Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of June 30, 2016, between Stellar Biotechnologies, Inc., a British
Columbia corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to (i) an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”), as to the Shares (as defined herein), and (ii) an exemption
from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D
thereunder as to the Warrants (as defined herein) and the Warrant Shares (as defined herein), the Company desires to issue and
sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1             
 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the
following terms have the meanings set forth in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.

 

“Action”
shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than
the third Trading Day following the date hereof.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common
Shares” means the common shares of the Company, no par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Common
Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Shares, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Shares.

 

“Company
Canadian Counsel” means McMillan LLP, with offices located at Royal Centre, 1055 W. Georgia Street, Vancouver, British
Columbia, Canada.

 

     

     

    

 

“Company
U.S. Counsel” means Greenberg Traurig, LLP, with offices located at One International Place, Boston, Massachusetts 02110.

 

“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exempt
Issuance” means the issuance of (a) Common Shares, options or other equity awards to employees, officers, consultants,
advisors or directors of the Company (in an aggregate amount not to exceed 2% of the issued and outstanding Common Shares as of
the date hereof) pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members
of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for
services to the Company; provided that such Common Shares, options or other equity awards are (i) “restricted securities”
at the time of issuance; (ii) have not been and will not be registered under the Securities Act during the period referenced in
Section 4.12(a); and (iii) no Person has any right to cause the Company or any Subsidiary to effect the registration under the
Securities Act of any such Common Shares, options or other equity awards, (b) securities upon the exercise or exchange of or conversion
of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into Common Shares issued
and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement
to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities
(other than in connection with share splits or combinations) or to extend the term of such securities, and (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided
that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA”
shall have the meaning ascribed to such term in Section 3.1(hh).

 

“FDCA”
shall have the meaning ascribed to such term in Section 3.1(hh).

 

“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).

 

“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

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“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).

 

“Per
Share Purchase Price” equals $4.00, subject to adjustment for reverse and forward share splits, share dividends, share
combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(hh).

 

“Placement
Agent” means Maxim Group LLC.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus”
means the final prospectus filed for the Registration Statement.

 

“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Registration
Statement” means the effective registration statement with Commission file No. 333-203595 which registers the sale of
the Shares to the Purchasers.

 

“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

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“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities”
means the Shares, the Warrants and the Warrant Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares”
means the Common Shares issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable Common Shares). 

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

 

“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company
formed or acquired after the date hereof.

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“Transaction
Documents” means this Agreement, the Warrants and any other documents or agreements executed in connection with the transactions
contemplated hereunder.

 

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“Transfer
Agent” means the current transfer agent of the Company and any successor transfer agent of the Company.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).

 

“Warrants”
means, collectively, the Common Shares purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable following the six month anniversary of the date of issuance and have a term
of exercise equal to 66 months, in the form of Exhibit A attached hereto.

 

“Warrant
Shares” means the Common Shares issuable upon exercise of the Warrants.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1             
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent
with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $6,750,000 of Shares and Warrants. Each Purchaser shall, on or prior
to the Closing Date, deliver to the clearing account designated by the Placement Agent, immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser. The Company shall
deliver to each Purchaser its respective Shares and Warrants as determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties
shall mutually agree. Unless otherwise agreed upon by the Company and the Placement Agent, settlement of the Shares shall occur
via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue
the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s)
at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically
deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing firm)
by wire transfer to the Company).

 

2.2             
Deliveries.

 

(a)               
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                
this Agreement duly executed by the Company;

 

(ii)              
a legal opinion of Company Canadian Counsel and Company U.S. Counsel, substantially in forms and substance reasonably acceptable
to the Purchasers;

 

(iii)            
Subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”)
Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such
Purchaser;

 

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(iv)            
a Warrant registered in the name of such Purchaser to purchase up to a number of Common Shares equal to 75% of such Purchaser’s
Shares, with an exercise price equal to $4.50, subject to adjustment therein (such Warrant certificate may be delivered within
three Trading Days of the Closing Date); and

 

(v)              
the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

(b)              
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, as applicable, the
following:

 

(i)                
this Agreement duly executed by such Purchaser; and

 

(ii)              
such Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement
with the Company.

 

2.3             
Closing Conditions. 

 

(a)The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)              
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall
have been performed; and

 

(iii)            
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b)              
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions
being met:

 

(i)                
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)              
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall
have been performed;

 

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(iii)            
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(iv)            
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(v)              
from the date hereof to the Closing Date, trading in the Common Shares shall not have been suspended by the Commission or
the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the
United States, or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities
at the Closing.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1             
Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure
Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure
contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and
warranties to each Purchaser:

 

(a)               
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in last Annual Report on Form
10-K in the SEC Reports. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary
free and clear of any Liens other than Liens securing the Indebtedness disclosed in the SEC Reports, and all of the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries
or any of them in the Transaction Documents shall be disregarded.

 

(b)              
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii)
a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under
any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.

 

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(c)               
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)              
No Conflicts or Breach. The execution, delivery and performance by the Company of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company, its subsidiaries nor, to its knowledge, any other party is in violation, breach or default of any agreement,
lease, credit facility, debt, note, bond, mortgage, indenture or other instrument that is reasonably likely to result in a Material
Adverse Effect.

 

(e)               
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus
Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant Shares for trading
thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws, and (v) such consents, waivers and authorizations that shall be obtained prior
to Closing (collectively, the “Required Approvals”).

 

(f)               
Issuance of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on transfer of the Warrants provided for in the Transaction Documents or imposed
by applicable securities laws. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer of the Warrants
provided for in the Transaction Documents or imposed by applicable securities laws. The Company has reserved from its duly authorized
capital shares the maximum number of Common Shares issuable pursuant to this Agreement and the Warrants. The Company has prepared
and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on May
8, 2015 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement in connection with the sale of the Shares hereunder. The Registration Statement
is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have
been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and
regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b) in relation to the sale of
the Shares hereunder. At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement
and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects
to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus
and any amendments or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the
Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will
not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.

 

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(g)              
Capitalization. The capitalization of the Company is as set forth in Schedule 3.1(g). The Company has not issued
any capital shares since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee share options under the Company’s share option plans, the issuance of Common Shares to employees pursuant to the
Company’s employee share purchase plans and pursuant to the conversion and/or exercise of Common Share Equivalents outstanding
as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.
Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares or the capital stock of any
Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound
to issue additional Common Shares or Common Share Equivalents or capital stock of any Subsidiary. The issuance and sale of the
Securities will not obligate the Company or any Subsidiary to issue Common Shares or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. There are no securities of the Company or any Subsidiary that have any anti-dilution
or similar adjustment rights (other than adjustments for stock splits, recapitalizations, and the like) to the exercise or conversion
price, have any exchange rights, or reset rights. Except as disclosed in Schedule 3.1(g), there are no outstanding securities or
instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company
or such Subsidiary. The Company does not have any share appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding capital shares of the Company are duly authorized, validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities.
There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
shares to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
Except as set forth in Schedule 3.1(g), the Company does not own, directly or indirectly, any capital stock or other ownership
interest in any partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock
company, trust, unincorporated association, joint venture or other entity.

 

(h)              
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to
file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, and
any prospectus, prospectus supplement, amendment or supplement filed in relation thereto, together with the Prospectus and the
Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.
As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and
the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The Company has not been an issuer subject to Rule 144(i) under
the Securities Act during the past three years. The financial statements of the Company included or incorporated by reference in
the SEC Reports or the Registration Statement comply in all material respects with applicable accounting requirements and the rules
and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. No other financial statements or schedules are required to be included in the Registration Statement or the Prospectus.

 

(i)                
Forward-Looking Statements. The Company had a reasonable basis for, and made in good faith, each “forward-looking
statement” (within the meaning of Section 27A of the Act or Section 21E of the Exchange Act) contained or incorporated by
reference in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus.

 

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(j)                
Statistical or Market Related Data. All statistical or market-related data included or incorporated by reference
in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus are based on or derived from sources that
the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such
data from such sources, to the extent required.

 

(k)              
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial
statements included within the SEC Reports, except as disclosed in Schedule 3.1(k), (i) there has been no event, occurrence
or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting,
(iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased,
redeemed or made any agreements to purchase or redeem any capital shares, (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company share option plans, and (vi) no supplier, customer, distributor
or sales agent of the Company has notified the Company that it intends to discontinue or decrease the rate
of business done with the Company, except where such decrease is not reasonably likely to result in a Material Adverse
Effect. The Company does not have pending before the Commission any request for confidential treatment of information. Except for
the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(k), no event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

(l)                
Litigation. No action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by
any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.

 

(m)            
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s
or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no
executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer
does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company
and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

    10 

     

    

 

(n)              
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree
or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(o)              
Environmental Laws.The Company and its Subsidiaries (i) are in compliance with all federal, state, local and
foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater,
land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into
the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder
(“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such
permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

(p)              
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as
described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material Permit.

 

(q)              
Title to Assets. Except as set forth in Schedule 3.1(q), the Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that
is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries, and (ii) Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(r)                
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights necessary or required for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.

 

    11 

     

    

 

(s)               
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

 

(t)                
Transactions With Affiliates and Employees. None of the officers or directors of the Company or any Subsidiary and,
to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services or separation from service as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case
in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including share option agreements under any share option plan
of the Company.

 

(u)              
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.
The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect
to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to
ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries
as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined
in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company and its Subsidiaries.

 

(v)              
Certain Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees
of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
The Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s
fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member within the 12-month period prior to the date on which the Registration Statement
was filed with the Commission (the “Filing Date”) or thereafter.

 

    12 

     

    

 

(w)            
FINRA Affiliation. To the Company’s knowledge, no (i) officer or director of the Company or its subsidiaries,
(ii) owner of 5% or more of the Company’s unregistered securities or that of its subsidiaries or (iii) owner of any amount
of the Company’s unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect
affiliation or association with any FINRA member.  The Company will advise the Placement Agent and their respective counsel
if it becomes aware that any officer, director or stockholder of the Company or its subsidiaries is or becomes an affiliate or
associated person of a FINRA member participating in the Offering.

 

(x)              
Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under
the Securities Act of any securities of the Company or any Subsidiary.

 

(y)              
Listing and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Shares are or have been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Shares
are currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation
and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation)
in connection with such electronic transfer. The issuance and sale of the Securities hereunder does not contravene the rules and
regulations of the Trading Market.

 

(z)               
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of
the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

(aa)           
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or might constitute material, non-public information
which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely
on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on
behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth
in Section 3.2 hereof.

 

    13 

     

    

 

(bb)          
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would
require the registration of any securities under the Securities Act, or (ii) any applicable shareholder approval provisions of
any Trading Market on which any of the securities of the Company are listed or designated.

 

(cc)           
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same
are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the
Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(dd)         
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state
and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.

 

(ee)           
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material
respect any provision of FCPA.

 

    14 

     

    

 

(ff)            
Accountants. The Company’s independent registered public accounting firm is Moss Adams LLP. To the knowledge
and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and
(ii) shall express its opinion with respect to the financial statements included in the Company’s Annual Report for the fiscal
year ending September 30, 2016.

 

(gg)          
 Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each
of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The
Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(hh)          
Acknowledgement Regarding Purchaser’s Trading Activity.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it
is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has
any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open
market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price
of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions
to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common
Shares, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party
in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more
Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined,
and (z) such hedging activities (if any) could reduce the value of the existing shareholders' equity interests in the Company
at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the Transaction Documents.

 

(ii)              
Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s placement agent in connection with the placement of the Securities.

 

(jj)              
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”)
under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company. 

 

    15 

     

    

 

(kk)          
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly
or indirectly use the proceeds of the Offering of the Securities contemplated hereby, or lend, contribute or otherwise make available
such proceeds to any person or entity, for the purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.

 

(ll)              
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in
compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company or any Subsidiary, threatened.

 

(mm)      
Good Manufacturing Practices. The FDA and other regulatory agencies regulate and inspect equipment, facilities and
processes used in the manufacture of pharmaceutical and biologic products prior to approving a product. To date, the Company has
not been subject to inspection by the FDA or other drug regulatory agency because none of the Company’s customers or partners
has filed an application in any country for marketing approval of a product encompassing the Company’s Stellar KLH protein.

 

(nn)          
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, no registration under the Securities Act is required for the offer and sale of Warrants and the Warrant Shares by the Company
to the Purchasers as contemplated hereby.

 

(oo)          
No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any
of the Warrants and Warrant Shares by any form of general solicitation or general advertising. The Company has offered the Warrants
and Warrant Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule
501 under the Securities Act.

 

(pp)          
 No Disqualification Events.  With respect to the Warrants and Warrant Shares to be offered and sold hereunder
in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director,
executive officer, other officer of the Company participating in the offering hereunder, or, to the knowledge of the Company, any
beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of sale (each, an "Issuer Covered Person"
and, together, "Issuer Covered Persons") is subject to any of the "Bad Actor" disqualifications described in
Rule 506(d)(1)(i) to (viii) under the Securities Act (a "Disqualification Event"), except for a Disqualification Event
covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is
subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

 

    16 

     

    

 

 

(qq)          
Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer
Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection
with the sale of any Securities.

 

(rr)             
 Notice of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing,
prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would,
with the passage of time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each
case of which it is aware.

 

3.2             
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):

 

(a)               
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
the Transaction Documents to which it is a party and performance by such Purchaser of the transactions contemplated by the Transaction
Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable,
on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)              
Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has
no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Specifically, such Purchaser understands that the Warrants and Warrant Shares
are “restricted securities” and have not been registered under the Securities Act or any other applicable state securities
law and is acquiring such Securities as principal for its own account, not as nominee or agent, and not with a view to or for distributing
or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has
no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities
law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty
not limiting such Purchaser’s right to sell such Securities pursuant to a registration statement, if applicable, or otherwise
in compliance with applicable federal and state securities laws).

 

    17 

     

    

 

(c)               
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is,
and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.

 

(d)              
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)               
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the
Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such
Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. 
Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities
and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser
agrees need not be provided to it.  In connection with the issuance of the Securities to such Purchaser, neither the Placement
Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

 

(f)               
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser
has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company
setting forth the material pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution
hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

    18 

     

    

 

(g)              
Affiliate Status. After giving effect to the transactions contemplated by this Agreement, such Purchaser will not
be a “beneficial owner” (as defined for purposes of Rule 13d-3 of the Exchange Act) of more than 10% of the Common
Shares.

 

The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1             
Removal of Legends. 

 

 

(a)               
The Warrants and Warrant Shares may only be disposed of in compliance with state and federal securities laws. In connection
with any transfer of Warrants or Warrant Shares other than pursuant to an effective registration statement or Rule 144, to the
Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require
the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer
does not require registration of such transferred Warrant under the Securities Act.

 

(b)
 The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Warrants
or Warrant Shares issuable upon exercise thereof in the following form:

 

NEITHER THIS
SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS NOT 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 WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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(c) 
 The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement
with a registered broker-dealer or grant a security interest in some or all of the Warrants or Warrant Shares issuable upon exercise
thereof to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities
Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser
may transfer pledged or secured Warrants or the Warrant Shares issuable upon exercise thereof to the pledgees or secured parties.
Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the
appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured
party of Warrants and the Warrant Shares issuable upon exercise thereof may reasonably request in connection with a pledge or transfer
of the Warrants or the Warrant Shares issuable upon exercise thereof.

 

(d)
   Certificates evidencing the Warrant Shares shall not contain any legend (including the legend set forth
in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Warrant Shares pursuant to Rule 144, (iii) if such Warrant Shares are eligible for sale under
Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144
as to such Warrant Shares and without volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission)
(“Effective Date”). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder. If all or any portion of a
Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, or
if such Warrant Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required
under Rule 144, or if Warrant Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such Warrant Shares or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the
Commission) then such Warrant Shares shall be issued free of all legends. The Company agrees that following the Effective Date
or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following
the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Warrant Shares issued with a restrictive
legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate
representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records
or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates
for Warrant Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting
the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.

 

(e) 
 In addition to such Purchaser’s other available remedies (but without duplication of the remedies provided in
Section 2(d)(i) of the Warrant), the Company shall pay to a Purchaser, in cash, (i) as partial liquidated damages and not as a
penalty, for each $1,000 of Warrant Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to
the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing
to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal
Date until such certificate is delivered without a legend and (ii) if the Company fails to (i) issue and deliver (or cause to be
delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the Company by such
Purchaser that is free from all restrictive and other legends or (ii) if after the Legend Removal Date such Purchaser purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all
or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion
of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend,
then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses,
if any) (the “Buy-In Price”) over the product of (A) such number of Warrant Shares that the Company was required to
deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any
Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Warrant
Shares and ending on the date of such delivery and payment under this clause (ii).

 

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(f) 
   The Shares shall be issued free of legends.

 

4.2             
Furnishing of Information.

 

(a)               
Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants
to use commercially reasonable efforts to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting
requirements of the Exchange Act.

 

(b)              
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that
all of the Warrant Shares may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise
without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in
the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the shares of Common
Stock issuable upon exercise of the Warrants, an amount in cash equal to two percent (2.0%) of the aggregate Exercise Price of
such Purchaser’s Warrants on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods
totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such
time that such public information is no longer required  for the Purchasers to transfer the Warrant Shares pursuant to Rule
144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public
Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i) the last
day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business
Day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event the Company
fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest
at the rate of 2.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

4.3             
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.4             
Securities Laws Disclosure; Publicity. The Company shall (a) by 8:45 a.m. (New York City time) on the date hereof,
issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form
8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.
From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed
all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.
In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates
on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release
nor otherwise make any such public statement with respect to the transactions contemplated hereby without the prior consent of
the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to
any press release of the Company (other than the press release described in the first sentence of this Section 4.4), which consent
shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing,
the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required
by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent
such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (b).

 

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4.5             
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any
other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.6             
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it,
nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have
consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of
its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any
notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.

 

4.7             
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder as described in
the Prospectus Supplement and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt
(other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the
redemption of any Common Shares or Common Share Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation
of FCPA or OFAC regulations.

 

4.8             
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold
each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents
or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any
shareholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties
or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such shareholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect
of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion
of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party,
in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but
only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or are incurred; provided,
however, if it is subsequently determined by a final decision of a court of competent jurisdiction that a Purchaser
Party was not entitled to receive such periodic payments, such Purchaser Party shall promptly
(but in no event later than two Business Days) return such payments to the Company. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.

 

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4.9             
Reservation of Common Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, a sufficient number of Common Shares for the purpose of enabling the
Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants. 

 

4.10         
Listing of Common Shares. The Company hereby agrees to use best efforts to maintain the listing or quotation of the
Common Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply
to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares
and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded
on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take such
other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market
as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its
Common Shares on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Shares for electronic
transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely
payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic
transfer.

 

4.11         
[RESERVED]

 

4.12         
Subsequent Equity Sales.

 

(a)               
From the date hereof until 90 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into
any agreement to issue or announce the issuance or proposed issuance of any Common Shares or Common Share Equivalents.

 

(b)              
From the date hereof until the third anniversary of the Closing Date, the Company shall be prohibited from effecting or
entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price
or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common
Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange
price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the
occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the
Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

(c)               
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable
Rate Transaction shall be an Exempt Issuance.

 

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4.13         
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless
the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

4.14         
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales,
including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement
and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.4.  Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed
by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality
of the existence and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding
the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company
to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.

 

4.15         
Capital Changes. Until the one year anniversary of the Closing Date, other than a share split or reclassification
that is effected to maintain the listing of the Common Shares on the primary Trading Market, the Company shall not undertake a
reverse or forward share split or reclassification of the Common Shares without the prior written consent of the Purchasers holding
a majority in interest of the Shares.

 

4.16         
Exercise Procedures. The form of Notice of Exercise included in the Warrants set
forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal opinion,
other information or instructions shall be required of the Purchasers to exercise their Warrants. Without limiting the preceding
sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. The Company shall honor exercises
of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction
Documents.

 

    24 

     

    

 

4.17         
Acknowledgment of Dilution.  The Company acknowledges that the issuance of the
Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation,
its obligation to issue the Shares and Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim
the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of
the other stockholders of the Company.

 

4.18         
 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect
to the Warrant and Warrant Shares as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser.
The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for,
or to qualify the Warrant and Warrant Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

 

4.19         
 Registration Statement. As soon as reasonably practicable (and in any event
within 90 calendar days after the date of this Agreement), the Company shall file a registration statement on Form S-3 (or other
appropriate form if the Company is not then S-3 eligible) providing for the resale by the Purchasers of the Warrants and the Warrant
Shares. The Company shall use commercially reasonable efforts to cause such registration to become effective no later than 181
days following the Closing Date and to keep such registration statement effective at all times until (a) the Warrant Shares are
sold under such registration statement or pursuant to Rule 144 or other exemption under the Securities Act, (b) the Warrant Shares
may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 under the Securities Act, and (c) 66 months after
the date of the issuance of the Warrants, whichever is the earliest to occur. Subject to the accuracy of the information provided
by the Purchasers to the Company, the Company shall ensure that such registration statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading. After the date hereof and during any period in which a prospectus or prospectus
supplement relating to any of the Securities subject to registration under this Section 4.19 is required to be delivered by any
Purchaser pursuant to the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172
of the Securities Act), (i) the Company will notify the Purchasers promptly of the time when any subsequent amendment to such registration
statement, other than documents incorporated by reference, has been filed with the Commission or has become effective or any subsequent
supplement to the prospectus regarding such Securities or any of the Purchasers or any subsequent amendment to the prospectus or
any supplement or amendment to the prospectus supplement has been filed with the Commission and of any comment letter from the
Commission or any request by the Commission for any amendment or supplement to such registration statement, any amendment to the
prospectus, any supplement to the prospectus that relates to the Securities subject to such registration statement under this Section
or any of the Purchasers, or any amendment or supplement to the prospectus supplement, provided that no notification of the Purchasers
shall be required if such amendment, supplement, or comment, or request would not, and would not seek, to limit the rights of the
Purchasers or Warrant Shares, (ii) the Company will prepare and file with the Commission, promptly upon a Purchaser’s request,
any amendments or supplements to such registration statement, prospectus or prospectus supplement that, in the Company’s
reasonable opinion, may be necessary in connection with any resale of the Warrant Shares by such Purchaser (provided, however,
that the failure of such Purchaser to make such request shall not relieve the Company of any obligation or liability hereunder),
(iii) the Company will not file any amendment or supplement to a registration statement, prospectus or prospectus supplement, other
than documents incorporated by reference, relating to the Warrant Shares subject to registration under this Section 4.19 unless
a copy thereof has been submitted or made available to each Purchaser within a reasonable period of time before the filing and
no Purchaser has reasonably objected in writing thereto (provided, however, that (A) the failure of any Purchaser to make such
objection shall not relieve the Company of any obligation or liability hereunder, and (B) the Company has no obligation to provide
a Purchaser any advance copy of such filing or to provide such Purchaser an opportunity to object to such filing if such filing
does not name such Purchaser or specifically discuss the Warrant Shares subject to registration under this Section 4.19 as contemplated
hereby) and the Company will furnish or make available to each Purchaser at the time of filing thereof a copy of any document that
upon filing is deemed to be incorporated by reference into a registration statement, prospectus or prospectus supplement, except
for those documents available via EDGAR, and (iv) the Company will cause each amendment or supplement to the prospectus or prospectus
supplement, other than documents incorporated by reference, to be filed with the Commission as required pursuant to the applicable
paragraph of Rule 424(b) of the Securities Act. The Company shall not name any Purchaser as an “underwriter”
in any registration statement, prospectus or prospectus supplement without such Purchaser’s express prior written consent.

 

    25 

     

    

 

ARTICLE V.

MISCELLANEOUS

 

5.1             
Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the Closing has not been consummated on or before July 6, 2016; provided, however, that no such
termination will affect the right of any party to sue for any breach by any other party (or parties).

 

5.2             
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all
Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchasers.

 

5.3             
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and
the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.

 

5.4             
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the facsimile number or email address as set forth on the signature
pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile or email attachment at the facsimile number or email address
as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for
such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided
pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

5.5             
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a
written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest
of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely
impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations
of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent
of such adversely affected Purchaser, Any amendment effected in accordance with accordance with this Section 5.5 shall be binding
upon each Purchaser and holder of Securities and the Company.

 

    26 

     

    

 

5.6             
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not
be deemed to limit or affect any of the provisions hereof.

 

5.7             
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8             
No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and
warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement
is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section
5.8.

 

5.9             
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding
is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under
Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action
or Proceeding.

 

    27 

     

    

 

5.10         
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

5.11         
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.

 

5.12         
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

5.13         
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any Common Shares
subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid
to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

 

5.14         
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance
of such replacement Securities.

 

5.15         
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery
of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any
such obligation the defense that a remedy at law would be adequate.

 

5.16         
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

    28 

     

    

 

5.17         
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for
any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience
only, each Purchaser and its respective counsel have chosen to communicate with the Company through EGS. EGS does not represent
any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any
of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between
and among the Purchasers.

 

5.18         
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing
under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled.

 

5.19         
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.

 

5.20         
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and Common Shares in any Transaction Document shall be subject to
adjustment for reverse and forward share splits, share dividends, share combinations and other similar transactions of the Common
Shares that occur after the date of this Agreement.

 

5.21         
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

 

 

(Signature Pages Follow)

 

    29 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.

 

 

	
        STELLAR BIOTECHNOLOGIES,
        INC.

         

         
	Address for Notice:
	
        By:__________________________________________

        Name:

        Title:

         

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

         

         

         
	 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

    30 

     

    

 

[PURCHASER SIGNATURE PAGES TO SECURITIES
PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF,
the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.

 

Name of Purchaser: ________________________________________________________

 

Signature of Authorized Signatory of
Purchaser: _________________________________

 

Name of Authorized Signatory: _______________________________________________

 

Title of Authorized Signatory: ________________________________________________

 

Email Address of Authorized Signatory:_________________________________________

 

Facsimile Number of Authorized Signatory: __________________________________________

 

Address for Notice to Purchaser:

 

 

Address for Delivery of Securities to Purchaser (if not same
as address for notice):

 

 

Subscription Amount: $_________________

 

Shares: _________________

 

Warrant Shares: __________________

 

EIN Number: _______________________

 

o
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur on the third (3rd) Trading Day following the date of this Agreement and (iii) any condition
to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company
or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be
a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such
agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.

 

[SIGNATURE PAGES CONTINUE]

    31Exhibit 10.1

  

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

 

This Executive Employment
Agreement (the “Agreement”) is made effective as of this 24th day of June, 2016 (the “Effective
Date”), by and between Citizens Community Bancorp, Inc., a Maryland corporation, (the “Holding Company”)
and its wholly-owned subsidiary, Citizens Community Federal, N.A., a national banking association (the “Bank”)
(collectively, the “Company”), and Stephen Bianchi (“Executive”).

 

WHEREAS, the Company
desires to employ Executive upon the terms and conditions set forth herein, and Executive desires to be so employed by the Company;

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1.Term of Employment.
Executive's employment hereunder shall commence as of the Effective Date set forth above, and continuing thereafter for a period
of two (2) years, unless and until terminated pursuant to the terms of Section 4 of this Agreement (the “Term”).
Notwithstanding the foregoing, the Term shall automatically be extended for additional one-year periods (each, a “Renewal
Term”) on the terms and conditions provided herein, unless either party shall give the other party no less than ninety
(90) days' written notice prior to the expiration of the Term or Renewal Term, as applicable. The Term and the Renewal Term, if
applicable, shall be collectively referred to as the “Employment Term.”

 

2.Position and
Duties.

 

(a)Position.
During the Employment Term, Executive shall serve as the President of the Bank, and President and Chief Executive Officer of the
Holding Company, reporting exclusively to the Holding Company's Board of Directors (the “Board”). Executive
shall also serve as an appointed member of Board of Directors of the Bank (the “Bank Board”). In such positions,
Executive shall have such duties, authority and responsibility as shall be determined from time to time by the Board and as are
customarily performed by persons situated in a similar executive capacity.

 

(b)Duties.
During the Employment Term, Executive shall devote substantially all of his business time and attention to the performance of Executive's
duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would
conflict or interfere with the performance of such services either directly or indirectly. Notwithstanding the foregoing, nothing
herein shall preclude Executive from (i) acting or serving as a director, trustee, conm1ittee member or principal of any type
of business, civic or charitable organization, or (ii) owning any interest in any other corporation, business or enterprise,
subject to Section 6 below.

 

    	 	1	 

     

    

 

3.Compensation
and Benefits.

 

(a)Salary.
The Company shall pay Executive a salary of Three Hundred Thousand and 00/100 Dollars ($300,000.00) per year, payable in regular
biweekly installments, in accordance with the Company's usual payroll procedures (the “Salary”). Following the
initial Term of the Agreement, Executive's base Salary shall be subject to annual review and may be increased based on Executive's
performance and contribution to the Firm, as determined by the Board.

 

(b)Performance
Bonus. For each full year of the Employment Term, Executive shall be eligible for an annual performance bonus (the “Performance
Bonus”) determined by the Board or its delegate, which shall be based on such financial or other factors, goals and objectives
as the Board and Executive mutually establish on an annual basis coinciding with the fiscal year of the Company. The target of
the Performance Bonus shall be twenty-five percent (25%) of Executive's base Salary, with Executive eligible to earn between zero
percent (0%) and two hundred percent (200%) of the target Performance Salary Bonus. Any Performance Bonus earned by Executive shall
be paid no later than January 15 of the year following the fiscal year in which the Performance Bonus is applicable. Executive
shall be first eligible for the Performance Bonus with respect to the fiscal year of the Company commencing October 1, 2016.

 

(c)Stock
Awards.

 

		(1)	Restricted Stock. As of the Effective Date of this Agreement, and subject to Executive's
execution of a Restricted Stock Award Agreement (the “Restricted Stock Award Agreement,” which shall be provided
separately) granted pursuant to the Company's Equity Incentive Plan (the “Plan”), Executive shall be granted
One Hundred Thousand Dollars ($100,000.00) worth (based on the closing trading price on the Effective Date) of restricted common
stock in the Company, as defined in the Restricted Stock Award Agreement. Such shares shall generally vest ratably over five (5)
years, but shall fully vest upon Executive's termination of Employment pursuant to Section 4(c) and Executive's compliance
with Section 5(d). Executive will be eligible to receive subsequent grants of shares following Executive's first anniversary
of employment during the first quarter of each fiscal year, in a quantity and form that is consistent with the Plan.

 

		(2)	Stock Option. As of the Effective Date, Executive shall receive a grant of Twenty Thousand
(20,000) stock options (“Options”) in the Holding Company, subject to Executive's execution of a Restricted
Stock Award Agreement (the “Option Agreement,” which shall be provided separately) granted pursuant to the Plan.
The Option Agreement shall contain the terms and conditions of the grant of the Options. The Options shall be granted at fair market
value based on a strike price equal to the closing price as of the Effective Date. Executive will be eligible to receive subsequent
grants of Options following Executive's first anniversary of employment during the first quarter of each fiscal year, in a quantity
and form that is consistent with the Plan.

 

    	 	2	 

     

    

 

(d)Benefits.
Executive shall be entitled to participate in any and all benefit programs, such as health insurance and retirement plans that
the Company establishes and makes available to its other similarly situated senior executives from time to time, provided that
Executive is eligible to participate under the plan documents governing those programs.

 

(e)Vacation.
During the Employment Term, Executive will be entitled to paid vacation on a basis that is at least as favorable as that provided
to other similarly situated senior executives of the Company, provided that Executive shall be entitled to not less than four (4)
weeks of vacation per year. For the 2016 fiscal year, the Executive's vacation entitlement shall be for four (4) weeks pro-rated
based upon the Effective Date of this Agreement. Executive shall receive other paid time-off in accordance with the Company's policies
for executive officers as such policies may exist from time to time.

 

(f)Business
Expenses. Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment
and travel expenses incurred by Executive in connection with the performance of Executive's duties hereunder in accordance with
the Company's expense reimbursement policies and procedures.

 

(g)Automobile
Expenses. The Company shall pay Executive a monthly automotive allowance of $600.00 during the Term and any Renewal Term and
will reimburse Executive for the use by Executive of Executive's personal automobile in connection with Executive's performance
of his/her job duties to the maximum extent permissible under the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

 

(h)Moving
Expenses. Executive shall be entitled to reimbursement of the reasonable cost of the following moving expenses due to the relocation
of the Employee at the direction of the Company, provided that Executive obtains at least two bids for such relocation expenses
and chooses the lesser of the two bids.

 

(i)Housing
Allowance. The Company shall pay Executive the reasonable costs and expenses of temporary housing in Eau Claire, Wisconsin
for the first seven (7) months of the Term of this Agreement or the date upon which Executive obtains a sublease of his apartment
in Sioux Falls, South Dakota, whichever occurs first.

 

(j)Withholdings
and Taxes. All payments to Executive will be payable pursuant to the Company's normal payroll practices. The Company shall
deduct from all payments to Executive hereunder any federal, state or local withholding or other taxes or charges which the Company
is from time to time required to deduct under applicable law, and all amounts payable to Executive hereunder are stated herein
before any such deductions.

 

    	 	3	 

     

    

 

(k)Liability
Insurance; Indemnification. The Bank shall provide the Executive (including his heirs, executors and administrators) with coverage
under a standard directors’ and officers’ liability insurance policy at the Bank's expense or, in lieu thereof, shall
indemnify the Executive (and his heirs, executors and administrators) to the fullest extent permitted under federal law against
all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in
which he may be involved by reason of his having been a director or officer of the Bank (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities). Such expenses and liabilities shall include, but are not limited
to, judgments, court costs, attorneys’ fees and the cost of reasonable settlements, and such settlements shall be approved
by the Board; provided, however, that such indemnification shall not extend to matters as to which the Executive is finally adjudged
to be liable for willful misconduct or gross negligence in the performance of his duties as a director or officer of the Bank.

 

4.Termination
of Employment. During the Employment Term, Executive's employment and this Agreement may be terminated only under the following
circumstances.

 

(a)Termination
by the Company for Cause, or by Executive without Good Reason. The Employment Term and Executive's employment hereunder may
be terminated immediately by the Company for Cause, and shall terminate upon Executive's resignation without Good Reason; provided,
that Executive will be required to give the Company at least thirty (30) days advance written notice of a resignation without Good
Reason.

 

(b)Definition
of Cause. For purposes of this Agreement, “Cause” shall mean a good faith determination by the Board that
Executive has: (A) committed a material act of dishonesty or disloyalty involving the Company; (B) committed a felony
or misdemeanor involving dishonesty or moral turpitude which has a material adverse effect on the business of the Company; (C) engaged
in willful conduct which is materially injurious to the Company; or (D) materially breached any provision of this Agreement,
which breach is not cured within thirty (30) days after written notice thereof is given to Executive, explaining in reasonable
detail the nature of such asserted breach.

 

(c)Definition
of Good Reason. For purposes of this Agreement, “Good Reason” shall mean, without the consent of Executive,
(A) the material diminution of Executive's job responsibilities as such responsibilities exist as of the Effective Date; (B) the
material reduction in Executive's Salary, or benefits under Section 3(d), unless such reduction is part of a reduction in
compensation for all Executives of the Company in general; (C) Executive is reassigned by the Company to job duties requiring
him to move his residence to a location more than 50 miles from the city limits of Eau Claire, WI; or (D) a Change in Control
(as defined below); provided, however, that a Change in Control shall not be deemed to be Good Reason for Executive's voluntary
termination if: (i) the Company has previously provided notice to Executive of termination or nonrenewal as set forth herein;
or (ii) Executive, in his sole discretion, accepts continued employment with the Bank or its successor within 30 days following
the Change in Control.

 

    	 	4	 

     

    

 

(d)Notice
Requirements for Good Reason Termination. In no event shall Good Reason exist unless notice of termination on account thereof
(specifying a termination date no later than thirty (30) days from the date of such notice) is given no later than thirty (30)
days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises; and, provided
that if there exists an event or condition that constitutes Good Reason, the Company shall have thirty (30) days from the date
notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall
not constitute Good Reason hereunder.

 

(e)Change
in Control. For the purposes of this Agreement, “Change in Control” shall mean any of the following:

 

		i.	The acquisition by any individual, entity or group (a “Person”) (within the meaning
of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either [a] the then
outstanding shares of common stock of Citizens Community Bancorp, Inc. (the “Company”) or the Bank (the “Outstanding
Common Stock”) or [b] the combined voting power of the then outstanding voting securities of the Company or the Bank
entitled to vote generally in the election of directors; provided, however, that the following acquisitions shall not constitute
a Change of Control: [i] any acquisition directly from the Company or the Bank, [ii] any acquisition by the Company or
the Bank, [iii] any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or
the Bank or any corporation controlled by the Company.

 

		ii.	Individuals who, as of the date hereof, constitute the board of directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of such board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board.

 

    	 	5	 

     

    

 

		iii.	Approval by the shareholders of the Company or the Bank of a reorganization, merger or consolidation
(a “Business Combination”) of the Company or the Bank, in each case, unless, following such Business Combination, the
Company and the Bank or their successors as a result of the Business Combination continue to be controlled by Persons who were
the holders of the Outstanding Common Stock immediately prior to the Business Combination.

 

		iv.	Approval by the shareholders of the Company or the Bank of [a] a complete liquidation or dissolution
of the Company or [b] the sale or other disposition of all or substantially all of the assets of the Company or the Bank.

  

(f)Termination
by Reason of Death or Disability. Executive's employment hereunder shall terminate automatically upon Executive's death during
the Employment Term. If the Company determines in good faith that a Disability (as defined below) of Executive has occurred during
the Term, the Company may give to Executive written notice of its intention to terminate Executive's employment. In such event,
Executive's employment with the Company shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive;
provided, that within thirty (30) days after such receipt, Executive shall not have returned to full-time performance of Executive's
duties. For purposes of this Agreement, “Disability” has the same meaning as in the Company's long-term disability
plan, or if there is no such plan, or no definition in such plan, “Disability” means a mental or physical condition
which, in the opinion of the Board, renders Executive unable or incompetent to carry out the material job responsibilities which
such Executive held or the material duties to which Executive was assigned at the time the disability was incurred, which has existed
for at least one hundred eighty (180) consecutive days and, which condition, in the opinion of an independent physician selected
by the Company, is expected to be permanent or to have a duration of more than one (1) year.

 

(g)Termination
by the Company without Cause, or Resignation by Executive for Good Reason. The Employment Term and Executive's employment hereunder
may be terminated by the Company without Cause (other than by reason of death or Disability) or by resignation by Executive for
Good Reason.

 

(h)Notice
of Termination. Any purported termination of Executive's employment by either party shall be communicated by written Notice
of Termination to the other party. As used herein, “Termination Date” shall mean in the case of Executive's
death, his date of death, or in all other cases of termination by the Company, the date specified in the Notice of Termination
which shall be at least 30 days following the date of the Notice of Termination, except for termination for Cause which may be
on or after the date of the Notice of Termination.

 

    	 	6	 

     

    

 

(i)Termination
or Suspension Under Federal Law. Notwithstanding anything herein to the contrary:

 

		i.	If the Employee is removed and/or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under section 8(e)(4) or 8(g)(l ) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. § 1818(e)(4) and (g)(l)), all obligations of the Bank under this Agreement shall terminate, as of the effective
date of the order, but vested rights of the parties shall not be affected.

 

		ii.	If the Bank is in default (as defined in section 3(x)(l) of (FDIA), all obligations under
this Agreement shall terminate as of the date of default; however, this paragraph shall not affect the vested rights of the parties.

 

		iii.	All obligations under this Agreement may be terminated, except to the extent that continuation
of this Agreement is necessary for the continued operation of the Bank [a] by an appropriate officer of the Bank's primary
federal regulator, or his or her designee, at the time that the Federal Deposit Insurance Corporation (“FDIC”) or the
Resolution Trust Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained
in section 13(c) of the FDIA, or [b] at the time the FDIC approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined to be in an unsafe or unsound condition. Such action shall not affect any
vested rights of the parties.

 

		iv.	If a notice served under section 8(e)(3) or (g)(l) of the FDIA (12 U.S.C.§ 1818(e)(3)
or (g)(l)) suspends and/or temporarily prohibits the Executive from participating in the conduct of the Bank's affairs, the Bank's
obligations under this Agreement shall be suspended as of the date of such service unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, the Bank may in its discretion [a] pay the Executive all or part of the compensation
withheld while its contract obligations were suspended, and/or [b] reinstate (in whole or in part) any of its obligations
which were suspended.

 

5.Obligations
Upon Termination.

 

(a)Termination
by the Company for Cause, or by Executive without Good Reason. If Executive's employment with the Company is terminated by
the Company for Cause, or is voluntarily terminated by Executive without Good Reason, the Company will pay or provide Executive
with the following: (i) Executive's Salary earned but unpaid as of the Termination Date, payable in a lump sum within thirty
(30) days after the Termination Date (or earlier to the extent required by law); and (ii) all vested benefits to which Executive
is entitled under any benefit plans set forth in the benefits section hereof in accordance with the terms of such plans through
the Termination Date (collectively, the “Accrued Obligations”). Executive shall forfeit any other unvested amounts,
including any unearned bonuses.

 

    	 	7	 

     

    

 

(b)Termination
by Reason of Disability or Death. If Executive's employment with the Company is terminated during the Employment Term by reason
of Executive's Disability or death, the Company will pay and/or provide Executive or Executive's legal representative, as the case
may be, (i) the Accrued Obligations; and (ii) a pro-rated Performance Bonus, payable on the same terms and conditions
and at the same time as payable to other senior executives of the Company.

 

(c)Termination
by the Company without Cause, or Resignation by Executive with Good Reason. If Executive's employment with the Company is terminated
by the Company without Cause or by Executive with Good Reason and Executive irrevocably executes the Release as specified in Section 5(d),
upon expiration of any revocation period applicable to the Release, the Company will pay or provide Executive with the following:

 

		i.	the Accrued Obligations;

 

		ii.	a pro-rated Performance Bonus for the year in which the termination occurs, based on the amount
of his Performance Bonus that the Executive would have been expected to have earned for such year if his employment continued through
the end of the year;

 

		iii.	a payment equal to two hundred percent (200%) of (A) the Executive's annual Salary at the
time of termination, (B) the pro-rated Performance Bonus for the year in which the termination occurs, and (C) the fair
market value of any stock awards issued pursuant to this Agreement and the Company's Plan as of the grant date of such stocks,
exclusive of the initial grant of restricted stock pursuant to Section 3(c)(1) of this Agreement.

 

		iv.	provided that Executive or his/her spouse or dependents elect continuation coverage under a group
health plan of the Company pursuant to the requirements of Section 4980B of the Code, as amended, and any similar applicable
law, (“COBRA”), continued participation in the Company's medical and dental plans with monthly premiums to be
paid by the Company until the earlier of (A) Executive's eligibility for coverage under another employer's group health plan,
(B) termination of Executive's or his spouse's or dependents' rights to continuation coverage under COBRA, or (C) eighteen
(18) months following the termination of Executive's employment with the Company. Executive agrees and acknowledges that the period
of coverage under such plans shall run concurrently with such plans' obligations to provide continuation coverage pursuant to COBRA,
and that this subsection shall not limit such plans' obligations to provide continuation coverage under COBRA.

 

 

    	 	8	 

     

    

 

(d)Release.
No obligations of the Company or the Bank with respect to payments to Executive pursuant to Section 5(c) or the vesting of
Restricted Stock or Options pursuant to Section 5(e) shall exist or apply unless Executive has irrevocably executed the General
Release in the form attached as Exhibit A and the expiration of any applicable revocation period with respect to the General
Release within 21 days after Executive's Termination Date.

 

(e)Vesting.
Provided Executive is in compliance with all covenants contained in Section 6 on the first anniversary of the Termination
Date, all Restricted Stock and Options granted to Executive under Section 3(c) shall be deemed to have vested in their entirety
as of the Termination Date.

 

6.Restrictive
Covenants.

 

(a)Need
for Restrictions. Executive acknowledges and agrees that the Company's business, technical, and customer information is established
and maintained at great expense to the Company and is of significant value to the Company, and that by virtue of employment with
the Company, Executive will have information pertaining to, unique and extensive exposure to, and personal contact with, the Company's
business, technical and customer information which would enable Executive to compete unfairly with the Company. As a result, and
in consideration of the Company's severance obligations under Section 5(c), Executive acknowledges and agrees that the following
restrictions are necessary to protect the Company's business.

 

(b)Confidential
Information. For purposes of this Agreement, “Confidential Information” means information disclosed to Executive
or known by him as a result of or as disclosed in the course of Executive's employment with the Company which is not generally
known to the public pe1iaining to the Company's business, including, but not limited to, operations, contracts, customers, proposals,
research and development, procedures and protocols, operating models, financial information, pricing, strategic planning information,
information stored in or developed for use with Company's computer systems, insurance plans, risk management information, or marketing
programs, and third-party information that the Company may learn from its customers or clients. Confidential Information shall
include any such information developed or created by Executive if the information was developed or created by Executive while executing
Executive's duties for the Company or if the information was developed or created by Executive based upon any Confidential Information
that Executive learned by virtue of Executive's employment with the Company. Confidential Information shall not include any information
that Executive can demonstrate is in the public domain by means other than disclosure by Executive, but shall include non-public
compilations, combinations, or analyses of otherwise public information.

 

    	 	9	 

     

    

 

(c)Non-Disclosure
of Confidential Information. For as long as Executive shall remain employed by the Company, and for a period of eighteen (18)
months after termination of employment with the Company for any reason, Executive shall not directly or indirectly, under any circumstances,
communicate or disclose to any person, firm, association, corporation, company or any other third party, any Confidential Information,
and Executive will keep secret and in strict confidence and hold inviolate said Confidential Information. Executive further agrees,
however, not to disclose to others or use at any time after the termination of his employment with the Company any Confidential
Information that constitutes and remains a trade secret under the Wisconsin Trade Secrets Act, as amended (Section 134.90
Wis. Stats.), any Confidential Information that the Company received from a third party and continues to hold in confidence, and
any Confidential Information that he is otherwise prohibited by law from disclosing to others or using. The prohibitions of this
paragraph do not apply to Confidential Information after it has become generally known and/or in the public domain through no fault
of Executive. The prohibitions of this paragraph also do not prohibit use of Executive's general skills and knowledge acquired
during and prior to his employment by the Company, as long as such use does not involve the use or disclosure of Confidential Information.

 

(d)Nonsolicitation
of Customers. During Executive's employment, and for a period of eighteen (18) months following the termination of Executive's
employment with the Company, whether voluntary or involuntary and whether with or without Cause, Executive shall not, directly
or indirectly canvas, contact or solicit any “Active Customer” (as defined below) of the Company for the purpose of
selling, offering or providing products or services which are the same as or substantially similar to the products or services
provided by the Company at any time during the “Reference Period” (as defined below). “Active Customer”
shall mean any person or entity which, within the 12-month period prior to the termination of Executive's employment with the Company
(the “Reference Period”), received any products or services supplied by or on behalf of the Company; provided,
however, “Active Customer” shall be further limited to those customers of the Company: (i) with whom Executive
had material business contact as an Executive of the Company during the Reference Period; (ii) whose dealings with the Company
were coordinated or supervised, in whole or in part, by Executive during the Reference Period; or (iii) about whom Executive
obtained Special Knowledge (as defined below) as a result of Executive's position with the Company during the Reference Period.
“Special Knowledge” means Confidential Information that is used, possessed by or developed for the Company in
the course of soliciting, selling to or servicing a customer, including, but not limited to, existing or proposed bids, pricing
and cost information, margins, negotiation strategies, sales strategies and information generated for customer engagements.

 

(e)Non-Solicitation
of Company Personnel. During Executive's employment and for a further period of eighteen (18) months beginning on the termination
of Executive's employment with the Company under any circumstances, Executive agrees that Executive shall not, directly or indirectly,
solicit, encourage or induce any Executive, consultant, contractor, or other agent of the Company with whom Executive had substantial
contact during the Reference Period to terminate a relationship (employment or otherwise), or breach any agreement with the Company.

 

    	 	10	 

     

    

 

(f)Noncompetition.
During Executive's employment, and for a period of eighteen (18) months following the termination of Executive's employment with
the Company, whether voluntary or involuntary and whether with or without Cause, Executive shall not, directly or indirectly, have
a financial interest in, or in a “Prohibited Capacity” (as defined below) become associated with, provide assistance
or service to or engage in, that aspect of any firm, entity, business, activity or enterprise which: (i) competes with the
Company anywhere within the “Restricted Territory” (as defined below); or (ii) which has [a] a physical bank
retail location within the city limits of Mankato, Minnesota and [b] whose holding company has total assets of less than $10,000,000,000.
For the sake of clarity, this noncompetition covenant applicable to Mankato, Minnesota pursuant to paragraph 6(f)(ii), above,
would not apply to institutions such as Wells Fargo, US Bank, TCF Bank, and Associated Bank regardless of whether the aforementioned
institutions maintain a physical bank retail location in Mankato, Minnesota. This restriction shall not apply to any activities
conducted on behalf of an entity that is not a financial institution or owned or controlled by a financial institution, except
to the extent such activities are for the benefit of a competitor. A “financial interest” shall not include
the ownership of less than 5% of the securities of any corporation or other entity that is listed on a national securities exchange
or traded in the national over-the-counter market. “Prohibited Capacity” means a capacity (i) involving
duties or responsibilities substantially similar to those of Executive's position with the Company at any time during the Reference
Period, (ii) involving management, sales or marketing duties or responsibilities, or (iii) reasonably likely to involve
the use or disclosure of Confidential Information or trade secrets of the Company. The “Restricted Territory”
means the territory within a 75-mile radius of the western most retail location of the Company within the city of Eau Claire, Wisconsin
at the time of Executive's termination.

 

6.Enforcement.

 

(g)If,
at the time of enforcement of the covenants contained in Section 6 above (collectively, the “Restrictive Covenants”),
a court shall hold that the duration, scope or area restrictions stated are unreasonable under circumstances then existing, the
parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the Restrictive Covenants to cover the maximum duration,
scope and area permitted by law. Executive has had the opportunity to consult with Executive's own legal counsel regarding the
Restrictive Covenants and agrees that the Restrictive Covenants are reasonable in terms of duration, scope and area restrictions
and are necessary to protect the goodwill of the Company's businesses and agrees not to challenge the validity or enforceability
of the Restrictive Covenants.

 

(h)If
Executive breaches, or threatens to commit a breach of any of the Restrictive Covenants, the Company shall have the following rights
and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which
is in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity:

 

    	 	11	 

     

    

 

i.The right
and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that
any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages
would not provide an adequate remedy to the Company; and

 

ii.The
right and remedy to require Executive to account for and pay over to the Company any profits, monies or other benefits derived
or received by Executive as the result of any transactions constituting a breach of the Restrictive Covenants.

 

7.Notices.
All notices, demands or other communications shall be sent to Executive and the Company at the addresses indicated below to such
other addresses or to the attention of such other persons as the recipient party has specified by prior written notice to the sending
party, or in the case of the Executive, to the most recent address on record with the Company's Human Resource Department.

 

Notice to Executive

Stephen Bianchi

4310 N. Pennsylvania Avenue

Sioux Falls, SD 57107

 

Notice to Company

2174 Eastridge Center

Eau Claire WI 54701

Attn: Richard McHugh, Chairman of the Board

 

8.Attorneys'
Fees. In the event that the either Party brings any action to enforce any of the provisions of this Agreement, or to obtain
money damages for the breach thereof, all expenses, including reasonable attorneys' fees, incurred by the party prevailing on substantially
all of the claims finally decided in the action, shall be paid by the other party with 120 days of the date that entry of judgment
on the claims brought in the action becomes final and non-appealable. In addition, the Company shall pay Executive any reasonable
legal fees and reasonable expenses incurred by Executive in connection with any dispute with any Federal state, or local governmental
agency with respect to benefits claimed under this Agreement. Such reimbursement must be requested no later than two (2) months
after the conclusion of the dispute and shall be paid within two months after the request for reimbursement.

 

9.Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such a manner to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid or illegal provision
had never been contained herein.

 

    	 	12	 

     

    

 

10.Complete
Agreement. This Agreement contains the complete agreement and understanding between the parties related to Executive's employment,
and supersedes, replaces, and preempts any prior understandings, agreements, or representations by or among the parties related
to such employment, whether written or oral, which may have related to the subject matter herein in any way.

 

11.Survival.
The provisions of Sections 4, 5, 6, 7, and 8 shall survive the termination of this Agreement and Executive's employment with
the Company.

 

12.Counterparts.
This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together
constitute one and the sai11e agreement.

 

13.Choice of
Law. All issues concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by
and construed in accordance with the laws of the State of Wisconsin, without giving effect to any choice of law or conflict of
law rules or provisions (whether of the State of Wisconsin or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Wisconsin.

 

14.Amendments
and Waiver. The provisions of this Agreement may be amended or waived only by a written instrument, with written consent by
both the Company and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall
affect the validity, binding effect or enforceability of this Agreement.

 

    	 	13	 

     

    

 

IN WITNESS WHEREOF,
the parties have duly executed this Agreement as of the
day and year first above written.

 

 

	CITIZENS COMMUNITY BANCORP, INC. 	 	STEPHEN BIANCHI
	 	 	 	 
	By:	/s/ Richard McHugh	 	/s/ Stephen Bianchi
	Its:	Chairman	 	 

  

 

	CITIZENS COMMUNITY FEDERAL, N.A. 	 
	 	 	 
	By:	/s/ Richard McHugh	 
	Its:	Chairman	 

 

 

    	 	14

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