Document:

ex_218208.htm

Exhibit 4.1

 

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

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

 ATOSSA THERAPEUTICS, INC.

 

Warrant Shares: [_______]                    Initial Exercise Date: [______], 2020

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [_____], 20251 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Atossa Therapeutics, Inc., a company incorporated under the laws of the State of Delaware (the “Company”), up to [___] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated December [_], 2020, among the Company and the purchasers signatory thereto.

 

Section 2. Exercise.

 

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by email (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

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

 

c) Cashless Exercise. If at any time after the six month anniversary of the Closing Date there is no effective registration statement registering, or no current prospectus available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing ((A-B)(X)) by (A), where:

 

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

 

d) Mechanics of Exercise.

 

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, 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 Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

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

 

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

 

iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (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 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 (in which case such exercise shall be deemed rescinded) 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 with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. 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 shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

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

 

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

 

vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

Section 3. Certain Adjustments.

 

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

 

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

 

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

 

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

 

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

 

f) Notice to Holder.

 

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

 

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

 

g) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

 

Section 4. Transfer of Warrant.

 

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

 

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

 

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

 

d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

 

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

 

Section 5. Miscellaneous.

 

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

 

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

 

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

 

d) Authorized Shares.

 

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

 

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

 

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

 

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

 

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

 

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

 

(Signature Page Follows)

 

 

 

 

 

 

 

 

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

 

 

	
			ATOSSA THERAPEUTICS, INC.

			 

			
	
			By:__________________________________________

			     Name:

			     Title:

			

 

 

NOTICE OF EXERCISE

 

To: ATOSSA THERAPEUTICS, INC.

 

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

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

 

[ ] in lawful money of the United States; or

 

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

 

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

 

_______________________________

 

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

 

_______________________________

_______________________________

_______________________________

 

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

 

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

 

 

 

 

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

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

 

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

 

	
			Name:

				 
	 	
			(Please Print)

			
	
			Address:

				 
	
			 

			Phone Number:

			Email Address:  

				
			(Please Print)

			______________________________________

			______________________________________

			
	
			Dated: _______________ __, ______

				 
	
			Holder’s Signature:

				 
	
			Holder’s Address:

				 

 

 

1 Insert the date that is the 4.5 year anniversary of the Initial Exercise Date; provided, however, that, if such date is not a Trading Day, insert the immediately following Trading Day.INTELLECTUAL
PROPERTY RIGHTS PURCHASE AND TRANSFER AGREEMENT

 

This
Intellectual Property Rights Purchase and Transfer Agreement (this “IP Purchase Agreement” or “Agreement”)
is effective this 17th day of December 2020, by and between Advanced Neural Dynamics, Inc. (“AND”) located at the
Pennsylvania Biotechnology Center (“PBC”) at 3805 Old Easton Road, Doylestown, PA 18902; and Fox Chase Chemical Diversity
Center, Inc. (“FOX”) located at the PBC at 3805 Old Easton Road, Doylestown, PA 18902; Douglas Brenneman, Ph.D, located
at 121 Kingston Way, North Wales, PA 19454 (“Brenneman”), (collectively, “TRANSFERORS”) and Neuropathix,
Inc., a Delaware corporation (“NPTX”) (hereinafter, “Acquiror” or “NPTX”). Each of Transferor
and the Acquiror shall be referred to separately herein as a “Party” and together as the “Parties.”

 

RECITALS

 

A. 
TRANSFERORS currently own certain Intellectual Property Rights identified on Exhibit A – Schedule of Assets (the “Assets”),
including but not limited to Patents, Pending Patents, and Continuation in Part, Applications, etc. listed thereon.

 

B. 
Upon the Closing Date, TRANSFERORS shall transfer to Acquiror the Assets free of any and all encumbrances, third party licenses
and sub-licenses, liens and debts owing and outstanding thereunder the Assets; and Acquiror accepts all rights to the Assets and
wishes to purchase the Assets for the Consideration set forth in Section 2 below (the “Transaction”).

 

C. 
Acquiror wishes to purchase the Assets for the Purchase Price set forth in Section 2 below.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereby agree as follows:

 

Definitions

 

As
used herein, the following terms shall have the following meanings:

 

A. 
Intellectual Property Rights. The term
“Intellectual Property Rights” means all rights, titles and interests that would otherwise belong to TRANSFERORS as
described in Exhibit A hereto, including but not limited to: (i.) royalties, and milestone payments; (ii.) patents, patent applications,
patent disclosures and inventions; (iii.) trade secrets and other confidential information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to practice); (iv.) know-how, manufacturing and production
processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical
data; and (vii) copies and tangible embodiments thereof (in whatever form or medium).

 

B. 
Closing. The term “Closing”
or “Closing Date(s)” shall have the meaning ascribed to it in Section 3.

 

C. 
Closing Date Payment. The term “Closing
Date Payment” shall have the meaning ascribed to it in Section 3.

 

D. 
Agreement. The term “Agreement”
shall mean this instrument and all Schedules and Exhibits attached hereto.

 

E. 
Closing. The term “Closing”
or “Closing Date” shall have the meaning ascribed to it in Section 3.

 

F. 
Closing Date Payment. The term “Closing
Date Payment” shall have the meaning ascribed to it in Section 3.

 

G. 
Material Adverse Effect. The term “Material
Adverse Effect” shall mean events which have an adverse effect in the aggregate which, measured in dollars, exceeds the
sum of $15,000.

 

H. 
Material Contract. The term “Material
Contract” shall have the meaning ascribed to it in Section 5(C.).

 

I. 
Proration Date. The term “Proration
Date” shall mean the specific date set for Closing in Section 3 or any subsequent date set for Closing, provided that the
actual date of Closing occurs within five (5) business days after said date set for Closing.

 

J. 
Affiliate of TRANSFERORS. The term “Affiliate
of TRANSFERORS” shall mean (i) any individual, partnership, corporation, or other entity or person which is owned or controlled
directly or indirectly by TRANSFERORS; (ii) any other individual, partnership, corporation, or other entity or person which controls
or is controlled by or under common control with TRANSFERORS; and (iii) any officer, director, partner, or owner of 10 percent
or greater equity or voting interest in any such other corporation, partnership, or other entity or person.

 

 

K. 
Code. The term “Code” shall
mean the Internal Revenue Code of 1986, as amended.

 

L. 
Agreement. The term “Agreement”
shall mean this instrument and all Schedules and Exhibits attached hereto.

 

Terms
and Conditions

 

1. 
Sale, Purchase and Transfer of Intellectual
Property Rights.

 

A. 
Assets. Subject to the terms and conditions of this Agreement, at the Closing referred to herein, TRANSFERORS agree to
sell, transfer and assign and Acquiror agrees to purchase and accept on the terms stated herein, all of TRANSFERORS' right, title
and interest in and to the Assets as listed in Exhibit A, including, without limitation, all contracts, contract rights, licenses,
licenses, notifications, approvals and authorizations.

 

B. 
Transferring Assets and Licenses.At the Closing, TRANSFERORS will assign, transfer or convey, or cause to be assigned,
transferred or conveyed to ACQUIROR or a Designee, if applicable, the Assets as listed in Exhibit A. 

 

2. 
Purchase Price / Consideration.

 

Purchase
Price. Six Hundred Thousand Dollars ($600,000), payable with the quantity of shares of Neuropathix, Inc. restricted Common
Stock, par value $.001 per share pursuant to the schedule of closings and issuances outlined on Exhibit B – Schedule Issuance
of Shares (the “ACQUIROR Shares” or “Consideration”). Closing shall occur in one (1) installment for Reitz
and five (5) installments for Brenneman. In addition to the issuances of the ACQUIROR Shares, additional cash payments shall be
made by the Acquiror to Brenneman pursuant to Exhibit B – Schedule of Issuance of Shares (the “Additional Consideration”)
to cover the tax liability that may or may not occur in relation to the issuances of shares to Brenneman. Such Additional Consideration
shall not exceed Brenneman’s tax costs incurred based upon the issuance of ACQUIROR Shares to Brenneman.

 

B. Delivery
of Shares. Immediately upon execution and delivery of this Agreement, ACQUIROR shall cause the ACQUIROR Shares to be delivered
to TRANSFERORS.

 

3. Closing.

 

The
Initial Closing of the Transaction (“Initial Closing”) shall be held at the offices of Neuropathix, Inc., 3805 Old
Easton Road, Doylestown, PA 18902 on or before December 21, 2020 (the “Initial Closing Date”).

4. 
ACQUIROR’s Representations and Warranties. 

 

ACQUIROR
represents and warrants to TRANSFERORS the following, each of which is true and correct as of the date hereof:

 

A. 
Ownership of the Shares.

 

ACQUIROR
owns all right, title and interest to the ACQUIROR Shares free and clear of all voting trusts, agreements, arrangements, encumbrances,
liens, claims, equities and liabilities. ACQUIROR has full and complete authority to transfer the ACQUIROR Shares and is conveying
clear and unencumbered title to the ACQUIROR Shares to TRANSFERORS.

 

B. 
No Other Representations and Warranties.

 

Other
than as set forth in Section 4(a) above, the ACQUIROR Shares are being transferred “as-is,” and ACQUIROR makes
no other representations or warranties in connection with the ACQUIROR Shares or the Transaction.

 

C. 
Shares Currently Subject to SEC Rule 144 Resale Restriction.

 

The
ACQUIROR Shares being sold hereunder are subject to a Rule 144 Resale Restriction and bear the following restrictive legend:

 

“The
securities evidenced hereby have not been registered under the Securities Act of 1933, as amended (the ‘Act’) nor
qualified under the securities laws of any states, and have been issued in reliance upon exemptions from such registration and
qualification for nonpublic offerings.  Accordingly, the sale, transfer, pledge, hypothecation, or other disposition of any
such securities or any interest therein may not be accomplished except pursuant to an effective registration statement under the
Act and qualification under applicable State securities laws, or pursuant to an opinion of counsel, satisfactory in form and substance
to the Company to the effect that such registration and qualification are not required.”

 

D. 
Delivery of Shares on Statement of Account.

 

ACQUIROR
shall cause Securities Transfer Corporation, the Company’s SEC registered transfer agent to produce a statement of account
evidencing the TRANSFERORS’ ownership of Shares. The total number of shares of the restricted Common Stock, par value $.001
per share of Neuropathix, Inc. to be issued to each Transferor is set forth in accordance with the schedule of closings and issuances
outlined on Exhibit B – Schedule Issuance of Shares.

 

E. 
Inventor Royalty License Agreement (Exhibit C)

 

F. 
Assignment of Patents and Intellectual Property (Exhibit D)

 

After
the intial closing, but prior to January 31, 2021, ACQUIROR shall deliver separate Scientific Advisory Board Agreements and Stock
Option Agreements to Allen Reitz and Douglas Brenneman.

 

5. 
TRANSFERORS’ Representations and Warranties. 

 

TRANSFERORS,
jointly and severally, represents and warrants to ACQUIROR the following, each of which is true and correct as of the date hereof:

 

		A.	Representations
                                         of TRANSFERORS.

 

i.TRANSFERORS
represents to ACQUIROR that:

 

a. 
Organization, Standing and Authority.

 

Fox
Chase Chemical Diversity, Inc. is a legally organized corporation under the laws of the state of Delaware and Allen Reitz is a
co-owner with >50% ownership of the company; and

 

Advanced
Neural Dynamics, Inc. is a legally organized corporation under the laws of the state of Delaware and under the control and ownership
of Douglas Brenneman.

 

B. 
Authorization of Agreement; Authority. 

 

The
execution, delivery and performance of this Agreement by TRANSFERORS has been duly authorized by all necessary corporate and partnership
actions of TRANSFERORS, and this Agreement constitutes the valid and binding obligation of TRANSFERORS, enforceable in accordance
with its terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general and subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

 

 

The
execution, delivery and performance of this Agreement by TRANSFERORS will not (a) violate or conflict with TRANSFERORS corporate
power and authority; (b) constitute a violation of any law, regulation, order, writ, judgment, injunction or decree applicable
to TRANSFERORS; or (c) subject to the receipt of appropriate consents as specified in this Agreement as of the Closing Date, conflict
with, or result in the breach of the provisions of, or constitute a default under, any agreement, license, permit or other instrument
to which TRANSFERORS is a party or is bound or by which the Assets are bound.

 

C. 
Material Contracts. 

 

All
of the Material Contracts which are to be transferred to ACQUIROR at Closing, if any, have not been further modified, or amended.
A Material Contract shall mean a Contract which involves payments, performance of services or delivery of goods by or to TRANSFERORS
after the Closing Date in an amount with any value.

 

To
the extent that any invention included within Exhibit A has been funded in whole or in part by the United States government through
the National Institutes of Health (“NIH”), the United States government retains certain rights in such invention as
set forth in 35 U.S.C. §200-212 and all regulations promulgated thereunder, as amended, and any successor statutes and regulations. 
ACQUIROR acknowledges and shall comply with these regulations, including the obligation that commercial products derived thereof
used or sold in the United States be manufactured substantially in the United States.  Nothing contained in this Agreement
obligates or shall obligate AND or FOX to take any action that would conflict in any respect with its past, current or future
obligations to the United States Government.

 

D. 
Litigation and Compliance with Laws. 

 

There
are no judicial or administrative actions, proceedings or investigations pending or, to the best of TRANSFERORS’ knowledge,
threatened, that question the validity of this Agreement or any action taken or to be taken by TRANSFERORS in connection with
this Agreement. There is no claim of infringement, litigation, proceeding or governmental investigation pending or, to the best
of TRANSFERORS’ knowledge, threatened, or any order, injunction or decree outstanding which, if decided unfavorably, would
have a Material Adverse Effect on ACQUIROR.

 

E. 
Delivery of the Assets. 

 

TRANSFERORS
have, or will have on the Closing Date, good and marketable title (which includes leasehold title if applicable) to the Assets
to be transferred to ACQUIROR on the Closing Date. (see: Exhibit A – Schedule of Assets; Exhibit F – Assignment of
Patents and Intellectual Property).

F. 
Authorization of Transaction. TRANSFERORS
have the full power and authority to execute and deliver this Agreement and any other agreements contemplated hereby or thereby,
and to perform TRANSFERORS’ obligations hereunder and thereunder. This Agreement constitutes the valid and legally binding
obligation of TRANSFERORS, enforceable against TRANSFERORS in accordance with its terms and conditions. TRANSFERORS need not give
any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency
in order to consummate the transactions contemplated by this Agreement. However, TRANSFERORS and ACQUIROR acknowledge that the
NIH have certain rights to the Intellectual Property listed in Exhibit A including a non-exclusive license to use such Intellectual
Property and that the NIH will be notified as to the change in assignment of the Intellectual Property and the transaction once
complete.

 

G. 
Disposition of ACQUIROR Shares.

 

i. 
Generally. TRANSFERORS has no present
intention to divide TRANSFERORS’ participation with others or to resell or otherwise dispose of all or any part of the ACQUIROR
Shares. TRANSFERORS has no present intention of participating in the formulation, determination or direction of the basic business
decisions of the Company.

 

ii.Compliance
with Securities Act. TRANSFERORS agrees that if TRANSFERORS sells or distributes the ACQUIROR Shares in the future, TRANSFERORS
shall sell or distribute them pursuant to the requirements of the Securities Act of 1933, as amended (the “Securities Act”)
and any applicable “Blue Sky” laws. TRANSFERORS agree that TRANSFERORS will not transfer any part of the ACQUIROR
Shares without (i.) effective registration under the Securities Act and applicable Blue Sky laws, or (ii.) obtaining an opinion
of counsel satisfactory in form and substance to counsel for the Company stating that the proposed transaction will not result
in a prohibited transaction under the Securities Act and the applicable Blue Sky laws.

 

6. 
Indemnification.

 

A. 
Subject only to Section 6(B) of this Agreement, in no event shall TRANSFERORS be liable for any use by ACQUIROR of the Assets.
ACQUIROR assumes all liability for damages which may arise from its use, storage, disposal or sale of the Assets and/or a product
containing an Asset. TRANSFERORS shall not be liable to ACQUIROR for any loss, claim or demand made by ACQUIROR, or made against
ACQUIROR by any other party, due to or arising from the use of the Assets by ACQUIROR. ACQUIROR agrees to defend, indemnify, and
hold harmless TRANSFERORS, its trustees, officers, employees, and agents from any loss, claim, injury, damage, expense or liability
(including attorney's fees), of whatsoever kind or nature, which may arise from or in connection with this Agreement, including
but not limited to: (i.) ACQUIROR’s use, handling, storage or sale of the Assets or a product containing an Asset; (ii.)
any act or omission by ACQUIROR or any ACQUIROR employee, agent, director, or officer; and (iii.) any breach of this Agreement.

 

B. 
TRANSFERORS agree, jointly and severally, to save, defend, indemnify and hold ACQUIROR and its officers and directors, parents,
subsidiaries, shareholders, affiliates, predecessors, successors and assigns (and their respective officers, directors, employees
and agents) harmless from and against any loss, claims, liabilities, damages, costs and expenses, including attorneys' fees incurred
with respect to third party claims resulting from, based upon, or related to ACQUIROR’s right, title or interest in and
to the Assets.

 

7. 
Defense of Claims by Third Parties. 

 

If
any claim is made against a party that, if sustained, would give rise to a liability of the other under this Agreement, ACQUIROR
or TRANSFERORS, as the case may be, shall promptly cause notice of the claim to be delivered to the other and shall notify the
other party and its counsel of its obligation to defend such claim, at such other party’s sole expense. The obligation to
defend indemnity claims shall be the responsibility of each party for a period of two (2) years, with counsel satisfactory to
the party against which such claim is made.

 

8. 
Miscellaneous.

 

A. 
Expenses.

 

Except
as otherwise provided for herein, each Party hereto shall be responsible for its or his own expenses accrued in connection with
the negotiation, execution and consummation of the transactions contemplated by this Agreement, including fees of his or its respective
attorneys, accountants or consultants.

 

B. 
Successors and Assignees.

 

All
covenants, representations, warranties and agreements of the Parties contained herein shall be binding upon and inure to the benefit
of their respective heirs, executors, administrators, personal representatives, successors and assignees.

 

 

 

 

C. 
Binding Effect; Assignment.

 

This
Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.
Except as expressly set forth herein, nothing in this Agreement shall create or be deemed to create any third party beneficiary
rights in any person or entity not a party to this Agreement, including any such person or entity asserting rights as a third
party beneficiary with respect to intellectual property matters. No assignment of this Agreement or any rights or obligations
hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other party
and any attempted assignment without the required consent shall be void.

 

D. 
Entire Agreement.

 

This
Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof and thereof and supersedes
all prior and contemporaneous agreements and understandings of the Parties in connection herewith and therewith.

 

E. 
Governing Law.

 

This
Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard
to its conflicts of law principles.

 

F. 
Attorneys’ Fees.

 

If
either Party hereto commences an arbitration or other action against the other Party to enforce any of the terms hereof or because
of the breach by such other Party of any of the terms hereof, the prevailing Party shall be entitled, in addition to any other
relief granted, to all actual out-of-pocket costs and expenses incurred by such prevailing Party in connection with such action,
including, without limitation, all reasonable attorneys’ fees, and a right to such costs and expenses shall be deemed to
have accrued upon the commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment.

 

G. 
Severability.

 

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

 

H. 
Notices.

 

If
to TRANSFERORS:

Fox Chase Chemical Diversity Center, Inc.

3805
Old Easton Road

Doylestown,
PA

c/o:
Allen Reitz, CEO

Email:
AReitz@fc-cdci.com

 

With
Additional Notice to:

Allen B. Reitz, Ph.D

109
Greenbriar Road

Lansdale,
PA 19446

Email:
AReitz@fc-cdci.com

 

If
to TRANSFERORS:

Advanced Neural Dynamics, Inc.

3805
Old Easton Road

Doylestown,
PA

c/o:
Douglas Brenneman, CEO

Email: dbrenneman@advneuraldynamics.com

 

With
Additional Notice to:

Douglas Brenneman

121
Kingston Way

North
Wales, PA 19454

c/o:
Douglas Brenneman

Email: dbrenneman@advneuraldynamics.com

 

If
to ACQUIROR:

Neuropathix,
Inc.

3805 Old Easton Road

Doylestown,
PA 18902

c/o:
Dean Petkanas, CEO

Email:
dean@neuropathix.com

 

I. 
Captions. The captions, headings and arrangements used in this Agreement are for convenience only and do not in any way
limit or amplify the terms and provisions hereof.

 

J. 
Counterparts. This Agreement may be executed in one or more counterparts, all of which when fully executed and delivered
by all Parties hereto and taken together shall constitute a single agreement, binding against each of the Parties. To the maximum
extent permitted by law or by any applicable governmental authority, any document may be signed and transmitted by facsimile with
the same validity as if it were an ink-signed document.

[SIGNATURE
PAGE TO FOLLOW]

IN
WITNESS WHEREOF, each of the Parties has executed this Intellectual Property Rights Purchase and Transfer Agreement on the
day and year first written above.

 

ACQUIROR:

 

NEUROPATHIX,
INC. 

 

/s/
Dean Petkanas 

By:Dean
Petkanas

Its:CEO

 

 

TRANSFERORS:

 

FOX
CHASE CHEMICAL DIVERSITY CENTER, INC.

 

/s/ Allen B. Reitz 

By:
Allen B. Reitz, Ph.D.

Its:CEO

 

	ADVANCED NEURAL DYNAMICS, INC.	DOUGLAS BRENNEMAN
	 	 
	/s/ Douglas Brenneman	/s/s Douglas Brenneman
	By: Douglas Brenneman, Ph.D.	By: Douglas Brenneman, Ph.D.
	Its. CEO	 

 

 

    	 	1	 

     

    

 

EXHIBIT
A – SCHEDULE OF ASSETS

 

All
patents, patents applications, trademarks, research and development materials including in issued patents, published patent applications
or that are unpublished, and raw materials, including compounds in storage, comprised of the anti-seizure and neuroprotective
compounds listed in the attached Excel spreadsheet entitled “AND-FCCDC Anticonvulsants 10 Dec 2020”, including, but
not limited to, AND-257, AND-283, AND-287, AND-302, AND-363, AND-378, AND-380, AND-381, AND-383, AND-406, AND-407, and AND-408,
also referenced in and by the following (the “Intellectual Property” or “IP”):

 

		(a.)	Issued
                                         US Patent 8,609,849 B2 (Dec. 17, 2013) – “Novel Hydroxylated Sulfamides Exhibiting
                                         Neuroprotective Action and Their Method of Use”;

 

		(b.)	Know-how,
                                         compounds, and strategy described in the following published and absondoned patent applications:

 

US
2012/0302546 A1 (Nov. 29 2012),

WO
2011/097337 A1 (Aug. 11, 2011),

US
2013/0253022 A1 (Sept. 26, 2013), and

WO
2012/074784 A2 (June 7, 2012).

 

		(c.)	All
                                         technology and conceptions described in the attached strategy section of a Phase 2 SBIR
                                         grant application pertaining to the aforementioned body of Intellectual Property.

 

		(d.)	All
                                         other patents, pending and/or granted pertaining to chemical compositions identified
                                         as the Intellectual Property, for composition of matter and for the method of use for
                                         epilepsy and related neurological and neurodegenerative disorders and indications. This
                                         shall also include, but not limited to, drafts of provisional and non-provisional applications
                                         that contain at least one of the above referenced compounds.

 

    	 	2	 

     

    

 

 

	Terms
    of Acquisition 	Fox
                                         Chase Chemical Diversity Center, Inc. (“Fox Chase”)

         
	Douglas
    Brenneman (“Brenneman”) / Advanced Neural Dynamics (“AND”)
	Upfront
    Stock Grant in Consideration for the Sale of the Assets in Exhibit A 	Fox
                                         Chase Chemical Diversity Center, Inc. Closing Date for issuance of shares to be scheduled
                                         on or before December 11, 2020, Fox Chase Chemical Diversity Center, Inc. shall be issued,
                                         1,000,000 shares of Neuropathix, Inc. Common Stock, par value $.001 per share at a price
                                         of $.30 per share.

         

         

         
	Brenneman-AND
                                         Initial Closing Date for issuance of shares to be scheduled on or about January 5, 2021,
                                         Brenneman-AND shall be issued such amount of shares as equal to the compliment of $60,000
                                         divided by the average ten (10) day closing price of Neuropathix, Inc. Common Stock,
                                         par value $.001, prior to January 5, 2021 (the “Initial Installment Issuance”).

         

        In
        no case will the Initial Installment Issuance price be a price below $.30 per share or higher than $.60 per share.

         

        For
        subsequent closings, the share price for issuance of additional tranches of $60,000 (in year 2, 3, 4 and year 5) in value,
        will be determined by the average ten (10) day closing price of Neuropathix, Inc. Common Stock prior to each scheduled
        Installment Issuance Date. There will be no floor or ceiling in the range of price per share.

         

	Schedule
    of Installments 	Single
    Installment Issuance Date: on or before December 11, 2020.	Initial
                                         Installment Issuance Date: January 5, 2021.

        Second
        Installment Issuance Date: January 4, 2022.

        Third
        Installment Issuance Date: January 3, 2023.

        Fourth
        Installment Issuance Date: January 2, 2024.

        Fifth
        Installment Issuance Date: January 2, 2025.

         

	Cash
                                         Payments to Offset

        Tax
        on Shares

         

         

         

         

         

         
	None.	Fifteen
                                         Thousand Five Hundred Dollars ($15,000) in cash annually, payable in quarterly installments
                                         of Three Thousand One Seven Hundred Fifty ($3,750), payable on March 30; June 30; September
                                         30 and December 31 of each year of an installment issuance (the “Quarterly Due
                                         Offset Payments”). Quarterly Due Offset payments are to be netted out against actual
                                         tax costs incurred based upon the issuance of Common Stock at a cost exceeding Doug Brenneman
                                         and/or AND’s basis.

         

	Ten
    Percent (10%) Penalty For Failure to Pay Offset Fees	None.	In
                                         the event a Quarterly Due Offset Payment is not made within thirty (30) days of the due
                                         date of such Quarterly Due Offset Payment (“Offset Default”), the amount
                                         payable will be Four Thousand One Hundred Twenty Five Dollars ($4,125) in total for each
                                         such Offset Default.

         

 

    	 	3	 

     

    

 

EXHIBIT
B – SCHEDULE ISSUANCE OF SHARES

 

 

    	 	4	 

     

    

 

EXHIBIT
C – INVENTOR ROYALTY LICENSE AGREEMENT

 

    	 	5	 

     

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT
D – ASSIGNMENT OF PATENTS AND INTELLECTUAL PROPERTY

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