to the date hereof or has
duly obtained extensions of time for the filing thereof. The
Company has paid all taxes (as hereinafter defined) shown as due on
such returns that were filed and has paid all taxes imposed on or
assessed against the Company. The provisions for taxes payable, if
any, shown on the financial statements filed with or as part of the
Registration Statement are sufficient for all accrued and unpaid
taxes, whether or not disputed, and for all periods to and
including the dates of such consolidated financial statements.
Except as disclosed in writing to the Selling Agents, (i) no issues
have been raised (and are currently pending) by any taxing
authority in connection with any of the returns or taxes asserted
as due from the Company, and (ii) no waivers of statutes of
limitation with respect to the returns or collection of taxes have
been given by or requested from the Company. The term
“taxes” mean all
federal, state, local, foreign, and other net income, gross income,
gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees,
assessments, or charges of any kind whatever, together with any
interest and any penalties, additions to tax, or additional amounts
with respect thereto. The term “returns” means all returns,
declarations, reports, statements, and other documents required to
be filed in respect to taxes.

 

 

 

-13-

 

 

4. Covenants
of the Company. The Company
covenants and agrees as follows:

 

4.1 Amendments to Registration
Statement. The Company will
deliver to the Selling Agent, prior to filing, any amendment or
supplement to the Registration Statement or Prospectus proposed to
be filed after the Effective Date and not file any such amendment
or supplement to which the Selling Agent shall reasonably object in
writing.

 

4.2 Federal
Securities Laws.

4.2.1 Compliance.
During the time when a Prospectus is required to be delivered under
the Act, the Company will use its reasonable efforts to comply with
all requirements imposed upon it by the Act, the Regulations and
the Exchange Act and by the regulations under the Exchange Act, as
from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Shares in accordance
with the provisions hereof and the Prospectus. If at any time when
a Prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which,
in the opinion of counsel for the Company or Selling Agent’s
counsel, the Prospectus, as then amended or supplemented, includes
an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, or if it is necessary at any time
to amend the Prospectus to comply with the Act, the Company will
notify the Selling Agent promptly and prepare and file with the
Commission, subject to Section 4.1 hereof, an appropriate
amendment or supplement in accordance with Section 10 of the
Act.

 

4.2.2 Filing
of Final Prospectus. The Company will file the Prospectus
(in form and substance satisfactory to the Selling Agent) with the
Commission pursuant to the requirements of Rule 424 of the
Regulations.

 

4.2.3 Exchange
Act Registration. For a period of five (5) years from the
Effective Date, the Company will use its commercially reasonable
efforts to maintain the registration of the Common Stock under the
Exchange Act.

 

4.2.4 Sarbanes-Oxley
Compliance. The Company shall take all actions necessary to
maintain material compliance with each applicable provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated thereunder and related or similar rules and regulations
promulgated by any other governmental or self-regulatory entity or
agency with jurisdiction over the Company, including maintenance of
a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in
accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary in order
to permit preparation of financial statements in accordance with
GAAP and to maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.

 

4.2.5 Issuer
Free Writing Prospectuses. The Company agrees that it will
not make any offer relating to the Shares that would constitute an
issuer free writing prospectus or that would otherwise constitute a
“free writing prospectus,” or a portion thereof,
required to be filed by the Company with the Commission or retained
by the Company under Rule 433 of the Regulations.

 

 

 

-14-

 

 

4.3 Delivery
to the Selling Agent of Prospectuses. The Company will
deliver to the Selling Agent, without charge, from time to time
during the period when the Prospectus is required to be delivered
under the Act or the Exchange Act such number of copies of each
Prospectus as the Selling Agent may reasonably request and, as soon
as the Registration Statement or any amendment or supplement
thereto becomes effective, deliver to the Selling Agent two
original executed Registration Statements, including exhibits, and
all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all
original executed consents of certified experts.

 

4.4 Effectiveness and Events Requiring
Notice to the Selling Agent. The Company will
use its reasonable commercial efforts to cause the Registration
Statement to remain effective with a current prospectus through the
Closing Date and will promptly notify the Selling Agent and confirm
the notice in writing: (i) of the effectiveness of any amendment to
the Registration Statement; (ii) of the issuance by the Commission
of any stop order or of the initiation, or the threatening, of any
proceeding for that purpose; (iii) of the issuance by any state
securities commission of any proceedings for the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any
proceeding for that purpose; (iv) of the mailing and delivery to
the Commission for filing of any amendment or supplement to the
Registration Statement or Prospectus; (v) of the receipt of any
comments or request for any additional information from the
Commission; and (vi) of the happening of any event during the
period described in this Section 4.4 hereof that, in the
judgment of the Company, makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or
the Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If
the Commission or any state securities commission shall enter a
stop order or suspend such qualification at any time, the Company
will make every reasonable effort to obtain promptly the lifting of
such order.

 

4.5 Reports
to the Selling Agent.

4.5.1 Periodic Reports, etc. For a
period of five (5) years from the Effective Date, the Company will
furnish to the Selling Agent copies of such financial statements
and other periodic and special reports as the Company from time to
time furnishes generally to holders of any class of its securities
and also promptly furnish to the Selling Agent: (i) a copy of each
periodic report the Company shall be required to file with the
Commission; (ii) a copy of each Form 8-K prepared and filed by the
Company; (iii) a copy of each registration statement filed by the
Company under the Act; and (iv) such additional documents and
information with respect to the Company and the affairs of any
future Subsidiaries of the Company as the Selling Agent may from
time to time reasonably request. Documents filed with the
Commission pursuant to its EDGAR system shall be deemed to have
been delivered to the Selling Agent pursuant to this Section 4.5.1.

 

4.5.2 Transfer
Agent. For a period of five (5) years from the Effective
Date, the Company shall retain a transfer and registrar agent
reasonably acceptable to the Selling Agent (the “Transfer Agent”).

 

4.5.3 Due
Diligence. The Company shall cooperate with the Selling
Agent and furnish to, or cause to be furnished to, Selling Agent
any and all information as the Selling Agent deems appropriate and
shall make Company management reasonably available to Selling Agent
to enable Selling Agent to conduct a due diligence
review.

 

 

 

-15-

 

 

4.6 Payment
of General Expenses Related to the Offering.

 

4.6.1 Accountable
Expenses.

 

(a) The Company hereby
agrees to pay on the Closing Date all expenses typically borne by
issuers relating to the offering, including (i) all filing fees and
communication expenses relating to the registration of the Shares
with the Securities and Exchange Commission; (ii) all Public Filing
System filing fees associated with the review of the Offering by
FINRA; (iii) all fees and expenses relating to the listing of the
Common Stock on The NASDAQ Capital Market, (iv) all fees, expenses
and disbursements relating to the registration, qualification or
exemption of the Shares under the securities laws of such foreign
jurisdictions as the Company and the Selling Agent together
determine; (v) the costs of all mailing and printing of the
Registration Statement, the Prospectus and all amendments,
supplements and exhibits thereto (all in such quantities as
the Selling Agent may reasonably require); (vi) the costs of
preparing, printing and delivering certificates representing the
Shares; (vii) fees and expenses of the transfer agent for the
Shares; (viii) stock transfer and/or stamp taxes, if any, payable
upon the transfer of the Shares from the Company to the Selling
Agent; (ix) actual accountable road show expenses for the Offering;
(x) the cost associated with the Selling Agent’s use of
book-building and compliance software for the Offering; (xi) up to
$20,000 of the reasonable and documented fees and disbursements of
the Selling Agent’s counsel; and (xii) background checks of
the Company’s officers and
directors; provided, that the total actual
accountable expenses of the Selling Agent reimbursed under this
Section 4.6.1(a) (including Selling
Agent’s counsel expenses) shall not exceed
$50,000.

 

(b) In
the event of termination of this Agreement, any reimbursement of
expenses to the Selling Agent will be limited to those actually
incurred by the Selling Agent pursuant to FINRA Rule
5110(f)(2)(D)(i).

 

4.6.2 Non-Accountable Expenses. The
Company further agrees that, in addition to the expenses payable
pursuant to Section
4.6.1, on the Closing Date
it shall pay to the Selling Agent, by deduction from the net
proceeds of the Offering, a non-accountable expense allowance equal
to one percent (1.0%) of the gross proceeds received by the Company
from the sale of Shares in the Offering.

 

4.7 Application
of Net Proceeds. The section of
the Prospectus, “Use of Proceeds,” will indicate the
intended uses of the net proceeds from the Offering. The Company
will apply the net proceeds from the Offering received by it in a
manner consistent with the application described under the caption
“Use of Proceeds” in the Prospectus.

 

4.8 Delivery
of Earnings Statements to Security Holders. The Company will
make generally available to its security holders as soon as
practicable, but not later than the first day of the sixteenth full
calendar month following the Effective Date, an earnings statement
(which need not be certified by independent public or independent
certified public accountants unless required by the Act or the
Regulations, but which shall satisfy the provisions of Rule 158(a)
of the Regulations) covering a period of at least twelve
consecutive months beginning after the Effective Date.

 

4.9 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees,
directors or stockholders (without the consent of the Selling
Agent) has taken or will take, directly or indirectly, any action
designed to or that has constituted or that might reasonably be
expected to cause or result in, under the Exchange Act, or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.

 

 

 

-16-

 

 

4.10 Accountants.
The Company shall retain a nationally recognized independent
certified public accounting firm after the Effective Date. The
Selling Agent acknowledges that Mazars is acceptable to the Selling
Agent.

 

4.11 Director
and Officer Insurance. As of the Closing
Date, the Company will have obtained director and officer insurance
in an aggregate coverage amount of not less than $5,000,000, to be
effective as of the Closing Date, under a form of insurance policy
that is reasonably acceptable to the Selling Agent.

 

4.12 FINRA.
The Company shall advise the Selling Agent (who shall make an
appropriate filing with FINRA) if it becomes aware that any 5% or
greater stockholder of the Company becomes an affiliate or
associated person of a FINRA member participating in the
distribution of the Shares.

 

4.13 Electronic
Prospectus. The Company shall
cause to be prepared and delivered to the Selling Agent, at the
Company’s expense, promptly, but in no event later than one
(1) Business Day from the effective date of this Agreement, an
Electronic Prospectus to be used by the Selling Agents in
connection with the Offering. As used herein, the term
“Electronic
Prospectus” means a form of prospectus, and any
amendment or supplement thereto, that meets each of the following
conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Selling Agent, that may be transmitted
electronically by any other selected dealer to offerees and
purchasers of the Shares for at least the period during which a
prospectus relating to the Shares is required to be delivered under
the Act; (ii) it shall disclose the same information as the paper
prospectus and prospectus filed pursuant to EDGAR, except to the
extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall
be replaced in the electronic prospectus with a fair and accurate
narrative description or tabular representation of such material,
as appropriate; and (iii) it shall be in or convertible into a
paper format or an electronic format, satisfactory to the Selling
Agent, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time,
without charge to such recipients (other than any fee charged for
subscription to the Internet as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to EDGAR or otherwise with the Commission
and in the Registration Statement at the time it was declared
effective an undertaking that, upon receipt of a request by an
investor or his or her representative within the period when a
prospectus relating to the Shares is required to be delivered under
the Act, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the
Prospectus.

 

5. Conditions
of Selling Agent’s Obligations. The time and date
of closing and delivery of the documents required to be delivered
to the Selling Agent on the Closing Date shall be at to the offices
of Cozen O’Connor. The several obligations of the Selling
Agent, as provided herein, shall be subject to (i) the continuing
accuracy of the representations and warranties of the Company as of
the date hereof and, as of each of the Closing Date; (ii) the
accuracy of the statements of officers of the Company made pursuant
to the provisions hereof; (iii) the performance by the Company of
its obligations hereunder, and (iv) the following
conditions:

 

5.1 Regulatory
Matters.

5.1.1 Effectiveness
of Registration Statement. The Registration Statement shall
be effective on the date of this Agreement, and, at each of the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or shall be pending or
contemplated by the Commission and any request on the part of the
Commission for additional information shall have been complied
with.

 

 

 

-17-

 

 

5.1.2 FINRA
Clearance. By the Effective Date, the Selling Agent shall
have received clearance from FINRA as to the amount of compensation
allowable or payable to the Selling Agent as described in the
Registration Statement.

 

5.1.3 Exchange Stock Market
Clearance. On the Closing Date, to the extent a notice
filing is required under the NASDAQ listing rules, NASDAQ shall
have notified the Company that it has completed its review of the
Offering of the Shares.

 

5.2 Company
Counsel Matters.

 

5.2.1 Closing Date Opinion of
Counsel. On the Closing Date, the Selling Agent shall have
received the opinion of Disclosure Law Group, counsel to the
Company, addressed to the Selling Agent, dated the Closing Date and
in form and substance reasonably satisfactory to the Selling
Agent.

 

5.2.2 Reliance. In rendering such
opinions, such counsel may rely: (i) as to matters involving the
application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such
counsel deems proper and to the extent specified in such opinion,
if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to the Selling Agent) of other counsel
reasonably acceptable to the Selling Agent, familiar with the
applicable laws; and (ii) as to matters of fact, to the extent they
deem proper, on certificates or other written statements of
officers of the Company and officers of departments of various
jurisdiction having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of
any such statements or certificates shall be delivered to Selling
Agent’s counsel if requested.

 

5.3 Cold Comfort Letter. On the
Closing Date, the Selling Agent shall have received a cold comfort
letter, addressed to it, and in form and substance reasonably
satisfactory in all respects to the Selling Agent from Mazars,
dated as of the Closing Date.

 

5.4 Company
Certificates.

 

5.4.1 Officers’
Certificate. On the Closing Date, the Selling Agent shall
have received a certificate of the Company signed by the Chief
Executive Officer of the Company, dated the Closing Date, to the
effect that the Company has performed all covenants and complied
with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date,
and that the conditions set forth in Section 5.5 hereof have been satisfied
as of such date and that, as of the Closing Date, the
representations and warranties of the Company set forth in
Section
3 hereof are true
and correct. In addition, the Selling Agent shall have received
such other and further certificates of officers of the Company as
the Selling Agent may reasonably request.

 

5.4.2 Secretary’s
Certificate. On the Closing Date, the Selling Agent shall
have received a certificate of the Company signed by the Secretary
or Assistant Secretary of the Company, dated the Closing Date,
certifying: (i) that the Certificate of Incorporation are true and
complete, have not been modified and is in full force and effect;
(ii) that the resolutions of the Company’s Board of Directors
relating to the Offering contemplated by this Agreement are in full
force and effect and have not been modified; (iii) as to the
accuracy and completeness of all correspondence between the Company
or its counsel and the Commission; and (iv) as to the incumbency of
the officers of the Company. The documents referred to in such
certificate shall be attached to such certificate.

 

 

 

-18-

 

 

5.5 No
Material Changes. Prior to and on
the Closing Date: (i) there shall have been no material adverse
change or development involving a prospective material adverse
change in the condition or the business activities, financial or
otherwise, of the Company from the latest dates as of which such
condition is set forth in the Registration Statement and the
Prospectus; (ii) no action, suit or proceeding, at law or in
equity, shall have been pending or, to the knowledge of the
Company, threatened against the Company or any Insider before or by
any court or federal or state commission, board or other
administrative agency wherein an unfavorable decision, ruling or
finding may materially adversely affect the business, operations or
financial condition or income of the Company, except as set forth
in the Registration Statement and the Prospectus; (iii) no stop
order shall have been issued under the Act and no proceedings
therefore shall have been initiated or threatened by the
Commission; and (iv) the Registration Statement and the Prospectus
and any amendments or supplements thereto shall contain all
material statements which are required to be stated therein in
accordance with the Act and the Regulations and shall conform in
all material respects to the requirements of the Act and the
Regulations, and the Registration Statement or the Prospectus and
any amendment or supplement thereto shall not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not
misleading.

 

5.6 Delivery
of Agreements. On or prior to
the Effective Date, the Company shall have delivered to the Selling
Agent an executed copy of this Agreement and, on or prior to the
Closing Date, the Company shall have delivered to the Selling Agent
executed copies of the Lock-Up Agreements.

 

6. Indemnification.

 

6.1 Indemnification
by the Company.

 

6.1.1 General. Subject to the
conditions set forth below, the Company agrees to indemnify and
hold harmless the Selling Agent and each dealer selected by the
Selling Agent that participates in the Offering and each of their
respective directors, officers and employees and each person (a
“Controlling
Person”), if any, who controls within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (each
“Indemnified
Person”), such Indemnified Person and the dealer, and
the successors and assigns of all of the foregoing persons, against
any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all legal or other expenses
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, whether arising out of any action between such
Indemnified Person and the Company or between such Indemnified
Person and any third party or otherwise) to which they or any of
them may become subject under the Act, the Exchange Act or any
other statute or at common law or otherwise or under the laws of
foreign countries, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement or the Prospectus (as from time
to time each may be amended and supplemented); (ii) any materials
or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the Offering of the
Shares, including any “road show” or investor
presentations made to investors by the Company (whether in person
or electronically); or (iii) any application or other document or
written communication (in this Section 6, collectively called
“application”) executed by the Company or based upon
written information furnished by the Company in any jurisdiction in
order to qualify the Shares under the securities laws thereof or
filed with the Commission, any state securities commission or
agency, NASDAQ or any securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon and in
strict conformity with “Selling Agent’s
Information” (as described in Section 3.3.1) furnished to the
Company by the Selling Agents. The Company agrees promptly to
notify the Indemnified Persons of the commencement of any
litigation or proceedings against the Company or any of its
officers, directors or Controlling Persons in connection with the
issue and sale of the Shares or in connection with the Registration
Statement or the Prospectus.

 

 

 

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6.1.2 Procedure.
If any action is brought against an Indemnified Person or a
Controlling Person in respect of which indemnity may be sought
against the Company pursuant to Section 6.1.1 or 6.1.2, such Indemnified Person
shall promptly notify the Company in writing of the institution of
such action and the Company shall assume the defense of such
action, including the employment and fees of counsel (subject to
the reasonable approval of such Indemnified Person) and payment of
actual expenses. Any delay in notice will not relieve the Company
of any liability to an indemnified party, except to the extent that
the Company demonstrates that the delay prejudiced the defense of
the action. Any indemnified person shall have the right to employ
its or their own counsel in any such case, but the fees and
expenses of such counsel which are incurred after the Company
assumes the defense of the action shall be at the expense of such
Indemnified Person unless (i) the employment of such counsel at the
expense of the Company shall have been authorized in writing by the
Company in connection with the defense of such action, or (ii) the
Company fails to assume the defense or to employ counsel to have
charge of the defense of such action within a reasonable time after
notice of the action, or (iii) such indemnified party or parties
shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to
those available to the Company (in which case the Company shall not
have the right to direct the defense of such action on behalf of
the indemnified party or parties), in any of which events the
reasonable fees and expenses of not more than one additional firm
of attorneys (in addition to local counsel) selected by such
Indemnified Person in their sole discretion shall be borne by the
Company and paid as incurred or, at the option of the indemnified
party, advanced pursuant to Section 6.1.5.

 

6.1.3 Settlement. The Company will
not affect any settlement of a proceeding in respect of which
indemnification may be sought hereunder (whether or not any
indemnified person is a party therein) unless the Company has given
an Indemnified Person reasonable prior written notice thereof and
such settlement, compromise, consent or termination includes an
unconditional release of each indemnified party from any
liabilities arising out of such proceeding. The Company will not
permit any such settlement, compromise, consent or termination to
include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of any indemnified party,
without that party’s prior written consent. Notwithstanding
anything to the contrary contained herein, if an Indemnified Person
shall conduct the defense of an action as provided in Section 6.1.2, the Company shall have
the right to approve the terms of any settlement of such action,
which approval shall not be unreasonably withheld, except that if
the Company is required to and nonetheless fails to reimburse or
advance the expenses of such defense, then the Company shall be
bound by any determination made in the action or by any compromise
or settlement made by the Indemnified Person without the
Company’s written consent, subject to the requirements of
Section 6.1.4.

 

6.1.4 Settlement without Consent if Failure
to Reimburse or Advance. If at any time an Indemnified
Person shall have requested the Company to reimburse or advance to
such Indemnified Person its fees and expenses, including those of
counsel, the Company agrees that it shall be liable for any
settlement of the nature contemplated by Section 6.1.3 affected without its
written consent if (i) such settlement is entered into more than
sixty (60) days after receipt by the Company of the aforesaid
request, (ii) the Company shall have received notice of the terms
of such settlement at least forty-five (45) days prior to such
settlement being entered into, and (iii) the Company shall not have
reimbursed or advanced to such Indemnified Person in accordance
with such request prior to the date of such settlement, unless such
failure to reimburse or advance to such Indemnified Person is based
on a dispute with a good faith basis as to either the obligation of
the Company arising under this Section 6 to indemnify such
Indemnified Person or the amount of such obligation, and the
Company shall have notified such Indemnified Person of such good
faith dispute prior to the date of such settlement.

 

 

 

-20-

 

 

6.1.5 Advances.
Notwithstanding any other provision hereof, the Company shall
advance, to the extent not prohibited by law, all expenses
reasonably anticipated to be incurred by or on behalf of an
Indemnified Person in connection with any proceeding, whether
pending or threatened, within fifteen (15) days of receipt of a
statement or statements from such indemnified parties, or any of
them, requesting such advances from time to time. This advancement
obligation shall include any retainers of counsel engaged by
indemnified parties. Any statement requesting advances shall
evidence the expenses anticipated or incurred by the indemnified
party with reasonable particularity and may include only those
expenses reasonably expected to be incurred within the ninety
(90)-day period following each statement. In the event some portion
of the amounts advanced are unused, or in the event a court of
ultimate jurisdiction determines that the indemnified parties are
not entitled to be indemnified against certain expenses, the
recipient shall return the unused or disallowed portion of any
advances within thirty (30) days of the final disposition of any
proceeding to which such advances pertain.

 

6.2 Indemnification
of the Company. The Selling Agent
and each dealer selected by the Selling Agent that participates in
the Offering (a “Selected
Dealer”), severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, officers
and employees and agents who control the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against
any and all loss, liability, claim, damage and expense described in
the foregoing indemnity from the Company to the Selling Agent, as
incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration
Statement or Prospectus or any amendment or supplement thereto or
in any application, made in reliance upon and in strict conformity
with the “Selling Agents’ Information” furnished
by the Selling Agents to the Company expressly for use in the
Registration Statement or the Prospectus or any amendment or
supplement thereto or in any such application. In case any action
shall be brought against the Company or any other person so
indemnified based on the Registration Statement or the Prospectus
or any amendment or supplement thereto or any application, and in
respect of which indemnity may be sought against the Selling Agent
or any Selected Dealer, such Selling Agent or Selected Dealer shall
have the rights and duties given to the Company, and the Company
and each other person so indemnified shall have the rights and
duties given to such Selling Agent or Selected Dealer, by the
provisions of Section 6.1.2.

 

6.3 Contribution.

 

6.3.1 Contribution Rights. In order
to provide for just and equitable contribution under the Act in any
case in which (i) any person entitled to indemnification under this
Section 6 makes claim for
indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this
Section 6 provides for
indemnification in such case, or (ii) contribution under the
Act, the Exchange Act or otherwise may be required on the part of
any such person in circumstances for which indemnification is
provided under this Section 6 but is unavailable, then,
and in each such case, the Company and the Selling Agent (and, if
applicable, any Selected Dealer) shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company
and the Selling Agent (and, if applicable, any Selected Dealer), as
incurred, in such proportions that the Selling Agent are
responsible for that portion represented by the percentage that the
Selling Fee bears to Purchase Price and the Company shall be
responsible for the balance; provided, that, no person
guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Notwithstanding the provisions of this Section 6.3.1, neither the Selling
Agent nor any Selected Dealer shall be required to contribute any
amount in excess of the amount by which the total price at which
the Shares sold by it and distributed to the public were offered to
the public exceeds the amount of any damages that the Selling Agent
or any Selected Dealer has otherwise been required to pay in
respect of such losses, liabilities, claims, damages and expenses.
For purposes of this Section 6.3.1, each director,
officer and employee of the Selling Agent, any Selected Dealer or
the Company, as applicable, and each person, if any, who controls
the Selling Agent or the Company, as applicable, within the meaning
of Section 15 of the Act shall have the same rights to contribution
as the Selling Agent, any Selected Dealer or the Company, as
applicable.

 

 

 

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6.3.2 Contribution
Procedure. Within fifteen days after receipt by any party to
this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if
a claim for contribution in respect thereof is to be made against
another party (“contributing
party”), notify the contributing party of the
commencement thereof, but the failure to so notify the contributing
party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and
such party notifies a contributing party or its representative of
the commencement thereof within the aforesaid fifteen days, the
contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any
claim, action or proceeding affected by such party seeking
contribution without the written consent of such contributing
party. The contribution provisions contained in this Section 6.3.2 are intended to
supersede, to the extent permitted by law, any right to
contribution under the Act, the Exchange Act or otherwise
available.

 

7. Additional
Covenants.

 

7.1 Board
Composition and Board Designations. The Company shall
ensure that: (i) the qualifications of the persons serving as board
members and the overall composition of the board comply with the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and
with the listing requirements of NASDAQ or any other national
securities exchange or national securities association, as the case
may be, in the event the Company seeks to have its Shares listed on
another exchange or quoted on an automated quotation system, and
(ii) if applicable, at least one member of the board of directors
qualifies as a “financial expert” as such term is
defined under the Sarbanes-Oxley Act of 2002 and the rules
promulgated thereunder.

 

7.2 Subsequent
Offerings. 

 

7.2.1 The
Company, on behalf of itself and any successor entity, has agreed
that, without the prior written consent of the Selling Agent, it
will not, for a period commencing on the date hereof and ending on
June 15, 2019 (the “Restricted Period”), (i) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any freely trading shares of
its capital stock or any securities convertible into or exercisable
or exchangeable for shares of its capital stock. The restrictions
contained in this Section
7.2 shall not apply to (i) the Shares sold in this offering,
(ii) the issuance of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date
hereof or (iii) the issuance of any option to purchase or shares of
the Company’s capital stock under any stock compensation plan
of the Company outstanding on the date hereof or otherwise for
compensatory purposes.

 

7.2.2 Until
August 1, 2019, the Selling Agent shall have the right and option
to participate as a co- or joint book running manager or
underwriter for any public offering of the Company’s Common
Stock (“Covered
Offering”); provided, however, the parties agree and
acknowledge that the Company shall only pay one customary selling,
placement or underwriting fee in connection with such Covered
Offering agreed to by the Company in connection therewith, and
shall not be required to pay a Selling Fee to Selling Agent, as set
forth in this Agreement in connection with the Covered
Offering.

 

 

 

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8. Effective
Date of this Agreement and Termination Thereof.

 

8.1 Effective
Date. This Agreement
shall become effective when the Company, the Selling Agent have
executed the same and delivered counterparts of such signatures to
the other parties.

 

8.2 Termination. The Selling Agent
shall have the right to terminate this Agreement at any time prior
to any Closing Date, (i) if any domestic or international event or
act or occurrence has materially disrupted, or in your reasonable
opinion will in the immediate future materially disrupt, general
securities markets in the United States; or (ii) if trading on the
New York Stock Exchange, the NASDAQ Global Market or the NASDAQ
Capital Market or NYSE MKT shall have been noticed for or actually
suspended or materially limited, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for
securities shall have been required by FINRA or by order of the
Commission or any other government authority having jurisdiction,
or (iii) if the United States shall have become involved in a new
war or a substantial increase in existing major hostilities occurs,
or (iv) if a banking moratorium has been declared by a New York
State or federal authority or foreign authority which has a
substantial disruptive effect on or adversely impacts the United
States securities markets, or (v) if a moratorium on foreign
exchange trading has been declared which materially adversely
impacts the United States securities markets, or (vi) if the
Company shall have sustained a material loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been
insured, will, in the Selling Agent’s reasonable opinion,
make it inadvisable to proceed with the delivery of the Shares, or
(vii) if the Company is in material breach of any of its
representations, warranties or covenants hereunder, or (viii) if
the Selling Agent shall have become aware after the date hereof of
such a Material Adverse Effect on the Company, or such adverse
material change in general market conditions as in the Selling
Agent’s good faith judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the Shares or to
enforce contracts made by the Selling Agents for the sale of the
Shares.

 

8.3 Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Section 6 shall not be in
any way effected by, such election or termination or failure to
carry out the terms of this Agreement or any part
hereof.

 

 

 

-23-

 

 

9. Miscellaneous.

 

9.1 Notices

 

. All
communications hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be mailed (registered or
certified mail, return receipt requested), personally delivered or
sent by facsimile transmission and confirmed, or by electronic
transmission via PDF, and shall be deemed given when so delivered
or faxed and confirmed or transmitted or if mailed, two days after
such mailing.

 

If to
the Selling Agent:

 

Alexander
Capital

17 State Street,
5th
Floor

New York, NY
10004

Attn: Jonathan
Gazdak

Fax No.: (212)
687-5649

 

Copy to (which
shall not constitute notice):  

 

Cozen O'Connor
P.C.

33
South 6th
Street, Suite 3800

Minneapolis,
MN 55402

Attn:
Christopher J. Bellini, Esq.

Fax
No.: (646) 838-1314

 

If to
the Company:

AzurRx
BioPharma, Inc.

760
Parkside Avenue

Downstate
Biotechnology Incubator, Suite 304

Brooklyn,
New York 11226

Attn:
Chief Executive Officer

Fax
No.:

 

Copy to
(which shall not constitute notice):

 

Disclosure
Law Group

655
West Broadway Suite 870

San
Diego, CA 92101

Attn:
Jessica R. Sudweeks, Esq.

Fax
No.: (619) 330-2101

 

9.2 Headings.
The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of
this Agreement.

 

9.3 Amendment.
This Agreement may only be amended by a written instrument executed
by each of the parties hereto.

 

9.4 Entire
Agreement. This Agreement
(together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and thereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to
the subject matter hereof. Notwithstanding anything to the contrary
set forth herein, it is understood and agreed by the parties hereto
that all terms and conditions of that certain engagement letter
between the Company and the Selling Agent, dated March 22, 2019,
shall remain in full force and effect.

 

 

 

-24-

 

 

9.5 Binding
Effect. This Agreement
shall inure solely to the benefit of and shall be binding upon the
Selling Agent, the Company and the directors, officers and
Controlling Persons referred to in Section 6 hereof, and their
respective successors, legal representatives and assigns, and no
other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provisions herein contained. The
term “successors and assigns” shall not include a
purchaser, in its capacity as such, of securities from the Selling
Agent.

 

9.6 Governing
Law. This Agreement
shall be deemed to have been executed and delivered in New York and
both this Agreement and the transactions contemplated hereby shall
be governed as to validity, interpretation, construction, effect,
and in all other respects by the laws of the State of New York,
without regard to the conflicts of laws principals thereof (other
than Section 5-1401 of The New York General Obligations Law). Each
of the Selling Agent and the Company: (a) agrees that any legal
suit, action or proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby shall be
instituted exclusively in the Supreme Court of the State of New
York, New York County, or in the United States District Court for
the Southern District of New York, (b) waives any objection which
it may have or hereafter to the venue of any such suit, action or
proceeding, and (c) irrevocably consents to the jurisdiction of
Supreme Court of the State of New York, New York County, or in the
United States District Court for the Southern District of New York
in any such suit, action or proceeding. Each of the Selling Agent
and the Company further agrees to accept and acknowledge service of
any and all process which may be served in any such suit, action or
proceeding in the Supreme Court of the State of New York, New York
County, or in the United States District Court for the Southern
District of New York and agrees that service of process upon the
Company mailed by certified mail to the Company’s address or
delivered by Federal Express via overnight delivery shall be deemed
in every respect effective service of process upon the Company, in
any such suit, action or proceeding, and service of process upon
the Selling Agents mailed by certified mail to the Selling
Agents’ address or delivered by Federal Express via overnight
delivery shall be deemed in every respect effective service process
upon the Selling Agents, in any such suit, action or proceeding.
THE COMPANY (ON BEHALF OF ITSELF, THE SUBSIDIARIES AND, TO THE
FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY
HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE
PROSPECTUS.

 

9.7 Execution
in Counterparts. This Agreement
may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective
when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
Delivery of a signed counterpart of this Agreement by facsimile or
email/pdf transmission shall constitute valid and sufficient
delivery thereof.

 

9.8 Waiver,
etc. The failure of
any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be
a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of
any of the parties hereto to thereafter enforce each and every
provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such
breach, non-compliance or non-fulfillment shall be construed or
deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.

 

 

 

-25-

 

 

9.9 No
Fiduciary Relationship. The Company
hereby acknowledges that each Selling Agent is acting solely as a
Selling Agent in connection with the Offering of the Shares. The
Company further acknowledges that the Selling Agent is acting
pursuant to a contractual relationship created solely by this
Agreement entered into on an arm’s length basis and in no
event do the parties intend that the Selling Agent act or be
responsible as a fiduciary to the Company, its management,
shareholders, creditors or any other person in connection with any
activity that the Selling Agent may undertake or have undertaken in
furtherance of the Offering, either before or after the date
hereof. The Selling Agent on its own behalf and on behalf of the
Selected Dealers, hereby each expressly disclaims any fiduciary or
similar obligations to the Company, either in connection with the
transactions contemplated by this Agreement or any matters leading
up to such transactions, and the Company hereby confirms its
understanding and agreement to that effect. The Company, the
Selling Agent on its own behalf and on behalf of the Selected
Dealers, agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and
that any opinions or views expressed by the Selling Agent to the
Company regarding such transactions, including but not limited to
any opinions or views with respect to the price or market for the
Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that
the Company may have against the Selling Agent or any Selected
Dealer with respect to any breach or alleged breach of any
fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading
up to such transactions.

 

9.10 Enforcement
of Agreement. The Company
acknowledges and agrees that the Selling Agent would be irreparably
damaged if any of the Company’s covenants hereunder,
including without limitations those set forth in Section 4, is not performed in
accordance with its specific terms and that any such breach of
covenant could not be adequately compensated in all cases by
monetary damages alone. Accordingly, in addition to any other right
or remedy to which the Selling Agent may be entitled, at law or in
equity, it shall be entitled to enforce any covenant of the Company
hereunder by a decree of specific performance and to temporary,
preliminary and permanent injunctive relief to prevent a breach or
threatened breach by the Company of any such covenant, without
posting any bond or other undertaking.

 

[SIGNATURE
PAGE FOLLOWS]

 

 

-26-

 

If the
foregoing correctly sets forth the understanding between the
Selling Agent and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.

 

Very
truly yours,

 

AZURRX
BIOPHARMA, INC.

 

By: 
/s/ Maged
Shenouda

Name:  Maged
Shenouda

Title:  Chief
Financial Officer

 

Confirmed
as of the date first written above mentioned,

 

ALEXANDER
CAPITAL L.P.

 

By: 
/s/ Jonathan
Gazdak

Jonathan
Gazdak

Managing
Director

 

 

 

 

-27-

 

 

SCHEDULE A

 

Purchasers

 

 

 

 

 

-28-

 

 

SCHEDULE B

 

Lock-Up Parties

 

 

 

 

 

-29-

 

 

EXHIBIT A

 

Form of Selling Agent’s Warrant Agreement

 

 

THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED
HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL,
TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT OR
CAUSE IT TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE,
PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE
ECONOMIC DISPOSITION OF THE PURCHASE WARRANT BY ANY PERSON FOR A
PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE
DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) ALEXANDER CAPITAL,
L.P. OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II)
A BONA FIDE OFFICER OR PARTNER OF ALEXANDER CAPITAL, L.P. OR OF ANY
SELECTED DEALER AND IN ACCORDANCE WITH FINRA RULE
5110(G)(2).

 

THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO MAY 13, 2020. VOID
AFTER 5:00 P.M., EASTERN TIME, MAY 13, 2024.

 

COMMON STOCK PURCHASE WARRANT

 

For the
Purchase of [ ] Shares of Common Stock

 

of

 

AZURRX
BIOPHARMA, INC.

 

1. Purchase Warrant. THIS
CERTIFIES THAT, in consideration of funds duly paid by or on behalf
of [__________] (“Holder”), as registered owner of
this Purchase Warrant, to AxurRx BioPharma, Inc., a Delaware
corporation (the “Company”), Holder is entitled, at
any time or from time to time from May 13, 2020 (the
“Commencement
Date”), and at or before 5:00 p.m., Eastern time May
13, 2024 (the “Expiration
Date”), but not thereafter, to subscribe for, purchase
and receive, in whole or in part, up to [●] shares of common
stock of the Company, par value $0.0001 per share (the
“Shares”),
subject to adjustment as provided in Section 5 hereof. If the
Expiration Date is a day on which banking institutions are
authorized by law to close, then this Purchase Warrant may be
exercised on the next succeeding day which is not such a day in
accordance with the terms herein. During the period ending on the
Expiration Date, the Company agrees not to take any action that
would terminate this Purchase Warrant. This Purchase Warrant is
initially exercisable at $2.82 per Share; provided, however, that
upon the occurrence of any of the events specified in Section 5
hereof, the rights granted by this Purchase Warrant, including the
exercise price per Share and the number of Shares to be received
upon such exercise, shall be adjusted as therein specified. This
Warrant is being issued pursuant to the certain Selling Agent
Agreement (the “Selling Agent
Agreement”), dated May 9, 2019, by and among the
Company and the Holder, providing for the public offering (the
“Offering”) of
shares of common stock, par value $0.001 per share, of the Company.
The term “Effective
Date” shall mean the effective date of the Offering.
The term “Exercise
Price” shall mean the initial exercise price or the
adjusted exercise price, depending on the context.

 

 

-30-

 

 

 

1. Exercise.

 

1.1 Exercise
Form. In order to exercise this
Purchase Warrant, the exercise form attached hereto must be duly
executed and completed and delivered to the Company, together with
this Purchase Warrant and payment of the Exercise Price for the
Shares being purchased payable in cash by wire transfer of
immediately available funds to an account designated by the Company
or by certified check or official bank check. If the subscription
rights represented hereby shall not be exercised at or before 5:00
p.m., Eastern time, on the Expiration Date, this Purchase Warrant
shall become and be void without further force or effect, and all
rights represented hereby shall cease and
expire.

 

1.2 Cashless
Exercise. If at any time after
the Commencement Date there is no effective registration statement
registering, or no current prospectus available for, the resale of
the Shares by the Holder, then in lieu of exercising this Purchase
Warrant by payment of cash or check payable to the order of the
Company pursuant to Section 1.1 above, Holder may elect to receive
the number of Shares equal to the value of this Purchase Warrant
(or the portion thereof being exercised), by surrender of this
Purchase Warrant to the Company, together with the exercise form
attached hereto, in which event the Company shall issue to Holder,
Shares in accordance with the following
formula:

 

	

X
=

	

Y(A-B)

	

A

 

Where,

 

X = The
number of Shares to be issued to Holder;

Y = The
number of Shares for which the Purchase Warrant is being
exercised;

A = The
fair market value of one Share; and

B = The
Exercise Price.

 

For
purposes of this Section 1.2, the fair market value of a Share is
defined as follows:

 

(i) if
the Company’s common stock is traded on a securities
exchange, the fair market value shall be deemed to be the closing
price on such exchange on the trading day immediately prior to the
date the exercise form is submitted to the Company in connection
with the exercise of the Purchase Warrant; or

 

(ii) if
the Company’s common stock is actively traded
over-the-counter, the fair market value shall be deemed to be the
closing bid price on the trading day immediately prior to the date
the exercise form is submitted to the Company in connection with
the exercise of the Purchase Warrant; or

 

(iii) if
there is no active public market, the value shall be the fair
market value thereof, as determined in good faith by the
Company’s Board of Directors.

 

1.3 Legend.
Each certificate for the securities purchased under this Purchase
Warrant shall bear a legend as follows unless such securities have
been registered under the Securities Act of 1933, as amended (the
“Act”):

 

“The
securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the
“Act”), or
applicable state law. Neither the securities nor any interest
therein may be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from registration under
the Securities Act and applicable state law which, in the opinion
of counsel to the Company, is available.”

 

 

-31-

 

 

 

1.4           No
Obligation to Net Cash Settle. Notwithstanding anything to
the contrary contained in this Purchase Warrant, in no event will
the Company be required to net cash settle the exercise of the
Purchase Warrant. The holder of the Purchase Warrant will not be
entitled to exercise the Purchase Option unless it exercises such
Purchase Warrant pursuant to the cashless exercise right or a
registration statement is effective, or an exemption from the
registration requirements is available at such time and, if the
Holder is not able to exercise the Purchase Warrant, the Purchase
Warrant will expire worthless.

 

2. Transfer.

 

2.1 General
Restrictions. The registered
Holder of this Purchase Warrant agrees by his, her or its
acceptance hereof, that such Holder will not: (a) sell, transfer,
assign, pledge or hypothecate this Purchase Warrant for a period of
one hundred eighty (180) days following the Effective Date to
anyone other than: (i) Alexander Capital L.P.
(“Alexander
Capital”) or another
selected dealer participating in the Offering, or (ii) a bona fide
officer or partner of Alexander Capital or of any such underwriter
or selected dealer, in each case in accordance with FINRA Conduct
Rule 5110(g)(1), or (b) cause this Purchase Warrant or the
securities issuable hereunder to be the subject of any hedging,
short sale, derivative, put or call transaction that would result
in the effective economic disposition of this Purchase Warrant or
the securities hereunder, except as provided for in FINRA Rule
5110(g)(2). On and after one (1) year after the Effective Date,
transfers to others may be made subject to compliance with or
exemptions from applicable securities laws. In order to make any
permitted assignment, the Holder must deliver to the Company the
assignment form attached hereto duly executed and completed,
together with the Purchase Warrant and payment of all transfer
taxes, if any, payable in connection therewith. The Company shall
within five (5) Business Days transfer this Purchase Warrant on the
books of the Company and shall execute and deliver a new Purchase
Warrant or Purchase Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the
aggregate number of Shares purchasable hereunder or such portion of
such number as shall be contemplated by any such
assignment.

 

2.2 Restrictions
Imposed by the Securities Act.
The securities evidenced by this Purchase Warrant shall not be
transferred unless and until: (i) the Company has received the
opinion of counsel for the Holder that the securities may be
transferred pursuant to an exemption from registration under the
Securities Act and applicable state securities laws, the
availability of which is established to the reasonable satisfaction
of the Company (the Company hereby agreeing that the opinion of
Cozen O’Connor shall be deemed satisfactory evidence of the
availability of an exemption), or (ii) a registration statement or
a post-effective amendment to the Registration Statement relating
to the offer and sale of such securities has been filed by the
Company and declared effective by the U.S. Securities and Exchange
Commission (the “Commission”) and compliance with
applicable state securities law has been
established.

 

 

-32-

 

 

 

3. Registration
Rights.

 

3.1 “Piggy-Back”
Registration.

 

3.1.1 Grant
of Right. The Holder shall have
the right, for a period of no more than seven (7) years from the
Effective Date in accordance with FINRA Rule 5110(f)(2)(G)(v), to
include any portion of the Shares underlying the Purchase Warrants
(collectively, the “Registrable
Securities”) as part of
any other registration of securities filed by the Company (other
than in connection with a transaction contemplated by Rule 145(a)
promulgated under the Securities Act or pursuant to Form S-8 or any
equivalent form); provided,
however,
that if, solely in connection with any primary underwritten public
offering for the account of the Company, the managing
underwriter(s) thereof shall, in its reasonable discretion, impose
a limitation on the number of shares of common stock which may be
included in the Registration Statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distribution,
then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities
with respect to which the Holder requested inclusion hereunder as
the underwriter shall reasonably permit. Any exclusion of
Registrable Securities shall be made pro rata among the Holders
seeking to include Registrable Securities in proportion to the
number of Registrable Securities sought to be included by such
Holders; provided,
however,
that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities,
the holders of which are not entitled to inclusion of such
securities in such Registration Statement or are not entitled to
pro rata inclusion with the Registrable
Securities.

 

3.1.2 Terms.
The Company shall bear all fees and expenses attendant to
registering the Registrable Securities pursuant to Section 3.1.1
hereof, but the Holders shall pay any and all underwriting
commissions and the expenses of any legal counsel selected by the
Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed
registration, the Company shall furnish the then Holders of
outstanding Registrable Securities with not less than thirty (30)
days written notice prior to the proposed date of filing of such
registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company
until such time as all of the Registrable Securities have been sold
by the Holder. The holders of the Registrable Securities shall
exercise the “piggy-back” rights provided for herein by
giving written notice within ten (10) days of the receipt of the
Company’s notice of its intention to file a registration
statement. Except as otherwise provided in this Purchase Warrant,
there shall be no limit on the number of times the Holder may
request registration under this Section 3.1.2; provided,
however,
that such registration rights shall terminate upon on the sixth
anniversary of the Commencement Date.

 

3.2 General
Terms.

 

3.2.1 Indemnification.
The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Holders within
the meaning of Section 15 of the Securities Act or Section 20(a) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), against all loss, claim, damage, expense
or liability (including all reasonable attorneys’ fees and
other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement but only to the
same extent and with the same effect as the provisions pursuant to
which the Company has agreed to indemnify the Selling Agent
contained in Section 6.1 of the Selling Agent Agreement between the
Selling Agent and the Company, dated as of May 8, 2019. The
Holder(s) of the Registrable Securities to be sold pursuant to such
registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company and its
affiliates, against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses
reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject
under the Securities Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or
their successors or assigns, in writing, for specific inclusion in
such registration statement to the same extent and with the same
effect as the provisions contained in Section 6.2 of the Selling
Agent Agreement pursuant to which the Selling Agent has agreed to
indemnify the Company.

 

 

-33-

 

 

 

3.2.2 Exercise
of Purchase Warrants. Nothing
contained in this Purchase Warrant shall be construed as requiring
the Holder(s) to exercise their Purchase Warrants prior to or after
the initial filing of any registration statement or the
effectiveness thereof.

 

3.2.3 Documents
Delivered to Holders. The
Company shall furnish to each Holder participating in any
underwritten offerings and to each underwriter of any such
offering, a signed counterpart, addressed to such Holder and
underwriter, of: (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and an opinion
dated the date of the closing under any underwriting agreement
related thereto), and (ii) a “cold comfort” letter
dated the effective date of such registration statement (and a
letter dated the date of the closing under the underwriting
agreement) signed by the independent registered public accounting
firm which has issued a report on the Company’s financial
statements included in such registration statement, in each case
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of such accountants’ letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer’s counsel and in
accountants’ letters delivered to underwriters in
underwritten public offerings of securities. The Company shall also
deliver promptly to each Holder participating in the underwritten
offering requesting the correspondence and memoranda described
below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and
all memoranda relating to discussions with the Commission or its
staff with respect to the registration statement and permit each
Holder and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of FINRA. Such
investigation shall include access to books, records and properties
and opportunities to discuss the business of the Company with its
officers and independent auditors, all to such reasonable extent
and at such reasonable times as any such Holder shall reasonably
request.

 

3.2.4 Underwriting
Agreement. In the event the
Company shall enter into an underwriting agreement with any
managing underwriter(s), if any, selected by the Company with
respect to the Registrable Securities that are being registered
pursuant to this Section 3, which managing underwriter shall be
reasonably satisfactory to the Majority Holders. Such agreement
shall be reasonably satisfactory in form and substance to the
Company and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type
used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of
their Registrable Securities and may, at their option, require that
any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be
made to and for the benefit of such Holders. Such Holders shall not
be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may
relate to such Holders, their Shares and their intended methods of
distribution.

 

3.2.5 Documents
to be Delivered by Holder(s).
Each of the Holder(s) participating in any of the foregoing
offerings shall furnish to the Company a completed and executed
questionnaire provided by the Company requesting information
customarily sought of selling security holders.

 

3.2.6 Damages.
Should the registration or the effectiveness thereof required by
Section 3.1 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Holder(s)
shall, in addition to any other legal or other relief available to
the Holder(s), be entitled to seek specific performance or other
equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach,
without the necessity of proving actual damages and without the
necessity of posting bond or other security.

 

 

-34-

 

 

 

4. New
Purchase Warrants to be Issued.

 

4.1 Partial
Exercise or Transfer. Subject
to the restrictions in Section 2 hereof, this Purchase Warrant may
be exercised or assigned in whole or in part. In the event of the
exercise or assignment hereof in part only, upon surrender of this
Purchase Warrant for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any
Exercise Price and/or transfer tax if exercised pursuant to Section
1.1 hereto, the Company shall cause to be delivered to the Holder
without charge a new Purchase Warrant of like tenor to this
Purchase Warrant in the name of the Holder evidencing the right of
the Holder to purchase the number of Shares purchasable hereunder
as to which this Purchase Warrant has not been exercised or
assigned.

 

4.2 Lost
Certificate. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Purchase Warrant and of
reasonably satisfactory indemnification or the posting of a bond,
the Company shall execute and deliver a new Purchase Warrant of
like tenor and date. Any such new Purchase Warrant executed and
delivered as a result of such loss, theft, mutilation or
destruction shall constitute a substitute contractual obligation on
the part of the Company.

 

5. Adjustments.

 

5.1 Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares
underlying the Purchase Warrant shall be subject to adjustment from
time to time as hereinafter set forth:

 

5.1.1 Share
Dividends; Split Ups. If, after
the date hereof, and subject to the provisions of Section 5.3
below, the number of outstanding Shares is increased by a stock
dividend payable in Shares or by a split up of Shares or other
similar event, then, on the effective day thereof, the number of
Shares purchasable hereunder shall be increased in proportion to
such increase in outstanding Shares, and the Exercise Price shall
be proportionately decreased.

 

5.1.2 Aggregation
of Shares. If, after the date
hereof, and subject to the provisions of Section 5.3 below, the
number of outstanding Shares is decreased by a consolidation,
combination or reclassification of Shares or other similar event,
then, on the effective date thereof, the number of Shares
purchasable hereunder shall be decreased in proportion to such
decrease in outstanding Shares, and the Exercise Price shall be
proportionately increased.

 

5.1.3 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding Shares other than a change
covered by Section 5.1.1 or 5.1.2 hereof or that solely affects the
par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation of the Company with
or into another corporation or other entity (other than a
consolidation or share reconstruction or amalgamation in which the
Company is the continuing corporation and that does not result in
any reclassification or reorganization of the outstanding Shares),
or in the case of any sale or conveyance to another corporation or
entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company
is dissolved, the Holder of this Purchase Warrant shall have the
right thereafter (until the expiration of the right of exercise of
this Purchase Warrant) to receive upon the exercise hereof, for the
same aggregate Exercise Price payable hereunder immediately prior
to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such
reclassification, reorganization, share reconstruction or
amalgamation, or consolidation, or upon a dissolution following any
such sale or transfer, by a Holder of the number of Shares of the
Company obtainable upon exercise of this Purchase Warrant
immediately prior to such event; and if any reclassification also
results in a change in Shares covered by Section 5.1.1 or 5.1.2,
then such adjustment shall be made pursuant to Sections 5.1.1,
5.1.2 and this Section 5.1.3. The provisions of this Section 5.1.3
shall similarly apply to successive reclassifications,
reorganizations, share reconstructions or amalgamations, or
consolidations, sales or other transfers.

 

 

-35-

 

 

 

5.1.4 Changes
in Form of Purchase Warrant.
This form of Purchase Warrant need not be changed because of any
change pursuant to this Section 5.1, and Purchase Warrants issued
after such change may state the same Exercise Price and the same
number of Shares as are stated in the Purchase Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of
the issuance of new Purchase Warrants reflecting a required or
permissive change shall not be deemed to waive any rights to an
adjustment occurring after the Commencement Date or the computation
thereof.

 

5.2 Substitute
Purchase Warrant. In case of
any consolidation of the Company with, or share reconstruction or
amalgamation of the Company with or into, another corporation or
other entity (other than a consolidation or share reconstruction or
amalgamation which does not result in any reclassification or
change of the outstanding Shares), the corporation or other entity
formed by such consolidation or share reconstruction or
amalgamation shall execute and deliver to the Holder a supplemental
Purchase Warrant providing that the holder of each Purchase Warrant
then outstanding or to be outstanding shall have the right
thereafter (until the stated expiration of such Purchase Warrant)
to receive, upon exercise of such Purchase Warrant, the kind and
amount of shares of stock and other securities and property
receivable upon such consolidation or share reconstruction or
amalgamation, by a holder of the number of Shares of the Company
for which such Purchase Warrant might have been exercised
immediately prior to such consolidation, share reconstruction or
amalgamation, sale or transfer. Such supplemental Purchase Warrant
shall provide for adjustments which shall be identical to the
adjustments provided for in this Section 5. The above provision of
this Section shall similarly apply to successive consolidations or
share reconstructions or amalgamations.

 

5.3 Elimination
of Fractional Interests. The
Company shall not be required to issue certificates representing
fractions of Shares upon the exercise of the Purchase Warrant, nor
shall it be required to issue scrip or pay cash in lieu of any
fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction
up or down, as the case may be, to the nearest whole number of
Shares or other securities, properties or
rights.

 

6. Reservation
and Listing. The Company shall
at all times reserve and keep available out of its authorized
Shares, solely for the purpose of issuance upon exercise of the
Purchase Warrants, such number of Shares or other securities,
properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of
the Purchase Warrants and payment of the Exercise Price therefor,
in accordance with the terms hereby, all Shares and other
securities issuable upon such exercise shall be duly and validly
issued, fully paid and non-assessable and not subject to preemptive
rights of any shareholder. The Company further covenants and agrees
that upon exercise of the Purchase Warrants and payment of the
exercise price therefor, all Shares and other securities issuable
upon such exercise shall be duly and validly issued, fully paid and
non-assessable and not subject to preemptive rights of any
shareholder. As long as the Purchase Warrants shall be outstanding,
the Company shall use its commercially reasonable efforts to cause
all Shares issuable upon exercise of the Purchase Warrants to be
listed (subject to official notice of issuance) on all national
securities exchanges (or, if applicable, on the OTC Bulletin Board
or any successor trading market) on which the Shares issued to the
public in the Offering may then be listed and/or
quoted.

 

7. Certain
Notice Requirements.

 

 

-36-

 

 

 

7.1 Holder’s
Right to Receive Notice.
Nothing herein shall be construed as conferring upon the Holders
the right to vote or consent or to receive notice as a shareholder
for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. If, however, at
any time prior to the expiration of the Purchase Warrants and their
exercise, any of the events described in Section 7.2 shall occur,
then, in one or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date
fixed as a record date or the date of closing the transfer books
for the determination of the shareholders entitled to such
dividend, distribution, conversion or exchange of securities or
subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer
books, as the case may be. Notwithstanding the foregoing, the
Company shall deliver to each Holder a copy of each notice given to
the other shareholders of the Company at the same time and in the
same manner that such notice is given to the
shareholders.

 

7.2 Events
Requiring Notice. The Company
shall be required to give the notice described in this Section 7
upon one or more of the following events: (i) if the Company shall
take a record of the holders of its Shares for the purpose of
entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books
of the Company, (ii) the Company shall offer to all the holders of
its Shares any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or share
reconstruction or amalgamation) or a sale of all or substantially
all of its property, assets and business shall be
proposed.

 

7.3 Notice
of Change in Exercise Price.
The Company shall, promptly after an event requiring a change in
the Exercise Price pursuant to Section 5 hereof, send notice to the
Holders of such event and change (“Price Notice”). The Price Notice shall describe the
event causing the change and the method of calculating same and
shall be certified as being true and accurate by the
Company’s Chief Financial Officer.

 

 

-37-

 

 

 

7.4 Transmittal
of Notices. All notices,
requests, consents and other communications under this Purchase
Warrant shall be in writing and shall be deemed to have been duly
made when hand delivered, or mailed by express mail or private
courier service: (i) if to the registered Holder of the Purchase
Warrant, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, to following address or to such
other address as the Company may designate by notice to the
Holders:

 

If to
the Holder:

 

____________

 

____________

 

____________

 

Attn:

Email:

 

with a
copy (which shall not constitute notice) to:

 

Cozen
O’Connor

33
South 6th
Street, Suite 3800

Minneapolis,
Minnesota 55402

Attn:
Christopher J. Bellini, Esq.

Email:
cbellini@cozen.com

 

If to
the Company:

 

AzurRx
BioPharma, Inc.

760
Parkside Avenue

Downstate
Biotechnology Incubator, Suite 304

Brooklyn,
New York 11226

Attn:
Chief Executive Officer

Email:
tspoor@azurrx.com

 

with a
copy (which shall not constitute notice) to:

 

Disclosure Law
Group

655
West Broadway Suite 870

San
Diego, CA 92101

Attn:
Jessica R. Sudweeks,
Esq.

Email:
jsudweeks@disclosurelawgroup.com

 

8. Miscellaneous.

 

8.1 Amendments.
The Company and Alexander Capital may from time to time supplement
or amend this Purchase Warrant without the approval of any of the
Holders in order to cure any ambiguity, to correct or supplement
any provision contained herein that may be defective or
inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder that
the Company and Alexander Capital may deem necessary or desirable
and that the Company and Alexander Capital deem shall not adversely
affect the interest of the Holders. All other modifications or
amendments shall require the written consent of and be signed by
the party against whom enforcement of the modification or amendment
is sought.

 

 

-38-

 

 

 

8.2 Headings.
The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of
this Purchase Warrant.

 

8.3 Entire
Agreement. This Purchase
Warrant (together with the other agreements and documents being
delivered pursuant to or in connection with this Purchase Warrant)
constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof, and supersedes all prior agreements
and understandings of the parties, oral and written, with respect
to the subject matter hereof.

 

8.4 Binding
Effect. This Purchase Warrant
shall inure solely to the benefit of and shall be binding upon, the
Holder and the Company and their permitted assignees, respective
successors, legal representative and assigns, and no other person
shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this
Purchase Warrant or any provisions herein
contained.

 

8.5 Governing
Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of
New York, without giving effect to conflict of laws principles
thereof. The Company hereby agrees that any action, proceeding or
claim against it arising out of, or relating in any way to this
Purchase Warrant shall be brought and enforced in the New York
Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an
inconvenient forum. Any process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered
or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 7 hereof. Such
mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The
Company and the Holder agree that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies)
all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and the Holder 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.

 

8.6 Waiver,
etc. The failure of the Company
or the Holder to at any time enforce any of the provisions of this
Purchase Warrant shall not be deemed or construed to be a waiver of
any such provision, nor to in any way affect the validity of this
Purchase Warrant or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every
provision of this Purchase Warrant. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this
Purchase Warrant shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such
breach, non-compliance or non-fulfillment shall be construed or
deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.

 

8.7 Execution
in Counterparts. This Purchase
Warrant may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of
the parties hereto and delivered to each of the other parties
hereto. Such counterparts may be delivered by facsimile
transmission or other electronic transmission.

 

[Signature
Page Follows]

 

 

 

-39-

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Purchase Warrant to be
signed by its duly authorized officer as of the ______ day of
________________, 2019.

 

 

AZURRX
BIOPHARMA, INC.

 

By:

Name:

Title:

 

 

 

-40-

 

 

[Form
to be used to exercise Purchase Warrant]

 

Date:
_______________, 20___

 

 

The
undersigned hereby elects irrevocably to exercise the Purchase
Warrant for  shares of common stock,
par value $0.0001 per share (the “Shares”), of AzurRx BioPharma,
Inc., a Delaware corporation (the “Company”), and hereby makes
payment of $ (at the rate of $2.82 per Share) in payment of the
Exercise Price pursuant thereto. Please issue the Shares as to
which this Purchase Warrant is exercised in accordance with the
instructions given below and, if applicable, a new Purchase Warrant
representing the number of Shares for which this Purchase Warrant
has not been exercised.

 

or

 

The
undersigned hereby elects irrevocably to convert its right to
purchase ___ Shares of the Company under the Purchase Warrant for
______ Shares, as determined in accordance with the following
formula:

 

	

X
=

	

Y(A-B)

	

A

 

Where,

 

X = The
number of Shares to be issued to Holder;

Y = The
number of Shares for which the Purchase Warrant is being
exercised;

A = The
fair market value of one Share which is equal to $_____;
and

B = The
Exercise Price which is equal to $2.82 per share

 

The
undersigned agrees and acknowledges that the calculation set forth
above is subject to confirmation by the Company and any
disagreement with respect to the calculation shall be resolved by
the Company in its sole discretion.

 

Please
issue the Shares as to which this Purchase Warrant is exercised in
accordance with the instructions given below and, if applicable, a
new Purchase Warrant representing the number of Shares for which
this Purchase Warrant has not been converted.

 

 

Signature

 

Signature
Guaranteed

 

 

 

-41-

 

 

INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

 

Name:

 

(Print
in Block Letters)

 

Address:

 

 

 

 

 

 

NOTICE:
The signature to this form must correspond with the name as written
upon the face of the Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm
having membership on a registered national securities
exchange.

 

 

-42-

 

 

[Form
to be used to assign Purchase Warrant]

 

ASSIGNMENT

 

 

(To be
executed by the registered Holder to effect a transfer of the
within Purchase Warrant):

 

FOR
VALUE RECEIVED, __________________ does hereby sell, assign and
transfer unto the right to purchase shares of common stock, par
value $0.0001 per share, of AzurRx BioPharma, Inc., a Delaware
corporation (the “Company”), evidenced by the
Purchase Warrant and does hereby authorize the Company to transfer
such right on the books of the Company.

 

Dated:
__________, 20__

 

Signature

 

Signature
Guaranteed                                                                                                            

 

NOTICE:
The signature to this form must correspond with the name as written
upon the face of the within Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm
having membership on a registered national securities
exchange.

 

 

 

 

 

-43-

 

 

 EXHIBIT
B

 

Lock-Up Agreement

 

Alexander
Capital L.P.

17
State Street, 5th Floor

New
York, NY 10004

 

Ladies
and Gentlemen:

 

The
undersigned understands that Alexander Capital L.P. (the
“Selling Agent”)
proposes to enter into a Selling Agent Agreement (the
“Selling Agent
Agreement”) with AzurRx BioPharma, Inc., a Delaware
corporation (the “Company”), providing for the
offering (the “Offering”) of shares of common
stock, par value $0.0001, of the Company (“Common Stock”).

 

To
induce the Selling Agent to continue its efforts in connection with
the Offering, the undersigned hereby agrees that, without the prior
written consent of the Selling Agent, the undersigned will not,
during the period commencing on the date hereof and ending 120 days
after the date hereof (the “Lock-Up Period”), (1) offer,
pledge, sell, contract to sell, grant, lend or otherwise transfer
or dispose of, directly or indirectly, any Common Stock, or any
securities convertible into or exercisable or exchangeable for
Common Stock (collectively, the “Lock-Up Securities”), without the
consent of the Selling Agent, except for the exercise or conversion
of currently outstanding warrants, options and convertible
debentures or notes (including any principal or interest incurred
during the Lock-Up Period), as applicable, and the exercise of
options under a stock incentive plan approved by the board of
directors of the Company (but not including any subsequent sales of
the securities received upon such exercise or conversion); or (2)
publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other
arrangement relating to any Lock-Up Securities.

 

Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer Lock-Up Securities without the prior written consent of
the Selling Agent in connection with (a) transactions relating to
Lock-Up Securities acquired in open market transactions after the
completion of the Offering; (b) transfers of Lock-Up Securities as
a bona fide gift, by will
or intestacy or to a family member or trust for the benefit of the
undersigned and/or its family member (for purposes of this lock-up
agreement, “family member” means any relationship by
blood, marriage or adoption, not more remote than first cousin);
(c) transfers of Lock-Up Securities to a charity or educational
institution; or (d) if the undersigned is or, directly or
indirectly, controls a corporation, partnership, limited liability
company or other business entity, any transfers of Lock-Up
Securities to any shareholder, partner or member of, or owner of
similar equity interests in, the undersigned or such business
entity, as the case may be; provided that in the case of
any transfer pursuant to the foregoing clauses (b), (c) or (d), (i)
any such transfer shall not involve a disposition for value (other
than in exchange for interests in a trust referred to in clause
(b)) and (ii) each transferee shall sign and deliver to the Selling
Agent a lock-up agreement substantially in the form of this lock-up
agreement. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company’s transfer agent
and registrar against the transfer of the undersigned’s
Lock-Up Securities except in compliance with this lock-up
agreement.

 

 

 

-44-

 

 

This
Agreement, and the obligations of the undersigned hereunder, shall
take effect as of the closing date of the Offering.

 

The
undersigned understands that the Company and the Selling Agent are
relying upon this lock-up agreement in proceeding toward
consummation of the Offering. The undersigned further understands
that this lock-up agreement is irrevocable and shall be binding
upon the undersigned’s heirs, legal representatives,
successors and assigns.

 

Whether
or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made
pursuant to a Selling Agent Agreement, the terms of which are
subject to negotiation between the Company and the Selling
Agent.

 

 

	
 

	

Very
truly yours,

	
 

	
 

	
 

	

(Name -
Please Print)

	
 

	
 

	
 

	

(Signature)

	
 

	
 

	
 

	

(Name
of Signatory, in the case of entities - Please Print)

	
 

	
 

	
 

	

(Title
of Signatory, in the case of entities - Please Print)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Address

 

 

 

-45-

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