Document:

Exhibit 4.69

 

	
US$120,000,000

	
November 18, 2014

	 	
New York, New York

EXCHANGEABLE PROMISSORY NOTE

FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, DRYSHIPS INC., a company organized under the laws of the Marshall Islands (the "Borrower"), hereby unconditionally promises to pay to the order of Alley Finance Co., a company organized under the laws of the Marshall Islands and a wholly owned subsidiary of Ocean Rig UDW Inc., or its permitted assigns (the "Noteholder", and together with the Borrower, the "Parties"), the principal amount of ONE HUNDRED TWENTY MILLION UNITED STATES DOLLARS (US$120,000,000) (the "Loan") or the principal amount then outstanding, together with all accrued interest thereon and all other amounts owing hereunder, as provided in this Exchangeable Promissory Note (this "Note").

1.            Definitions. Capitalized terms used herein shall have the meanings set forth in this Section 1.

"ABN AMRO Facility" means the term loan facility provided to the Borrower pursuant to the ABN AMRO Facility Agreement.

"ABN AMRO Facility Agreement" means the facility agreement, dated as of November 14, 2014, among the Borrower, ABN AMRO Bank N.V., in its various capacities, and the other parties thereto.

"ABN AMRO Obligations" shall have the meaning given to the term "Secured Liabilities" in the ABN AMRO Facility Agreement.

"ABN AMRO Rate" means the interest rate per annum that is in effect under the ABN AMRO Facility for the relevant period (or if the ABN AMRO Facility has been repaid in full, the interest rate per annum that would have been in effect had amounts remained outstanding under the ABN AMRO Facility). When determining the ABN AMRO Rate for periods after the ABN AMRO Facility has been repaid in full, the following assumptions shall apply: (i) an Interest Period (as defined in the ABN AMRO Facility Agreement) of three (3) months shall have been selected; and (ii) at all times after the Initial Maturity Date (as defined in the ABN AMRO Facility Agreement), the "Margin" under the ABN AMRO Facility Agreement shall be equal to the greater of (a) 8.75% and (b) the highest "Margin" that was actually agreed pursuant to Section 8.5 of the ABN AMRO Facility Agreement while the ABN AMRO Facility was outstanding.

"Advance" means the disbursement of the Loan made by the Noteholder to the Borrower pursuant to Section 2.2.

"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

"Applicable Rate" means:

		(i)	For the period from the Closing Date to and including the date that is one year after the Closing Date, a rate per annum equal to (a) the ABN AMRO Rate plus (b) 3.00%;

		(ii)	After the date that is one year after the Closing Date, the greater of:

		1)	the ABN AMRO Rate plus 3.00%, and

		2)	LIBOR plus 11.75%.

"Anti-Terrorism Law" means any Law related to money laundering or financing terrorism, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56) (the "USA PATRIOT Act"), the Currency and Foreign Transactions Reporting Act, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959) (also known as the "Bank Secrecy Act"), the Trading With the Enemy Act (50 U.S.C. § I et seq., as amended) and Executive Order 13224 (effective September 24, 2001).

"Blocked Person" means any Person that (a) is publicly identified on the most current list of "Specially Designated Nationals and Blocked Persons" published by the Office of Foreign Assets Control of the US Department of the Treasury ("OFAC") or resides, is organized or chartered, or has a place of business in a country or territory subject to OFAC sanctions or embargo programs or (b) is publicly identified as prohibited from doing business with the United States under the International Emergency Economic Powers Act, the Trading With the Enemy Act, or any other Law.

"Borrower" has the meaning set forth in the introductory paragraph. 

"Borrowing Notice" has the meaning set forth in Section 2.2.

"Business Day" means any day that is not a Saturday, Sunday or a day on which banking institutions in New York, New York, London, England and Athens, Greece are not required to be open.

"Change of Control" means any transaction or series of transactions resulting, directly or indirectly, in (a) the sale of all or substantially all of the assets of the Borrower

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and its Subsidiaries taken as a whole to any Person or group; (b) a sale resulting in more than 50 percent of the Equity Interests of the Borrower being held by any Person or group; or (c) a merger, consolidation, recapitalization or reorganization of the Borrower with or into any Person.

"Closing Date" means November 18, 2014.

"Commitment Period" means the period from the Closing Date to and including December I, 2014.

"Control", including the terms "controlled by" and "under common control with", when used with respect to any specified Person, means the possession, directly or indirectly, of (a) more than 50% of the securities or other ownership interests in such Person or the voting power of such Person or (b) the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

"Debt" of the Borrower, means all (a) indebtedness for borrowed money; (b) obligations for the deferred purchase price of property or services, except trade payables arising in the ordinary course of business; (c) obligations evidenced by notes, bonds, debentures or other similar instruments; (d) obligations as lessee under capital leases; (e) obligations in respect of any interest rate swaps, currency exchange agreements, commodity swaps, caps, collar agreements or similar arrangements entered into by the Borrower providing for protection against fluctuations in interest rates, currency exchange rates or commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies; (f) obligations under acceptance facilities and letters of credit; (g) guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person, or otherwise to assure a creditor against loss, in each case, in respect of indebtedness set out in clauses (a) through (f) of a Person other than the Borrower; and (h) indebtedness set out in clauses (a) through (g) of any Person other than Borrower secured by any lien on any asset of the Borrower, whether or not such indebtedness has been assumed by the Borrower.

"Default" means any of the events specified in Section 10 that constitutes an Event of Default or which, upon the giving of notice, the lapse of time, or both pursuant to Section 10 would, unless cured or waived, become an Event of Default.

"Default Rate" means, at any time, the Applicable Rate plus 3%.

"Event of Default" has the meaning set forth in Section 10.

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"Equity Interests" means (a) any capital stock, share, partnership or membership interest, unit of participation or other similar interest (however designated) in any Person and (b) any option, warrant, purchase right, conversion right, exchange right, voting right or other contractual obligation which would entitle any Person to acquire any such interest in such Person or otherwise entitle any Person to share in the equity, profit, earnings, losses or gains of such Person (including stock appreciation, phantom stock, profit participation or other similar rights).

"Exchange Price" means US$13.50 per Ocean Rig Share, as such price may be adjusted pursuant to Section 12.3.

"Existing Debt" means the Borrower's convertible bond in the initial principal amount of $700,000,000, issued under an indenture dated 17 November 2009 (as amended from time to time) and maturing on 1 December 2014.

"Funding Date" means the date that the Advance is funded by the Noteholder.

"GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time.

"Governmental Authority" means any Federal, state, local, foreign, political subdivision, court, administrative agency, commission or department or other governmental authority, regulatory body or instrumentality.

"Interest Payment Date" means the last Business Day in each March, June, September and December of each year, with the first Interest Payment Date being the last Business Day in December 2014.

"Law" as to any Person, means any law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement of any Governmental Authority and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.

"LIBOR" means, for any day, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person that takes over the administration of that rate) for dollars deposits having a maturity of three (3) months displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service that publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Noteholder may specify another page or service displaying the relevant rate after consultation with the Borrower.

"Loan" has the meaning set forth in the introductory paragraph.

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"Material Adverse Effect" means a material adverse effect on (a) the business, assets, properties, operations or condition (financial or otherwise) of the Borrower or its Subsidiaries taken as a whole; (b) the validity or enforceability of the Note; (c) the material rights or remedies of the Noteholder hereunder; or (d) the Borrower's ability to perform any of its material obligations hereunder.

"Maturity Date" means the earlier of (a) the Scheduled Maturity Date, and (b) the date on which all amounts under this Note shall become due and payable pursuant to Section 11.

"Maximum Principal Amount" means $120,000,000.

"Note" has the meaning set forth in the introductory paragraph.

"Noteholder" has the meaning set forth in the introductory paragraph.

"Ocean Rig" means Ocean Rig UDW Inc. a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands.

"Ocean Rig Shares" means (i) the duly authorized and issued common stock of Ocean Rig with a par value of $0.01 per share, and (ii) any capital shares into which such common shares shall have been changed or any share capital resulting from a reclassification of such common shares.

"Order" as to any Person, means any order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case, applicable to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.

"Parties" has the meaning set forth in the introductory paragraph.

"Person" means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, Governmental Authority or other entity.

"Proceedings" means actions, suits, claims, investigations or legal or administrative or arbitration proceedings

"Scheduled Maturity Date" means the earlier of (i) the date falling 18 months after the Funding Date and (ii) June 1, 2016.

"Subsidiary" means, with respect to any Person, any other Person of which the outstanding equity securities or other ownership interests having the power to elect the

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majority of the board of directors or comparable managing body of such Person are owned, directly or indirectly, by the first Person.

"Threshold Amount" means $25,000,000.

"USA PATRIOT Act" has the meaning set forth in the definition of Anti-Terrorism Law.

2.                   Loan Disbursement Mechanics.

2.1            Commitment. Subject to satisfaction of the conditions precedent set forth herein, the Noteholder shall make the Loan available to the Borrower in one Advance during the Commitment Period in an amount not to exceed the Maximum Principal Amount. Amounts borrowed and repaid hereunder may not be reborrowed. Upon the expiration of the Commitment Period, the Noteholder shall no longer be obligated to make an Advance to the Borrower hereunder.

2.2            The Advance. (A) As a condition to the disbursement of the Advance, the Borrower shall, at least one (1) Business Day prior to the requested disbursement date, deliver to the Noteholder a written notice in the form attached hereto as Exhibit A (a "Borrowing Notice") setting out (a) that no Default has occurred and is continuing; (b) the amount of the Advance, which amount may not exceed the Maximum Principal Amount; and (c) the date on which the Advance is to be disbursed. The Borrowing Notice shall be deemed to repeat the Borrower's representations and warranties in Section 7 as of the date thereof. The Loan shall be available in one (1) Advance in a principal amount not to exceed the Maximum Principal Amount. Subject to satisfaction of the conditions precedent set forth herein and the terms hereof, upon receipt of the Borrowing Notice, the Noteholder shall make available to the Borrower, on the disbursement date set forth in the Borrowing Notice, the Advance in immediately available funds.

2.3            Conditions to the Advance. The obligation of the Noteholder to make the Advance hereunder is subject to satisfaction of the following conditions precedent:

		(a)	The Borrower shall have duly executed and delivered this Note to the Noteholder;

		(b)	The Noteholder shall have received from the Borrower a copy of the officer's certificate attaching and/or certifying (i) the organizational documents of the Borrower, (ii) the resolutions or other authority documents of the Borrower required in connection with the Loan, (iii) as to the incumbency of the members of board of directors of the Borrower, the signatory of the Borrower executing this Note, and the signatory of the Borrower that will execute the Borrowing Notice;

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		(c)	A good standing certificate in respect of the Borrower issued by the appropriate governmental authority in its jurisdiction of organization;

		(d)	The Noteholder shall have received a copy of a certificate from the chief executive officer or any other senior executive officer of the Borrower certifying that the execution, delivery and performance by the Borrower of this Note and compliance by the Borrower and its Subsidiaries with the terms and conditions herein and the consummation of the transactions contemplated hereby do not and will not (i) infringe or conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, the documents constituting the Borrower or any of its Subsidiaries; (ii) infringe or conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Borrower or any of its Subsidiaries pursuant to any loan agreement, facility agreement, indenture, trust deed, mortgage or other agreement or instrument to which the Borrower or any of its Subsidiaries is a party or by which it or any of its properties is bound; or (iii) infringe any existing applicable law, rule or regulation or any judgment, decree or order of any applicable government, governmental body or court having jurisdiction over the Borrower or any of its subsidiaries or any of their respective properties;

		(e)	The Noteholder shall have received legal opinions addressed to the Noteholder from New York and Marshall Islands counsel to the Borrower in form and substance acceptable to the Noteholder;

		(f)	The Noteholder shall have received a fairness opinion in form and substance acceptable to the Noteholder;

		(g)	The Noteholder shall have received evidence satisfactory to it that the Existing Debt will be repaid in full by December 1, 2014;

		(h)	The Noteholder shall have received a Borrowing Notice in accordance with Section 2.2;

		(i)	No Default or Event of Default shall have occurred and be continuing or would be caused by the funding of the Advance;

		(j)	The Noteholder shall have received evidence satisfactory to the Noteholder that the Borrowers has paid the fees required pursuant to Section 4 hereof; and

		(k)	There has been no Material Adverse Effect.

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2.4            Ranking; Subordination. The Loan will be the Borrower's general unsecured senior obligation and will rank equally in right of payment to all of its existing and future obligations that are not expressly subordinated in right of payment to the Loan. Notwithstanding the foregoing, the payment and performance by the Borrower of its obligations in connection with this Loan shall be subordinated to the ABN AMRO Obligations until the repayment in full of the ABN AMRO Obligations and shall be subject to certain restrictions on prepayment as set forth in the ABN AMRO Facility Agreement; provided that the Borrower shall be permitted to make regularly scheduled payments of principal, interest and fees hereunder pursuant to Section 3.1, Section 4.1 and Article 5 (including the repayment of all amounts due on the Maturity Date) so long as no Default (as defined in the ABN AMRO Facility Agreement) shall have occurred and be continuing.

3.                   Final Payment Date; Optional Prepayments.

3.1            Final Payment Date. Subject to Section 2.4, the aggregate unpaid principal amount of the Loan, all accrued and unpaid interest, fees, and all other amounts payable under this Note, shall be due and payable on the Maturity Date.

3.2            Optional Prepayment. Subject to Section 2.4, the Borrower may prepay, without fees or penalties, the Loan in whole or in part at any time or from time to time by paying the principal amount to be prepaid (which shall be in a minimum amount of $1,000,000 or a multiple of that amount) together with accrued interest thereon to the date of prepayment in accordance with the terms hereof.

4.                   Fees.

4.1 Arrangement Fee. The Borrower shall pay to the Noteholder a fee in the amount of $3,000,000 on the Closing Date.

5.                  Interest.

5.1            Interest Rate. Except as otherwise provided herein, the outstanding principal amount of the Loan shall bear interest each day at the Applicable Rate for such day from the date the Loan was made until the Loan is paid in full, whether at maturity, upon acceleration, by prepayment or otherwise.

5.2            Interest Payment Dates. Interest shall be payable quarterly m arrears to the Noteholder on each Interest Payment Date.

5.3            Default Interest. If any amount payable hereunder is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such overdue amount shall bear interest at the Default Rate from the date of such non-payment until such overdue amount is paid in full.

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5.4            Computation of Interest and Fees. All computations of interest and fees shall be made on the basis of a year of 365 days and the actual number of days elapsed. Interest on the Loan shall begin to accrue on the day on which the Advance is made, and shall not accrue on the Loan for the day on which it is paid.

5.5            Interest Rate Limitation. lf at any time and for any reason whatsoever, the interest rate payable on the Loan shall exceed the maximum rate of interest permitted to be charged by the Noteholder to the Borrower under applicable Law, such interest rate shall be reduced automatically to the maximum rate of interest permitted to be charged under applicable Law and that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest permitted by applicable Law shall be deemed a voluntary prepayment of principal or, if the ABN AMRO Facility is outstanding, returned to the Noteholder.

5.6            Taxes. All payments in respect of or relating to this Note by the Borrower shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of any tax jurisdiction unless the withholding or deduction is required by Jaw. If withholding or deduction is required by Jaw, the Borrower shall pay such additional amounts as are necessary in order that the net amounts received by the Noteholder after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of or relating to this Note in the absence of the withholding or deduction.

6.                  Payment Mechanics.

6.1            Manner of Payments. All payments of interest, principal and fees shall be made in lawful money of the United States of America no later than 12:00 PM New York time on the date on which such payment is due by wire transfer of immediately available funds to the Noteholder's account at a bank specified by the Noteholder in writing to the Borrower from time to time.

6.2            Application of Payments. Subject to Section 2.4, all payments made hereunder shall be applied first to the payment of any fees or charges outstanding hereunder, second to accrued interest, and third to the payment of the principal amount outstanding under the Note.

6.3            Business Day Convention. Whenever any payment to be made hereunder shall be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest payable under this Note.

6.4            Rescission of Payments. If at any time any payment made by the Borrower under this Note is rescinded or must otherwise be restored or returned upon the

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insolvency, bankruptcy or reorganization of the Borrower or otherwise, the Borrower's obligation to make such payment shall be reinstated as though such payment had not been made.

6.5            Repayment with Ocean Rig Shares.  Amounts payable on the Maturity Date may, subject to compliance with any restrictions set forth in the ABN AMRO Facility Agreement, at the option of the Noteholder in its sole and absolute discretion, be required to be repaid, in whole or in part (such amount that is required to be repaid through delivery of Ocean Rig Shares, the "PIK Amount"), by delivery to the Noteholder of Ocean Rig Shares as set forth herein. Repayment of the PIK Amount shall be satisfied upon delivery to the Noteholder of Ocean Rig Shares having an aggregate value (based on each Ocean Rig Share having a value equal to the Exchange Price) equal to (a) the PIK Amount less (b) an amount equal to the difference between the aggregate amount of interest paid to date on the PIK Amount and the aggregate amount of interest that would have been payable to date on the PIK Amount had the PIK Amount accrued interest during such period at a rate that was at all times 3.5% less than the interest rate that was actually in effect during such period.

7.                    Representations and Warranties. The Borrower hereby represents and warrants to the Noteholder on the date hereof as follows:

7.1            Existence; Compliance With Laws. The Borrower is (a) a corporation duly formed, validly existing and in good standing under the Jaws of its jurisdiction of incorporation and has the requisite power and authority, and the legal right, to own, lease and operate its properties and assets and to conduct its business as it is now being conducted and (b) in compliance with all Laws and Orders applicable to it or by which any of its properties or assets are bound.

7.2            Power and Authority. The Borrower has the power and authority, and the legal right, to execute and deliver this Note and to perform its obligations hereunder.

7.3            Authorization; Execution and Delivery. The execution and delivery of this Note by the Borrower and the performance of its obligations hereunder have been duly authorized by all necessary corporate action and in accordance with all applicable Laws. The Borrower has duly executed and delivered this Note.

7.4            No Approvals. No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in order for the Borrower to execute, deliver, or perform any of its obligations under this Note.

7.5            No Violations. The execution and delivery of this Note and the consummation by the Borrower of the transactions contemplated hereby do not and will not (including, without limitation, after the giving of notice or the passage of time) (a)

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violate any provision of the Borrower's organizational documents; (b) violate any Law or Order applicable to the Borrower or by which any of its properties or assets are bound; or (c) constitute a default or an event of default under any material agreement or contract by which the Borrower is bound.

7.6            Enforceability. This Note is a valid, legal and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to the effects of (a) bankruptcy, insolvency, reorganization, moratorium and similar laws effecting creditors' rights generally and (b) general equitable principles (regardless of whether enforcement is sought in equity or at law).

7.7            No Litigation. No action, suit, litigation, investigation or proceeding of, or before, any arbitrator or Governmental Authority is pending or, to its knowledge, threatened by or against the Borrower or any of its property or assets (a) with respect to the Note or any of the transactions contemplated hereby or (b) that could reasonably be expected to have a Material Adverse Effect.

8.                  Affirmative Covenants. Until all amounts outstanding under this Note have been paid in full and the Commitment Period has ended, the Borrower shall, and shall unless otherwise specified cause each of its Subsidiaries to:

8.1            Maintenance of Existence. (a) Preserve, renew and maintain in full force and effect its organizational existence and (b) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

8.2            Compliance.Comply with (a) all of the terms and provisions of its organizational documents; (b) its obligations under its material contracts and agreements; and (c) all Laws and Orders applicable to it and its business, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

8.3            Payment Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings, and reserves in conformity with GAAP with respect thereto have been provided on its books and such failure could not reasonably be expected to have a Material Adverse Effect.

8.4            Notice of Certain Events. As soon as possible and in any event within two (2) Business Days after it becomes aware that a Default or an Event of Default has occurred, notify the Noteholder in writing of the nature and extent of the relevant default.

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8.5            Use of Proceeds. Use the proceeds of the Loan to repay the Existing Debt.

8.6            Maintenance of Ocean Rig Shares. After the termination or repayment in full of the ABN AMRO Facility, the Borrower shall at all times maintain ownership and control of freely available Ocean Rig Shares (such shares to be free of impairments in accordance with Section 12.4) in an amount sufficient to satisfy in full the Noteholder's exchange rights pursuant to Section 12 hereof if the Noteholder were to exchange the entire outstanding amount of the Loan for Ocean Rig Shares on the date of determination.

8.7            Further Assurances. Upon the request of the Noteholder, promptly execute and deliver such further instruments and do or cause to be done such further acts as may be necessary or advisable to carry out the intent and purposes of this Note.

8.8            Financial Covenants. The Borrower shall at all times maintain, on a consolidated basis, a:

		(a)	Minimum Market Adjusted Equity Ratio of20%;

		(b)	Minimum Interest Cover Ratio of 2.05 to 1.00; and

		(c)	Minimum Market Adjusted Net Worth of$1,000,000,000.

In this clause, the following definitions shall apply:

"Adjusted Equity" means, as of any compliance date, the value of the stockholders' equity of the Group determined on a consolidated basis in accordance with GAAP and as shown in the consolidated balance sheets for the Borrower in the Applicable Accounts, adjusted by adding or subtracting (depending on whether the same is positive or negative) any difference between:

		(a)	the value of Total Assets determined on a consolidated basis in accordance with GAAP and as shown in such consolidated balance sheets; and

		(b)	the Market Value Adjusted Total Assets;

"Applicable Accounts" means, in relation to a compliance date or an accounting period, the consolidated balance sheets and related consolidated statements of stockholders' equity, income and cash flows of the Borrower set out in the annual financial statements or interim financial statements prepared as of the compliance date or, as the case may be, the last day of the accounting period in question;

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"EBITDA" means, for any accounting period, the consolidated net income of the Group for that accounting period:

		(a)	plus, to the extent deducted in computing consolidated Net Income of the Group for that accounting period, the sum, without duplication, of:

(i)            all federal, state, local and foreign taxes and tax distributions;

(ii)            Net Interest Expenses; and

(iii)            depreciation, depletion, amortisation of intangibles and other non­cash charges or non-cash losses (including non-cash transaction expenses and the amortisation of debt discounts) and any extraordinary, exceptional or infrequently occurring losses not incurred in the ordinary course of business;

		(b)	minus, to the extent added in computing consolidated net income of the Group for that accounting period, any non-cash income or non-cash gains and any extraordinary, exceptional or infrequently occurring gains not incurred in the ordinary course of business;

all determined on a consolidated basis in accordance with GAAP and as shown in the consolidated statements of income for the Group in the Applicable Accounts;

"Group" means, together, the Borrower and its subsidiaries (direct or indirect);

"Interest Coverage Ratio" means, in relation to a compliance date or an accounting period, the ratio of (a) EBITDA for the most recent financial period of the Group ending on the compliance date to (b) the Net Interest Expenses for that financial period (calculated on a trailing 12-months basis);

"Market Adjusted Equity Ratio" means, in relation to a compliance date, the ratio of (a) the Adjusted Equity for the most recent financial period of the Group ending on the compliance date to (b) the aggregate of (i) Total Interest Bearing Liabilities and (ii) Adjusted Equity for that financial period;

"Market Value" means, in relation to each fleet vessel, the market value of the vessel as determined by the management of the Borrower;

"Market Value Adjusted Net Worth" means Paid-Up Capital plus General Reserves plus Retained Earnings adjusted to reflect the difference between the book values of the fleet vessels and the Market Values of all fleet vessels at any relevant time;

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"Market Value Adjusted Total Assets" means, at any time, Total Assets adjusted to reflect the Market Value of all fleet vessel;

"Net Income" means, in relation to each financial year of the Borrower, the aggregate income of the Group appearing in the Applicable Accounts for that financial year less the aggregate of:

		(a)	the amounts incurred by the Group during that financial year as expenses of its business;

		(b)	depreciation, amortization and all interest in respect of all Financial Indebtedness of the Group paid by all members of the Group during that financial year;

		(c)	Net Interest Expenses;

		(d)	taxes; and

		(e)	other items charged to the Borrower's consolidated profit and loss account for the relevant financial year;

"Net Interest Expenses" means, as of any compliance date, the aggregate of all interest, commitment and other fees, commissions, discounts and other costs, charges or expenses accruing due from all the members the Group during that accounting period less interest income received, determined on a consolidated basis in accordance with GAAP and as shown in the consolidated statements of income for the Group in the Applicable Accounts;

"Paid-Up Capital", "General Reserves" and "Retained Earnings" have the meanings described to them in the Applicable Accounts;

"Total Assets" means, as of any compliance date, the aggregate value of all trade debtors and the value of all stock (valued in accordance with GAAP) and all other investments and other tangible and intangible assets of the Group properly included in the Applicable Accounts as "fixed assets" in accordance with GAAP but excluding any assets held on trust;

"Total Interest Bearing Liabilities" means, as of any compliance date, the consolidated total amount of the interest bearing Financial Indebtedness of the Group; and

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"Total Liabilities" means, as of any compliance date, the aggregate Financial Indebtedness of the Group.

9.                  Negative Covenants. Until all amounts outstanding under this Note have been paid in full and the Commitment Period has ended, the Borrower shall not, and shall not unless otherwise specified permit any of its Subsidiaries to:

9.1            Compliance With Anti-Terrorism Regulations

		(a)	(i) Violate any Anti-Terrorism Laws or (ii) engage in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of prohibited offenses designatedby the Organization for Economic Co-operation and Development's Financial Action Task Force on Money Laundering or (iii) permit any of its Affiliates to violate these laws or engage in these actions.

		(b)	(i) Become a Blocked Person or (ii) permit any of its Affiliates to become a Blocked Person.

		(c)	Conduct any business or engage in making or receiving any contribution of goods, services or money to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction related to, any property or interests in property blocked pursuant to any Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law or (iv) permit any of its Affiliates to do any of the foregoing.

9.2            Merger.  The Borrower shall not enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction unless the surviving entity expressly agrees to assume and be bound by the Borrower's obligations in connection with the Loan.

9.3            Dividends. While any amount is outstanding under this Note, the Borrower shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital.

10.                Events of Default. The occurrence and continuance of any of the following shall constitute an Event of Default hereunder:

10.1            Failure to Pay. The Borrower fails to pay (a) any principal amount of the Loan when due or (b) interest, fees or any other amount when due and such failure continues for three (3) Business Days.

10.2            Breach of Representations and Warranties. Any representation or warranty made

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or deemed made by the Borrower to the Noteholder herein is incorrect in any material respect on the date as of which such representation or warranty was made or deemed made.

10.3            Breach of Covenants. The Borrower fails to observe or perform (a) any covenant, condition or agreement contained in Section 8.8 or (b) any other covenant, obligation, condition or agreement contained in this Note other than those specified in clause (a) above and Section 10.1 and such failure continues for 20 days.

10.4            Cross-Acceleration. Any amount (in excess of the Threshold Amount) of any of the Debt of the Borrower (other than debt arising under this Note) becomes due and payable by acceleration before its maturity.

10.5            Bankruptcy.

		(a)	The Borrower commences any case, proceeding or other action (i) under anyexisting or future Law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or (ii) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower makes a general assignment for the benefit of its creditors;

		(b)	there is commenced against the Borrower any case, proceeding or other action of a nature referred to in Section 10.5(a) above which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged or unbonded for a period of 90 days;

		(c)	there is commenced against the Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof;

		(d)	the Borrower takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section 10.5(a), Section 10.5(b) or Section 10.5(c) above; or

		(e)	the Borrower is generally not able to, or admits in writing its inability to,

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pay its debts as they become due.

10.6            Judgments. One or more judgments or decrees shall be entered against the Borrower and all of such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof, in an amount in excess of the Threshold Amount.

10.7            Change of Control. The occurrence of a Change of Control.

11.                 Remedies. Upon the occurrence of any Event of Default and at any time thereafter during the continuance of such Event of Default, the Noteholder may at its option, by written notice to the Borrower (a) terminate its commitment to make the Advance hereunder; (b) declare the entire principal amount of this Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately due and payable; and/or (c) exercise any or all of its rights, powers or remedies under this Note or applicable Law; provided, however that, if an Event of Default described in Section 10.5 shall occur, the principal of and accrued interest on the Loan shall become immediately due and payable without any notice, declaration or other act on the part of the Noteholder.

12.                Exchange. Subject to compliance with any restrictions set forth in the ABN AMRO Facility Agreement, this Note shall be exchangeable into Ocean Rig Shares on the terms and conditions set forth in this Section 12.

12.1            Exchange Right. At any time or times on or after the Funding Date, the Noteholder shall be entitled to exchange any portion of the outstanding amount of the Loan (any such amount, the "Exchange Amount") for Ocean Rig Shares as set forth herein.

12.2            Exchange Rate. The Borrower's obligation to deliver Ocean Rig Shares pursuant to this Section 12 shall be satisfied upon delivery to the Noteholder of Ocean Rig Shares having an aggregate value (based on each Ocean Rig Share having a value equal to the Exchange Price) equal to (a) the Exchange Amount less (b) an amount equal to the difference between the aggregate amount of interest paid to date on the Exchange Amount and the aggregate amount of interest that would have been payable to date on the Exchange Amount had the Exchange Amount accrued interest during such period at a rate that was at all times 3.5% less than the interest rate that was actually in effect during such period.

12.3            Adjustment of Exchange Price upon Subdivision or Combination of Shares. If Ocean Rig at any time on or after the Closing Date subdivides (by any share split, share dividend, recapitalization or otherwise) one or more classes of its outstanding Ocean Rig Shares into a greater number of shares, the Exchange Price in effect immediately prior to such subdivision will be proportionately reduced. If Ocean Rig

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at any time on or after the Closing Date combines (by combination, reverse share split or otherwise) one or more classes of its outstanding Ocean Rig Shares into a smaller number of shares, the Exchange Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 12.3 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 12.3 occurs during the period that an Exchange Price is calculated hereunder, then the calculation of such Exchange Price shall be adjusted appropriately to reflect such event. If Ocean Rig at any time on or after the Closing Date pays a share dividend on one or more classes of its then outstanding Ocean Rig Shares or otherwise makes a distribution on any class of capital stock that is payable in Ocean Rig Shares, the Exchange Price in effect immediately prior to such dividend or distribution shall be multiplied by a fraction of which the numerator shall be the number of Ocean Rig Shares outstanding immediately before such dividend or distribution and of which the denominator shall be the number of Ocean Rig Shares outstanding immediately after such dividend or distribution.

12.4 Free of Liens; Payment of Taxes. Any Ocean Rig Shares delivered to the Noteholder pursuant to this Section 12 or Section 6.6 shall be fully paid, non­ assessable, and free and clear of any security interest, mortgage, pledge, lien, encumbrance or other claim. The Borrower shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Ocean Rig Shares pursuant to this Note.

13.                Miscellaneous.

13.1            Notices. All notices, requests, or other communications required or permitted hereunder shall be given in writing by personal delivery, facsimile transmission or in electronic (i.e., "pdf" or "tif") format, registered or certified mail, return receipt requested, postage prepaid, or nationally recognized overnight courier, to the party to receive the same at its respective address set forth below, or at such other address as may from time to time be designated by such party to the other in accordance with this Section 13.1:

If to Noteholder, to:

Alley Finance Co.

c/o Ocean Rig UDW Inc.

Tribune House, 2nd Floor

10 Skopa Street

Nicosia, Cyprus CY-1075

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If to Borrower, to:

Athens Shipping Office

109 Kifisias Avenue and Sina Street

151 24 Marousi

Athens, Greece

All such notices and communications shall be deemed to have been delivered and received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of facsimile transmission, on the date of such transmission (with receipt of transmission confirmed) if transmitted during normal business hours on a Business Day or, if not transmitted during business hours on a Business Day, the first Business Day thereafter, (c) in the case of delivery by overnight courier, on the Business Day following dispatch, (d) in the case of mailing, on the third Business Day following such mailing, and (e) in the case of an electronic transmission (i.e., "pdf" or "tif"), with emailed or telephonic confirmation of receipt.

13.2            Expenses; Indemnity. The Borrower shall reimburse the Noteholder on demand for all reasonable costs, expenses and fees (including reasonable expenses and fees of its counsel) incurred by the Noteholder in connection with the enforcement of the Noteholder's rights hereunder. The Borrower agrees to indemnify, exonerate and hold harmless the Noteholder and its Affiliates and their successors and assigns, and each of their respective members, partners, managers, directors, officers, employees, agents, representatives (each an "Indemnified Party") from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, attorneys' fees, charges and disbursements) incurred by such Indemnified Party (irrespective of whether any such Indemnified Party is a party of the action for which indemnification is sought) as a result of, arising out of, or relating to (a) any inaccuracy in or breach of the representations, warranties or covenants made by the Borrower herein, or (b) the entering into and performance of this Note by any of the Indemnified Parties or the use of the proceeds of the Loan by the Borrower; and if and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the foregoing losses, liabilities, deficiencies, costs, damages and expenses that is permissible under applicable law.

13.3            Governing Law. The parties hereto have agreed that the validity, construction, operation, and effect of any and all of the terms and provisions of this Note shall be determined and enforced in accordance with the substantive laws of the State of New York without giving effect to principles of conflicts of law thereunder.

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13.4            Suits in New York; Consent to Jurisdiction; Waiver of Jury Trial. The Parties agree that any Proceeding arising out of or relating in any way to this Note or the transactions contemplated hereby shall be brought and enforced exclusively in the state courts of New York located in New York County, New York or the U.S. District Court located in the Southern District of New York. Each of the parties irrevocably (a) consents to the jurisdiction of the state courts of New York located in New York County, New York and the U.S. District Court located in the Southern District of New York in connection with any Proceeding arising out of or relating to this Note or the transactions contemplated hereby; (b) waives to the extent not prohibited by applicable Law and agrees not to assert in any such Proceeding that such Person is not personally subject to the jurisdiction of such courts, that the Proceeding is brought in an inconvenient forum or that the venue of the Proceeding is improper; (c) consents to service of process in any such Proceeding in any manner permitted by the Laws of the State of New York; and (d) agrees that the service thereof may be made by certified or registered mail directed to such Person at such Person's address for purposes of notices hereunder. The provisions of this Section 13.4 shall not restrict the ability of any Party to enforce in any court any judgment obtained in the state courts of New York located in New York County, New York or the U.S. District Court located in the Southern District of New York. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY TIJRY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

13.5            Counterparts; Integration; Effectiveness. This Note and any amendments, waivers, consents or supplements hereto may be executed in counterparts, each of which shall constitute an original, but all taken together shall constitute a single contract. This Note constitutes the entire contract between the Parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic (i.e., "pdf" or "tif") format shall be effective as delivery of a manually executed counterpart of this Note.

13.6            Successors and Assigns.

(a)            After the expiration of the Commitment Period, this Note may be assigned or transferred, in whole or in part, by the Noteholder (or any transferee) to any Person. The Borrower may not assign or transfer this Note or any of its rights or obligations hereunder without the prior written consent of the Noteholder. This Note shall inure to the benefit of, and be binding upon, the Parties, their successors and permitted assigns.

-20-

(b)            If this Note is to be assigned or transferred by the Noteholder to any Person, the Noteholder shall surrender this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Noteholder a new Note registered in the assignee's or transferee's name, representing the outstanding principal being transferred or assigned by the Noteholder and, if less than the entire outstanding principal is being transferred or assigned, a new Note to the Noteholder representing the outstanding principal not being assigned or transferred.

(c)            After the expiration of the Commitment Period, the Noteholder may, at any time, without the consent of the Borrower, sell participations to one or more Persons in all or a portion of the Noteholder's rights and obligations under this Note.

13.7            Waiver of Notice. The Borrower hereby waives demand for payment, presentment for payment, protest, notice of payment, notice of dishonor, notice of nonpayment, notice of acceleration of maturity and diligence in taking any action to collect sums owing hereunder.

13.8            USA PATRIOT Act. The Noteholder hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify, and record information that identifies the Borrower, which information includes the name of the Borrower and other information that will allow the Noteholder to identify the Borrower in accordance with the US PATRIOT Act, and the Borrower agrees to provide such information from time to time to the Noteholder.

13.9            Interpretation. For purposes of this Note (a) the words "include," "includes" and "including" shall be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive· and (c) the words "herein" "hereof" "hereby" "hereto" and "hereunder" refer to this Note as a whole. The definitions given for any defined terms in this Note shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the context otherwise requires, references herein: (x) to Schedules, Exhibits and Sections mean the Schedules, Exhibits and Sections of this Note; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Note shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

13.10            Amendments and Waivers. No term of this Note may be waived, modified

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or amended except by an instrument in writing signed by both of the parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.

13.11            Headings. The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit any of the terms or provisions hereof.

13.12            No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising on the part of the Noteholder, of any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

13.13            Severability. If any term or provision of this Note is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction.

13.14            Acknowledgements. The Borrower hereby acknowledges that:

		(a)	it has been advised by counsel in the negotiation, execution and delivery of this Note;

		(b)	neither the Noteholder nor the Affiliates thereof have any fiduciary relationship with or fiduciary duty to the Borrower arising out of or in connection with this Note, and the relationship between the Noteholder, on the one hand, and the Borrower, on the other hand, in connection herewith is solely that of debtor and creditor;

		(c)	no joint venture is created hereby or otherwise exists by virtue of any transactions contemplated hereby; and

		(d)	neither the Noteholder nor the Affiliates thereof, nor any receiver or manager appointed by the Noteholder, shall have any liability to the Borrower for any loss caused by an exercise of rights under this Note or by any failure or delay to exercise such a right.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Borrower has executed this Note as of the date first written above.

	 	
BORROWER

	 	 
	 	
DRY SHIPS INC.

	 	 
	 	 
	 	
By

	
/s/ Ziad Nakhleh

	 	 	
Name:

	
Ziad Nakhleh

	 	 	
Title:

	
Chief Financial Officer

	
NOTEHOLDER

	 
	
ALLEY FINANCE

	 
	 
	
By

	
/s/ Solon Drakoulis

	 	
Name:

	
Solon Drakoulis

	 	
Title:

	
Attorney-in-Fact

[SIGNATURE PAGE TO NOTE]

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EXHIBIT A

FORM OF BORROWING NOTICE

Date: [DATE]

To: ALLEY FTNANCE CO.

Ladies and Gentlemen:

1.            Reference is made to that certain Exchangeable Promissory Note, dated as of November 18, 2014 (as amended, restated or otherwise modified from time to time, the "Note"; terms defined therein, unless otherwise defined herein, being used herein as therein defined), between you and the undersigned.

2.            The undersigned hereby requests that the Advance to be made available under the Note be:

		(a)	Funded on [DATE] (a Business Day) (the "Borrowing Date").

		(b)	In the amount of $[AMOUNT].

3.            Please remit funds to: [INSERT REMITTANCE INSTRUCTIONS].

4.            The undersigned hereby certifies that:

(a)            All representations and warranties made by any the Borrower contained in the Note are true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the Borrowing Date (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date).

(b)            No event has occurred and is continuing, or would result from the borrowing requested herein or from the application of the proceeds therefrom, that constitutes a Default or Event of Default.

[SIGNATURE PAGE FOLLOWS]

-24-

	 	
Very truly yours,

	 	 
	 	
DRYSHIPS INC.

	 	 
	 	 
	 	
By

	 
	 	
Name:

	 	
Title:

 

 

 

  

[SIGNATURE PAGE TO BORROWING NOTICE]

SK 26497 0001 6399744

-25-EXHIBIT 10.1

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of __________ ___, 2015 by and
among Cardax, Inc., a Delaware corporation (the “Company” or “CDXI”), and the parties listed
on Schedule I hereto (collectively, the “Investors”) as amended or supplemented by the Company to reflect
Persons that purchase securities in the Offering. Capitalized terms used but not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Subscription Agreement (as defined below).

 

WHEREAS,
the Investors are purchasing securities in the Company and have requested registration rights for such securities as a condition
to purchasing such securities;

 

WHEREAS,
the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Investors
to facilitate their investment in the Company; and

 

NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by each party hereto, the parties hereby agree as follows:

 

ARTICLE
I

DEFINITIONS

 

Section
1.01Definitions. 

 

The
terms set forth below are used herein as so defined:

 

“Business
Day” means a day other than a Saturday, Sunday or other day on which banks located in New York, New York are authorized
or required by law to close.

 

“Change
of Control” shall mean either (i) the acquisition of the Company by another person or entity by means of any transaction
or series of related transactions to which the Company is a party (including, without limitation, any stock acquisition, reorganization,
merger or consolidation, but excluding any such transaction if the primary purpose of such transaction is to change the Company’s
domicile, and excluding any equity financing the primary purpose of which is to raise operating capital for the Company) that
results in a transfer of at least fifty percent (50%) of the total voting power represented by the Company’s voting securities
before such acquisition; or (ii) a sale, lease, or other conveyance of all or substantially all of the Company’s assets.

 

“Commission”
shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Holder”
means the record holder of any Registrable Securities.

 

    	 

    	 

    

 

“Included
Registrable Securities” has the meaning specified therefore in Section 2.02(a) of this Agreement.

 

“Losses”
has the meaning specified therefore in Section 2.06(a) of this Agreement.

 

“Majority-in-Interest”
means Investors holding a majority of the Registrable Securities.

 

“Managing
Underwriter” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.

 

“Offering”
means the private investment in public equity, or PIPE, financing of the Company that occurs in accordance with the Subscription
Agreement or any similar agreement for the private placement of securities described in the Subscription Agreement or any subsequent
offering on substantially similar terms, including any offering that may include the Company retaining a Placement Agent.

 

“Qualified
Financing” means an offering that is consummated on or prior to March 31, 2016 by the Company of securities that (x)
has aggregate gross proceeds to the Company of $250,000 or more that (y) is received by the Company on or prior to March 31, 2016.

 

“Piggyback
Registration” means a registration involving the sale of Common Stock by the Company as described further in Section
2.02(a) of this Agreement.

 

“Placement
Agent” means any broker dealer that the Company may retain in connection with the Offering.

 

“Priority
Holders” has the meaning specified therefore in Section 2.01 (c) of this Agreement.

 

“Subscription
Agreement” means any Subscription Agreement dated as of _________ ___, 2015 or any date prior to such date between the
Company and the investors named therein.

 

“Registrable
Securities” means, with respect to any Holder (i) any and all shares of Company Common Stock which are owned by such
Holder as of the Consummation Date (as hereinafter defined), (ii) any shares of Company Common Stock issuable upon exercise or
exchange of any securities of the Company, including, but not limited to, the Common Stock issued upon exercise of the warrants
purchased under the Subscription Agreement, which are owned by such Holder as of the Consummation Date, (iii) any shares of Company
Common Stock issuable to the Placement Agent or its assigns upon exercise of warrants issued to the Placement Agent in connection
with the private placement of shares of Common Stock and warrants or the Offering; and (iv) any securities of the Company issued
in respect of the shares of Company Common Stock issued or issuable to any of the Holders by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise and
any shares of Company Capital Stock issuable upon exercise or exchange thereof, in each case to the extent relating to any securities
of the Company which were owned by such Holder as of the Consummation Date, each of which Registrable Securities described under
(i) through (iii) above are subject to the rights provided herein until such rights terminate pursuant to the provisions hereof.

 

    	2

    	 

    

 

“Registration
Expenses” has the meaning specified therefore in Section 2.05(a) of this Agreement.

 

“Registration
Statement” means a registration statement under the Securities Act to permit the resale of the Registrable Securities.

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as may be amended from time to time.

 

“Rule
145” means Rule 145 promulgated by the Commission pursuant to the Securities Act, as may be amended from time to time.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Selling
Expenses” has the meaning specified therefore in Section 2.05(a) of this Agreement.

 

“Selling
Holder” means a Holder who is selling Registrable Securities pursuant to a Registration Statement by the Company in
accordance with the provisions of this Agreement.

 

“Underwritten
Offering” means an offering (including an offering pursuant to a Registration Statement) in which Common Stock is sold
to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with
one or more investment banks.

 

Section
1.02Registrable Securities. Any Registrable Security will cease to be a Registrable Security (a) when a Registration
Statement covering such Registrable Security has been declared effective by the Commission and such Registrable Security has been
sold or disposed of pursuant to such effective Registration Statement, (b) when such Registrable Security is held by the Company
or one of its subsidiaries, (c) when such Registrable Security has been sold in a private transaction in which the transferor’s
rights under this Agreement are not assigned to the transferee of such securities. 

 

ARTICLE
II

REGISTRATION RIGHTS

 

Section
2.01(a)Timing of Registration. As soon as practicable following March 31, 2016 or the final closing date of a Qualified
Financing (the “Consummation Date”), but in any event within thirty (30) days thereof, the Company shall use
its commercially reasonable efforts prepare and file a Registration Statement under the Securities Act with respect to all of
the Registrable Securities. The Company shall use its commercially reasonable efforts to cause such Registration Statement to
become effective no later than sixty (60) days after the date of the initial filing of the Registration Statement. If a prospectus
supplement will be used in connection with the marketing of an Underwritten Offering from the Registration Statement and the Managing
Underwriter at any time shall notify the Company in writing that, in the reasonable judgment of such Managing Underwriter, inclusion
of detailed information to be used in such prospectus supplement is of material importance to the success of the Underwritten
Offering of such Registrable Securities, the Company shall use its commercially reasonable efforts to include such information
in the prospectus, it being acknowledged and agreed that the Company will not be required to provide any confidential information
under any material agreement or disclose information for that has not been disclosed in its filings due to confidential treatment
with the SEC. The Company will cause the Registration Statement filed pursuant to this Section 2.01 to be continuously effective
under the Securities Act, until there are no longer any Registrable Securities outstanding, but in any event no longer than such
time as counsel for the Company is willing to issue a legal opinion, in a form acceptable to the transfer agent for the Company,
that the Registrable Securities held by the Investors (assuming that no Investor is an Affiliate of the Company or has transferred
or assigned their Registrable Securities) may be sold pursuant to Section 4(1) of the Securities Act, and the safe harbor provided
under Rule 144. The number of Registrable Securities that will be included will be the fullest amount that is permitted and if
the Company is required to not include Registrable Securities because of applicable law, then the number not included in the Registration
Statement will be determined on a pro rata basis.

 

    	3

    	 

    

 

(b)Delay
Rights. Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to any Selling Holder
whose Registrable Securities are included in the Registration Statement, suspend such Selling Holder’s use of any prospectus
which is a part of the Registration Statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities
pursuant to the Registration Statement) if (i) the Company is pursuing an acquisition, merger, reorganization, disposition or
other similar transaction and the Company’s independent directors determine in good faith that the Company’s ability
to pursue or consummate such a transaction would be materially and adversely affected by any required disclosure of such transaction
in the Registration Statement or (ii) the Company has experienced some other material non-public event the disclosure of which
at such time, in the good faith judgment of the Company’s directors, would materially adversely affect the Company; provided,
however, in no event shall the Registration Statement be suspended for a period exceeding an aggregate of ninety
(90) days in any three hundred sixty five (365)-day period. Upon disclosure of such information or the termination of the condition
described above, the Company shall provide prompt notice to the Selling Holders whose Registrable Securities are included in the
Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other
actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

 

(c)Priority
to Purchasers in a Qualified Financing. The parties to this Agreement acknowledge that the Company may consummate a Qualified
Financing or any offering of securities to be part of a Qualified Financing (the “Proposed Subsequent Offering”)
and that under the terms of the Subscription Agreement, a Holder may elect to participate in the Proposed Subsequent Offering
on substantially similar terms. The Company expects to provide the purchasers of securities in a Proposed Subsequent Offering
rights to register securities purchased in the Proposed Subsequent Offering under the Securities Act and grant a priority to such
purchasers (“Priority Holders”). Notwithstanding any provision of this Agreement to the contrary: (i) the rights
of the Holders to require that the Company register Registrable Shares shall be subject to the rights and priorities of the Priority
Holders; (ii) the Company will request that the Holders have the right to register their Registrable Securities on pari passu
basis with the Priority Holders; and (iii) any Holder that duly exercises its Anti-Dilution Right under its Subscription Agreement
will terminate its rights under this Agreement and have the same rights to register its securities as the purchasers in the Proposed
Subsequent Offering.

 

    	4

    	 

    

 

Section
2.02Piggyback Rights. 

 

(a)Participation.
If at any time after the Consummation Date, the Company proposes to file a registration statement for the sale of Common Stock
in an Underwritten Offering for its own account and/or a Priority Holder, then as soon as practicable but not less than ten Business
Days prior to the filing of such registration statement, the Company shall give notice of such proposed Underwritten Offering
to the Holders and such notice shall offer the Holders the opportunity to include in such Underwritten Offering such number of
Registrable Securities (the “Included Registrable Securities”) as each such Holder may request in writing (but
only to the extent that such Registrable Securities are not then subject to lock-up provisions under any lock-up or similar agreement);
provided, however, that if the Company has been advised by the Managing Underwriter that the inclusion
of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution
of the Common Stock offered by the Company under such registration statement or if the registration rights granted by the Company
to the Priority Holders require that the securities held by the Priority Holders be given priority, then the amount of Registrable
Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b). The notice
required to be provided in this Section 2.02(a) to Holders shall be provided on a Business Day pursuant to Section 3.02 hereof
and receipt of such notice shall be deemed to be received by Holders on the next Business Day. Holder shall then have three (3)
Business Days after such deemed receipt of the notice to request inclusion of Registrable Securities in the Underwritten Offering
by providing a written notice (“Piggy Back Registration Notice”) to the Company within such period. If no Piggy
Back Registration Notice from a Holder is received within the specified time, then such Holder shall have no further right to
participate in such Underwritten Offering. If a Holder decides not include some or all of its Registrable Securities in any registration
statement filed by the Company as described in this Section 2.02(a) as stated in the Piggy Back Registration Notice, such Holder
shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to the offering by the Company of its securities, all upon
the terms and conditions set forth herein. If, at any time after giving written notice of its intention to undertake an Underwritten
Offering and prior to the closing of such Underwritten Offering, the Company shall determine for any reason not to undertake or
to delay such Underwritten Offering, the Company may, at its election, give written notice of such determination to the Holders
the timely provided a Piggy Back Registration Rights Agreement and, (x) in the case of a determination not to undertake such Underwritten
Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten
Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any
Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the
right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such
offering by giving written notice to the Company of such withdrawal up to and including the Business Day immediately preceding
the Business Day on which the underwriters price such offering. 

 

    	5

    	 

    

 

(b)Priority
of Piggyback Rights. If the Managing Underwriter or Underwriters of any proposed Underwritten Offering of Company Common Stock
included in an Underwritten Offering involving Included Registrable Securities advises the Company that the total amount of Company
Common Stock that the Selling Holders and any other persons intend to include in such offering exceeds the number that can be
sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Company Common
Stock offered or the market for the Company Common Stock or if the rights provided by the Company to Priority Holders do not permit
inclusion of the Registrable Shares held by the Holders, then the Company Common Stock to be included in such Underwritten Offering
shall include the number of Registrable Securities that such Managing Underwriter or Underwriters advises the Company can be sold
without having such adverse effect or such Registrable Shares held by the Holders that may be permitted under such agreement or
agreements by the Company and the Priority Holders, with such number to be allocated (i) first, to the Company and (ii) second,
pro rata among the Selling Holders who have requested participation in such Underwritten Offering and any other person holding
Company securities who may also be including any such securities for sale in such Underwritten Offering based, for each Selling
Holder or other person, on the fraction derived by dividing (x) the number of shares of Company Common Stock proposed to be sold
by such Selling Holder or other person in such Underwritten Offering by (y) the aggregate number of shares of Company Common Stock
proposed to be sold by all Selling Holders and other persons in such Underwritten Offering. For clarity, the Managing Underwriter
or Underwriters (and the Company in order to not breach its agreement with a Priority Holder) shall have the ability to fully
cut back any Registrable Securities in connection with the Underwritten Offering without limiting the shares of Common Stock or
other securities to be registered in such Underwritten Offering. If any Selling Holder or other person does not agree to the terms
of any such underwriting, such Selling Holder or other person, as the case may be, may be excluded from the Underwritten Offering
by written notice from the Company or the Managing Underwriter. Any Registrable Securities or other Company securities excluded
or withdrawn from such underwriting shall be withdrawn from such registration. To facilitate the allocation of shares in accordance
with the above provisions, the Company or the Managing Underwriter or Underwriters may round the number of shares allocated to
any Holder to the nearest one hundred (100) shares. If shares are so withdrawn from the registration and if the number of shares
of Registrable Securities to be included in such registration was previously reduced as a result of marketing factors, the Company
shall then offer to all persons who have retained the right to include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated
among the Selling Holders or other person or persons requesting additional inclusion in accordance with the formula contained
in this Section 2.02(b). The Company shall have the right to terminate or withdraw any registration initiated by it under this
Section 2.02 at any time whether or not any Holder has elected to include securities in such registration. 

 

(c)Notwithstanding
the provisions of this Section 2.02, the Company shall not have any obligation under this Section 2.02 if a Registration Statement
permitting the sale the Registrable Securities has been effective or from and after the date that is 6 months after the Consummation
Date. 

 

(d)Notwithstanding
any provision of this Agreement to the contrary, the Company shall not have any obligation under this Section 2.02 to register
any Registrable Securities with respect to any registration of securities by the Company under Registration Statement (registration
number 33-195745) or any registration of securities with respect to a merger of Cardax Pharmaceuticals, Inc. with and into the
Company or any subsidiary of the Company.

 

    	6

    	 

    

 

Section
2.03Sale Procedures. In connection with its obligations contained in Section 2.01, the Company will:

 

(a)prepare
and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective and as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered by the Registration Statement;

 

(b)furnish
to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement or any other registration
statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts
of all such documents proposed to be filed, and provide each such Selling Holder five (5) Business Days to object in writing to
any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections
reasonably requested by such Selling Holder with respect to such information prior to filing the Registration Statement or such
other registration statement or supplement or amendment thereto, and (ii) such number of copies of the Registration Statement
or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such persons
may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such
Registration Statement or other registration statement;

 

(c)if
applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the Registration
Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions
as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request, provided,
however, that the Company will not be required to qualify generally to transact business in any jurisdiction
where it is not then required to so qualify or to take any action which would subject it to general service of process in any
such jurisdiction where it is not then so subject;

 

(d)promptly
notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act,
of (i) the filing of the Registration Statement or any other registration statement contemplated by this Agreement or any prospectus
or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such
Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective,
and (ii) any written comments from the Commission with respect to any filing referred to in clause (i) and any written request
by the Commission for amendments or supplements to the Registration Statement or any other registration statement or any prospectus
or prospectus supplement thereto;

 

    	7

    	 

    

 

(e)immediately
notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act,
of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Registration Statement
or any other registration statement contemplated by this Agreement, as then in effect, 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 not misleading
in the light of the circumstances then existing, (ii) the issuance or overt threat of issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any other registration statement contemplated by this Agreement,
or the initiation of any proceedings for that purpose, or (iii) the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of
any jurisdiction. Following the provision of such notice, the Company agrees to as promptly as practicable amend or supplement
the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does
not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances then existing and to take such other action as
is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

 

(f)otherwise
use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(g)make
available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and the
Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities
Act; provided, however, that the Company need not disclose any information to any such representative
unless and until such representative has entered into a confidentiality agreement with the Company;

 

(h)cause
all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized
quotation system on which similar securities issued by the Company are then listed;

 

(i)use
its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Selling Holders
to consummate the disposition of such Registrable Securities;

 

(j)provide
a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the effective
date of such registration statement; and

 

(k)enter
into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters,
if any, in order to expedite or facilitate the disposition of such Registrable Securities.

 

    	8

    	 

    

 

Each
Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (e)
of this Section 2.04, shall forthwith discontinue disposition of the Registrable Securities until such Selling Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.04 or until it
is advised in writing by the Company that the use of the prospectus may be resumed, and has received copies of any additional
or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Company, such Selling Holder will,
or will request the managing underwriter or underwriters, if any, to deliver to the Company (at the Company’s expense) all
copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the
prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

Each
Holder shall provide all information that is reasonably requested by the Company with respect to the selling stockholder information
that is required to be included in a Registration Statement and matters to determine the accuracy of the information that is required
to be so disclosed (the “Selling Stockholder Information”). Notwithstanding any provisions of this Agreement to the
contrary, the Company shall not be required to include any Registrable Shares of any Holder in any Registration Statement if such
Holder does not provide in writing confirmation as to the Selling Stockholder Information of such Holder and the Holder shall
no longer have any rights under Section 2.01 or 2.04 if such Holder does not timely respond to such request for Selling Stockholder
Information or does not provide such confirmation with respect to the Registration Statement that is filed in accordance with
Section 2.01.

 

Section
2.04Expenses.

 

(a)Certain
Definitions. “Registration Expenses” means all expenses incident to the Company’s performance under
or compliance with this Agreement to effect the registration of Registrable Securities under the Registration Statement pursuant
to Section 2.01 or an Underwritten Offering pursuant to Section 2.02 and the disposition of such securities, including, without
limitation, all registration, filing, securities exchange listing and annual maintenance fees, all registration, filing, qualification
and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority,
transfer taxes and fees of transfer agents and registrars, all word processing, duplicating and printing expenses, the fees and
disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or “cold
comfort” letters required by or incident to such performance and compliance. Except as otherwise provided in Section 2.05
hereof, the Company shall not be responsible for legal or other professional or similar fees incurred by Holders in connection
with the exercise of such Holders’ rights hereunder. In addition, the Company shall not be responsible for any “Selling
Expenses,” which means all underwriting fees, discounts and selling commissions allocable to the sale of the
Registrable Securities under the Registration Statement.

 

(b)Expenses.
The Company will pay all reasonable Registration Expenses as determined in good faith, including, in the case of an Underwritten
Offering, whether or not any sale is made pursuant to such Underwritten Offering. Each Selling Holder shall pay all Selling Expenses
in connection with any sale of its Registrable Securities hereunder and pay all taxes related to the sale of the securities.

 

    	9

    	 

    

 

Section
2.05Indemnification.

 

(a)By
the Company. In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement,
the Company will indemnify and hold harmless each Selling Holder thereunder, its directors and officers, and each underwriter,
pursuant to the applicable underwriting agreement with such underwriter, of Registrable Securities thereunder and each person,
if any, who controls such Selling Holder or underwriter within the meaning of the Securities Act and the Exchange Act, against
any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively,
“Losses”), joint or several, to which such Selling Holder or underwriter or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any other registration statement contemplated by this Agreement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse
each such Selling Holder, its directors and officers, each such underwriter and each such controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings;
provided, however, that the Company will not be liable in any such case if and to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Selling Holder, such underwriter or such controlling person in writing specifically for use
in the Registration Statement or such other registration statement, or prospectus supplement, as applicable. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any such director,
officer or controlling person, and shall survive the transfer of such securities by such Selling Holder.

 

(b)By
Each Selling Holder. Each Selling Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, its
directors and officers, and each person, if any, who controls the Company within the meaning of the Securities Act or of the Exchange
Act to the same extent as the foregoing indemnity from the Company to the Selling Holders, but only with respect to information
regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in the Registration
Statement or prospectus supplement relating to the Registrable Securities, or any amendment or supplement thereto; provided,
however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of
the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving
rise to such indemnification.

 

    	10

    	 

    

 

(c)Notice.
Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing
thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any
indemnified party other than under this Section 2.06. In any action brought against any indemnified party, it shall notify the
indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and,
after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof,
the indemnifying party shall not be liable to such indemnified party under this Section 2.06 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume
the defense and employ counsel or (ii) if the defendants in any such action include both the indemnified party and the indemnifying
party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified
party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have
the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action,
with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to
be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnified party
shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent
of the indemnifying party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional
release from all liability of, the indemnifying party.

 

(d)Contribution.
If the indemnification provided for in this Section 2.06 is held by a court or government agency of competent jurisdiction to
be unavailable to any indemnified patty or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party
as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of such indemnified party on the other in connection with the statements or omissions which resulted in such Losses,
as well as any other relevant equitable considerations; provided, however, that in no event shall such Selling
Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received
by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the
indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations referred to herein. The amount paid by an indemnified
party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss which is the subject
of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation.

 

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(e)Other
Indemnification. The provisions of this Section 2.06 shall be in addition to any other rights to indemnification or contribution
which an indemnified party may have pursuant to law, equity, contract or otherwise.

 

Section
2.06Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission
that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially
reasonable efforts to:

 

(a)Make
and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 of the Securities
Act, at all times from and after the date hereof;

 

(b)File
with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the
Exchange Act at all times from and after the date hereof, and

 

(c)So
long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so filed as such Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration; provided
that the Company’s obligations pursuant to this Section 2.07(c) shall be deemed satisfied with respect to any document that
is publicly available, free of charge, on the Commission’s EDGAR website. 

 

Section
2.07Transfer or Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities
granted to the Investors by the Company under this Article II may be transferred or assigned by any Investor to one or more transferee(s)
or assignee(s) of at least one thousand (1,000) shares of Registrable Securities or to an Affiliate of such Investor. The Company
shall be given written notice prior to any said transfer or assignment, stating the name and address of each such transferee and
identifying the securities with respect to which such registration rights are being transferred or assigned. Each such transferee
shall assume in writing responsibility for its portion of the obligations of such Investor under this Agreement be executing a
counterpart signature page hereto pursuant to which such transferee agrees to be bound by all terms and conditions contained in
this Agreement.

 

Section
2.08Limitation on Subsequent Registration Rights. From and after the date hereof, the Company shall not (except in
connection with the issuance of securities as consideration to the sellers of any Company or business acquired by the Company),
without the prior written consent of the a Majority-in-Interest of the Investors (or their respective permitted assignees), enter
into any agreement with any current or future holder of any securities of the Company that alters, restricts, or otherwise limits
the registration rights granted hereunder or that would allow such current or future holder to require the Company to include
securities in any registration statement filed by the Company on a basis that is superior (as opposed to pari passu) in
any way to the registration rights granted to the Investors hereunder; provided, that the Company may register the securities
that are subject to a registration statement (registration number 33-195745) or any registration of securities with respect to
a merger of Cardax Pharmaceuticals, Inc. with and into the Company or any subsidiary of the Company.

 

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ARTICLE
III

MISCELLANEOUS

 

Section
3.01Termination. This Agreement shall terminate upon the earlier of: (a) with respect to a particular Holder, from
and after the date that is six months after the Consummation Date, assuming that the Company has complied with its obligations
under Section 2.07, and all of the Registrable Securities may be sold assuming that the Investors are the only Holders and no
such Holder is an Affiliate (as defined by the Securities Act) of the Company, (b) a Change of Control, but only as long as all
Registrable Securities (or any securities for which such Registrable Securities are exchanged in such transaction) may be sold
by the Holder or Holders thereof without restriction pursuant to Rule 144 or Rule 145 immediately following the closing of such
Change of Control or the Registrable Securities are exchanged for securities that are registered under the Securities Act or for
cash consideration, (c) five (5) years following the date first set forth above; or (d) if a registration statement covering the
Registrable Securities has been filed and declared effective, then three (3) years following the date first set forth above or
the date that warrants purchased under the Subscription Agreement that represent 80% of the Registrable Shares underlying such
warrants have been exercised.

 

Section
3.02Communications. All notices and other communications provided for or permitted hereunder shall be made in writing
by facsimile, courier service or personal delivery:

 

(a)if
to an Investors, to the address set forth under such Investor’s signature block in accordance with the provisions of this
Section 3.02,

 

(b)if
to a transferee of the Investor, to such transferee at the address provided pursuant to Section 2.08 above, and

 

(c)if
to the Company, to the address set forth under the Company’s signature block in accordance with the provisions of this Section
3.02.

 

All
such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered;
when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by
any other means.

 

Section
3.03Effectiveness. This Agreement shall be effective automatically and without further action on the part of any party
hereto on the final closing date of the Offering as conclusively determined by the Company. Any person that purchases securities
issues by the Company in any closing related to the Offering may become a party to this Agreement.

 

Section
3.04Amendments and Waivers. This Agreement may be amended, and any provision of it may be waived, only by a written
agreement executed by the Company and a Majority-in-Interest of the Investors; provided, however, that no such consent
shall be required to amend this Agreement to add as parties Investors purchasing Company securities in the Offering.

 

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Section
3.05Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

 

Section
3.06Assignment of Rights. All or any portion of the rights and obligations of the Investors under this Agreement may
be transferred or assigned by the Investors in accordance with Section 2.08 hereof.

 

Section
3.07Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement
are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor under this Agreement or the Subscription Agreement. Nothing contained herein,
and no action taken by any Investor pursuant hereto shall be deemed to constitute the Investors as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or a
group with respect to such obligations or the transactions contemplated by this Agreement or the Subscription Agreement. Each
Investor acknowledges that no other Investor has acted as agent for such Investor in connection with enforcing its rights and
obligations under this Agreement. Each Investor will be entitled to independently protect an enforce its rights, including without
limitation the rights arising out of this Agreement and it shall not be necessary for any other Investor to be joined as an additional
party in any proceeding for such purpose. The Company acknowledges that each of the Investors has been provided with the same
Agreement for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do
so by any Investor.

 

Section
3.08Aggregation of Purchased Common Stock. All Company Common Stock held or acquired by persons who are Affiliates
of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

Section
3.09Recapitalization, Exchanges, etc. Affecting the Common Stock. The provisions of this Agreement shall apply to the
full extent set forth herein with respect to any and all securities of the Company or any successor, assign or acquirer of the
Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or
in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, recapitalizations and the
like occurring after the date of this Agreement.

 

Section
3.10Specific Performance. Damages in the event of breach of this Agreement by a party hereto may be difficult, if not
impossible, to ascertain, and it is therefore agreed that each such person, in addition to and without limiting any other remedy
or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining
any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any
and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other
equitable relief. The existence of this right will not preclude any such person from pursuing any other rights and remedies at
law or in equity which such person may have.

 

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Section
3.11Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one and the same Agreement. Facsimile or other electronically
transmitted signatures, including by email attachment, shall be deemed originals for all purposes of this Agreement.

 

Section
3.12Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.

 

Section
3.13Governing Law. The laws of the State of California shall govern this Agreement without regard to principles of
conflict of laws.

 

Section
3.14Severability of Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

 

Section
3.15Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein
with respect to the rights granted by the Company set forth herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.

 

Section
3.16No Presumption. If any claim is made by a party relating to any conflict, omission, or ambiguity in this Agreement,
no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or
at the request of a particular party or its counsel.

 

[SIGNATURE
PAGES FOLLOW]

 

    	15

    	 

    

 

IN
WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Registration Rights Agreement on the date
first written above.

 

	 	CARDAX,
    INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	With
    a copy to:
	 	 	 
	 	 	Herrick, Feinstein
    LLP
	 	 	2 Park Ave
	 	 	New York, NY 10016
	 	 	Facsimile: (212)
    592-1500
	 	 	Attention: Richard
    Morris
	 	 	 
	 	and	 
	 	 	 
	 	 	Cardax, Inc.
	 	 	2800 Woodlawn
    Drive
	 	 	Honolulu, HI 96822
	 	 	Facsimile: (808)
    237-5901
	 	 	Attention: David
    G. Watumull, CEO

 

[Signatures
of the Investors on the Following Pages]

 

    	16

    	 

    

 

Signature
page of an Investor to the Registration Rights Agreement

 

	If
    the Investor is an individual:	 	If
    the Investor is not an individual:
	 	 	 
	 	 	 Name of Investor
	Print Name:	 	

	 	 	
	 	By:	
	 	Name:	
	 	Title:	

	Address
    for notices:	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

	 	 
	Facsimile:	 	 
	 	 
	Email:	 	 

 

    	 

    	 

    

 

Schedule
I

Schedule
of Investors

 

	Investor
        Name, Address and Other 

        Information

        (retained
        by the Company)

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