Document:

ptx_ex101.htm

Exhibit 10.1

 

 EXECUTION COPY

 

INDUCEMENT AGREEMENT

 

This Inducement Agreement (this “Agreement”) is made this 16th day of April, 2015, by and among Pernix Therapeutics Holdings, Inc., a Maryland corporation (the “Company”), and the investors listed on Schedule 1 hereto (the “Holders”).

 

R E C I T A L S

 

A. The Holders collectively hold $65,000,000 in aggregate principal amount of the Company’s 8.00% Convertible Senior Notes due 2019 (together with the guarantees thereof by certain subsidiaries of the Company, the “Notes”) outstanding under the Indenture (as amended through the date hereof, the “Indenture”), dated as of February 21, 2014, by and among the Company, certain subsidiaries of the Company, as guarantors, and Wilmington Trust, National Association (the “Trustee”).

 

B. The Company desires to deliver to each Holder a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), set forth on Schedule 1 hereto, with a customary restrictive legend (collectively, the “Inducement Shares”) to induce each Holder to convert all Notes held by it (collectively, the “Conversion Notes”) in accordance with the provisions of the Notes and the Indenture,  and each Holder desires to convert the Conversion Notes held by it in accordance with the provisions of the Notes and the Indenture upon receipt of the Inducement Shares and in accordance with this Agreement.

 

C.   The Holders desire to consent to the proposed amendments to the Indenture reflected in substantially in the Form of Third Supplemental Indenture to the Indenture attached hereto as Exhibit A (the “Third Supplemental Indenture”).

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and obligations contained herein, the parties agree as follows:

 

1. Inducement Payment; Conversion; Consent.

 

1.1 General.  On the terms and subject to the conditions set forth in this Agreement and upon the representations and warranties made herein by each of the parties to the other, on a Closing Date (as defined below) (i) a Holder in respect of which such Closing Date has occurred shall deliver to the Company (A) an executed copy of the lock-up agreement (a “Lock-up Agreement”) substantially in form attached hereto as Exhibit B and (B) the documents required by Section 4.2 hereof and in exchange (ii) the Company shall instruct the transfer agent in respect of the Company’s Common Stock (the “Transfer Agent”) to create an account in such Holder’s name and through which the Inducement Shares applicable to such Holder as specified in Schedule 1 hereto will be held in book-entry form (the transactions described in clauses (i) and (ii) and the conversion of such Holder’s Conversion Notes in accordance with the Indenture are collectively referred to as the “Conversion Transactions”).

 

1.2 Consent. Whether or not the Conversion Transactions are consummated, each of the Holders hereby consents in respect of the aggregate principal amount of Notes held by such Holder (as indicated on Schedule 1 hereto) to the execution, delivery and performance by the Company and the Trustee of the Third Supplemental Indenture on or after the date hereof.

 

1.3  Closing. The closing of the transactions described in clauses (i) and (ii) of Section 1.1 hereof with respect to a Holder (a “Closing”) shall take place at or about 12:00 P.M. (Eastern Time) on the second Business Day following the Business Day on which the Company has received (i) notice from the Trustee in accordance with Section 14.02(b) of the Indenture with respect to the conversion by such Holder of all of the Conversion Notes held by such Holder, (ii) information of such Holder required by the Transfer Agent to establish the account referred to in Section 1.1(ii) and (iii) information of such Holder required to deliver the Indenture Shares (as defined below) in book-entry form through the facilities of the Depository Trust Company (“DTC”), at the offices of Goodwin Procter LLP, 53 State Street, Boston, Massachusetts 02109, or at such other time and place as mutually agreed upon by such Holder and the Company. The date and time of a Closing with respect to a Holder are referred to herein as a “Closing Date”.

 

1.4 Remedy for Default. In the event that the Company fails to comply with its obligations to deliver to a Holder (i) the Inducement Shares on the date or dates when due to such Holder in accordance with this Agreement or (ii) the shares deliverable under the Indenture upon conversion of the Conversion Notes held by such Holder on the date or dates when due to such Holder in accordance with the Indenture (the “Indenture Shares”), the Company shall promptly pay to such Holder on demand an amount in cash equal to, in the case of clause (i), $0.002 per Inducement Share that was not so delivered, and in the case of clause (ii), the product of (x) the principal amount of the Conversion Notes in respect of which Indenture Shares were not so delivered to such Holder and (y) 0.0002192, in all cases, for each day that the Company is so in default, until, but not including, the day on which the Company delivers such Inducement Shares and/or Indenture Shares, as the case may be, to such Holder.  Payment of any amount pursuant to this clause 1.4 shall not relieve the Company of its obligations hereunder to deliver the Inducement Shares and Indenture Shares.

 

  

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1.5 Amendment to Registration Rights Agreements.  To the extent a Holder is entitled to the benefits of a registration rights agreement, dated February 21, 2014, by and among the Company and the investors party thereto, the definition of “Registrable Securities” defined therein shall be deleted and replaced with: “means the Conversion Shares (without consideration of any blocker provision contained therein) and the Inducement Shares (as such term is defined in the Inducement Agreement, dated as of April 16, 2015, by and among the Company and the investors identified therein), until the earliest of (a) their effective registration under the Securities Act, (b) the date on which the Notes or such Conversion Shares or such Inducement Shares have been transferred by the Investor to any Person that is not an Affiliate of the Investor (including any affiliated fund), and (c) the date on which such Conversion Shares, the Inducement Shares and the Notes cease to be outstanding.”

 

2. Representations and Warranties of the Holders. Each Holder hereby separately represents and warrants to the Company, as of the date hereof and as of the Closing Date applicable to such Holder, as follows:

 

2.1 Existence and Authority Relative to Agreement. Each Holder is duly formed, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Holder has all necessary power and authority to execute and deliver this Agreement and each other agreement, document or instrument to be executed in connection herewith and to perform the obligations to be performed by it hereunder and thereunder. The execution, delivery and performance of this Agreement by each Holder, including the consummation of the Conversion Transactions by each Holder pursuant hereto, have been duly authorized by all necessary action of each Holder. This Agreement and each other instrument or document to be executed in connection herewith have been duly and validly executed and delivered by a duly authorized officer of each Holder. This Agreement and each other instrument or document to be executed in connection herewith shall, upon the execution and delivery thereof by each Holder, constitute the legal, valid and binding obligations of each Holder enforceable against each Holder in accordance with the respective terms thereof, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles.

 

2.2 No Conflicts. Neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions contemplated hereby nor compliance by each Holder with any provisions hereof, will (i) violate (with or without the giving of notice or the lapse of time or both), or conflict with, or result in any violation of or default under, any indenture, mortgage, deed of trust, loan agreement, joint venture agreement, partnership agreement, limited liability company agreement or any other agreement or instrument to which the Holder is a party or by which any Holder is bound or to which any of the property or assets of any Holder is subject, except for such conflicts, breaches or violations which would not, singly or in the aggregate, result in a material adverse effect on the consolidated financial position, results of operations or business of any Holder, (ii) result in any violation of the provisions of the charter, by-laws, certificate of limited partnership, partnership agreement or other organizational documents of any Holder, as the case may be, or (iii) result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over any Holder, except where such noncompliance or violation of any such statute, order, rule or regulation would not, singly or in the aggregate, result in a material adverse effect on the consolidated financial position, results of operations or business of such Holder.

 

2.3 No Consents Required. No application, notice, order, registration, qualification, waiver, consent, approval or other action (collectively, “Consent”) is required to be filed, given, obtained or taken by any Holder by virtue of the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, which has not already been obtained, other than the delivery of the items specified in Section 1.1 of this Agreement.

 

2.4 Title to Interests. Each Holder is the record owner of the Conversion Notes (in such amounts as indicated on Schedule 1 hereto).

 

2.5 Brokers and Finders. Except as set forth on Schedule 2, no Holder has employed any broker or finder who will seek compensation from the Company, and no Holder has otherwise entered into any arrangement regarding the payment of any brokerage fees, commissions or finder’s fees in connection with the sale of the Conversion Notes that will result in any liability on the part of the Company.

 

2.6 Informed Investment Decision. Each Holder has the ability to bear the economic risks of the Inducement Shares and the shares of Common Stock issued upon conversion of the Conversion Notes and is able to afford the complete loss of such investment. Each Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Inducement Shares and the shares of Common Stock issued upon conversion of the Conversion Notes. Each Holder has relied solely on its own investigations in making a decision to participate in the Conversion Transaction, and has received no representation or warranty from the Company or any of its affiliates, employees or agents in connection with the transactions contemplated by this Agreement, other than those set forth in this Agreement. Each Holder has had an opportunity to ask questions regarding the Conversion Notes, the Inducement Shares, the shares of Common Stock issued upon conversion of the Conversion Notes and the business of the Company, and has acquired sufficient information about the Company to reach an informed decision to execute and deliver and perform under this Agreement. There has been made available to each Holder and its advisors the opportunity to ask questions of, and receive answers from the Company concerning the terms and conditions of the investment in the Inducement Shares and the shares of Common Stock issued upon conversion of the Conversion Notes and to obtain the documents publicly filed with the Securities and Exchange Commission (the “Commission”) by the Company and any additional information, to the extent that the Company possesses such information, or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information given to it, or to otherwise make an informed investment decision, and that each Holder has had an opportunity to consult with counsel and other advisers about the execution and delivery and performance under this Agreement and an investment in the Inducement Shares and the shares of Common Stock issued upon conversion of the Conversion Notes, and that all material documents, records and books pertaining to such have, on request, been made available to each Holder and its advisors.

 

2.7  Advisors. Each Holder is relying upon the advice of its own personal, legal and tax advisors with respect to the legal, tax and other aspects of the execution and delivery and performance under this Agreement, including participation in the Conversion Transaction and an investment in the Inducement Shares and the shares of Common Stock issued upon conversion of the Conversion Notes.

 

  

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2.8 Determination of Price. In connection with the Conversion Transactions, each Holder has independently determined an acceptable inducement price to convert its Conversion Notes, and the number of shares of Common Stock included in the Inducement Shares is based upon such independent determination.

 

3. Representations and Warranties of the Company. The Company hereby represents and warrants to each Holder on the date hereof and as of the Closing Date applicable to such Holder, as follows:

 

3.1 Existence and Authority Relative to Agreement. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Maryland. The Company has all necessary corporate power and authority to execute and deliver this Agreement and each other agreement, document or instrument to be executed in connection herewith and to perform the obligations to be performed by the Company hereunder and thereunder. The execution, delivery and performance of this Agreement by the Company, including the delivery of the Inducement Shares, have been duly authorized by all necessary corporate action. This Agreement and each other instrument or document to be executed in connection herewith have been duly and validly executed and delivered by a duly authorized officer of the Company. This Agreement and each other instrument or document to be executed in connection herewith shall, upon the execution and delivery thereof by the Company constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with the respective terms thereof, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles.

 

3.2 No Conflicts. Neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions contemplated hereby nor compliance by the Company with any provisions hereof, will (i) violate (with or without the giving of notice or the lapse of time or both), or conflict with, or result in any violation of or default under, any indenture, mortgage, deed of trust, loan agreement, joint venture agreement, partnership agreement, limited liability company agreement or any other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) result in any violation of the provisions of the charter, by-laws, certificate of limited partnership, partnership agreement or other organizational documents of the Company or any Subsidiary (as defined below), as the case may be, or (iii) result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, except where such noncompliance or violation of any such statute, order, rule or regulation would not, singly or in the aggregate, have a material adverse effect on the consolidated financial position, results of operations or business of the Company and its subsidiaries taken as a whole. “Subsidiary” means each of the subsidiaries of the Company which is a “significant subsidiary” as defined in Rule 405 of Regulation C under the Securities Act of 1933, as amended (the “Securities Act”). The Company is not in possession of non-public information that a reasonable investors would consider significant in making a decision to participate in the Conversion Transactions.

 

3.3 No Consents Required. Except for (i) the filing with the Commission of a current report on Form 8-K, (ii) the filing of documents required to be filed with The NASDAQ Stock Market, LLC in connection with the Conversion Transactions after the consummation of the Conversion Transactions, (iii) delivery of the consideration specified in Section 1.1 of this Agreement and (iv) delivery of Common Stock upon conversion of the Conversion Notes , no Consent is required to be filed, given, obtained or taken by the Company by virtue of the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, which has not already been obtained.

 

3.4 Shares. The issuance of the Inducement Shares to each Holder pursuant to this Agreement and the shares deliverable under the Indenture upon conversion of the Conversion Notes have been duly authorized by the Company. The Inducement Shares issued in connection with each Closing will be validly issued, fully paid and nonassessable. The issuance of the Inducement Shares and the shares deliverable under the Indenture upon conversion of the Conversion Notes is not subject to preemptive or similar rights.

 

4. Covenants.

 

4.1 Tax Matters. Each Holder shall cooperate, as and to the extent reasonably requested by the Company at the Company’s expense, in connection with the filing of any tax returns, tax elections or other tax reporting matters related to the transactions contemplated by this Agreement.

 

4.2 Withholding. At the Closing applicable to a Holder, such Holder shall deliver to the Company a properly executed Internal Revenue Service Form W-9 or applicable Form W-8 together with any applicable underlying forms or documentation. The Company shall be entitled to withhold taxes to the extent required by applicable law from any payment made to the Holder pursuant to this Agreement.

 

4.3 Conversion Consideration. In connection with the Conversion Transactions, each Holder agrees that in its notice of conversion delivered to the Trustee under the Indenture it will provide that such Holder will receive the consideration due under the Indenture.

 

4.4 Prompt Action.  As promptly as practicable, but in any event no later than three Business Days after the date of this Agreement, each Holder shall deliver the documentation it is required to deliver under the Indenture to create a Conversion Date (as defined in the Indenture) with respect to its Conversion Notes.

 

4.5 Securities Offering Exemption.  The Company represents that the issuance of the Inducement Shares is being made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and the rules promulgated thereunder and the Company shall make any filings and take all such actions required in connection with such exemption.

 

  

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4.6 Post-Closing Disclosure Requirement of the Company. No later than the close of business on the business day after the date of this Agreement, the Company shall publicly disclose the material transactions contemplated by this Agreement pursuant to a broadly distributed press release.

 

4.7.  Removal of Legend.  Upon request of a Holder at any time after six (6) months from the date of issuance of Inducement Shares to such Holder, and subject to all of the other conditions of Rule 144 under the Securities Act being met with respect to such Holder and the Company at such time, provided that the Holder provides the Company with reasonable assurances (in the form of seller and, if applicable, broker representation letters in customary form) that the securities may be sold pursuant to such Rule, the Company shall take all actions reasonably necessary to (i) cause the Transfer Agent to remove the restrictive legend from the Inducement Shares owned by such Holder, and (ii) cause the Transfer Agent to deliver such Inducement Shares by electronic delivery at the applicable balance account at DTC converted to freely-tradable, unrestricted shares of Common Stock, registered as such with DTC, in each case, within five Business Days after the date of such request.

 

4.8.  Indenture Shares. Provided that a Holder delivers to the Company the information described in Section 1.3(iii) hereto and (a) is not an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company, the Company agrees to deliver Indenture Shares owed to such Holder pursuant to the terms of the Indenture in freely tradable, unrestricted form, registered with DTC and without the restrictive legend described in Section 2.05(d) of the Indenture, or (b) is an affiliate of the Company, the Company agrees to deliver Indenture Shares owed to such Holder pursuant to the terms of the Indenture with appropriate restrictive legends.

 

5. General.

 

5.1 Notices. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if personally delivered, delivered by nationally recognized overnight courier with proof of delivery thereof, sent by United States registered or certified mail (postage prepaid, return receipt requested) addressed as hereinafter provided or via telephonic facsimile transmission with proof of delivery in the form of a telecopier’s transmission confirmation report. Notice shall be sent and deemed given when (a) if personally delivered or via nationally recognized overnight courier, then upon receipt by the receiving party, or (b) if mailed, then three (3) days after being postmarked, or (c) if sent via telephonic facsimile transmission, then at the time set forth in the telecopier’s transmission confirmation report.

 

Any party listed below may change its address hereunder by notice to the other party listed below. Until further notice, notice and other communications hereunder shall be addressed to the parties listed below as follows:

 

If to any Holder, to the address set forth on the signature pages to this Agreement.

 

If to the Company:

 

Pernix Therapeutics Holdings, Inc.

10 North Park Place, Suite 201

Morristown, New Jersey 07960

Attention:  General Counsel

Facsimile:  (800) 793-2145

 

With a copy to:

Thomas Levato, Esq.

James Barri, Esq.

Goodwin Procter LLP

53 State Street

Boston, MA 02109

Facsimile: (617) 523-1231

 

or to such other address as any party hereto shall have designated by notice in writing to the other party.

 

5.2 Further Assurances. Each party hereto shall at any time, and from time to time, both before and after the date of this Agreement, upon request of the other party hereto, use commercially reasonable efforts to execute, acknowledge and deliver all such further assignments, transfers, conveyances or other documents or instruments, and take all such further action, as may be reasonably requested by the other party to carry out the intent of this Agreement.

 

  

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5.3 Expenses. The parties hereto shall each pay their respective fees and expenses, including but not limited to attorneys’ fees, incident to the negotiations, preparation and execution of this Agreement and the consummation of the transactions provided for herein.

 

5.4 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by a written instrument making specific reference to this Agreement and duly executed by the party to be bound thereby. This Agreement supersedes all prior agreements and understandings between the parties with respect to the transactions contemplated hereby.

 

5.5 Assignability. Neither this Agreement nor any of the rights or obligations hereunder may be assigned without the prior written consent of the parties hereto and any attempt to do so shall be of no force or effect.

 

5.6 Captions. The captions of the various sections and articles contained in this Agreement are for reference purposes only and shall not be deemed in any manner to affect the meaning or interpretation of any of the provisions of this Agreement.

 

5.7 Severability. If any provision of this Agreement or in any document referred to herein shall be determined to be illegal, void or unenforceable, all other provisions of this Agreement or in any other document referred to herein shall not be affected and shall remain in full force and effect.

 

5.8 Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

5.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument.

 

5.10 Survival. The warranties, representations, covenants and agreements contained in this Agreement shall terminate 18 months after the execution and delivery of this Agreement and any Closing of the transactions contemplated hereby.

 

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	 	

PERNIX THERAPEUTICS HOLDINGS, INC.

	 
	 	 	 	 
	
 

	
By: 

	

/s/ Sanjay Patel

	 
	 	 	

Name: Sanjay Patel

	 
	 	 	

Title: Chief Financial Officer

	 
	 	 	 	 

 

 

 

 

  

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NOTEHOLDERS:

Athyrium Opportunities Fund (A) LP

By:  Athyrium Opportunities Associates LP, its general partner

By:  Athyrium Opportunities Associates GP LLC, its general partner

By: /s/ Andrew C. Hyman

(Authorized Signatory)

 

Athyrium Opportunities Fund (B) LP

By:  Athyrium Opportunities Associates LP, its general partner

By:  Athyrium Opportunities Associates GP LLC, its general partner

By: /s/ Andrew C. Hyman

 (Authorized Signatory)

Address for Notice:

c/o Athyrium Capital Management, LP

530 Fifth Avenue, 25th Floor

New York, NY 10036

Attention: Laurent D. Hermouet

Email: lhermouet@athyrium.com

With a copy to:

c/o Athyrium Capital Management, LP

530 Fifth Avenue, 25th Floor

New York, NY 10036

Attention: Andrew C. Hyman

Email: ahyman@athyrium.com

  

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FFI FUND LTD.

By: /s/ Jon Grenzke

Name: Jon Grenzke

Title: Authorized Signatory

FYI LTD.

By: /s/ Jon Grenzke

Name: Jon Grenzke

Title: Authorized Signatory

OLIFANT FUND, LTD.

By: /s/ Jon Grenzke

Name: Jon Grenzke

Title: Authorized Signatory

STRONGBOW FUND LTD.

By: /s/ Jon Grenzke

Name: Jon Grenzke

Title: Authorized Signatory

VALUE RECOVERY FUND LIMITED

By: /s/ Jon Grenzke

Name: Jon Grenzke

Title: Authorized Signatory

  

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NOTEHOLDERS:

Cetus Capital II, LLC

By:  Littlejohn Fund IV, L.P., its manager

By:  Littlejohn Associates IV, L.L.C., its general partner

By: /s/ Richard E. Maybaum

Name: Richard E. Maybaum

(Authorized Signatory)

 

Littlejohn Opportunities Master Fund LP

By:  Littlejohn Opportunities GP LLC, its general partner

By: /s/ Richard E. Maybaum 

Name: Richard E. Maybaum

(Authorized Signatory)

SG Distressed Fund, LP

By:  Littlejohn Opportunities GP LLC, its general partner

By: /s/ Richard E. Maybaum ____________

Name: Richard E. Maybaum

(Authorized Signatory)

 

Address for Notice:

c/o Cetus Capital

8 Sound Shore Drive

Suite 303

Greenwich, CT 06830

  

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NOTEHOLDERS:

GEODE CAPITAL MASTER FUND LTD.

solely on behalf of CBARB SEGREGATED ACCOUNT

By:  GEODE CAPITAL MANAGEMENT LP,

as Investment Manager

 

By: /s/ Jeffrey S. Miller

Name: Jeffrey S. Miller

Title: Chief Operating Officer

One Post Office Square, 20th Floor

Address for Notice:

c/o Geode Capital Management, LLC

Boston, MA 02109

Telephone: (617) 563-3499

Fax: (617) 385-0701

  

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Exhibit A

Form of Third Supplemental Indenture

 

PERNIX THERAPEUTICS HOLDINGS, INC.

 

AND

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

 

as Trustee

 

THIRD SUPPLEMENTAL INDENTURE

 

Dated as of April [__], 2015

 

8.00% Convertible Senior Notes due 2019

 

  

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THIS THIRD SUPPLEMENTAL INDENTURE (this “Third Supplemental Indenture”), entered into as of April [__], 2015, among Pernix Therapeutics Holdings, Inc., a Maryland corporation (the “Company”) party hereto and Wilmington Trust, National Association, a national banking association (the “Trustee”).

 

RECITALS

 

WHEREAS, the Company, the Guarantors party thereto and the Trustee entered into an indenture, dated as of February 21, 2014 (the “Base Indenture”), relating to the Company’s 8.00% Convertible Senior Notes due 2019 (the “Notes”);

WHEREAS, the Trustee and the Company are parties to the First Supplemental Indenture, dated August 19, 2014 (the “First Supplemental Indenture”), and the Trustee, Worrigan Limited and the Company are parties to the Second Supplemental Indenture, dated August 19, 2014 (the “Second Supplemental Indenture” and, the Base Indenture, as amended by the First Supplemental Indenture and the Second Supplemental Indenture, the “Indenture”); and

 

WHEREAS, the holders of a majority of the aggregate principal amount of the outstanding Notes have consented to the amendments to the Indenture reflected herein and, in accordance with Section 10.02 of the Indenture, all such amendments may be made to the Indenture with the consent of a majority of the aggregate principal amount of the outstanding Notes.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions.

 

(a) Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

 

(b) The term “ABL Facility” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(c) The term “Account Debtor” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(d) The term “Accounts” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(e) The term “Acquisition Subsidiary” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(f) The last sentence of the term “Affiliate”, beginning with “Solely for purposes of Section 4.13” and ending with “by contract or otherwise” is hereby deleted from Section 1.01 of the Indenture.

 

(g) The term “Anti-Terrorism Laws” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(h) The term “Asset Disposition” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(i) The term “Bank Product Obligations” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(j) The term “Blocked Person” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(k) The term “Broadly Held” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(l) The term “Contingent Obligations” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(m) The term “Controlled Group” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(n) The term “Core Product” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(o) The term “Cypress” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

  

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(p) The term “Cypress Purchase Agreement” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(q) The term “Debt” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(r) The term “Domestic Material Subsidiary” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(s) The term “Earnout/Escrow Payments” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(t) The term “EBITDA” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(u) The term “EBITDA” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(v) The term “Excluded Asset Disposition” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(w) The term “Foreign Subsidiary” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(x) The term “guarantee” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(y) The term “Intellectual Property” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(z) The term “Inventory” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(aa) The term “Investment” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(bb) The term “Liens” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(cc) The term “Midcap Facility” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(dd) The term “Milestone Payments” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ee) The term “Minimum Liquidity” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ff) The term “Multiemployer Plan” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(gg) The term “Non-Core Product” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(hh) The term “OFAC” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ii) The term “OFAC Lists” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(jj) The term “Ordinary Course of Business” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(kk) The term “Pension Plan” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ll) The term “Permitted Acquisition” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

  

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(mm) The term “Permitted Acquisition Debt” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(nn) The term “Permitted Asset Dispositions” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(oo) The term “Permitted Contest” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(pp) The term “Permitted Contingent Obligations” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(qq) The term “Permitted Debt” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(rr) The term “Permitted Distributions” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ss) The term “Permitted Investments” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(tt) The term “Permitted Liens” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(uu) The term “PML Business” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(vv) The term “Pro Forma Basis” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ww) The term “Restricted Distribution” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(xx) The term “Specified Acquisition” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(yy) The term “Specified Acquisition Subsidiary” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(zz) The term “Specified Assets” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(aaa) The term “Subsidiary Change in Control” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(bbb) The term “Swap Contract” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ccc) The term “Test Period” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(ddd) The term “Total Leverage Ratio” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

(eee) The term “UCC” and the definition thereof are hereby deleted from Section 1.01 of the Indenture.

 

Section 102. Incorporation of Indenture Provisions.  The parties hereto agree that the terms of Sections 17.01 (Provisions Binding on Company’s Successors), 17.04 (Governing Law; Jurisdiction) 17.11 (Execution in Counterparts), 17.12 (Severability) and 17.13 (Waiver of Jury Trial) of the Indenture are incorporated herein by reference, mutatis mutandis.

 

Section 103. Effect of Amendment.  This Third Supplemental Indenture is an amendment supplemental to the Indenture, and the  Indenture and this Third Supplemental Indenture shall henceforth be read together. The Company acknowledges and agrees that this Third Supplemental Indenture only amends, supplements and modifies the terms of the Indenture and does not constitute a novation, and the Company ratifies and confirms the terms and provisions of, and its obligations under, the Indenture (as modified by this Third Supplemental Indenture) and the Notes (as modified by this Third Supplemental Indenture) in all respects.  Pursuant to Section 10.03 of the Indenture, each of the parties hereto acknowledges and agrees that each reference in the Indenture and the Notes to the Indenture shall be deemed to be a reference to the Indenture as amended, supplemented and modified by this Third Supplemental Indenture.

 

  

14

  

Section 104. Trustee Disclaimer. The Trustee accepts the amendments of the Indenture effected by this Third Supplemental Indenture, but on the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee.  Without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, or for or with respect to (i) the validity or sufficiency of this Third Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company by action or otherwise, (iii) the due execution hereof by the Company or (iv) the consequences of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.

 

Section 105. Conditions.  The effectiveness of this Third Supplemental Indenture is conditioned on receipt by the Trustee of the written consent of the Required Holders (receipt of which is hereby acknowledged), an Officer’s Certificate and an Opinion of Counsel as required by Section 10.05 of the Indenture.

 

ARTICLE 2

 

REMOVAL OF AND AMENDMENTS TO CERTAIN COVENANTS AND EVENTS OF DEFAULT

 

Section 201. Each of Sections 4.07, 4.11, 4.13, 6.01(e), 6.01(g) and 6.01(h) of the Indenture is hereby deleted and replaced in its entirety with “Intentionally Omitted.”

 

Section 202. Section 4.10 of the indenture is hereby amended and restated to read as follows:

 

“Section 4.10  Guarantees by Subsidiaries.  Each of the Guarantors that guarantees the Notes immediately prior to the effectiveness of this Third Supplemental Indenture shall remain a Guarantor under the Indenture until such time it is released pursuant to Section 13.03 of the Indenture.”

 

Section 203. Section 6.01(f) of the Indenture is hereby amended and restated to read as follows:

 

“(f) failure by the Company or any Guarantor for 60 days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding has been received by the Company or the Guarantor to comply with any of its other agreements contained in the Notes or this Indenture;”

 

ARTICLE 3

 

CONFORMING CHANGE

 

Section 301. Section 10.01(a) of the Indenture is hereby amended and restated to read as follows:

 

“(a)  to cure any ambiguity, omission, defect or inconsistency;”

 

ARTICLE 4

 

REMOVAL OF CERTAIN PROVISIONS REGARDING CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

Section 401. Section 11.01 of the Indenture is hereby amended and restated to read as follows:

 

“Section 11.01.  Company May Consolidate, Etc. on Certain Terms.  Subject to the provisions of Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to another Person, unless the resulting, surviving or transferee Person (the “Successor Company”), if not the Company, shall expressly assume, by supplemental indenture all of the obligations of the Company under the Notes and this Indenture.

 

  

15

  

For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more Subsidiaries of the Company to another Person (that is not one or more Subsidiaries of the Company or the Company), which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Company to another Person.”

 

ARTICLE 5

 

REMOVAL OF CERTAIN SCHEDULES

 

Section 501. Schedule I to the Indenture, Transaction with Affiliates I-1,  is hereby deleted and replaced in its entirety with “Intentionally Omitted.”

 

Section 502. Schedule II to the Indenture, Permitted Contingent Obligations II-1,  is hereby deleted and replaced in its entirety with “Intentionally Omitted.”

 

Section 503. Schedule III to the Indenture, Permitted Debt III-1, is hereby deleted and replaced in its entirety with “Intentionally Omitted.”

 

Section 504. Schedule IV to the Indenture, Permitted Investments IV-1, is hereby deleted and replaced in its entirety with “Intentionally Omitted.”

 

Section 505. Schedule VI to the Indenture, Specified Assets VI-1, is hereby deleted and replaced in its entirety with “Intentionally Omitted.”

 

ARTICLE 6

 

AMENDMENT TO NOTE

 

Section 6.01.    The definition of “Blocker Percentage” included in certain Notes issued under the Indenture is hereby deleted and replaced with “9.9%.”

 

 [Signatures on Next Page]

  

16

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the date first above written.

 

	  	

PERNIX THERAPEUTICS HOLDINGS, INC.

 

By: ___________________________

Name: [___________]

Title:   [___________]

	  
	  	

 

 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, as Trustee

 

By: _________________________

Name:

 Title:   

	  

 

 

  

17

  

 

Exhibit B

Form of Lock-up Agreement

April [__], 2015

 

Pernix Therapeutics Holdings, Inc.

10 North Park Place, Suite 201

Morristown, New Jersey 07960

 

RE: Pernix Therapeutics Holdings, Inc. (the “Company”)

 

Ladies & Gentlemen:

 

The undersigned is an owner of the Company’s 8.00% Convertible Senior Notes due 2019 outstanding under the Indenture (as amended through the date hereof, the “Indenture”), dated as of February 21, 2014, by and among the Company, certain subsidiaries of the Company, as guarantors, and Wilmington Trust, National Association (the “Trustee”), in the aggregate principal amount set forth on Schedule 1 to the Inducement Agreement, dated as of April 16, 2015, by and among the Company, the undersigned and the other investors listed on Schedule 1 thereto (the “Inducement Agreement”).  Capitalized terms used herein without definition shall have the meanings ascribed to them in the Inducement Agreement.  The shares of Common Stock issuable in accordance with the Indenture to the undersigned upon conversion of the Conversion Notes held by the undersigned are referred to herein as the “Shares.”   For the purposes of clarity, the “Shares” will not include the Inducement Shares or any other Common Stock other than the Common Stock referred to in the immediately preceding sentence.

 

The Company proposes to carry out a private offering of new convertible senior notes (the “Offering”).  The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company by, among other things, raising additional capital for its operations. The undersigned acknowledges that the Company is relying on the representations and agreements of the undersigned contained in this letter agreement in carrying out the Offering and agreeing to deliver the Inducement Shares.

 

In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not without the prior written consent of the Company  (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise dispose of any Shares, or publicly announce an intention to do any of the foregoing, for a period commencing on the date hereof and continuing through the close of trading on the date 145 days after the Closing Date applicable to the undersigned (the “Lock-up Period”).

 

The foregoing paragraph shall not apply to:

 

1. the disposition of no more than [_________] Shares to close short positions created prior to the date hereof in connection with the ownership of the Notes (Shares remaining after such disposition are referred to as the “Remaining Shares”);

 

2. the disposition of up to 20% of the Remaining Shares after the period ending 10 days after the Closing Date applicable to the undersigned;

 

3. the disposition of up to an additional 20% of the Remaining Shares after the period ending 40 days after the Closing Date applicable to the undersigned;

 

4. the disposition of up to an additional 20% of the Remaining Shares after the period ending 75 days after the Closing Date applicable to the undersigned;

 

5. the disposition of up to an additional 20% of the Remaining Shares after the period ending 110 days after the Closing Date applicable to the undersigned;

 

6. the disposition of any Remaining Shares in connection with an underwritten offering pursuant to any of the registration rights agreements, each of which is dated February 21, 2014 and entered into between the Company and the investors party thereto, in respect of the Shares; and

 

7. any transfer to an affiliate of the undersigned; provided, however, that, it shall be a condition to such transfer that the transferee executes and delivers to the Company an agreement stating that the transferee is receiving and holding Shares received in such transfer subject to the provisions of this letter agreement, and there shall be no further transfer of such Shares, except in accordance with this letter agreement.

 

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of Shares except in compliance with the foregoing restrictions.

 

This letter agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned. However, it is understood that, if the Company notifies the undersigned in writing that it does not intend to proceed with the Offering, this letter agreement shall immediately be terminated and the undersigned shall automatically be released from all of the obligations under this letter agreement.

 

[Signature on Next Page]

 

  

18

  

 

 

[INVESTOR SIGNATURE BLOCKS]

 

 

 

By:_____________________________

 

 

 

 

19Exhibit 4.4

 

Warrant Certificate No. ___

 

NEITHER THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAWS.

 

	Effective Date: [______ __, 2015]	Void After: March 30,
    2020

 

MATINAS BIOPHARMA HOLDINGS, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

Matinas BioPharma
Holdings, Inc., a Delaware corporation (the “Company”), for value received on [  ], 2015
(the “Effective Date”), hereby issues to [               ] (the
“Holder” or “Warrant Holder”) this Warrant (the “Warrant”) to
purchase, [         ] shares (each such share as from time to time
adjusted as hereinafter provided being a “Warrant Share” and all such shares being the “Warrant
Shares”) of the Company’s Common Stock (as defined below), at the Exercise Price (as defined below), as
adjusted from time to time as provided herein, on or before March 30, 2020 (the “Expiration
Date”), all subject to the following terms and conditions. This Warrant is one of a series of warrants of like
tenor that have been issued in connection with the Company’s private offering solely to accredited investors of
units in accordance with, and subject to, the terms and conditions described in the Subscription Agreement, attached to the
Confidential Private Placement Memorandum of the Company dated March 19, 2015, as the same may be amended and supplemented
from time to time (the “Subscription Agreement” and the “Private Placement Memorandum”
respectively). In addition, the Company has issued other warrants of like tenor in connection with the transactions described
in the Private Placement Memorandum (the “Other Warrants”).

 

As used in this Warrant,
(i) “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the
City of New York, New York, are authorized or required by law or executive order to close; (ii) “Common Stock”
means the common stock of the Company, par value $0.0001 per share, including any securities issued or issuable with respect thereto
or into which or for which such shares may be exchanged for, or converted into, pursuant to any stock dividend, stock split, stock
combination, recapitalization, reclassification, reorganization or other similar event; (iii) “Exercise Price”
means $0.75 per share of Common Stock, subject to adjustment as provided herein; (iv) “Trading Day” means any
day on which the Common Stock is traded (or available for trading) on its principal trading market; (v) “Affiliate”
means any person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, a person, as such terms are used and construed in Rule 144 promulgated under the Securities Act of 1933, as amended
(the “Securities Act”) and (vi) “Warrantholders” means the holders of Warrants issued pursuant
to the Subscription Agreement and Private Placement Memorandum.

 

1.           DURATION
AND EXERCISE OF WARRANTS

 

(a)          Exercise
Period. The Holder may exercise this Warrant in whole or in part on any Business Day on or before 5:00 P.M., Eastern Time,
on the Expiration Date, at which time this Warrant shall become void and of no value.

 

    	 

    	 

    

 

(b)          Exercise
Procedures.

 

(i)          While
this Warrant remains outstanding and exercisable in accordance with Section 1(a), in addition to the manner set forth in Section
1(b)(ii) below, the Holder may exercise this Warrant in whole or in part at any time and from time to time by:

 

(A)         delivery
to the Company of a duly executed copy of the Notice of Exercise attached as Exhibit A;

 

(B)         surrender
of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify
in writing to the Holder; and

 

(C)         payment
of the then-applicable Exercise Price per share multiplied by the number of Warrant Shares being purchased upon exercise of the
Warrant (such amount, the “Aggregate Exercise Price”) made in the form of cash, or by certified check, bank
draft or money order payable in lawful money of the United States of America or in the form of a Cashless Exercise to the extent
permitted in Section 1(b)(ii) below.

 

(ii)         In
addition to the provisions of Section 1(b)(i) above, if any time commencing 300 days after the Effective Date, a registration statement
covering the resale of the Warrant Shares by the Holder is not effective with the Securities and Exchange Commission (the “SEC”),
the Holder may, in its sole discretion, exercise all or any part of the Warrant in a “cashless” or “net-issue”
exercise (a “Cashless Exercise”) by delivering to the Company (1) the Notice of Exercise and (2) the original
Warrant, pursuant to which the Holder shall surrender the right to receive upon exercise of this Warrant, a number of Warrant Shares
having a value (as determined below) equal to the Aggregate Exercise Price, in which case, the number of Warrant Shares to be issued
to the Holder upon such exercise shall be calculated using the following formula:

 

	X 	=	Y * (A - B)
	 	 	A

 

	with:	X =	the number of Warrant Shares to be issued to the Holder
	 	 	 
	 	Y =	the number of Warrant Shares with respect to which the Warrant is being exercised
	 	 	 
	 	A =	the fair value per share of Common Stock on the date of exercise of this Warrant
	 	 	 
	 	B =	the then-current Exercise Price of the Warrant

 

Solely for the purposes
of this paragraph, “fair value” per share of Common Stock shall mean the average Closing Price (as defined below)
per share of Common Stock for the twenty (20) trading days immediately preceding the date on which the Notice of Exercise is deemed
to have been sent to the Company. “Closing Price” means, for any date, the price determined by the first of
the following clauses that applies:  (a) if the Common Stock is then listed or quoted on the New York Stock Exchange,
the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market or any other national securities
exchange, the closing price per share of the Common Stock for such date (or the nearest preceding date) on the primary eligible
market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the
OTC Bulletin Board or any tier of the OTC Markets, the closing bid price per share of the Common Stock for such date (or the nearest
preceding date) so quoted; or (c) if prices for the Common Stock are then reported in the “Pink Sheets” published by
the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices),
the most recent closing bid price per share of the Common Stock so reported. If the Common Stock is not publicly traded as set
forth above, the “fair value” per share of Common Stock shall be reasonably and in good faith determined by the Board
of Directors of the Company as of the date which the Notice of Exercise is deemed to have been sent to the Company.

 

Notwithstanding the foregoing,
provided that a registration statement covering the resale of the Warrant Shares by the Holder has (x) been declared effective
by the SEC and (y) remained effective for a period of one year, any Cashless Exercise right hereunder shall thereupon terminate.

 

    	-2-

    	 	 	 

    

 

For purposes of Rule 144
promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for such shares shall be deemed
to have commenced, on the date this Warrant was originally issued.

 

(iii)        Upon
the exercise of this Warrant in compliance with the provisions of this Section 1(b), and except as limited pursuant to the last
paragraph of Section 1(b)(ii), the Company shall promptly issue and cause to be delivered to the Holder a certificate for the Warrant
Shares purchased by the Holder. Each exercise of this Warrant shall be effective immediately prior to the close of business on
the date (the “Date of Exercise”) that the conditions set forth in Section 1(b) have been satisfied, as the
case may be. On the first Business Day following the date on which the Company has received each of the Notice of Exercise and
the Aggregate Exercise Price (or notice of a Cashless Exercise in accordance with Section 1(b)(ii)) (the “Exercise Delivery
Documents”), the Company shall transmit an acknowledgment of receipt of the Exercise Delivery Documents to the Company’s
transfer agent (the “Transfer Agent”). On or before the third Business Day following the date on which the Company
has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer
Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal
Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
issue and dispatch by overnight courier to the address as specified in the Notice of Exercise, a certificate, registered in the
Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the certificates evidencing such Warrant Shares.

 

(iv)        If
the Company shall fail for any reason or for no reason to issue to the Holder, within three (3) Business Days of receipt of the
Exercise Delivery Documents, a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for
such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant, and if
on or after such Business Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving
from the Company (a “Buy-In”), then the Company shall, (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased
(the “Buy-In Amount”) plus the amount paid by the Holder to the Company as the exercise price for the Warrant
Shares exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock, and paid the Company $5,000 as the exercise price, the Holder’s cash outlay would be a total of $16,000;
and if the aggregate sales price of the shares giving rise to such Buy-In obligation was $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $6,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to
the terms hereof.

 

    	-3-

    	 	 	 

    

 

(c)          Partial
Exercise. This Warrant shall be exercisable, either in its entirety or, from time to time, for part only of the number of Warrant
Shares referenced by this Warrant. If this Warrant is submitted in connection with any exercise pursuant to Section 1 and the number
of Warrant Shares represented by this Warrant submitted for exercise is greater than the actual number of Warrant Shares being
acquired upon such an exercise, then the Company shall as soon as practicable and in no event later than five (5) Business
Days after any exercise and at its own expense, issue a new Warrant of like tenor representing the right to purchase the number
of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised.

 

(d)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 16.

 

2.            ISSUANCE
OF WARRANT SHARES

 

(a)          The
Company covenants that all Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be (i) duly authorized,
fully paid and non-assessable, and (ii) free from all liens, charges and security interests, with the exception of claims arising
through the acts or omissions of any Holder and except as arising from applicable Federal and state securities laws.

 

(b)          The
Company shall register this Warrant upon records to be maintained by the Company for that purpose in the name of the record holder
of such Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner thereof
for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

 

(c)          The
Company will not, by amendment of its certificate of incorporation, by-laws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in the taking of all action necessary or appropriate in order to
protect the rights of the Holder to exercise this Warrant, or against impairment of such rights.

 

3.            ADJUSTMENTS
OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT SHARES

 

(a)          The
Exercise Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time
to time upon the occurrence of certain events described in this Section 3; provided, that notwithstanding the provisions
of this Section 3, the Company shall not be required to make any adjustment if and to the extent that such adjustment would require
the Company to issue a number of shares of Common Stock in excess of its authorized but unissued shares of Common Stock, less all
amounts of Common Stock that have been reserved for issue upon the conversion of all outstanding securities convertible into shares
of Common Stock and the exercise of all outstanding options, warrants and other rights exercisable for shares of Common Stock.
If the Company does not have the requisite number of authorized but unissued shares of Common Stock to make any adjustment, the
Company shall use its commercially best efforts to obtain the necessary stockholder consent to increase the authorized number of
shares of Common Stock to make such an adjustment pursuant to this Section 3.

 

(i)          Subdivision
or Combination of Stock. In case the Company shall at any time subdivide (whether by way of stock dividend, stock split or
otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior
to such subdivision shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased, and conversely,
in case the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse stock
split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be
proportionately increased and the number of Warrant Shares shall be proportionately decreased. The Exercise Price and the Warrant
Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in
this Section 3(a)(i).

 

    	-4-

    	 	 	 

    

 

(ii)         Dividends
in Stock, Property, Reclassification. If at any time, or from time to time, all of the holders of Common Stock (or any shares
of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to
receive, without payment therefore:

 

(A)         any
shares of stock or other securities that are at any time directly or indirectly convertible into or exchangeable for Common Stock,
or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution,
or

 

(B)         additional
stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, combination of shares or
similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall
be covered by the terms of Section 3(a)(i) above),

 

then and in each such case, the Exercise Price
and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately, and the Holder
hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to above) that such Holder would hold on the date of such exercise had such Holder been the
holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such
shares or all other additional stock and other securities and property. The Exercise Price and the Warrant Shares, as so adjusted,
shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(ii).

 

(iii)        Reorganization,
Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially
all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive
stock, securities, or other assets or property (an “Organic Change”), then, as a condition of such Organic Change,
lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase
and receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued
or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable assuming the full exercise of the rights represented by this Warrant.
In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests
of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments
of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant and registration
rights) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof. The Company will not affect any such consolidation, merger or sale unless, prior to the consummation thereof,
the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing
such assets shall assume by written instrument reasonably satisfactory in form and substance to the Holder executed and mailed
or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation
to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder
may be entitled to purchase. If there is an Organic Change, then the Company shall cause to be
mailed to the Holder at its last address as it shall appear on the books and records of the Company, at least 10 calendar days
before the effective date of the Organic Change, a notice stating the date on which such Organic Change is expected to become effective
or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their
shares for securities, cash, or other property delivered upon such Organic Change; provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant during the 10-day period commencing on the date of such notice
to the effective date of the event triggering such notice. In any event, the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation
to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such
obligation to the extent such assumption occurs by operation of law.

 

    	-5-

    	 	 	 

    

 

(b)          Certificate
as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 3, the Company at its expense
shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant
a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment
is based. The Company shall promptly furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such
adjustments and readjustments; and (ii) the number of shares and the amount, if any, of other property which at the time would
be received upon the exercise of the Warrant.

 

(c)          Certain
Events. If any event occurs as to which the other provisions of this Section 3 are not strictly applicable but the lack of
any adjustment would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent
and principles of such provisions, or if strictly applicable would not fairly protect the purchase rights of the Holder under this
Warrant in accordance with the basic intent and principles of such provisions, then the Company's Board of Directors will, in good
faith, make an appropriate adjustment to protect the rights of the Holder; provided, that no such adjustment pursuant to
this Section 3(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to
this Section 3.

 

4.            REDEMPTION
OF WARRANTS

 

(a)          General.
Prior to the Expiration Date, the Company shall have the option, subject to the conditions set forth herein, to redeem all of the
Warrants then outstanding upon not less than thirty (30) days nor more than sixty (60) days prior written notice to the Warrant
Holders at any time provided that, at the time of delivery of such notice (i) there is an effective registration statement covering
the resale of the Warrant Shares, and (ii) the closing bid price of the Company’s Common Stock for each of the twenty (20)
consecutive trading days immediately prior to the Notice Date, as defined below, is at least $3.00 per share, as proportionately
adjusted to reflect any stock splits, stock dividends, combination of shares or like events.

 

(b)          Notice.
Notice of redemption will be effective upon mailing in accordance with this Section 4 and such date may be referred to below as
the “Notice Date.” Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company
not less than 30 days prior to the date fixed for redemption to the Holders of the Warrants to be redeemed at their last addresses
as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed
to have been duly given whether or not the Holder received such notice.

 

(c)          Redemption
Date and Redemption Price. The notice of redemption shall state the date set for redemption, which date shall be not less than
thirty (30) days, or more than sixty (60) days, from the Notice Date (the “Redemption Date”). The Company shall
not mail the notice of redemption unless all funds necessary to pay for redemption of the Warrants to be redeemed shall have first
been set aside by the Company for the benefit of the Warrant Holders so as to be and continue to be available therefor. The redemption
price to be paid to the Warrant Holders will be $0.0001 for each share of Common Stock of the Company to which the Warrant Holder
would then be entitled upon exercise of the Warrant being redeemed, as adjusted from time to time as provided herein (the “Redemption
Price”).

 

(d)          Exercise.
Following the Notice Date, the Warrant Holders may exercise their Warrants in accordance with Section 1 of this Warrant between
the Notice Date and 5:00 p.m. Eastern Time on the Redemption Date and such exercise shall be timely if the form of election to
purchase duly executed and the Warrant Exercise Price for the shares of Common Stock to be purchased are actually received by the
Company at its principal offices prior to 5:00 p.m. Eastern Time on the Redemption Date.

 

(e)          Mailing.
If any Warrant Holder does not wish to exercise any Warrant being redeemed, he should mail such Warrant to the Company at its principal
offices after receiving the notice of redemption. On and after 5:00 p.m. Eastern Time on the Redemption Date, notwithstanding that
any Warrant subject to redemption shall not have been surrendered for redemption, the obligation evidenced by all Warrants not
surrendered for redemption or effectively exercised shall be deemed no longer outstanding, and all rights with respect thereto
shall forthwith cease and terminate, except only the right of the holder of each Warrant subject to redemption to receive the Redemption
Price for each share of Common Stock to which he would be entitled if he exercised the Warrant upon receiving notice of redemption
of the Warrant subject to redemption held by him.

 

    	-6-

    	 	 	 

    

 

5.            TRANSFERS
AND EXCHANGES OF WARRANT AND WARRANT SHARES

 

(a)          Registration
of Transfers and Exchanges. Subject to Section 5(c), upon the Holder’s surrender of this Warrant, with a duly executed
copy of the Form of Assignment attached as Exhibit B, to the Secretary of the Company at its principal offices or at such
other office or agency as the Company may specify in writing to the Holder, the Company shall register the transfer of all or any
portion of this Warrant. Upon such registration of transfer, the Company shall issue a new Warrant, in substantially the form of
this Warrant, evidencing the acquisition rights transferred to the transferee and a new Warrant, in similar form, evidencing the
remaining acquisition rights not transferred, to the Holder requesting the transfer.

 

(b)          Warrant
Exchangeable for Different Denominations. The Holder may exchange this Warrant for a new Warrant or Warrants, in substantially
the form of this Warrant, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased
hereunder, each of such new Warrants to be dated the date of such exchange and to represent the right to purchase such number of
Warrant Shares as shall be designated by the Holder. The Holder shall surrender this Warrant with duly executed instructions regarding
such re-certification of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency
as the Company may specify in writing to the Holder.

 

(c)          Restrictions
on Transfers. This Warrant may not be transferred at any time without (i) registration under the Securities Act or (ii) an
exemption from such registration and a written opinion of legal counsel addressed to the Company that the proposed transfer of
the Warrant may be effected without registration under the Securities Act, which opinion will be in form and from counsel reasonably
satisfactory to the Company.

 

(d)          Permitted
Transfers and Assignments. Notwithstanding any provision to the contrary in this Section 5, the Holder may transfer, with or
without consideration, this Warrant or any of the Warrant Shares (or a portion thereof) to the Holder’s Affiliates (as such
term is defined under Rule 144 of the Securities Act) without obtaining the opinion from counsel that may be required by Section
5(c)(ii), provided, that the Holder delivers to the Company and its counsel certification, documentation, and other assurances
reasonably required by the Company’s counsel to enable the Company’s counsel to render an opinion to the Company’s
Transfer Agent that such transfer does not violate applicable securities laws.

 

6.            MUTILATED
OR MISSING WARRANT CERTIFICATE

 

If this Warrant is mutilated,
lost, stolen or destroyed, upon request by the Holder, the Company will, at its expense, issue, in exchange for and upon cancellation
of the mutilated Warrant, or in substitution for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the form
of this Warrant, representing the right to acquire the equivalent number of Warrant Shares; provided, that, as a prerequisite
to the issuance of a substitute Warrant, the Company may require satisfactory evidence of loss, theft or destruction as well as
an indemnity from the Holder of a lost, stolen or destroyed Warrant.

 

7.            PAYMENT
OF TAXES

 

The Company will pay all
transfer and stock issuance taxes attributable to the preparation, issuance and delivery of this Warrant and the Warrant Shares
(and replacement Warrants) including, without limitation, all documentary and stamp taxes; provided, however, that
the Company shall not be required to pay any tax in respect of the transfer of this Warrant, or the issuance or delivery of certificates
for Warrant Shares or other securities in respect of the Warrant Shares to any person or entity other than to the Holder.

 

8.            FRACTIONAL
WARRANT SHARES

 

No fractional Warrant Shares
shall be issued upon exercise of this Warrant. The Company, in lieu of issuing any fractional Warrant Share, shall round up the
number of Warrant Shares issuable to nearest whole share.

 

    	-7-

    	 	 	 

    

 

9.            NO
STOCK RIGHTS AND LEGEND

 

No holder of this Warrant,
as such, shall be entitled to vote or be deemed the holder of any other securities of the Company that may at any time be issuable
on the exercise hereof, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, the
rights of a stockholder of the Company or the right to vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting
stockholders (except as provided herein), or to receive dividends or subscription rights or otherwise (except as provide herein).

 

Each certificate for Warrant
Shares initially issued upon the exercise of this Warrant, and each certificate for Warrant Shares issued to any subsequent transferee
of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED
UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
(2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES,
WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED
OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES
LAWS.”

 

10.          REGISTRATION
RIGHTS

 

The Holder shall be entitled
to the registration rights as are contained in the Registration Rights Agreement, the provisions of which are deemed incorporated
herein by reference.  

 

11.          NOTICES

 

All notices, consents,
waivers, and other communications under this Warrant must be in writing and will be deemed given to a party when (a) delivered
to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile
or e-mail with confirmation of transmission by the transmitting equipment; (c) received or rejected by the addressee, if sent by
certified mail, return receipt requested, if to the registered Holder hereof; or (d) seven days after the placement of the notice
into the mails (first class postage prepaid), to the Holder at the address, facsimile number, or e-mail address furnished by the
registered Holder to the Company in accordance with the Subscription Agreement by and between the Company and the Holder, or if
to the Company, to it at 1545 Route 206 South, Suite 302, Bedminster, New Jersey, Attention: Roelof Rongen (or to such other address,
facsimile number, or e-mail address as the Holder or the Company as a party may designate by notice the other party).

 

12.          SEVERABILITY

 

If a court of competent
jurisdiction holds any provision of this Warrant invalid or unenforceable, the other provisions of this Warrant will remain in
full force and effect. Any provision of this Warrant held invalid or unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.

 

13.          BINDING
EFFECT

 

This Warrant shall be binding
upon and inure to the sole and exclusive benefit of the Company, its successors and assigns, the registered Holder or Holders from
time to time of this Warrant and the Warrant Shares.

 

    	-8-

    	 	 	 

    

 

14.          SURVIVAL
OF RIGHTS AND DUTIES

 

This Warrant shall terminate
and be of no further force and effect on the earlier of 5:00 P.M., Eastern Time, on the Expiration Date or the date on which this
Warrant has been exercised in full.

 

15.          GOVERNING
LAW

 

This Warrant will be governed
by and construed under the laws of the State of New York without regard to conflicts of laws principles that would require the
application of any other law.

 

16.          DISPUTE
RESOLUTION

 

In the case of a dispute
as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two Business Days of receipt of the Notice of Exercise
giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination
or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two Business Days, submit via facsimile (a) the disputed
determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder
or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company
shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error.

 

17.          NOTICES
OF RECORD DATE

 

Upon (a) any establishment
by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or right or option to acquire securities of the Company, or any other
right, or (b) any capital reorganization, reclassification, recapitalization, merger or consolidation of the Company with or into
any other corporation, any transfer of all or substantially all the assets of the Company, or any voluntary or involuntary dissolution,
liquidation or winding up of the Company, or the sale, in a single transaction, of a majority of the Company’s voting stock
(whether newly issued, or from treasury, or previously issued and then outstanding, or any combination thereof), the Company shall
mail to the Holder at least ten (10) Business Days, or such longer period as may be required by law, prior to the record date specified
therein, a notice specifying (i) the date established as the record date for the purpose of such dividend, distribution, option
or right and a description of such dividend, option or right, (ii) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to become effective and (iii) the
date, if any, fixed as to when the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock
for securities or other property deliverable upon such reorganization, reclassification, transfer, consolation, merger, dissolution,
liquidation or winding up.

 

18.          RESERVATION
OF SHARES

 

The Company shall reserve
and keep available out of its authorized but unissued shares of Common Stock for issuance upon the exercise of this Warrant, free
from pre-emptive rights, such number of shares of Common Stock for which this Warrant shall from time to time be exercisable. The
Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation. Without limiting the generality of the foregoing, the Company covenants
that it will use commercially reasonable efforts to take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents, including but not limited to consents from the Company’s
stockholders or Board of Directors or any public regulatory body, as may be necessary to enable the Company to perform its obligations
under this Warrant.

 

    	-9-

    	 	 	 

    

 

19.          NO
THIRD PARTY RIGHTS

 

This Warrant is not intended,
and will not be construed, to create any rights in any parties other than the Company and the Holder, and no person or entity may
assert any rights as third-party beneficiary hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

    	-10-

    	 	 	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to be duly executed as of the date first set forth above.

 

	 	MATINAS BIOPHARMA HOLDINGS, INC.
	 	 
	 	By:	 
	 	 	Name:	Roelof Rongen
	 	 	Title:	President and Chief Executive Officer

 

    	-11-

    	 	 	 

    

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

(To be executed by the Holder of Warrant if
such Holder desires to exercise Warrant)

 

To Matinas BioPharma Holdings,Inc.:

 

The undersigned hereby
irrevocably elects to exercise this Warrant and to purchase thereunder, ___________________ full shares of Matinas BioPharma Holdings,Inc.
common stock issuable upon exercise of the Warrant and delivery of:

 

(1)         $_________
(in cash as provided for in the foregoing Warrant) and any applicable taxes payable by the undersigned pursuant to such Warrant;
and

 

(2)         __________
shares of Common Stock (pursuant to a Cashless Exercise in accordance with Section 1(b)(ii) of the Warrant) (check here if the
undersigned desires to deliver an unspecified number of shares equal the number sufficient to effect a Cashless Exercise [___]).

 

The undersigned requests
that certificates for such shares be issued in the name of:

 

_________________________________________

(Please print name, address and social security
or federal employer

identification number (if applicable))

 

_________________________________________

 

_________________________________________

 

If the shares issuable
upon this exercise of the Warrant are not all of the Warrant Shares which the Holder is entitled to acquire upon the exercise of
the Warrant, the undersigned requests that a new Warrant evidencing the rights not so exercised be issued in the name of and delivered
to:

 

_________________________________________

(Please print name, address and social security
or federal employer

identification number (if applicable))

 

_________________________________________

 

_________________________________________

 

	 	Name of Holder (print):    ____________________________

	 	(Signature):    _____________________________________

	 	(By:)  ___________________________________________

	 	(Title:) __________________________________________

	 	Dated:  __________________________________________

 

    	-12-

    	 	 	 

    

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED, ___________________________________
hereby sells, assigns and transfers to each assignee set forth below all of the rights of the undersigned under the Warrant (as
defined in and evidenced by the attached Warrant) to acquire the number of Warrant Shares set opposite the name of such assignee
below and in and to the foregoing Warrant with respect to said acquisition rights and the shares issuable upon exercise of the
Warrant:

 

	Name of Assignee	 	Address	 	Number of Shares
	
         

         
	 	 	 	 
	
         

         
	 	 	 	 
	
         

         
	 	 	 	 
	
         

         
	 	 	 	 

 

If the total of the Warrant
Shares are not all of the Warrant Shares evidenced by the foregoing Warrant, the undersigned requests that a new Warrant evidencing
the right to acquire the Warrant Shares not so assigned be issued in the name of and delivered to the undersigned.

 

	 	Name of Holder (print):    ____________________________

	 	(Signature):    _____________________________________

	 	(By:)  ___________________________________________

	 	(Title:) __________________________________________

	 	Dated:  __________________________________________

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