Document:

Exhibit

Exhibit 10.51

AVON PRODUCTS, INC.
LONG-TERM CASH BONUS PLAN

		
	I.
	INTRODUCTION

1.1.    Purpose.  The purpose of this Plan is to provide certain long-term cash bonuses to eligible employees of the Company.
1.2.    Term.  This Plan will be effective as of January 1, 2015 and will remain in effect until terminated in accordance with Section 7.1.
		
	II.
	DEFINITIONS 

For purposes of the Plan and the Administrative Guidelines, the following terms will have the following meanings:
“Administrative Guidelines” means the guidelines, rules and procedures for administering and operating the Plan, as established from time to time by the Committee or its designee.
“Affiliate” means (a) an entity that directly or through one or more intermediaries is controlled by the Company, and (b) any entity in which the Company has a significant equity interest, as determined by the Company.
“Award” means a Long-Term Incentive Bonus or Long-Term Bonus granted under the Plan.
“Base Salary” means the Participant’s annualized base rate of salary as of the date designated by the Committee or its designee as reflected on the books and records of the Company, exclusive of bonus, commission, incentive compensation, fringe benefits, employee benefits, expense allowances and other nonrecurring forms of remuneration.
“Board” means the Board of Directors of the Company.
“Cause” has the meaning set forth in the Stock Plan. 
“Change in Control” has the meaning set forth in the Stock Plan.
“Change in Control Good Reason” has the meaning set forth in the Stock Plan.
“Code” means the Internal Revenue Code of 1986.
“Code Section 409A” means Section 409A of the Code and the regulations and other guidance issued thereunder.
“Committee” means the Compensation and Management Development Committee of the Board.

“Company” means Avon Products, Inc.
“DCP” means the Avon Products, Inc. Deferred Compensation Plan.
“Disability” has the same meaning set forth in the Stock Plan.
“Long-Term Bonus” means the cash bonus payable to a Participant with respect to the time period as determined pursuant to the Plan and Administrative Guidelines.
“Long-Term Incentive Bonus” means the cash bonus payable to a Participant with respect to the performance period as determined pursuant to the Plan and Administrative Guidelines.
“Participant” means any employee of the Company or its Affiliates who is selected to participate in the Plan and granted a Long-Term Incentive Bonus and/or a Long-Term Bonus pursuant to the Plan and the Administrative Guidelines.
“Plan” means this Avon Products, Inc. Long-Term Cash Bonus Plan.
“Plan Year” means a one-year period beginning January 1 and ending on December 31.
“Retirement” has the meaning set forth in the Stock Plan.
“Senior Officer” has the meaning set forth in the Committee’s Charter.
“Separation from Service” means a separation from the service of the Company or an Affiliate within the meaning of and for purposes of Code Section 409A.  “Separates from Service” means the incurrence of a Separation from Service.
“Stock Plan” means the Avon Products, Inc. 2013 Stock Incentive Plan.
		
	III.
	ADMINISTRATION

The Committee or its designee will establish the Administrative Guidelines for administering and operating the Plan.  The Committee may delegate its duties under the Plan to such individuals, and may revoke or change any such delegation, as it deems appropriate from time to time, provided that, notwithstanding any other provision of this Plan to the contrary, it may not delegate duties with respect to determining the eligibility and Awards under the Plan for any Senior Officer.  The Committee or its designee will interpret and construe any and all provisions of the Plan and any determination made by the Committee or its designee under the Plan will be final and conclusive.  Neither the Board nor the Committee, nor any member of the Board or the Committee, nor any employee of the Company will be liable for any act, omission, interpretation, construction or determination made in connection with the Plan (other than acts of willful misconduct) and the members of the Board and the Committee and the employees of the Company will be entitled to indemnification and reimbursement by the Company to the maximum extent permitted by law in respect of any claim, loss, damage or expense (including counsel’s fees) arising from their acts, omissions and conduct in their official capacity with respect to the Plan.

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IV.    ELIGIBILITY AND PARTICIPATION

The Committee or its designee will select the employees of the Company or its Affiliates to participate in the Plan and to receive one or more Awards under the Plan from among such employees of the Company or its Affiliates.  Being eligible for an Award for a particular performance period or time period does not guarantee eligibility for any subsequent Award.  Employees selected to participate in the Plan may differ from Award to Award, performance period to performance period and time period to time period.
V.    GRANT NOTIFICATION

The Committee or its designee will establish procedures for granting Awards under the Plan, including grant date and notification.
VI.    AWARDS

6.1    Performance Measures, Adjustments, Periods and Achievement and Bonus Formula for Long-Term Incentive Bonus.  The Committee or its designee will establish the performance measures, performance period, adjustments to performance measures and level of achievement of performance measures with respect to, and formula for calculating, any Long-Term Incentive Bonus payable under the Plan.  Performance measures may differ from Participant to Participant and from Long-Term Incentive Bonus to Long-Term Incentive Bonus.

6.2    Bonus Time Period and Formula for Long-Term Bonus.  The Committee or its designee will establish the time-period and formula for calculating any Long-Term Bonus payable under the Plan.  The bonus time period and formula may differ from Participant to Participant and from Long-Term Bonus to Long-Term Bonus.

6.2.    Vesting.  The Committee or its designee will establish the vesting requirements for each Award payable under the Plan, including the applicable vesting date, events which may trigger earlier vesting and amount payable upon vesting.   
6.3.    Payment.  Subject to Section 7.5(d) of the Plan, the Committee or its designee will establish the payment requirements for each Award payable under the Plan.  Any Participant who is eligible to participate in the DCP may elect to defer into the DCP the payment of all or a portion of his or her Award, to the extent permitted by and in accordance with the terms and conditions of the DCP and Code Section 409A.
VII.    GENERAL PROVISIONS

7.1    Amendment and Termination.

(a)The Committee or its designee may at any time amend, suspend, discontinue or terminate the Plan; provided, however, that no such amendment, suspension, discontinuance or termination made after the end of the specified performance period or time period, as applicable, will adversely affect the rights of any Participant to any Award, for such applicable performance period or time period.  Notwithstanding the foregoing, the Committee or its designee may at any time amend, suspend, discontinue or terminate the Administrative 

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Guidelines; provided, however, that the Committee may not delegate duties with respect to determining the eligibility and Awards under the Plan for any Senior Officer.  All determinations concerning the interpretation and application of this Section 7.1 will be made by the Committee or its designee.  On and after a Change in Control, neither the Committee nor any designee may amend or terminate any Award under the Plan in a manner that adversely affects such Award without the consent of the holder of the Award.  In the event of any inconsistency between the terms of the Plan and the Administrative Guidelines, except as otherwise expressly provided herein, the terms of the Plan will control.

(b)In the case of Participants employed outside of the United States, the Company or its Affiliates may vary the provisions of the Plan as deemed appropriate to conform to, as required by, or made desirable by, local laws, practices and procedures.

7.2    Designation of Beneficiary.  If a Participant dies while entitled to a payment under the Plan, such payments will be made to his or her estate in accordance with the Plan and the Administrative Guidelines.

7.3    Unfunded Plan/Rights Unsecured.  The Plan will be unfunded.  No provision of the Plan will require the Company or an Affiliate, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor will the Company or an Affiliate maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes.  Participants will have no rights under the Plan other than as unsecured general creditors of the Company.  The Committee or its designee may, however, in the event of a potential Change in Control, determine to deposit an amount sufficient to pay outstanding Awards for each Participant calculated as set forth in Section 7.5(g) into a grantor trust, subject to the claims of the Company’s creditors in the event of the Company’s insolvency.  The grantor trust shall serve as a source of payment of Awards calculated as set forth in Section 7.5(g) if a Participant is involuntarily terminated by the Company without Cause, or terminates for a Change in Control Good Reason, after the Change in Control but prior to payment of outstanding Awards.  If the Change in Control does not occur prior to payment of an outstanding Award and the Company pays Awards to Participants in accordance with the terms and conditions of such Awards, the Company may recoup the amount so deposited in the grantor trust or other segregated arrangement together with earnings thereon.

7.4    Withholding Taxes.  The Company will have the right to deduct from each Award made under the Plan any federal, state and local taxes required by such laws to be withheld with respect to any payment of the Plan.

7.5    Miscellaneous.

(a)    No Right of Continued Employment.  No provision in the Plan will be construed as conferring upon any Participant any right to continue in the employment of the Company or any of its subsidiaries or Affiliates.

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(b)    No Limitation on Corporate Actions.  No provision of the Plan will be construed to prevent the Company or any Affiliate from taking any corporate action which is deemed by it to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any awards made under the Plan.  No employee, Participant or other person will have any claim against the Company or any of its subsidiaries or Affiliates as a result of any such action.

(c)    Nonalienation of Benefits.  Except as expressly provided herein, no Participant will have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under the Plan.  The Company’s obligations under the Plan are not assignable or transferable except that the Company’s obligations hereunder will become the obligations of a company which acquires all or substantially all of the assets of the Company or any company into which the Company may be merged or consolidated.

(d)    Code Section 409A.  To the extent that any Award under the Plan is subject to Code Section 409A, any provision, application or interpretation of the Plan or the Administrative Guidelines that is inconsistent with such Section will be disregarded with respect to such Award, as applicable.  To the extent that any Award is subject to Code Section 409A and is payable upon a Separation from Service, then, notwithstanding any other provision of this Plan or the Administrative Guidelines to the contrary, the Award will not be paid to the Participant during the six-month period immediately following the Participant's Separation from Service if the Participant is then deemed to be a "specified employee" (as that term is defined in Code Section 409A and determined pursuant to procedures and elections made by the Company).  The Award will instead be paid on the first day of the seventh month following such Separation from Service.  The Company will make all determinations as to who is a “specified employee”.  The six month wait provision set forth in this Section 7.5(d) will cease to apply in the event of and following the Participant's death.

(e)    Payment in Cash.  This Plan provides for cash awards and does not provide for awards paid in shares of Company common stock.  Although this Plan incorporates by reference certain definitions and other provisions in the Stock Plan for ease of reference, this Plan is not part of the Stock Plan and no Award will be considered granted under or subject to the Stock Plan or will reduce any shares of Company common stock available for grant or otherwise subject to limits under the Stock Plan.

(f)    Employment Agreements.  The Plan will be a long-term incentive plan for purposes of any employment agreement between the Company or an Affiliate and the Participant.  

(g)    Change in Control.  Except as otherwise provided in a Participant’s employment agreement with the Company in effect on the effective date of the Plan, if (A) a Change in Control occurs prior to the payment of an Award and (B) all Awards that are outstanding have been assumed by the new owner or surviving entity of the Company or its parent company and continued in accordance with their terms and conditions in effect on the date of the Change in Control, and (C) within two (2) years following such Change in Control a Participant experiences a Separation from Service, either: (i) by the Company without Cause; or (ii) due to the Participant incurring a Change in Control Good Reason, then, subject to Sections 

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7.5(d) and 7.5(h) of the Plan, the Award will be fully vested and paid out sixty (60) days following the effective date of the Separation from Service, and any applicable Long-Term Incentive Bonuses shall be calculated as if the applicable performance measures had been achieved at target if the applicable performance period has not yet been completed.  

If, upon a Change in Control, outstanding Awards are not assumed by the new owner or surviving entity of the Company or its parent company and not continued in accordance with their terms and conditions in effect on the date of the Change in Control, then, subject to Sections 7.5(d) and 7.5(h) of the Plan, all outstanding Awards will be fully vested as of the effective date of the Change in Control and paid out sixty (60) days following such date and any applicable Long-Term Incentive Bonuses shall be calculated as if the applicable performance measures had been achieved at target without any proration.

(h)    Clawback of Awards.  Awards issued pursuant to the Plan are subject to forfeiture and/or recoupment in the event a Participant has engaged in misconduct, including a (i) violation of the Company’s Code of Conduct, or (ii) violation of law within the scope of employment with the Company or any Affiliate.  For Participants who are subject to the Company’s Compensation Recoupment Policy, any Award issued to such Participants under the Plan will be considered long-term incentive compensation that is subject to the Company’s Compensation Recoupment Policy.

(i)    Severability.  If any provision of the Plan is held unenforceable, the remainder of the Plan will continue in full force and effect without regard to such unenforceable provision and will be applied as though the unenforceable provision were not contained in the Plan.

(j)    Governing Law.  The Plan will be construed in accordance with and governed by the laws of the State of New York, without reference to the principles of conflict of laws.

(k)    Headings.  Headings are inserted in the Plan for convenience of reference only and are to be ignored in the construction of the provisions of the Plan.

(l)    Rules of Construction.  Except as otherwise expressly provided in the Plan, for purposes of the Plan, any reference in the Plan to:

		
	A.
	plans, programs, arrangements, codes and charters will be deemed to include any and all amendments and restatements thereof, any and all amendments thereto and any and all successor plans, programs, codes and charters thereto, and any such plan, program, arrangement, code or charter may be amended from time to time;

		
	B.
	“determine” or “determination” (and like terms) by the Company or Committee or its respective designee will be deemed to be a determination that is within the sole discretion of the Company or Committee or its respective designee; and

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	C.
	“include” or “including (and like terms) will be deemed to mean “including without limitation”.                 

[Signature on Next Page]

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IN WITNESS WHEREOF, the Plan is hereby executed to be effective as of January 1, 2015.

AVON PRODUCTS, INC.
	
	
	By:                                                                                               

	Name:

	Title:

8Exhibit 4.1

 

In accordance with Instruction 2 to Item 601 of Regulation S-K, below is a schedule setting forth details in which the omitted executed warrants differ from the form of warrant that follows:

 

	 	
Number of Underlying Shares of Common Stock

	
Warrantholder

	
Tranche A 

Warrant Shares

	
Tranche B

Warrant Shares

	
Total Warrant 

Shares

	
A.B.M. IDO Holdings

	
 29,274

	
29,274

	
58,548

	
Adam Newman

	
23,420

	
23,420

	
46,840

	
Ali Ardakani

	
4,684

	
4,684

	
9,368

	
Allianz Biotechnologie

	
227,389

	
227,389

	
454,778

	
Allianz Health Sciences Fund

	
123,899

	
123,899

	
247,798

	
Alois "Luis" Praxmarer and Sandra Praxmarer JTWROS

	
3,512

	
3,512

	
7,024

	
Amir Avniel

	
2,342

	
2,342

	
4,684

	
Ari and Rony Raved

	
11,709

	
11,709

	
23,418

	
Brio Capital Master Fund Ltd.

	
58,548

	
58,548

	
117,096

	
Christopher Morgan

	
23,529

	
23,529

	
47,058

	
Cynergy Brookline Healthcare Fund LLC

	
29,274

	
29,274

	
58,548

	
David Bassa

	
43,906

	
43,906

	
87,812

	
David Greenberg

	
2,341

	
2,341

	
4,682

	
David Grossman

	
2,342

	
2,342

	
4,684

	
Deerfield Special Situations Fund, L.P.

	
23,529

	
23,529

	
47,058

 

		
Number of Underlying Shares of Common Stock

	
Warrantholder

	
Tranche A 

Warrant Shares

	
Tranche B

Warrant Shares

	
Total Warrant 

Shares

	
Deutsch Family Investment Partnership

	
23,419

	
23,419

	
46,838

	
Doron, Tikotzky, Kantor, Gutman Cederboum & Co.

	
2,322

	
2,322

	
4,644

	
Duncan Bathe

	
10,000

	
10,000

	
20,000

	
Enrique Derzovich

	
23,420

	
23,420

	
46,840

	
Erick Lucera

	
1,171

	
1,171

	
2,342

	
Frederick Montgomery

	
9,300

	
9,300

	
18,600

	
G.N.E. Biotechnologies LTD.

	
5,854

	
5,854

	
11,708

	
Giora Davidai

	
2,342

	
2,342

	
4,684

	
Gregory S. Lisi

	
23,419

	
23,419

	
46,838

	
Healthcare Opportunities Master Fund, LP

	
117,096

	
117,096

	
234,192

	
Iroquois Capital Investment Group LLC

	
58,546

	
58,546

	
117,092

	
Iroquois Master Fund Ltd.

	
23,420

	
23,420

	
46,840

	
J. Goldman Master Fund L.P.

	
234,192

	
234,192

	
468,384

	
James P. Agah

	
23,419

	
23,419

	
46,838

	
Jan J. Laskowski and Sofia M. Laskowski JTWROS

	
5,854

	
5,854

	
11,708

	
Jarrod Newman

	
4,684

	
4,684

	
9,368

	
JBS Healthcare Ventures LLC

	
23,420

	
23,420

	
46,840

 

 

		
Number of Underlying Shares of Common Stock

	
Warrantholder

	
Tranche A 

Warrant Shares

	
Tranche B

Warrant Shares

	
Total Warrant 

Shares

	
Jeffrey Fox

	
2,342

	
2,342

	
4,684

	
John Doolan

	
11,710

	
11,710

	
23,420

	
John Molter

	
8,196

	
8,196

	
16,392

	
Jon E. Newman

	
17,564

	
17,564

	
35,128

	
Klaus Kretschmer

	
35,129

	
35,129

	
70,258

	
Laurence Chang

	
20,000

	
20,000

	
40,000

	
M. Kingdon Offshore Master Fund L.P.

	
234,192

	
234,192

	
468,384

	
Mark Mizrahi

	
3,505

	
3,505

	
7,010

	
Medlant Biotech Ltd.

	
43,906

	
43,906

	
87,812

	
Michael Geschwer

	
23,419

	
23,419

	
46,838

	
Mor Research Applications, Ltd.

	
23,412

	
23,412

	
46,824

	
NauVista Capital Master Fund LP

	
23,420

	
23,420

	
46,840

	
Pulmonox Technologies Corporation

	
117,080

	
117,080

	
234,160

	
Rhona Beth Shanker

	
2,000

	
2,000

	
4,000

	
Robert Katz

	
7,026

	
7,026

	
14,052

	
Ron Bentsur

	
23,419

	
23,419

	
46,838

	
Ronald A. Soicher

	
2,500

	
2,500

	
5,000

	
Rosalind Master Fund L.P.

	
120,000

	
120,000

	
240,000

	
Satheesh Kumar and Anju Satheesh JTWROS

	
 5,855

	
 5,855

	
 11,710

	
Schonfeld Fundamental Equity Fund LLC

	
70,258

	
70,258

	
140,516

	
Steven Lisi

	
117,112

	
117,112

	
234,224

	
Asher Tal

	
2,341

	
2,341

	
4,682

	
Tatiana Kotchoubey

	
5,854

	
5,854

	
11,708

	
Todd A. Deutsch

	
11,710

	
11,710

	
23,420

	
Whitney Capital Series Fund LLC

	
163,934

	
163,934

	
327,868

	
Yoori Lee

	
2,342

	
2,342

	
4,684

 

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

AIT THERAPEUTICS, INC.

 

Tranche A Warrant Shares:  _______

Tranche B Warrant Shares: _______

	
Total Warrant Shares:  _______

	
Issue Date:  February 16, 2018

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, __________ or [their/its] assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after February 16, 2018 (the “Initial Exercise Date”), to subscribe for and purchase from AIT Therapeutics, Inc., a Delaware corporation (the “Company”), at the purchase price of the Exercise Price as defined in Section 2(b) per one share of Common Stock:

 

		a)	
a total of (and no less than) _______ shares (as subject to adjustment hereunder, the “Tranche A Warrant Shares”) of Common Stock at any time on or prior to the close of business on the third Business Day following the Issue Date (the “Tranche A Termination Date”) but not thereafter; and

 

		b)	
up to _______ shares (as subject to adjustment hereunder, the “Tranche B Warrant Shares” and, together with the Tranche A Warrant Shares, the “Warrant Shares”) of Common Stock at any time on or prior to the close of business on the three year anniversary of the Issue Date (the “Tranche B Termination Date”) but not thereafter.

 

Section 1.          Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated February 16, 2018, among the Company and the purchasers signatory thereto.

 

Section 2.             Exercise.

 

a)           Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made:

 

i.          with respect to the Tranche A Warrants, in whole but not in part, at any time or times on or after the Initial Exercise Date and on or before the Tranche A Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Tranche A Notice of Exercise in the form attached hereto as Exhibit A-1 concurrently with payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank; and

 

ii.          with respect to the Tranche B Warrants, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Tranche B Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Tranche B Notice of Exercise in the form attached hereto as Exhibit A-2 and within three (3) Trading Days of the date said Tranche B Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c) below.

 

In each case, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has received all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in issuances of a portion of the total number of Tranche B Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Tranche B Warrant Shares issuable hereunder in an amount equal to the applicable number of Tranche B Warrant Shares issued.  The Holder and the Company shall maintain records showing the number of Warrant Shares issued and the date of such issuances. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Tranche B Warrant Shares hereunder, the number of Tranche B Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

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b)          Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $4.25, subject to adjustment hereunder (the “Exercise Price”).

 

c)          Cashless Exercise.  If at any time after the Effectiveness Date (as defined in the Registration Rights Agreement), there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Tranche B Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Tranche B Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the number of Tranche B Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Tranche B Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares.  The Company agrees not to take any position contrary to this Section 2(c).

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

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		d)	
Mechanics of Exercise.

 

i.          Delivery of Warrant Shares Upon Exercise.  Warrant Shares issued hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the delivery to the Company of the Notice of Exercise, which delivery of such notice, in the case of an exercise in respect of the Tranche A Warrant Shares, shall occur concurrently with the delivery of the relevant Exercise Price (such date, the “Warrant Share Delivery Date”).   The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid.  If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.

 

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ii.          Delivery of New Warrants Upon Exercise.  If, with respect to the Tranche B Warrant Shares, this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Tranche B Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Tranche B Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.          Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.          No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v.          Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

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e)          Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. The Holder acknowledges that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.   In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be [4.99% / 9.985%] of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

f)           No Cash Settlement.  Notwithstanding anything to the contrary contained herein, under no circumstances will the Company be required to settle any Warrant exercise for cash, whether by net cash settlement or otherwise; provided that the liquidated damages provisions set forth in Section 2(d)(i) above shall remain in full force and effect.

 

Section 3.              Certain Adjustments.

 

a)            Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

 

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b)          Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance, to the extent permissible, for the Holder until such time not to exceed six (6) months, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c)          Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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d)          Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

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e)            Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)             Notice to Holder.

 

i.           Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.          Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice  except as may otherwise be expressly set forth herein.

 

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Section 4.            Transfer of Warrant.

 

a)          Transferability.  This Warrant may not be transferred prior to the Tranche A Termination Date. Following the Tranche A Termination Date and subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

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b)          New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

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

 

d)          Representation by the Holder.  The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.            Miscellaneous.

 

a)          Termination.  Notwithstanding any provision of this Warrant to the contrary, if the Holder hereunder has not exercised this Warrant with respect to the entire amount of Tranche A Warrant Shares on or before the Tranche A Termination Date, this Warrant shall, as of such Tranche A Termination Date, expire, terminate and be null and void with respect to any right to acquire shares of Common Stock hereunder.

 

b)          No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

 

c)          Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

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d)            Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

e)             Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon exercise of the rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

f)              Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

 

g)             Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

h)             Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i)              Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)              Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)             Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)              Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m)            Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)            Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

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

 

(Signature Page Follows)

 

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

 

	 	
AIT THERAPEUTICS, INC.

 

	 	
By:__________________________________________

     Name:  Steven Lisi

     Title:  Chief Executive Officer

14

 

EXHIBIT A-1

 

TRANCHE A NOTICE OF EXERCISE

TO:          AIT THERAPEUTICS, INC.

(1)           The undersigned hereby elects to purchase all of its Tranche A Warrant Shares of the Company pursuant to the terms of the Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)           Payment shall take the form of lawful money of the United States.

 

(3)           Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________

_______________________________

_______________________________

(4)  Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

EXHIBIT A-2

TRANCHE B NOTICE OF EXERCISE

TO:          AIT THERAPEUTICS, INC.

(4)           The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(5)           Payment shall take the form of (check applicable box):

 

☐ in lawful money of the United States; or

 

☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(6)           Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________

_______________________________

_______________________________

(4)  Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

EXHIBIT B

ASSIGNMENT FORM

 (To assign the foregoing Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
Name:

	
______________________________________

	 	
(Please Print)

	
Address:

	______________________________________
	
 

Phone Number:

Email Address:

	
(Please Print)

______________________________________

______________________________________

	
Dated: _______________ __, ______

	 
	
Holder’s Signature: _______________

	 
	
Holder’s Address: _______________

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