Document:

Exhibit 10.3

 

STOCK
SUBSCRIPTION AGREEMENT

 

This
STOCK SUBSCRIPTION AGREEMENT dated as of December 18, 2015 is by and between Open Joint Stock Company “Rusnano”, a
company organized under the laws of the Russian Federation with its registered address at 10A prospect 60-letiya Oktyabrya, Moscow
117036, Russian Federation (the “Investor”), and Panacela Labs, Inc., a Delaware corporation (the “Company”).

 

WHEREAS,
the Company, the Investor and Cleveland BioLabs, Inc. have entered into that certain Acknowledgment Agreement dated as of the
date hereof (the “Acknowledgment Agreement”), pursuant to which the parties hereto are required to deliver
this Agreement (as defined below);

 

WHEREAS,
the Company is authorized by its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”)
to issue up to 137,420 shares of its Common Stock (the “Shares”); and

 

WHEREAS,
the Investor hereby offers to subscribe to and purchase, and the Company desires to provide for the subscription for and purchase
of, 6,014 Shares for, the purchase price per share of $117.40 and an aggregate purchase price of $706,043.60 (such aggregate purchase
price, the “Purchase Price”).

 

NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company and
the Investor hereby agree as follows:

 

1.           Definitions.

 

(a)          As
used in this Agreement, the following terms shall have the following meanings:

 

“Agreement”
means this Stock Subscription Agreement dated as of the date hereof, and all amendments hereto made in accordance with the provisions
of Section ‎7(c).

 

“Common
Stock” means the Common Stock, $0.001 par value per share, of the Company.

 

“Governmental
Authority” means any United States federal, state or local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral body.

 

“Lien”
means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance,
adverse claim, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use,
voting, transfer, receipt of income or other exercise of any attributes of ownership.

 

    	 	1	 

     

    

 

“Material
Adverse Effect” means any circumstance, change in or effect on the Company or any of its Subsidiaries that, individually
or in the aggregate with all other circumstances, changes in, or effects on, the Company and/or its Subsidiaries is materially
adverse to the business, operations, assets, liabilities, results of operations or financial condition of the Company and its
Subsidiaries taken as a whole.

 

“Offering
Materials” means this Agreement, the Stockholders’ Agreement and the PPM.

 

“Other
Subscription Agreements” means the Stock Subscription Agreements by and among certain other existing stockholders of
the Company and the Company, in each case dated on or about the date hereof, the executed copies of which have been provided to
the Investor at or prior to the Closing.

 

“Person”
means an individual, corporation, limited liability company, partnership, association, trust, joint stock company, or other entity
or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“PPM”
means the Confidential Private Placement Memorandum of the Company relating to the Shares dated as of December 4, 2015, as supplemented
and otherwise updated.

 

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

 

“Stockholders’
Agreement” means that certain Stockholders and Investor Rights Agreement, by and among the Company and the stockholders
listed on Schedule 1 thereto, as amended by that certain First Amendment to Stockholders and Investor Rights Agreement dated as
of September 3, 2013.

 

“Subsidiary”
or “Subsidiaries” means, with respect to any Person, any entity of which (i) securities or other ownership
interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions,
(ii) more than 50% of the interest in the capital or profits of such Person or entity or (iii) more than 50% of the beneficial
interest in such trust or estate, is at the time of determination directly or indirectly owned or controlled by such Person.

 

(b)          The
terms not defined in Section 1(a) above shall have the meanings set forth in this Agreement.

 

2.           Purchase
and Sale of the Shares.

 

(a)          Commitments
to Purchase the Shares. In reliance on the representations and warranties herein contained of the Investor, but subject to
the terms and conditions hereinafter stated, the Company agrees to issue and sell to the Investor and the Investor, in reliance
on the representations and warranties herein contained of the Company, but subject to the terms and conditions hereinafter stated,
agrees to purchase from the Company the Shares, for an aggregate purchase price equal to the Purchase Price.

 

    	 	2	 

     

    

 

(b)          The
Closing. Subject to the terms and conditions of this Agreement, the closing (the “Closing”) of the purchase
and sale provided for in Section 2(a) shall take place at McGuireWoods LLP, 7 Saint Paul Street, Suite 1000, Baltimore,
Maryland 21202 on December 18, 2015 or at such other date and place as the parties shall agree. At the option of the parties,
documents to be delivered to the place of Closing (other than stock certificates evidencing the Shares) may be delivered by electronic
transmission on or before the Closing.

 

(c)          Deliveries.
At the Closing, (i) the Investor shall pay to the Company the Purchase Price by setting off the Purchase Price against certain
indebtedness owed to the Investor by the Company pursuant to that certain Convertible Loan Agreement dated as of September 3,
2013 (as amended and supplemented by that certain Amendment and Supplemental Agreement No. 1 to Convertible Loan Agreement dated
as of the date hereof, the “Convertible Loan Agreement”) such that an amount of such indebtedness that is equal
to the Purchase Price is deemed satisfied and paid, as contemplated by the Acknowledgment Agreement, and (ii) the Company shall
deliver to the Investor certificates evidencing the Shares to be purchased by the Investor pursuant to this Agreement registered
in the name of the Investor.

 

3.           Representations
and Warranties of the Company.

 

The
Company represents and warrants to the Investor as follows as of the Closing:

 

(a)          Organization,
Standing, etc. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own, operate or lease the properties and assets now owned, operated or
leased by it and to carry on its business as it has been and is currently conducted. The Company is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary or desirable, except where the failure to be so licensed, qualified
or in good standing would not have a Material Adverse Effect.

 

(b)          Authorization,
Noncontravention. The Company has all requisite power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Company of this Agreement,
the consummation of the transactions contemplated herein, and the fulfillment of and compliance with the respective terms, conditions
and provisions thereof or of any instruments required hereby have been duly authorized by all requisite action on the part of
the Company and do not and, will not (i) conflict with or result in a breach of any of the terms, conditions or provisions of
any (A) law or regulation of any Governmental Authority applicable to the Company or any of its Subsidiaries, (B) writ, injunction,
award or decree of any court or arbitral tribunal applicable to the Company or any of its Subsidiaries, or (C) material agreement
or instrument to which the Company or any of its Subsidiaries is a party, by which it is bound, or to which it is subject; (ii)
result in (A) the creation or imposition of any Lien or (B) any violation of the Certificate of Incorporation or bylaws (or analogous
documents) of the Company or any of its Subsidiaries or (iii) require filing with, notice to or consent of any Governmental Authority
or other third Person, except as set forth in the Stockholders’ Agreement or Section ‎3(f).

 

    	 	3	 

     

    

 

(c)          Binding
Effect. This Agreement has been duly authorized, executed and delivered by the Company, and assuming due authorization, execution
and delivery by the Investor, this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except that enforceability hereof may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights generally and (ii) equitable principles which may
limit the availability of certain equitable remedies (such as specific performance).

 

(d)          Capitalization,
Subsidiaries.

 

(i)          The
shares of Common Stock comprising the Shares to be purchased pursuant to this Agreement have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will have been validly issued and will be fully paid and
nonassessable, and the Investor upon payment of the Purchase Price shall have valid and legal title to the Shares, free and clear
of all Liens, other than restrictions on transfer pursuant to U.S. federal and state securities laws and Liens created by the
Stockholders’ Agreement. Other than as provided in the Offering Materials and the Other Subscription Agreements, (A) there
are no outstanding or authorized subscriptions, warrants, options, calls, commitments or other rights or agreements to which the
Company or any other Person is bound or entitled to the benefit of relating to the issuance, sale, redemption, conversion, transfer
or voting of any equity interests of the Company; and (B) the issuance of the Shares will not be subject to preemptive or similar
rights, except for such as have been validly waived or complied with. Immediately following the Closing, the authorized capital
stock of the Company will consist of 102,580 shares of Series A Preferred Stock and 137,420 shares of Common Stock, of which 11,353
shares of Series A Preferred Stock will be issued and outstanding, and following all closings in connection with the offering
pursuant to the PPM and assuming the purchase of all Common Stock proposed in the offering, 48,377 shares of Common Stock will
be issued and outstanding.

 

(ii)          The
Company has no Subsidiaries other than the Limited Liability Company “Panacela Labs”, a limited liability company
formed under the laws of the Russian Federation on July 14, 2011, state registration number (OGRN): 1117746551812. There are no
corporations, partnerships, joint ventures, associations or other entities in which the Company owns of record or beneficially,
any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the same. The Company is not
a member of any partnership nor is the Company a participant in any joint venture or similar arrangement.

 

(e)          Solicitation.
No form of general solicitation or general advertising was used by the Company, or, to the best knowledge of the Company, any
other Person acting on its behalf, in respect of the Shares or in connection with the offer and sale of the Shares.

 

(f)          No
Other Action. No action by, or in respect of, or filing with, any Governmental Authority is required for the execution, delivery
and performance of this Agreement by the Company and acquisition of the Shares, except for the Form D filing pursuant to Rule
506 of Regulation D of the Securities Act and any notice filings required by the laws of any U.S. state or any political subdivision
thereof.

 

    	 	4	 

     

    

 

(g)          PPM.
The PPM does not contain any untrue statement of a material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and
no event or circumstance has occurred since the date of the PPM that would cause the PPM to contain any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

4.           Representations
and Warranties of the Investor.

 

The
Investor represents and warrants to the Company as follows as of the Closing:

 

(a)          Organization
and Authority. The Investor is a joint stock company duly organized, validly existing and in good standing under the laws
of the Russian Federation.

 

(b)          Authorization,
Noncontravention. The Investor has all requisite power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Investor of this Agreement,
the consummation by the Investor of the transactions contemplated herein, and the fulfillment of and compliance by the Investor
with the terms, conditions and provisions hereof or of any instruments required hereby, have been duly authorized by all requisite
action on the part of the Investor and do not and will not (i) conflict with or result in a breach of any of the terms, conditions
or provisions of any (A) law or regulation of any Governmental Authority applicable to the Investor, (B) writ, injunction, award
or decree of any court or arbitral tribunal applicable to the Investor, or (C) material agreement or instrument to which the Investor
is a party, by which it is bound, or to which it is subject, (ii) result in any violation of the Certificate of Incorporation
or bylaws (or analogous documents) of the Investor or (ii) require filing with, notice to or consent of any third Person.

 

(c)          Binding
Effect. This Agreement has been duly executed and delivered by the Investor and (assuming due authorization, execution and
delivery by the Company) constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in
accordance with its terms, except that enforceability hereof may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights generally and (ii) equitable principles which may limit the availability
of certain equitable remedies (such as specific performance).

 

(d)          No
Other Action. No action by, or in respect of, or filing with, any Governmental Authority is required for the execution, delivery
and performance of this Agreement by the Investor.

 

(e)          Investment
Intent. The Shares to be acquired by the Investor hereunder are being acquired for its own account and without a view to the
public distribution of such Shares or any interest therein.

 

    	 	5	 

     

    

 

5.           Investment
Representations. The Investor further represents and warrants to the Company as follows as of the Closing:

 

(a)          Shares
Unregistered. The Investor understands and acknowledges that (i) the offering and sale of the Shares to be acquired by the
Investor hereunder are intended to be exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof and,
accordingly, the offer and sale of the Shares have not been registered under the Securities Act, (ii) the Shares must be held
indefinitely and the Investor must continue to bear the economic risk of the investment in the Shares unless the offering and
sale of such Shares are subsequently registered under the Securities Act and all applicable securities laws of the states of the
United States of America (“U.S. state securities laws”) or an exemption from such registration is available,
(iii) there is no established public or other market for the Shares and it is not anticipated that there will be any public market
for the Shares in the foreseeable future, (iv) the Company does not provide current public information within the meaning of Rule
144 under the Securities Act and, other than in accordance with the Stockholders’ Agreement, the Company has made no covenant
to make such information available and (v) a restrictive legend in the form set forth in Section 12(a) and (b) of the Stockholders’
Agreement shall be placed on all certificates evidencing the Shares to be acquired by the Investor hereunder.

 

(b)          The
Shares are speculative investments which involve a substantial degree of risk of loss by the Investor of its investment in the
Shares.

 

(c)          No
federal or state agency has made any findings as to the fairness of the terms of the offering of the Shares.

 

(d)          That
the Investor is an “accredited investor” as that term is defined in Regulation D under the Act or is otherwise a sophisticated,
knowledgeable investor (either alone or with the aid of a purchaser representative) with adequate net worth and income for this
investment. The Investor acknowledges that it has completed the Accredited Investor Certificate contained in Annex A
hereto and that the information contained therein is complete and accurate as of the date hereof, and the Investor will immediately
notify the Company if any such information contained therein becomes incomplete or inaccurate at any time.

 

(e)          That
the Investor has knowledge and experience in financial and business matters, is capable of evaluating the merits and risks of
an investment in the Company and its proposed activities and has carefully considered the suitability of an investment in the
Company for Investor’s particular financial situation, and has determined that the Shares are a suitable investment.

 

(f)          That
the Investor has reviewed the information provided to the Investor by the Company in connection with the Investor’s decision
to purchase the Shares, including but not limited to the PPM. The Investor acknowledges that the PPM is as of December 4, 2015,
as supplemented by that certain Confidential Private Placement Memorandum-Supplement dated as of December 15, 2015, and may not
contain all of the terms and conditions of the offering and sale of the Shares, and understands and acknowledges that it is the
Investor’s responsibility to conduct its own independent investigation and evaluation of the Company; provided, however,
the Investor is not relying on any information contained on the Company’s website located at http://www.panacelalabs.com.
That the offer to sell Shares was communicated to the Investor by the Company in such a manner that the Investor was able to ask
questions of and receive answers from the Company concerning the terms and conditions of this transaction and that at no time
was the Investor presented with or solicited by any leaflet, public promotional meeting, newspaper or magazine article, radio
or television advertisement or any other form of advertising or general solicitation.

 

    	 	6	 

     

    

 

(g)          That
the Investor is a joint stock company, resident in the Russian Federation, is providing a Form W-8BEN, and the Investor will notify
the Company within sixty (60) days of any change to such status and of any new country of residence. The Investor agrees to provide
to the Company in a timely manner any tax documentation that may be reasonably required by the Company.

 

(h)          That
the Investor is an existing entity, and has not been organized or reorganized for the purpose of making this investment (or if
not true, such fact shall be disclosed to the Company in writing).

 

6.           Covenants.

 

(a)          Use
of Proceeds. The Company acknowledges that the net proceeds received from the offering under the PPM will be used to pay off
certain of the Company’s outstanding indebtedness (including amounts owed to the Investor), to satisfy certain outstanding
trade payables and $19,876.39 shall be used for general operating purposes, in each case as further described in the Acknowledgment
Agreement, and shall not be used for any other purpose.

 

(b)          Investment
Company Act. The Company shall take all reasonable actions necessary to remain exempt from the provisions of the Investment
Company Act of 1940, as amended.

 

(c)          Further
Action. If at any time after the date hereof any further action is reasonably necessary to carry out the purpose of this Agreement,
each of the Company and the Investor agrees to use its reasonable efforts to take such further action.

 

(d)          Restrictions
on Transfer. The Investor agrees to comply in all respects with the provisions of this Agreement and the provisions of the
Stockholders’ Agreement. To the extent required by the Stockholders’ Agreement, the Investor will cause any proposed
purchaser, assignee, transferee or pledgee of the Shares held by the Investor to agree to take and hold such securities subject
to the provisions and conditions of the Stockholders’ Agreement. The parties hereto acknowledge that after the Closing,
the Stockholders’ Agreement shall continue in full force and effect as in effect on the date hereof (prior to the Closing),
and is hereby ratified and affirmed by the parties hereto.

 

(e)          Form
D Filing. The Company shall properly and timely effectuate the filing of Form D pursuant to Rule 506 of the Securities Act.

 

    	 	7	 

     

    

 

(f)          Waiver
of Series A Conversion Price. In accordance with Section 5.2 of the Certificate of Incorporation, and as the holder of 75%
of the issued and outstanding shares of Series A Preferred Stock (as defined in the Certificate of Incorporation) the Investor
hereby agrees and acknowledges that no adjustment in the Series A Conversion Price (as defined in the Certificate of Incorporation)
pursuant to Section 5.4 of the Certificate of Incorporation shall be made in connection with the Offering (as defined in the PPM).

 

7.           Miscellaneous.

 

(a)          Governing
Law. This Subscription Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the
State of New York, without regard to principles of conflicts of laws.

 

(b)          Entire
Agreement. This Agreement, together with the Acknowledgment Agreement, the Convertible Loan Agreement and the Offering Materials,
constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede any prior or
contemporaneous understandings, representations, warranties or agreements (whether oral or written) and may be amended only by
a writing executed by all parties.

 

(c)          No
Waivers, Amendments. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be
construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure or delay
on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Any provision
of this Agreement may be amended if, but only if such amendment is in writing and is signed by the Company and the Investor. Any
agreement on the part of any party to any waiver shall be valid only if set forth in a written instrument executed and delivered
by a duly authorized officer on behalf of such party.

 

(d)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

(e)          Communications.
All notices, consents and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when
delivered by hand or by Federal Express or a similar overnight courier, (ii) five business (5) days after being deposited in any
United States Post Office enclosed in a postage prepaid and registered or certified envelope addressed to or (iii) when successfully
transmitted by fax or e-mail (with a confirming copy of such communication to be sent as provided in clauses (i) or (ii) above)
to, the party for whom intended, at the address or fax number for such party set forth below (or at such other address, fax number
or e-mail address for a party as shall be specified by like notice, provided, however, that any notice of change of address, fax
number or e-mail address shall be effective only upon receipt):

 

(i)          If
to the Company:

 

Panacela
Labs, Inc.

73
High Street

Buffalo,
New York USA 14203

Attention:
Chief Executive Officer

Facsimile:
(716) 849-6820

E-mail:
notices@cbiolabs.com

 

    	 	8	 

     

    

 

(ii)          If
to the Investor:

 

OJSC
“RUSNANO”

10A
Prospect 60-Letiya Oktyabrya

Moscow
117036

Russian
Federation

Attention:
Leysan Shaydullina, Investment Manager

Facsimile:
7-495-988-5399

E-mail:
Leysan.Shaydullina@rusnano.com

 

With
a copy to:

 

Dentons
US LLP

1221
Avenue of Americas

New
York, NY 10020-1089

USA

Attention:
Olga Sandler

Facsimile:
+1-212-768-6800

Email:
olga.sandler@dentons.com

 

(f)          Survival
of Provisions. The representations, warranties, covenants and agreements contained in this Agreement shall survive the consummation
of the transactions contemplated hereby. This Section ‎7(f) shall not limit any covenant or agreement of the parties
hereto which, by its terms, contemplates performance after the Closing. Without limiting the generality of the previous sentence,
Section ‎7(g) shall survive beyond the Closing.

 

(g)          Expenses,
Documentary Taxes. Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution,
delivery and performance of this Agreement, or any amendment or waiver thereof; provided, however, that the Company shall not
incur any such costs or expense in connection with this Agreement, the Acknowledgment Agreement or any other agreement or document
executed or filed pursuant to the Acknowledgment Agreement that in the aggregate exceed $2,000.

 

(h)          Headings.
The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

(i)          Severability.
Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective,
enforceable and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable under applicable law, this Agreement shall be considered divisible and such provision or portion thereof
shall be deemed inoperative to the extent it is deemed invalid, illegal or unenforceable, and in all other respects this Agreement
shall remain in full force and effect and such invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision

 

    	 	9	 

     

    

 

(j)          No
Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.

 

(k)          Execution
in Counterparts. This Agreement may be executed in two counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same agreement. The delivery of signed counterparts by
facsimile or email transmission that includes a copy of the sending party’s signature is as effective as signing and delivering
the counterpart in person, for all purposes; provided that an original of such facsimile or electronic signature shall be delivered
within five (5) business days thereof.

 

(l)          Currency.
All references to “$” in this Agreement shall be deemed to refer to U.S. dollars, the legal currency of the United
States of America.

 

[Signatures
Follow]

 

    	 	10	 

     

    

 

IN
WITNESS WHEREOF, the undersigned has executed this Stock Subscription Agreement as of the date first written above.

 

	6,014
	 	Open
    Joint Stock Company “Rusnano”
	Number
    of Shares of Common Stock Subscribed for	 	 
	 	 	 
	 	 	By:	/s/
        Yurii Udalstov

	 	 	on
    behalf of  OJSC Rusnano

Yurii Udaltsov

Deputy Chairman of the Management Board of Management company RUSNANO LLC
    acting on the basis of a power of attorney

 

THE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES
ARE REGISTERED UNDER THE ACT OR AN EXEMPTION THEREFROM IS AVAILABLE, AND THEN ONLY IN COMPLIANCE WITH THE CERTIFICATE OF INCORPORATION
AND STOCKHOLDERS’ AGREEMENT.

 

	Accepted
    by the Company:	 
	PANACELA
    LABS, INC.	 
	 	 
	By:	/s/
    C. Neil Lyons	 
	 	C.
    Neil Lyons, CPA	 
	 	Chief
    Financial Officer	 

 

[Signature Page for Rusnano/Panacela Subscription
Agreement]

     

     

    

 

Annex
A

 

Accredited
Investor Certificate

 

The
undersigned hereby certifies to being an “accredited investor” as that term is defined in Regulation D adopted
pursuant to the Securities Act of 1933, as amended (the “Securities Act”). The specific category(s) of accredited
investor applicable to the undersigned is checked below.

 

		☐	an
                                         individual whose individual net worth, or joint net worth with the individual’s
                                         spouse, exceeds $1,000,000 (excluding the value of the individual’s primary residence)
                                         (the term “net worth” means the excess of total assets over total liabilities).

 

		☐	an
                                         individual who had an individual income in excess of $200,000 in each of 2013 and 2014
                                         or joint income with that person’s spouse in excess of $300,000 in each of those
                                         years and who reasonably expects to reach the same income level in 2015.

 

		☐	a
                                         bank as defined in Section 3(a)(2) of the Securities Act, or a savings and loan
                                         association or other institution as defined in Section 3(a)(5)(A) of the Securities
                                         Act, whether acting in its individual or fiduciary capacity; a broker or dealer registered
                                         pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; an insurance
                                         company as defined in Section 2(13) of the Securities Act; an investment company
                                         registered under the Investment Company Act of 1940 (the “1940 Act”) or a
                                         business development company as defined in Section 2(a)(48) of the 1940 Act; a Small
                                         Business Investment Company licensed by the U.S. Small Business Administration under
                                         Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established
                                         and maintained by a state, its political subdivisions, or any agency or instrumentality
                                         of a state or its political subdivisions, for the benefit of its employees, if such plan
                                         has total assets in excess of $5,000,000; or an employee benefit plan within the meaning
                                         of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”),
                                         if the investment decision is made by a plan fiduciary, as defined in Section 3(21)
                                         of ERISA, which is either a bank, savings and loan association, insurance company or
                                         registered investment adviser, or if the employee benefit plan has total assets in excess
                                         of $5,000,000 or if a self-directed plan, with investment decisions made solely by persons
                                         that are accredited investors.

 

		☐	a
                                         private business development company as defined in Section 202(a)(22) of the Investment
                                         Advisers Act of 1940.

 

    	 	A-1	 

     

    

 

		☐	an
                                         organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation,
                                         a Massachusetts or similar business trust, or a partnership, not formed for the specific
                                         purpose of acquiring the Purchased Stock, with total assets in excess of $5,000,000.

 

		☐	an
                                         individual who is a director or executive officer of the Company.

 

		☐	a
                                         trust, with total assets in excess of $5,000,000, not formed for the specific purpose
                                         of acquiring the securities offered, whose purchase is directed by a person who has such
                                         knowledge and experience in financial and business matters that he or she is capable
                                         of evaluating the merits and risks of the prospective investment.

 

		☐	an
                                         entity in which all of the equity owners are accredited investors as set forth above.

 

Open
Joint Stock Company “Rusnano”

  

	By:	/s/
        Yurii Udalstov
	 
	on
    behalf of  OJSC Rusnano

Yurii Udaltsov

Deputy Chairman of the Management Board of Management company RUSNANO LLC
    acting on the basis of a power of attorney	 

 

	Address: 	10A
    Prospect 60-Letiya Oktyabrya
	 	Moscow
    117036
	 	Russian
    Federation

 

 

A-2Exhibit 10.4

 

ACKNOWLEDGMENT
AGREEMENT

 

This
ACKNOWLEDGMENT AGREEMENT (this “Acknowledgment”), is effective as of the 18 day of December, 2015 (the “Effective
Date”), and is executed by and among Panacela Labs, Inc., a Delaware corporation (the “Company”),
Cleveland BioLabs, Inc., a Delaware corporation (“CBLI”), and Open Joint Stock Company “Rusnano”,
a company organized under the laws of the Russian Federation (“Rusnano”).

 

WHEREAS,
CBLI and Rusnano are stockholders of the Company;

 

WHEREAS,
the Company, as borrower, and Rusnano, as lender, are parties to that certain Convertible Loan Agreement dated as of September
3, 2013, as amended and supplemented by the Supplemental Agreement (as defined below) (the “Convertible Loan Agreement”);

 

WHEREAS,
attached hereto as Exhibit A is an accounting of the indebtedness of the Company owed to Rusnano under the Convertible
Loan Agreement and certain other indebtedness of the Company owed to CBLI, Rusnano and certain other third party trade creditors
identified therein immediately prior to the Effective Date (collectively, the “Obligations”); and

 

WHEREAS,
the parties desire to evidence the mutual agreements and understandings of the parties hereto with respect to the satisfaction
in full of the Obligations.

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual acknowledgments hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto acknowledge and agree to the following facts
and understandings:

 

1.           Definitions.

 

(a)          As
used in this Acknowledgment, the following terms shall have the following meanings:

 

(i)           “CBLI
Common Stock” means the Common Stock, $0.005 par value per share, of CBLI.

 

(ii)         “Governmental
Authority” means any United States federal, state or local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral body.

 

(iii)         “Intercompany
Loan Agreement” means that certain Loan Agreement dated as of September 3, 2013, between the Company and the LLC, as
amended by Amendment No. 1 to Loan Agreement dated as of October 8, 2013.

 

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(iv)         “Intercompany
Loan Amendment” means that certain Amendment No. 2 to Loan Agreement to be entered into by the Company and the LLC,
substantially in the form of Exhibit B attached hereto.

 

(v)          “Lien”
means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance,
adverse claim, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use,
voting, transfer, receipt of income or other exercise of any attributes of ownership.

 

(vi)         “LLC”
means Panacela Labs, LLC, a company organized under the laws of the Russian Federation.

 

(vii)        “Material
Adverse Effect” means, with respect to any Person, any circumstance, change in or effect on such Person or any of its
Subsidiaries that, individually or in the aggregate with all other circumstances, changes in, or effects on, such Person and/or
its Subsidiaries is materially adverse to the business, operations, assets, liabilities, results of operations or financial condition
of such Person and its Subsidiaries, taken as a whole.

 

(viii)       “Minority
Stockholder” means any stockholder of the Company, other than CBLI or Rusnano.

 

(ix)          “Panacela
Common Stock” means the Common Stock, $0.001 par value per share, of the Company.

 

(x)          “Person”
means an individual, corporation, limited liability company, partnership, association, trust, joint stock company, or other entity
or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

(xi)         “Proportionate
Percentage” means the percentage that expresses the ratio of (x) the number of issued and outstanding shares of capital
stock of the Company (on an as converted basis) then owned of record by such stockholder over (y) the aggregate number of outstanding
shares of capital stock of the Company (on an as converted basis).

 

(xii)         “Securities
Act” means the United States Securities Act of 1933, as amended.

 

(xiii)        “Stockholders’
Agreement” means that certain Stockholders and Investor Rights Agreement, by and among the Company and the stockholders
listed on Schedule 1 thereto, as amended by that certain First Amendment to Stockholders and Investor Rights Agreement dated as
of September 3, 2013.

 

(xiv)       “Subsidiary”
or “Subsidiaries” means, with respect to any Person, any entity of which (i) securities or other ownership
interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions,
(ii) more than 50% of the interest in the capital or profits of such Person or entity or (iii) more than 50% of the beneficial
interest in such trust or estate, is at the time of determination directly or indirectly owned or controlled by such Person.

 

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(xv)        “Supplemental
Agreement” means that certain Amendment and Supplemental Agreement No. 1 to Convertible Loan Agreement dated as of the
date hereof between Rusnano and the Company.

 

(xvi)     
“Transaction Documents” means this Acknowledgment, the CBLI/Rusnano Subscription Agreement, the Panacela/Rusnano
Subscription Agreement, the CBLI Subscription Agreement, the Supplemental Agreement, the Intercompany Loan Amendment and other
documents, agreements, certificates and instruments delivered pursuant to any of the foregoing.

 

(b)          The
terms not defined in Section 1(a) above shall have the meanings set forth in this Acknowledgment.

 

2.           Restructuring.

 

(a)          Issuance
of Panacela Shares.

 

(i)          Prior
to the Closing, the Company has offered for sale to all stockholders of the Company 24,724 shares of Panacela Common Stock (“Panacela
Shares”), at $117.4 per share, with each stockholder entitled to purchase such stockholder’s Proportionate Percentage
of such Panacela Shares, which offer and sale, subject to Section ‎2(e)(i) and ‎(ii), was conducted in accordance
with the Stockholders’ Agreement and applicable U.S. federal and state securities laws. None of the Minority Stockholders
have elected to subscribe for or purchase any Panacela Shares.

 

(ii)          Subject
to the satisfaction or waiver of the conditions set forth in Section ‎4, at the Closing:

 

(A)        Rusnano
shall subscribe for and purchase, and the Company shall issue and deliver to Rusnano, 6,014 Panacela Shares;

 

(B)          Rusnano
shall pay the aggregate consideration for such Panacela Shares by acknowledging the repayment of $706,043.60 of the Rusnano Obligations
as set forth in Section ‎2(b)(i)(B) (as it relates to Section ‎2(b)(i)(A)(3)); and

 

(C)         In
connection with transactions contemplated by this Section ‎2(a)(ii), Rusnano and the Company shall enter into a Stock
Subscription Agreement substantially in the form of Exhibit C attached hereto (the “Panacela/Rusnano Subscription
Agreement”).

 

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(iii)         Subject
to the satisfaction or waiver of the conditions set forth in Section ‎4, at the Closing:

 

(A)         CBLI
shall subscribe for and purchase, and the Company shall issue and deliver to CBLI, 18,710 Panacela Shares;

 

(B)          CBLI
shall pay the aggregate consideration for such Panacela Shares of $2,196,554 as set forth in Sections ‎2(b)(i)(A)(1)
and ‎(2) and Sections ‎2(b)(ii) and ‎(iii);

 

(C)         In
connection with transactions contemplated by this Section ‎‎2(a)(iii), CBLI and the Company shall enter into a
Stock Subscription Agreement substantially in the form of Exhibit D attached hereto (the “CBLI Subscription Agreement”);

 

(iv)        Issuance
of CBLI Shares. Subject to the satisfaction or waiver of the conditions set forth in Section ‎4, at the Closing:

 

(A)         Rusnano
shall subscribe for and purchase, and CBLI shall issue and deliver to Rusnano, 256,215 shares of CBLI Common Stock (the “CBLI
Shares”), at $4.45 per share (the closing market price of a share of CBLI Common Stock on the NASDAQ Capital Market
as of October 13, 2015);

 

(B)         Rusnano
shall pay the aggregate consideration for such CBLI Shares of $1,140,156.75 by accepting CBLI Shares in partial satisfaction of
the Rusnano Obligations, as described in Section ‎2(b)(i)(A)(2) and ‎(B) (to the extent related to Section
‎2(b)(i)(A)(2)); and

 

(C)         In
connection with the transactions contemplated by Section ‎‎2(a)(iv), Rusnano and CBLI shall enter into a Stock
Subscription Agreement substantially in the form of Exhibit E attached hereto (the “CBLI/Rusnano Subscription
Agreement”).

 

(v)          All
CBLI Shares and Panacela Shares shall be issued free and clear of all Liens other than any restrictions pursuant to U.S. federal
and state securities laws and, in the case of Panacela Shares, any additional Liens created by or arising under the Stockholders’
Agreement.

 

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(b)          Repayment
of the Obligations.

 

(i)          Rusnano
Obligations.

 

(A)         As
of the Effective Date, prior to the consummation of the transactions contemplated hereby, provided that the transactions contemplated
in this Acknowledgment are consummated prior to December 30, 2015, the Company owes $2,137,165.96 to Rusnano pursuant to the Convertible
Loan Agreement (the “Rusnano Obligations”) of which $1,530,000.00 is the outstanding initial principal amount
(the “Principal Amount”) and $607,165.96 is the accrued and unpaid interest as of October 13, 2015, as further
set forth on Exhibit A. Provided the transactions contemplated in this Acknowledgment are consummated prior to December
30, 2015, Rusnano hereby waives any interest accrued on the Principal Amount after October 13, 2015 through the Effective Date.
At the Closing, the Rusnano Obligations shall be satisfied in full as follows and as set forth in the Supplemental Agreement:

 

(1)        CBLI
shall pay Rusnano, on behalf of the Company, $290,965.61 (the “Cash Amount”) by wire transfer of immediately
available funds to the account of Rusnano as notified by Rusnano in writing prior to the Closing;

 

(2)        CBLI
shall pay $1,140,156.75 of the Rusnano Obligations (the “CBLI Shares Amount”), on behalf of the Company, by
issuing and delivering the CBLI Shares to Rusnano, as described in Section ‎2(a)(iv); and

 

(3)         The
Company shall pay $706,043.60 of the Rusnano Obligations by issuing and delivering 6,014 Panacela Shares to Rusnano pursuant to
the Panacela/Rusnano Subscription Agreement as described in Section ‎2(a)(ii).

 

(B)         Rusnano
hereby accepts repayment of the Rusnano Obligations as set forth in Section ‎2(b)(i)(A)(1) through ‎(3)
above and acknowledges and agrees that, after (i) the consummation of the transactions contemplated by clauses (1) through
(3) above (including, without limitation, the receipt by Rusnano of the Cash Amount, the CBLI Shares and the Panacela Shares)
and subject to Section ‎2(b)(i)(D) (including, without limitation, Section 9 of the Convertible Loan Agreement): (w)
the Rusnano Obligations shall automatically and without any further action by the parties be deemed fully paid and satisfied,
(x) that certain Warrant dated as of September 3, 2013 by and between CBLI and Rusnano (the “Warrant”) shall
be deemed cancelled, (y) Rusnano hereby releases any and all liens, security interests, assignments, pledges and other similar
interests Rusnano may have in respect of the Convertible Loan Agreement, the Warrant and the Rusnano Obligations, and (z) Rusnano
for itself and for its successors and assigns, fully and unconditionally releases and forever discharges the Company and its employees,
officers, directors, agents, representatives successors and assigns from all of its obligations and liabilities under or claims
relating to the Convertible Loan Agreement and the Warrant.

 

(C)         After
consummation of the transactions set forth in Section ‎2(b)(i)(A)(1) through ‎(3) above, the Company does
hereby for itself and for its successors and assigns, fully and unconditionally release and forever discharge Rusnano and its
employees, officers, directors, agents, representatives successors and assigns from all of its obligations and liabilities under
or claims relating to the Convertible Loan Agreement and the Warrant.

 

    	 	5	 

     

    

 

(D)         Notwithstanding
anything to the contrary in this Acknowledgment, (i) all obligations and duties of the Company under the Convertible Loan Agreement
which, by their express terms, specifically survive the repayment of the Rusnano Obligations (and, in all events, Sections 9 and
11.3 of the Convertible Loan Agreement) and any claims related thereto first arising after the Effective Date shall not be deemed
to have been terminated, released or discharged pursuant to this Acknowledgment and (ii) in the event of occurrence of events
described in Section 9 of the Convertible Loan Agreement, each of the waiver set forth in Section ‎2(b)(i)(A) and Section
1 of the Supplemental Agreement shall be null and void and of no force and effect.

 

(E)          For
the avoidance of doubt and notwithstanding anything to the contrary in this Acknowledgment, the payment provisions set forth in
Section 3 of the Supplemental Agreement shall not be in addition to, but shall be a mere restatement of, certain agreements of
the parties as set forth in this Acknowledgment.

 

(ii)         CBLI
Obligations. As of the Effective Date and prior to the consummation of the transactions contemplated hereby, the Company owes
$333,337.89 to CBLI as further set forth on Exhibit A (the “CBLI Obligations”). At the Closing, (i)
the Company and CBLI shall set off the CBLI Obligations against CBLI’s purchase price obligation under the CBLI Subscription
Agreement, whereby, after giving effect to such set-off, the amount to be remitted by CBLI pursuant to the CBLI Subscription Agreement
as the purchase price shall be reduced by the amount of the CBLI Obligations and (ii) upon receipt by CBLI of 18,710 Panacela
Shares, the CBLI Obligations shall automatically and without any further action by the parties be deemed fully paid and satisfied
and (iii) upon and subject to receipt of 18,710 Panacela Shares, CBLI hereby releases any and all liens, security interests, assignments,
pledges and other similar interests CBLI may have in respect of the CBLI Obligations.

 

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(iii)         Trade
Payables. As of the Effective Date and prior to the consummation of the transactions contemplated hereby, the Company owes
(x) an aggregate amount of $397,217.36 in trade payables to third party creditors (other than CBLI and Rusnano) and (y) an aggregate
amount of $15,000.00 to Rusnano pursuant to Section 6.2(a) of the Master Agreement dated as of September 3, 2013, as amended (the
“Master Agreement Obligations”), for a total of $412,217.36, each as shown on Exhibit A (collectively,
the “Trade Payables”). At or prior to the Closing, CBLI, on behalf of the Company, shall pay by wire transfer
of immediately available funds to the account of each such third party creditor (including Rusnano) the respective amounts shown
on Exhibit A and provide evidence of payment of such amounts to Rusnano and CBLI. Such payments made by CBLI shall be set-off
against CBLI’s purchase price obligations under the CBLI Subscription Agreement (as further described in Section ‎2(a)(iii)(B)),
thereby reducing the actual amount that CBLI shall be required to remit to the Company in immediately available funds pursuant
thereto. The Company shall use its best efforts to obtain a pay-off letter substantially in the form of Exhibit F attached
hereto from each such third party creditor (other than Rusnano) on or prior to the Closing. Subject to and upon receipt by Rusnano
of $15,000.00 pursuant to this Section ‎2(b)(iii), (i) the Master Agreement Obligations shall automatically and without
any further action by the parties be deemed fully paid and satisfied and (ii) Rusnano hereby releases any and all liens, security
interests, assignments, pledges and other interests Rusnano may have in respect of the Master Agreement Obligations. For the avoidance
of doubt, the preceding sentence shall not apply to the Rusnano Obligations, which are addressed in Section ‎2(b)(i).

 

(c)          Additional
Documentation. At or prior to the Closing:

 

(i)          The
Company shall enter, and shall cause the LLC to enter, into the Intercompany Loan Amendment, which amendment is to extend the
term of the Intercompany Loan Agreement until October 8, 2017.

 

(ii)          CBLI
shall deliver to Rusnano a certificate duly executed by the Secretary of CBLI certifying and attaching all corporate approvals
obtained by CBLI in connection with the Transaction Documents to which CBLI is a party.

 

(iii)         The
Company shall deliver to Rusnano a certificate duly executed by the Secretary of the Company certifying and attaching (i) all
corporate approvals obtained in connection with the Transaction Documents to which the Company is a party and (ii) all executed
waivers obtained from Minority Stockholders pursuant to Section ‎2(e)(ii).

 

(d)          Application
of Funds. All funds received by the Company pursuant to this Acknowledgment, the Panacela/Rusnano Subscription Agreement and
the CBLI Subscription Agreement shall be applied towards satisfaction of the Obligations; provided that a total of $19,876.39
out of the amount to be received from CBLI pursuant to Section ‎2(a)(iii) shall be used by the Company for general
operational purposes.

 

(e)          Waiver
and Ratification of Stockholders’ Agreement.

 

(i)          CBLI
and Rusnano hereby waive the requirements of Section 4 of the Stockholders’ Agreement solely in respect of the transactions
contemplated by this Acknowledgment.

 

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(ii)          On
or prior to the Closing, the Company shall obtain a waiver of Section 4 of the Stockholders’ Agreement in respect of the
transactions contemplated by this Acknowledgment from each Minority Stockholder that does not participate in the offering by the
Company to purchase Panacela Shares.

 

(iii)         Except
for the waivers described in clauses (i) and (ii) above, the Stockholders’ Agreement shall continue in full force and effect
as originally constituted and is hereby ratified and affirmed by the parties hereto.

 

3.           The
Closing. Subject to the terms and conditions of this Acknowledgment, the closing (the “Closing”) of
the transactions provided for in Section 2 shall take place at McGuireWoods LLP, 7 Saint Paul Street, Suite 1000,
Baltimore, Maryland 21202 on December 18, 2015 or at such other date and place as the parties shall agree. At the option
of the parties, documents to be delivered to the place of Closing may be delivered by electronic transmission on or before
the Closing (except for stock certificates representing Panacela Shares).

 

4.           Condition
to Closing. All transactions described in Section 2 shall occur contemporaneously.

 

5.           Representations
and Warranties of CBLI.

 

CBLI
represents and warrants to Rusnano and the Company as follows as of the Effective Date:

 

(a)          Organization,
Standing, etc. CBLI is a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, operate or lease the properties and assets now owned, operated or leased
by it and to carry on its business as it has been and is currently conducted. CBLI is duly licensed or qualified to do business
and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes
such licensing or qualification necessary or desirable, except where the failure to be so licensed, qualified or in good standing
would not have a Material Adverse Effect with respect to CBLI.

 

(b)          Authorization,
Noncontravention. CBLI has all requisite power and authority to enter into this Acknowledgment and into each other Transaction
Document to which CBLI is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by CBLI of this Acknowledgment and all other Transaction Documents to which CBLI
is a party, the consummation of the transactions contemplated herein and therein, and the fulfillment of and compliance with the
respective terms, conditions and provisions hereof or thereof or of any instruments required hereby or thereby have been duly
authorized by all requisite action on the part of CBLI and do not and will not (i) conflict with or result in a breach of any
of the terms, conditions or provisions of any (A) law or regulation of any Governmental Authority applicable to CBLI or any of
its Subsidiaries, (B) writ, injunction, award or decree of any court or arbitral tribunal applicable to CBLI or any of its Subsidiaries,
or (C) material agreement or instrument to which CBLI or any of its Subsidiaries is a party, by which it is bound, or to which
it is subject, (ii) result in (A) the creation or imposition of any Lien or (B) any violation of the Certificate of Incorporation
or bylaws (or analogous documents) of CBLI or any of its Subsidiaries or (iii) require filing with, notice to or consent of any
Governmental Authority or other third Person, except as set forth in Section ‎5(d).

 

    	 	8	 

     

    

 

(c)          Binding
Effect. This Acknowledgment and each of the other Transaction Documents to which CBLI is a party have been duly authorized,
executed and delivered by CBLI, and assuming due authorization, execution and delivery by other parties thereto, this Acknowledgment
constitutes, and each other Transaction Document to which CBLI is a party at Closing will constitute, legal, valid and binding
obligations of CBLI, enforceable against CBLI in accordance with their respective terms, except that enforceability hereof and
thereof may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’
rights generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific
performance).

 

(d)          No
Other Action. No action by, or in respect of, or filing with, any Governmental Authority is required for the execution, delivery
and performance by CBLI of this Acknowledgment or any Transaction Document to which CBLI is a party, except for any Form D filings
pursuant to Rule 506 of Regulation D of the Securities Act and any notice filings required by the laws of any U.S. state or any
political subdivision thereof.

 

(e)          Offering.
Assuming the veracity and accuracy of the representations and warranties of Rusnano in this Acknowledgment and in the CBLI/Rusnano
Subscription Agreement and subject to any Form D filings pursuant to Rule 506 of Regulation D of the Securities Act and any notice
filings required by applicable law, the issuance of the CBLI Shares as set forth in this Acknowledgment and the CBLI/Rusnano Subscription
Agreement will comply with all applicable laws.

 

6.           Representations
and Warranties of the Company.

 

The
Company represents and warrants to Rusnano and CBLI as follows as of the Effective Date:

 

(a)          Organization,
Standing, etc. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own, operate or lease the properties and assets now owned, operated or
leased by it and to carry on its business as it has been and is currently conducted. The Company is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary or desirable, except where the failure to be so licensed, qualified
or in good standing would not have a Material Adverse Effect with respect to the Company.

 

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(b)          Authorization,
Noncontravention. The Company has all requisite power and authority to enter into this Acknowledgment and into each other
Transaction Document to which the Company is a party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by the Company of this Acknowledgment and all other Transaction
Documents to which the Company is a party, the consummation of the transactions contemplated herein and therein, and the fulfillment
of and compliance with the respective terms, conditions and provisions hereof and thereof or of any instruments required hereby
or thereby have been duly authorized by all requisite action on the part of the Company and do not and will not (i) conflict with
or result in a breach of any of the terms, conditions or provisions of any (A) law or regulation of any Governmental Authority
applicable to the Company or any of its Subsidiaries, (B) writ, injunction, award or decree of any court or arbitral tribunal
applicable to the Company or any of its Subsidiaries, or (C) material agreement or instrument to which the Company or any of its
Subsidiaries is a party, by which it is bound, or to which it is subject, (ii) result in (A) the creation or imposition of any
Lien or (B) any violation of the Certificate of Incorporation or bylaws (or analogous documents) of the Company or any of its
Subsidiaries or (iii) require filing with, notice to or consent of any Governmental Authority or other third Person, except as
set forth in Section ‎6(d).

 

(c)          Binding
Effect. This Acknowledgment and each of the other Transaction Documents to which the Company is a party have been duly authorized,
executed and delivered by the Company, and assuming due authorization, execution and delivery by other parties thereto, this Acknowledgment
constitutes, and each other Transaction Document to which the Company is a party, at Closing will constitute, legal, valid and
binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except that enforceability
hereof and thereof may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally and (ii) equitable principles which may limit the availability of certain equitable remedies
(such as specific performance).

 

(d)          No
Other Action. No action by, or in respect of, or filing with, any Governmental Authority is required for the execution, delivery
and performance of this Acknowledgment by the Company, except for any Form D filings pursuant to Rule 506 of Regulation D of the
Securities Act and any notice filings required by the laws of any U.S. state or any political subdivision thereof .

 

(e)          Obligations.
Except for miscellaneous expenses, not to exceed $2,000 in the aggregate, incurred by the Company in connection with the performance
by the Company of its obligations under this Acknowledgment and the other Transaction Documents, the Company has no liabilities
to any third party other than as described on Exhibit A hereto.

 

(f)           Offering.
Assuming the veracity and accuracy of the representations and warranties of Rusnano in this Acknowledgment and in the Panacela/Rusnano
Subscription Agreement and subject to any Form D filings pursuant to Rule 506 of Regulation D of the Securities Act and any notice
filings required by applicable law, the offering and sale of the Panacela Shares pursuant to that certain Private Placement Memorandum
of the Company, dated as of December 4, 2015, and supplemented on December 15, 2015, will comply with all applicable laws.

 

    	 	10	 

     

    

 

7.           Representations
and Warranties of the Company with respect to the LLC.

 

The
Company represents and warrants to Rusnano and CBLI as follows as of the Effective Date:

 

(a)          Organization,
Standing, etc. The LLC is a limited liability company duly organized, validly existing and in good standing under the laws
of the Russian Federation and has all requisite power and authority to own, operate or lease the properties and assets now owned,
operated or leased by it and to carry on its business as it has been and is currently conducted. The LLC is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary or desirable, except where the failure to be so licensed, qualified
or in good standing would not have a Material Adverse Effect with respect to the LLC.

 

(b)          Authorization,
Noncontravention. The LLC has all requisite power and authority to enter into the Intercompany Loan Amendment, to perform
its obligations thereunder and to consummate the transactions contemplated thereby. The execution and delivery by the LLC of the
Intercompany Loan Amendment, the consummation of the transactions contemplated therein, and the fulfillment of and compliance
with the terms, conditions and provisions thereof have been duly authorized by all requisite action on the part of the LLC and
do not (i) conflict with or result in a breach of any of the terms, conditions or provisions of any (A) law or regulation of any
Governmental Authority applicable to the LLC, (B) writ, injunction, award or decree of any court or arbitral tribunal applicable
to the LLC, or (C) material agreement or instrument to which the LLC is a party, by which it is bound, or to which it is subject,
(ii) result in (A) the creation or imposition of any Lien or (B) any violation of the Certificate of Incorporation or bylaws (or
analogous documents) of the LLC or (iii) require filing with, notice to or consent of any Governmental Authority or other third
Person.

 

(c)          Binding
Effect. The Intercompany Loan Amendment has been duly authorized, executed and delivered by the LLC, and assuming due authorization,
execution and delivery by other parties thereto, the Intercompany Loan Agreement at Closing will constitute, a legal, valid and
binding obligation of the LLC, enforceable against the LLC in accordance with its terms, except that enforceability thereof may
be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights
generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance).

 

(d)          No
Other Action. No action by, or in respect of, or filing with, any Governmental Authority is required for the execution, delivery
and performance of the Intercompany Loan Amendment by the LLC.

 

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8.           Representations
and Warranties of Rusnano.

 

Rusnano
represents and warrants to CBLI and the Company as follows as of the Effective Date:

 

(a)          Organization
and Authority. Rusnano is a joint stock company duly organized, validly existing and in good standing under the laws of the
Russian Federation.

 

(b)          Authorization,
Noncontravention. Rusnano has all requisite power and authority to enter into this Acknowledgment and all other Transaction
Documents to which Rusnano is a party, to perform its obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery by Rusnano of this Acknowledgment and all other Transaction Documents to which Rusnano is a party,
the consummation of the transactions contemplated herein and therein, and the fulfillment of and compliance by Rusnano with the
respective terms, conditions and provisions hereof and thereof or of any instruments required hereby or thereby have been duly
authorized by all requisite action on the part of Rusnano and do not and will not (i) conflict with or result in a breach of any
of the terms, conditions or provisions of any (A) law or regulation of any Governmental Authority applicable to Rusnano, (B) writ,
injunction, award or decree of any court or arbitral tribunal applicable to Rusnano, or (C) material agreement or instrument to
which Rusnano is a party, by which it is bound, or to which it is subject, (ii) result in any violation of the Certificate of
Incorporation or bylaws (or analogous documents) of Rusnano or (iii) require filing with, notice to or consent of any third Person.

 

(c)          Binding
Effect. This Acknowledgment and each of the other Transaction Documents to which Rusnano is a party have been duly executed
and delivered by Rusnano and (assuming due authorization, execution and delivery by the other parties thereto) this Acknowledgment
Agreement constitutes, and each other Transaction Document to which Rusnano is a party, at Closing will constitute, legal, valid
and binding obligations of Rusnano, enforceable against Rusnano in accordance with their respective terms, except that enforceability
hereof and thereof may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally and (ii) equitable principles which may limit the availability of certain equitable remedies
(such as specific performance).

 

(d)          No
Other Action. No action by, or in respect of, or filing with, any Governmental Authority is required for the execution, delivery
and performance by Rusnano of this Acknowledgment and any other Transaction Document to which Rusnano is a party.

 

9.           No
Third Party Beneficiary Rights. This Acknowledgment is for the sole benefit of the parties hereto and their permitted assigns
and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit
or remedy of any nature whatsoever under or by reason of this Acknowledgment.

 

    	 	12	 

     

    

 

10.          Governing
Law. This Acknowledgment shall be construed, governed, interpreted and applied in accordance with the laws of the State of
New York, without regard to principles of conflicts of laws.

 

11.          Entire
Agreement. This Acknowledgment and the other Transaction Documents constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and thereof and supersede any prior or contemporaneous understandings, representations,
warranties or agreements (whether oral or written). 

 

12.          No
Waivers, Amendments. The waiver by any party hereto of a breach of any provision of this Acknowledgment shall not operate
or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure
or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power
or remedy. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by
law. Any provision of this Acknowledgment may be amended if, but only if such amendment is in writing and is signed by CBLI and
Rusnano. Any agreement on the part of any party to any waiver shall be valid only if set forth in a written instrument executed
and delivered by a duly authorized officer on behalf of such party.

 

13.          Successors
and Assigns. This Acknowledgment shall be binding upon and inure to the benefit of the parties hereto and their respective
successors, and assigns.

 

14.          Communications.
All notices, consents and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when
delivered by hand or by Federal Express or a similar overnight courier, (ii) five business (5) days after being deposited in any
United States Post Office enclosed in a postage prepaid and registered or certified envelope addressed to or (iii) when successfully
transmitted by fax or e-mail (with a confirming copy of such communication to be sent as provided in clauses (i) or (ii) above)
to, the party for whom intended, at the address or fax number for such party set forth below (or at such other address, fax number
or e-mail address for a party as shall be specified by like notice, provided, however, that any notice of change of address, fax
number or e-mail address shall be effective only upon receipt):

 

(a)         If
to CBLI:

 

Cleveland
BioLabs, Inc.

73
High Street

Buffalo,
New York USA 14203

Attention:
Chief Executive Officer

Facsimile:
(716) 849-6820

E-mail:
notices@cbiolabs.com

 

    	 	13	 

     

    

 

With
a copy to:

 

McGuireWoods
LLP

7
Saint Paul Street, Suite 1000

Baltimore,
Maryland USA 21202

Attention:
Cecil E. Martin, III

Facsimile:
(410) 659-4535

E-mail:
cmartin@mcguirewoods.com

 

(b)         If
to the Company:

 

Panacela
Labs, Inc.

73
High Street

Buffalo,
New York USA 14203

Attention:
Chief Executive Officer

Facsimile:
(716) 849-6820

E-mail:
notices@cbiolabs.com

 

(c)         If
to Rusnano:

 

OJSC
“RUSNANO”

10A
Prospect 60-Letiya Oktyabrya

Moscow
117036

Russian
Federation

Attention:
Leysan Shaydullina, Investment Manager

Facsimile:
7-495-988-5399

E-mail:
Leysan.Shaydullina@rusnano.com

 

With
a copy to:

 

Dentons
US LLP

1221
Avenue of Americas

New
York, NY 10020-1089

USA

Attention:
Olga Sandler

Facsimile:
+1-212-768-6800

Email:
olga.sandler@dentons.com

 

15.          Survival
of Provisions. The representations, warranties, covenants and agreements contained in this Acknowledgment shall survive the
consummation of the transactions contemplated hereby. This Section ‎‎15 shall not limit any covenant or agreement
of the parties hereto which, by its terms, contemplates performance after the Closing. Without limiting the generality of the
previous sentence, Section ‎16 shall survive beyond the Closing.

 

16.          Expenses,
Documentary Taxes. Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution,
delivery and performance of this Acknowledgment and other Transaction Documents, or any amendment or waiver hereof or thereof;
provided, however, that the Company shall not incur any such costs or expenses in connection with this Acknowledgment or any other
agreement or document executed or filed pursuant to this Acknowledgment that in the aggregate exceed $2,000.

 

    	 	14	 

     

    

 

17.          Headings.
The descriptive headings contained in this Acknowledgment are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Acknowledgment.

 

18.          Severability.
Whenever possible, each provision or portion of any provision of this Acknowledgment shall be interpreted in such manner as to
be effective, enforceable and valid under applicable law, but if any provision or portion of any provision of this Acknowledgment
is held to be invalid, illegal or unenforceable under applicable law, this Acknowledgment shall be considered divisible and such
provision or portion thereof shall be deemed inoperative to the extent it is deemed invalid, illegal or unenforceable, and in
all other respects this Acknowledgment shall remain in full force and effect and such invalidity, illegality or unenforceability
shall not affect any other provision or portion of any provision.

 

19.          Execution
in Counterparts. This Acknowledgment may be executed in two or more counterparts, each of which when executed shall be deemed
to be an original, but all of which taken together shall constitute one and the same agreement. The delivery of signed counterparts
by facsimile or email transmission that includes a copy of the sending party’s signature is as effective as signing and
delivering the counterpart in person, for all purposes; provided that an original of such facsimile or electronic signature shall
be delivered within five (5) business days thereof.

 

20.          Conflicts.
In the event of any conflicts between the terms of this Acknowledgment and any other Transaction Document, the terms of this Acknowledgment
shall prevail.

 

21.          Currency.
All references to “$” in this Acknowledgment shall be deemed to refer to U.S. dollars, the legal currency of the United
States of America.

 

22.          No
Presumption Against Drafting Party.  Each party acknowledges that each party to this Acknowledgment has been represented
by counsel in connection with this Acknowledgment and other Transaction Documents and the transactions contemplated by this Acknowledgement
and other Transaction Documents.  Accordingly, any rule of law or any legal decision that would require interpretation of
any claimed ambiguities in this Acknowledgment or any other Transaction Document against the drafting party has no application
and is expressly waived.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	 	15	 

     

    

 

IN
WITNESS WHEREOF, the undersigned have duly executed this Acknowledgment as of the date above set forth.

 

	 	PANACELA LABS, INC.
	 	 
	 	By:	/s/
    C. Neil Lyons
	 	Name:	C.
    Neil Lyons, CPA
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	CLEVELAND BIOLABS, INC.
	 	 	 
	 	By:	/s/
    C. Neil Lyons
	 	Name:	C.
    Neil Lyons, CPA
	 	Title:	Executive
    Vice President & Chief Financial Officer
	 	 	 
	 	OPEN JOINT STOCK COMPANY “RUSNANO”
	 	 	 
	 	By:	/s/
    Yurii Udalstov
	 	Name:	Yurii
    Udalstov
	 	Title:	Deputy
    Chairman of the Management Board of Management company RUSNANO LLC acting on the basis of a power of attorney

 

 

16

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