Document:

artl_ex42.htm

 EXHIBIT 4.2
   
 	  

 
   
 Artelo Biosciences, Inc.
  
 and
  
 American Stock Transfer & Trust Company, LLC, as
 Warrant Agent
   
 	  

 
    
 Warrant Agency Agreement 
  
 Dated as of October 14, 2020
    
 	 
	
	

	 

 
   .
 WARRANT AGENCY AGREEMENT
  
 WARRANT AGENCY AGREEMENT, dated as of October 14, 2020 (“Agreement”), between Artelo Biosciences, Inc., a Nevada corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (the “Warrant Agent”).
  
 W I T N E S S E T H
  
 WHEREAS, pursuant to a registered offering by the Company of Warrants (the “Warrants”) to purchase shares of common stock, par value $0.001 per share (the “Common Stock”) pursuant to an effective registration statement on Form S-1 (File No. 333-249083) (the “Registration Statement”), the Company wishes to issue the Warrants in book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street name,” a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to 10,120,000 shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the “Offering”);
  
 WHEREAS, the shares of Common Stock and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but will be purchased together in the Offering; and
  
 WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s transfer agent, the delivery of the Warrant Shares (as defined below).
  
 NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
  
 Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
  
 (a) “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 the New York Stock Exchange is authorized or required by law or other governmental action to close.
    
 (b) “Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.
  
 (c) “Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.
   
 (d) “Warrant Certificate” means a certificate issued to a Holder, representing such number of Warrant Shares as is indicated therein.
   
 (e) “Warrant Shares” means the shares of Common Stock underlying the Warrants and issuable upon exercise of the Warrants.
   
 All other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant.
  
 Section 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint a Co-Warrant Agent as it may, in its sole discretion, deem necessary or desirable. The Warrant Agent shall have no duty to supervise, and will in no event be liable for the acts or omissions of, any co-Warrant Agent.
  
 Section 3. Global Warrants.
  
 (a) The Warrants shall be issuable in book entry form (the “Global Warrants”). All of the Warrants shall initially be represented by one or more Global Warrants deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a “Participant”).
    
 	 
	
	

	 

 
     
 (b) If the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder a Warrant Certificate.
   
 (c) A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s Global Warrants for a Warrant Certificate evidencing the same number of Warrants, which request shall be in the form attached hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder a Warrant Certificate for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Warrant Certificate shall be dated the original issue date of the Warrants and shall be manually executed by an authorized signatory of the Company. In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant Certificate to the Holder within three (3) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver to the Holder the Warrant Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Warrant Certificate (based on the VWAP (as defined in the Warrant) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day (increasing to $20 per Business Day on the fifth Business Day after such liquidated damages begin to accrue) for each Business Day after such Warrant Certificate Delivery Date until such Warrant Certificate is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant Certificate and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes to contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement, other than Section 3(c), which shall not apply to the Warrants evidenced by a Warrant Certificate. In the event abeneficial owner requests a Warrant Exchange, upon issuance of the paper Warrant Certificate, the Company shall act as warrant agent and the terms of the paper Warrant Certificate so issued shall exclusively govern in respect thereof.
    
 Section 4. Form of Warrant. The Warrants, together with the form of election to purchase Common Stock (the “Exercise Notice”) and the form of assignment to be printed on the reverse thereof, whether a Warrant Certificate or a Global Warrant, shall be substantially in the form of Exhibit 1 hereto.
  
 Section 5. Countersignature and Registration. The Warrants shall be executed on behalf of the Company by its Chief Executive Officer or Chief Financial Officer, either manually or by facsimile signature. In case any officer of the Company who shall have signed a Warrant shall cease to be such officer of the Company before issuance and delivery by the Company, such Warrant, nevertheless, may be issued and delivered with the same force and effect as though the person who signed such Warrant had not ceased to be such officer of the Company; and any Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant, shall be a proper officer of the Company to sign such Warrant, although at the date of the execution of this Warrant Agreement any such person was not such an officer.
  
 The Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number of warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant Agent will create a special account for the issuance of Warrant Certificates.
  
 	 
	
	

	 

 
    
 Section 6. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Subject to the provisions of the Warrant and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such surrender is applicable to the Holder of a Global Warrant. Any requested transfer of Warrants, whether a Global Warrant or a Warrant Certificate, shall be accompanied by reasonable evidence of authority of the party making such request that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto any Warrant Certificate or Global Warrant, as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Warrants. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by the parties hereto and provided separately on the date hereof.
  
 Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss, theft or destruction, of indemnity in customary form and amount, and satisfaction of any other reasonable requirements established by Section 8-405 of the Uniform Commercial Code as in effect in the State of Delaware, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.
  
 Section 7. Exercise of Warrants; Exercise Price; Termination Date.
  
 (a) The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination Date. Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon providing the items required by Section 7(c) below to the Warrant Agent at the principal office of the Warrant Agent or to the office of one of its agents as may be designated by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant, the Holder shall deliver the executed Exercise Notice and payment of the Exercise Price pursuant to Section 2(a) of the Warrant. Notwithstanding any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), shall effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation, as applicable). The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will receive interest on any deposits or Exercise Price.
  
 (b) Upon receipt of an Exercise Notice for a cashless exercise pursuant to Section 2(c) of the Warrant (each, a “Cashless Exercise”), the Company will promptly calculate and transmit to the Warrant Agent the number of Warrant Shares issuable in connection with such Cashless Exercise and deliver a copy of the Exercise Notice to the Warrant Agent, which shall issue such number of Warrant Shares in connection with such Cashless Exercise.
  
 (c) Upon the Warrant Agent’s receipt, at or prior to the Close of Business on the Termination Date set forth in a Warrant, of the executed Exercise Notice, accompanied by payment of the Exercise Price pursuant to Section 2(a) of the Warrant, the shares to be purchased (other than in the case of a Cashless Exercise), an amount equal to any applicable tax, governmental charge or expense reimbursement referred to in Section 6 in cash, or by certified check or bank draft payable to the order of the Company and, in the case of an exercise of a Warrant in the form of a Warrant Certificate for all of the Warrant Shares represented thereby, the Warrant Certificate, the Warrant Agent shall cause the Warrant Shares underlying such Warrant to be delivered to or upon the order of the Holder of such Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery Date. If the Company is then a participant in the DWAC system of the Depositary and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of the Warrant, such obligation shall be solely that of the Company and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a) hereof, the Warrant Agent will not obligated to deliver certificates representing any such Warrant Shares (via DWAC or otherwise) until following receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Warrant Agent.
   
 	 
	
	

	 

 
  
 (d) The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via telephone at the end of each day on which funds for the exercise of any Warrant are received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing.
  
 (e) In case the Holder of any Warrant Certificate exercises fewer than all Warrants evidenced thereby and surrenders such Warrant Certificate in connection with such partial exercise, a new Warrant Certificate evidencing the number of Warrant Shares equivalent to the number of Warrant Shares remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to his duly authorized assigns in accordance with Section 2(d)(ii) of the Warrant, subject to the provisions of Section 6 hereof.
    
 Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled certificates.
  
 Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock or Cash.
  
 (a) This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits thereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).
  
 (b) As of the date hereof and prior to the Offering, the authorized capital stock of the Company consists of (i) 18,750,000 shares of Common Stock, of which the Company has no more than 8,126,524 shares of its Common Stock issued and outstanding or reserved for issuance, and (ii) 6,250,000 shares of preferred stock, par value $0.001 per share, none of which are issued and outstanding. Except as disclosed in the Registration Statement, there are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company any class of capital stock of the Company.
  
 (c) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.
  
 (d) The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Warrants.
  
 (e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.
  
 	 
	
	

	 

 
  
 Section 10. Common Stock Record Date. Each Holder shall be deemed to have become the holder of record for the Warrant Shares pursuant to Section 2(d)(i) of the Warrants.
  
 Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 3 of the Warrant, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.
  
 Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of a Warrant.
  
 Section 13. Fractional Shares of Common Stock.
  
 (a) The Company shall not issue fractions of Warrants or distribute a Global Warrant or Warrant Certificates that evidence fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction either up or down to the nearest whole Warrant.
    
 (b) The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates that evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant.
    
 Section 14. Conditions of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant shall be subject:
  
 	  
	 (a) 
	Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 2 hereto for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of- pocket expenses (including reasonable counsel fees) incurred without gross negligence, bad faith or willful misconduct by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, including the reasonable costs and expenses of defending against any claim of such liability.
	  
	  
	  

	  
	 (b) 
	Agent for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants.
	  
	  
	  

	  
	 (c) 
	Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

 
    
 	 
	
	

	 

 
    
 	  
	 (d) 
	Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.
	  
	  
	  

	  
	 (e) 
	Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Warrant Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to which the Company is a party.
	  
	  
	  

	  
	 (f) 
	No Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.
	  
	  
	  

	  
	 (g) 
	No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the Warrant Certificates (except as to the Warrant Agent's countersignature thereon).
	  
	  
	  

	  
	 (h) 
	No Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant Agent's countersignature thereon), all of which are made solely by the Company.
	  
	  
	  

	  
	 (i) 
	No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrants specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrants against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrants authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrants. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrants or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law.

 
    
 Section 15. Purchase or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Warrants shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrants so countersigned; and in case at that time any of the Warrants shall not have been countersigned, any successor Warrant Agent may countersign such Warrants either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrants shall have the full force provided in the Warrants and in this Agreement.
  
 In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrants shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrants so countersigned; and in case at that time any of the Warrants shall not have been countersigned, the Warrant Agent may countersign such Warrants either in its prior name or in its changed name; and in all such cases such Warrants shall have the full force provided in the Warrants and in this Agreement.
  
 Section 16. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound:
  
 	 
	
	

	 

 
   
 (a) The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.
   
 (b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.
   
 (c) Subject to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct, or for a breach by it of this Agreement.
   
 (d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrants (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.
   
 (e) The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or conditioncontained in this Agreement or in any Warrant; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable.
   
 (f) Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by any party of the provisions of this Agreement.
   
 (g) The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer or Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith or willful misconduct.
   
 (h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.
   
 (i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.
  
 	 
	
	

	 

 
     
 Section 17. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing sent to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.
  
 Section 18. Issuance of New Warrants. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue a new Global Warrant or Warrant Certificates, if any, evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the Global Warrant or Warrant Certificates, if any, made in accordance with the provisions of this Agreement.
  
 Section 19. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
    
 	  
	 (a) 
	If to the Company, to:
	  
	  
	  

	  
	  
	 Artelo Biosciences, Inc.

	  
	  
	 888 Prospect Street, Suite 210

	  
	  
	 La Jolla, CA 92037

	  
	  
	 Email: gorgas@artelobio.com 

	  
	  
	 Attention: Gregory D. Gorgas

 
       
 	  
	(b)	 If to the Warrant Agent, to:

	  
	  
	  

	  
	  
	 American Stock Transfer & Trust Company, LLC 

	  
	  
	6201 15th Avenue
	  
	  
	Brooklyn, New York 11219
	  
	  
	 Attention: Frank Skeen

 
     
 For any notice delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.
  
 (c) If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a
  
 Holder of any Warrant Certificate, for a Global Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.
   
 	 
	
	

	 

 
   
 Section 20. Supplements and Amendments.
  
 (a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Warrant Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Warrants Certificates in any material respect.
    
 (b) In addition to the foregoing, with the consent of Holders of Warrants, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the Holders of the Warrant Certificates; provided, however, that no modification of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or reducing the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding warrant certificate affected thereby. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section 20.
   
 Section 21. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.
  
 Section 22. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.
  
 Section 23. Governing Law. This Agreement and each Warrant issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflicts of law principles thereof.
  
 Section 24. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
  
 Section 25. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
  
 Section 26. Information. The Company agrees to promptly provide to the Holders of the Warrants any information it provides to all holders of the Common Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities and Exchange Commission.
  
 Section 27. Force Majeure. Notwithstanding anything to the contrary contained herein, Warrant Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest, it being understood that the Warrant Agent shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
   
 	 
	
	

	 

 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
  
 	 	ARTELO BIOSCIENCES, INC.	
	 	 	 	 
	Date	By:	/s/ Gregory D. Gorgas	
	  
	 Name: 
	Gregory D. Gorgas	 
	 	Title: 	Chief Executive Officer and President	 
	  
	  
	  
	  

	  
	 AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
	  

	  
	  
	  
	  

	  
	 By: 
	 /s/ Michael Legregin
	  

	  
	 Name:
	 Michael Legregin
	  

	  
	 Title:
	 Senior Vice President
	  

 
   
 [Signature Page to Warrant Agency Agreement]
  
 	 
	
	

	 

 
  
 Annex A: Form of Warrant Certificate Request Notice
  
 WARRANT CERTIFICATE REQUEST NOTICE
  
 To: American Stock Transfer & Trust Company, LLC as Warrant Agent for Artelo Biosciences, Inc. (the “Company”)
  
 The undersigned Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:
  
 	 1. 
	Name of Holder of Warrants in form of Global Warrants: _________________________
	  
	  

	 2. 
	Name of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants): _________________________
	  
	  

	 3. 
	Number of Warrants in name of Holder in form of Global Warrants: ______________________
	  
	  

	 4. 
	Number of Warrants for which Warrant Certificate shall be issued: ______________________
	  
	  

	 5. 
	Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if any: _____________________
	  
	  

	 6.
	 Warrant Certificate shall be delivered to the following address:

	  
	  

	 ___________________________

	  

	 ___________________________

	  

	 ___________________________

	  

	 ___________________________

 
     
 The undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.
  
 [SIGNATURE OF HOLDER]
   
 Name of Investing Entity: ___________________________________________________________
   
 Signature of Authorized Signatory of Investing Entity: _______________________________
   
 Name of Authorized Signatory: ________________________________________________
   
 Title of Authorized Signatory: ________________________________________________
   
 Date: _______________________________________________________
   
 	 
	
	

	 

 
  
 Exhibit 1: Form of Warrant
  
  
  
  
   
 	 
	
	

	 

 
   
 COMMON STOCK PURCHASE WARRANT 
  
 ARTELO BIOSCIENCES, INC.
    
 Warrant Shares: [●]
  
 CUSIP: [●]
 ISIN: [●]
  
 THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CEDE & CO. or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Charter Amendment Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on October [●], 2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Artelo Biosciences, Inc., a Nevada corporation (the “Company”), up to [●] shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s common stock (“Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.
  
 Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant,the following terms have the meanings indicated in this Section 1:
  
 “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.
  
 “Amendment” means an amendment to the articles of incorporation of the Company increasing the number of authorized shares of the Company’s common stock to 250,000,000 and the Company’s preferred stock to 25,000,000.
  
 “Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
  
 	 
	
	

	 

 
    
 “Board of Directors” means the board of directors of the Company.
  
 “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
  
 “Charter Amendment Approval” means approval of the Amendment by the shareholders of the Company.
  
 “Charter Amendment Date” means, subject to the Charter Amendment Approval, the date on which the Amendment is filed and accepted with the State of Nevada.
  
 “Commission” means the United States Securities and Exchange Commission. 
  
 “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, 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 Stock.
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
  
 “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.
  
 “Registration Statement” means the Company’s registration statement on Form S- 1 (File No. 333-249083).
  
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
  
 	 
	
	

	 

 
   
 “Trading Day” means a day on which the Common Stock is traded on a Trading Market.
  
 “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
  
 “Transfer Agent” means American Stock Transfer and Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, Brooklyn, New York 11219, and any successor transfer agent of the Company.
  
 “Underwriting Agreement” means the underwriting agreement, dated as of October [●], 2020, by and between the Company and Ladenburg Thalmann & Co. Inc. as representative of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with its terms.
  
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
  
 “Warrant Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.
  
 “Warrant Agent” means the Transfer Agent and any successor warrant agent of the Company.
  
 “Warrants” means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
  
 	 
	
	

	 

 
    
 Section 2. Exercise.
  
 a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company or Warrant Agent (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company or Warrant Agent for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company or Warrant Agent shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
  
 Notwithstanding the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book- entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.
  
 b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $[●], subject to adjustment hereunder (the “Exercise Price”).
    
 c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
   
 	 
	
	

	 

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

	  
	  
	  

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

	  
		  

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

 
   
 In connection with clause (ii) in (A) above, upon written request of the Company, the Holder will provide evidence reasonably acceptable to the Company of the Bid Price of the Common Stock on the principal Trading Market that was reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise.
  
 If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
  
 Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise” and without limiting the liquidated damages provision in Section 2(d)(i) and the buy-in provision in Section 2(d)(iv), in no event will the Company be required to net cash settle a Warrant exercise.
  
 Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
  
 	 
	
	

	 

 
   
 d) Mechanics of Exercise.
    
 	  
	 i. 
	Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares (if freely tradable) purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company or the Warrant Agent of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company or the Warrant Agent of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 
    
 	 
	
	

	 

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

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

	  
	 iv. 
	Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy- In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

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

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

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

 
   
 	 
	
	

	 

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

	 

 
   
 f) Call Provision. Subject to the provisions of Section 2(e) and this Section 2(f),if, days after the Initial Exercise Date, (i) the VWAP for each of 20 consecutive Trading Days (the “Measurement Period,” which 20 consecutive Trading Day period shall not have commenced until after the Initial Exercise Date) exceeds $ (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Initial Exercise Date), (ii) the average daily dollar volume of the Common Stock for such Measurement Period exceeds $500,000 per Trading Day and (iii) the Holder is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, then the Company may, within one (1) Trading Day of the end of any such Measurement Period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for consideration equal to $.001 per Warrant Share. To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day after the date the Call Notice is received by the Holder (such date and time, the “Call Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the number of Warrant Shares subject to such Call Notice prior to reducing the remaining Warrant Shares available for purchase under this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 2(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, and (2) a registration statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use by the Company for the sale of all such Warrant Shares to the Holder, and (3) the Common Stock shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient number of authorized shares of Common Stock for issuance of all Warrant Shares, and (5) the issuance of all Warrant Shares subject to a Call Notice shall not cause a breach of any provision of Section 2(e) herein. The Company’s right to call the Warrants under this Section 2(f) shall be exercised ratably among the Holders based on each Holder’s initial purchase of Warrants.
   
 	 
	
	

	 

 
  
 Section 3. Certain Adjustments.
  
 a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
   
 b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
       
 c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
   
 	 
	
	

	 

 
  
 d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company's control, including not approved by the Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock shall be deemed to have received common stock of the Successor Entity (which entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, (iii) the underlying price per share used in such calculation shall be the greater of (A) the sum of the price per share being offered in cash, if any, plus the per share value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (B) the greater of (x) the last weighted average price of the Common Stock immediately prior to the public announcement of such Fundamental Transaction and (y) the last weighted average price of the Common Stock immediately prior to the consummation of such Fundamental Transaction, (iv) a zero cost of borrow and (v) a 360 day annualization factor. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
   
 	 
	
	

	 

 
   
 e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
  
 f) Notice to Holder.
    
 i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
    
 ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non- public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
   
 	 
	
	

	 

 
  
 g) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
   
 Section 4. Transfer of Warrant.
  
 a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
   
 b) New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
   
 c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner  hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
  
 	 
	
	

	 

 
   
 Section 5. Miscellaneous.
  
 a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.
   
 b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
   
 c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.
   
 d) Authorized Shares.
   
 The Company covenants that, after the Charter Amendment Date and during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
  
 	 
	
	

	 

 
  
 Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
  
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
  
 For the avoidance of doubt, in the event the Company fails to obtain the Charter Amendment Approval, in no event shall any cash be payable to the Holder with respect to this Warrant. For the avoidance of doubt, in the event that the Company does not obtain the Charter Amendment Approval by the Termination Date, this Warrant will expire unexercisable.
  
 e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant 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 Warrant (whether brought against a party hereto or their 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, 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 suit, 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 Warrant 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 either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
    
 	 
	
	

	 

 
   
 f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
   
 g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
   
 h) Notices. Any notices, consents, waivers or other document or communications required or permitted to be given or delivered under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Trading Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. If notice is given by facsimile or email, a copy of such notice shall be dispatched no later than the next business day by first class mail, postage prepaid. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
    
 	  
	 If to the Company:
	  

	  
	  
	  

	  
	  
	 Artelo Biosciences, Inc.
	  

	  
	  
	 888 Prospect Street, Suite 210 
	  

	  
	  
	 La Jolla, CA 92037
	  

 
 	  
	  
	 E-mail:
	  
	 gorgas@artelobio.com 

	  
	  
	 Attention: 
	  
	 Gregory D. Gorgas

	  
	  
	  
	  
	 Chief Executive Officer and President

 
   
 	 
	
	

	 

 
    
 	  
	 With a copy (for informational purposes only) to:
	  

	  
		  

	  
	  
	 Wilson Sonsini Goodrich & Rosati, P.C. 
	  

	  
	  
	 12235 El Camino Real
	  

	  
	  
	 San Diego, CA 92130
	  

 
 	  
	  
	 E-mail:
	  
	mwaters@wsgr.com 
	  
	  
	 Attention: 
	  
	Martin J. Waters
	  
	  
	  
	  
	

 
    
 If to a Holder, to its address, facsimile number or e-mail address set forth herein or on the books and records of the Company.
  
 Or, in each of the above instances, to such other address, facsimile number or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party at least five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iv) above, respectively. A copy of the e-mail transmission containing the time, date and recipient e• mail address shall be rebuttable evidence of receipt by e-mail in accordance with clause (iii) above.
  
 i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
   
 j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
   
 k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
   
 	 
	
	

	 

 
  
 l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.
   
 m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
   
 n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
   
 o) Warrant Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency Agreement, the provisions of this Warrant shall govern and be controlling.
  
  
 ********************
 (Signature Page Follows)
    
 	 
	
	

	 

 
  
 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
  
 	 	ARTELO BIOSCIENCES, INC.	
	 	 	 	 
		By:		
	  
	  
	Name	 
	 	 	Title	 

 
   
 	 
	
	

	 

 
  
 NOTICE OF EXERCISE
   
 TO:     ARTELO BIOSCIENCES, INC.
  
 (1) The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
   
 (2) Payment shall take the form of (check applicable box): ☑ in lawful money of the United States; or
  
  ☐ in lawful money of the United States; or
  
 ☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
   
 (3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
   
 		_________________________________________

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

 
  
 		_________________________________________

 
  
 		_________________________________________

 
   
 [SIGNATURE OF HOLDER]
   
 	 Name of Investing Entity: ________________________________________________________________________________________________

	 Signature of Authorized Signatory of Investing Entity: __________________________________________________________________________

	 Name of Authorized Signatory: ____________________________________________________________________________________________

	 Title of Authorized Signatory: _____________________________________________________________________________________________

	 Date: ________________________________________________________________________________________________________________

 
  
 	 
	
	

	 

 
  
 ASSIGNMENT FORM
   
 (To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
   
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
  
 	 Name:
	  
	  
	  

	  
	  
	 (Please Print)
	  

	 Address:
	  
	  
	  

	  
	  
	 (Please Print)
	  

	 Phone Number: 
	  
		  

	  
	  
	  
	  

	 Email Address:
	  
	  
	  

	  
	  
	  
	  

	 Dated: ________________ , ___________
	  
	  
	  

	  
	  
	  
	  

	 Holder’s Signature: ________________________
	  
	  
	  

	  
	  
	  
	  

	 Holder’s Address: _________________________Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (this “Agreement”), dated as of October 13, 2020, is by and among Aridis Pharmaceuticals, Inc.,
a Delaware corporation with headquarters located at 5941 Optical Ct., San Jose, CA 95138 (the ”Company”), and
the buyers identified on the signature pages hereto (the “Buyers”).

 

RECITALS

 

A.            The
Buyers, severally and not jointly, wish to purchase, and the Company wishes to sell, upon the terms and subject conditions stated
in this Agreement, an aggregate of (i) 1,134,470 shares of Common Stock (as defined herein) (the “Common Shares”)
pursuant to the Company’s shelf registration statement on Form S-3 (Registration Number 333-233601) (the “Registration
Statement”), which has been declared effective in accordance with the Securities Act of 1933, as amended (the “1933
Act”), by the United States Securities and Exchange Commission (the “SEC”) and (ii) a Series A
common stock purchase warrant (the “Series A Warrant”) and Series B common stock purchase warrant
(the “Series B Warrant” and together with the Series A Warrant, the “Warrants”),
in the form attached hereto as Exhibit A  and Exhibit B, respectively, to initially purchase an aggregate
of up to 283,617 shares of Common Stock at an exercise price of $7.43 per share with respect to the Series A Warrants (the
 “Series A Warrant Shares”) and an aggregate of up to 283,617 shares of Common Stock at an exercise price
of $9.00 per share with respect to the Series B Warrants (the “Series B Warrant Shares” and together
with the Series A Warrant Shares, the “Warrant Shares”), in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act of 1933, and Rule 506(b) of Regulation D (“Regulation
D”) as promulgated by the SEC under the 1933 Act.

 

B.            The
Common Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Buyers hereby agree as follows:

 

		1.	PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.

 

(a)            Purchase
of Common Shares and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to the Buyers, and the Buyers agree to purchase from the Company on the Closing Date (as defined
below), (i) 1,134,470 Common Shares and (ii) Warrants to initially acquire an aggregate of up to 567,234 Warrant Shares.

 

(b)            Closing.
The closing (the “Closing”) of the purchase of the Common Shares and the Warrants by the Buyers shall occur
at the offices of Sheppard, Mullin, Richter & Hampton LLP,

 

    -1-

     

    

  

30 Rockefeller Plaza, New York, NY 10012.
The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st)
Business Day (as defined below) on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived
(or such other date as is mutually agreed to by the Company and the Buyers). As used herein “Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by
law to remain closed.

 

(c)            Purchase
Price. The aggregate gross purchase price for the Common Shares, and the Warrants to be purchased by the Buyers hereunder shall
be $7.4925 (the “Purchase Price”).

 

(d)           Form of
Payment; Deliveries. On the Closing Date, (i) the Buyers shall pay the Purchase Price (less the amount withheld pursuant
to Section 4(g)) to the Company for the Common Shares and the Warrants to be issued and sold to the Buyer at the Closing,
by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (ii) the
Company shall (A) cause Philadelphia Stock Transfer, Inc. (together with any subsequent transfer agent, the “Transfer
Agent”) through the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, to
credit such number of Common Shares as set forth on the signature page hereto for each Buyer’s or its respective designee’s
balance account with DTC through its Deposit/Withdrawal at Custodian system and (B) deliver to the Buyers the Warrants pursuant
to which each Buyer shall have the right to initially acquire such number of Warrant Shares as set forth on the signature page hereto,
duly executed on behalf of the Company and registered in the name of each Buyer or its respective designee.

 

		2.	BUYER’S REPRESENTATIONS AND WARRANTIES.

 

Each Buyer represents
and warrants to the Company that, as of the date hereof and as of the Closing Date:

 

(a)           Organization;
Authority. The Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder.

 

(b)           Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and shall constitute
the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with its terms, except as such
enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

    -2-

     

    

 

(c)            No
Public Sale or Distribution of Securities. The Buyer is acquiring the Securities for its own account and not with a view towards,
or for resale in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant
to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, the Buyer does not
agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption
under the 1933 Act. The Buyer is acquiring the Securities hereunder in the ordinary course of its business. The Buyer does not
presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities in violation
of applicable securities laws.

  

(d)           Accredited
Investor Status. At the time the Buyer was offered the Securities, it was, and as of the date hereof it is, an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the 1933 Act.

 

(e)            Experience
of Buyer. The Buyer, 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. The Buyer 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.

 

(f)            Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility
of such Buyer to acquire the Securities.

 

(g)           Information.
The Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer. The Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by the Buyer or its advisors, if any, or its representatives shall modify, amend or affect
the Buyer’s right to rely on the Company’s representations and warranties contained herein 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 transaction contemplated hereby. The Buyer has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

(h)           No
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

    -3-

     

    

 

(i)            Transfer
or Resale. The Buyer understands that except as provided in Section 4(g) hereof: (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned
or transferred unless (A) subsequently registered thereunder, (B) the Buyer shall have delivered to the Company (if requested
by the Company) an opinion of counsel to the Buyer, in a form reasonably acceptable to the Company, to the effect that the Warrant
or the Warrant Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such
registration, or (C) the Buyer provides the Company with reasonable assurance that the Warrant or Warrant Shares can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Warrant or Warrant Shares made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of
the Warrant or Warrant Shares under circumstances in which the seller (or the Person (as defined below) through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor
any other Person is under any obligation to register the Warrant or Warrant Shares under the 1933 Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder.

  

(j)            Certain
Trading Activities. The Buyer represents and warrants to the Company that at no time during the 12 months prior to the date
of this Agreement has any of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever,
directly or indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging transaction,
which establishes a net short position with respect to the Common Stock.

 

(k)           General
Solicitation. The Buyer is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar.

 

(l)            Manipulation
of Price. Since the time that such Buyer was first contacted by the Company or its agent regarding the investment in the Company
contemplated herein, the Buyer has not, and, to the knowledge of the Buyer, no Person acting on its behalf has, directly or indirectly,
(i) taken 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.

 

		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each Buyer that, as of the date hereof and as of the Closing Date:

 

    -4-

     

    

  

(a)           Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company
and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse
Effect (as defined below). As used in this Agreement, “Material Adverse Effect” means any material adverse effect
on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby
or in any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or
therewith or (iii) the authority or ability of the Company to perform any of their respective obligations under any of the
Transaction Documents (as defined below). All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Documents.
The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear
of any Liens, 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. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (A) owns any of the outstanding capital stock or holds any
equity or similar interest of such Person or (B) controls or operates all or any part of the business, operations or administration
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary”.

 

(b)           Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the offer and sale of the Common Shares and
the offer and sale of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of
the Warrant) have been duly authorized by the Company’s board of directors and (other than (i) the filing with the SEC
of the prospectus supplement relating to the offer and sale of the Common Shares pursuant to Rule 424(b) under the 1933
Act (the “Prospectus Supplement”) supplementing the base prospectus forming part of the Registration Statement
(the “Prospectus”), (ii) the filing of a Form D with the SEC relating to the offer and sale of the
Warrants and Warrant Shares pursuant to Regulation D, (iii) the filing of a Notice of Additional Listing with The Nasdaq Capital
Market (the “Principal Market”) and (iv) any other filings as may be required by any state securities authorities)
no further filing, consent or authorization is required by the Company, its board of directors or its stockholders or other governing
body. This Agreement has been, and the other Transaction Documents will be prior to the Closing, duly executed and delivered by
the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state
securities law. “Transaction Documents” means, collectively, this Agreement and the Warrants and each of the
other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated
hereby and thereby, as may be amended from time to time.

 

    -5-

     

    

  

(c)           Issuance
of Securities; Registration Statement. The issuance of the Common Shares and the Warrants are duly authorized and, upon issuance
and payment in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and
free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal,
encumbrances, security interests and other encumbrances (collectively “Liens”) with respect to the issuance
thereof. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 100% of the maximum
number of shares of Common Stock issuable upon the exercise of the Warrants (without taking into account any limitations on the
exercise of the Warrants set forth in the Warrants). Upon exercise in accordance with the terms of the Warrants, the Warrant Shares,
when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with
respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Upon receipt
of the Common Shares and the Warrants at the Closing and upon receipt of Warrant Shares upon exercise of the Warrants, respectively,
the Buyer will have good and marketable title to such Common Shares, Warrants, and Warrant Shares, respectively. Subject to the
accuracy of the representations and warranties of the Buyer in this Agreement, the offer and sale of the Warrants and Warrant Shares
to the Buyer under this Agreement and the Warrant, as applicable, are exempt from registration under the 1933 Act under Section 4(a)(2) of
the 1933 Act and Rule 506(b) of Regulation D. The offer and sale of all of the Common Shares to the Buyer under this
Agreement is registered under the 1933 Act pursuant to the Registration Statement, and all of the Common Shares are freely transferable
and freely tradable by the Buyer without restriction. The Registration Statement was declared effective under the Securities Act
by the SEC on September 5, 2019, and any post-effective amendment thereto has also been declared effective by the SEC under
the 1933 Act. The Company has not received from the SEC any notice pursuant to Rule 401(g)(1) under the 1933 Act objecting
to the use of the shelf registration statement form. No stop order suspending the effectiveness of the Registration Statement or
any related registration statement filed by the Company with the SEC under Rule 462(b) under the 1933 Act is in effect
and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or
threatened by the SEC. At the time of (i) the initial filing of the Registration Statement with the SEC and the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus),
the Company met the then applicable requirements for use of Form S-3 under the 1933 Act. The Company and the offer, issuance
and sale of the Common Shares to the Buyer hereunder meet the requirements for and comply with the applicable conditions
set forth in Form S-3 under the Securities Act, including compliance with General Instructions I.A and I.B.6. of Form S-3.
The Registration Statement and the offer, issuance and sale of the Common Shares meet the requirements of Rule 415(a)(1)(x) under
the 1933 Act and comply in all material respects with said Rule. The Registration Statement is effective
and available for the offer, issuance and sale of all of the Common Shares and the Company has not received any notice that the
SEC has issued or intends to issue a stop-order with respect to the Registration Statement or that the SEC otherwise has suspended
or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in
writing to do so. The “Plan of Distribution” section under the Registration Statement permits the issuance and sale
of the Common Shares hereunder. At the time the Registration Statement and any amendment thereto became effective and on the date
of this Agreement, the Registration Statement and any amendment thereto complied and complies in all material respects with the
requirements of the 1933 Act and did not and does 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. The Prospectus and any amendment
or supplements thereto (including, without limitation the Prospectus Supplement), at the time the Prospectus or any amendment or
supplement thereto was issued and on the date of this Agreement, complied and complies in all material respects with the requirements
of the 1933 Act and did not and does not contain any 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. At the earliest
time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) under the 1933 Act) relating to the Common Shares, the Company was not and is not an “Ineligible
Issuer” (as defined in Rule 405 under the 1933 Act). The Company has not distributed any offering material in connection
with the offer or sale of the Common Shares, other than the Registration Statement, the Prospectus and the Prospectus Supplement.

 

    -6-

     

    

  

(d)           No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the offer and sale of the Common Shares,
the offer and sale of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of
the Warrant, respectively) will not (i) result in a violation of the Certificate of Incorporation (as defined below) (including,
without limitation, any certificate of designation contained therein), Bylaws (as defined below), or the certificate of incorporation,
certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of any of
the Company’s Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment
or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations
of the Principal Market and including all applicable foreign, federal and state laws, rules and regulations) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or
affected.

  

(e)           Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than (i) the filing with the SEC of the Prospectus Supplement relating to the offer, issuance and
sale of the Common Shares to the Buyer, (ii) the filing with the SEC of a Form D relating to the offer, issuance and
sale of the Warrants and Warrant Shares to the Buyer pursuant to Regulation D, (iii) the filing of a Notice of Additional
Listing with the Principal Market and (iv) any other filings as may be required by any state securities authorities), any
Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute,
deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date,
and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or
any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction
Documents. The Company is not currently in violation of the requirements of the Principal Market and has no knowledge of any facts
or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental
Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature,
federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization
or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned
or controlled by a government or a public international organization or any of the foregoing.

 

(f)            Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that the Buyer is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner”
of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further
acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice
given by the Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the
Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation
by the Company and its representatives.

 

    -7-

     

    

 

(g)           No
General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer, issuance and sale of the Warrants and Warrant Shares. The Company shall be responsible
for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions relating to or arising
out of the transactions contemplated by the Transaction Documents. The Company shall pay, and hold the Buyer harmless against,
any liability, loss or expense (including, without limitation, attorney's fees and out-of-pocket expenses) arising in connection
with any such claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection
with the offer and sale of any of the Securities contemplated by the Transaction Documents.

 

(h)           No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on 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 the issuance of any of the Securities to require approval of stockholders of the Company under any applicable
stockholder approval laws, rules or regulations, including, without limitation, under the rules of any exchange or automated
quotation system on which any securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries
or any of their affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers, issuances or sales
of any security (including, without limitation, the offer, issuance and sale of the Common Shares to the Buyer hereunder) or solicited
any offers to buy any security (including, without limitation, any of the Common Shares), under circumstances that would require
registration of the offer, issuance or sale of the Warrant or any of the Warrant Shares under the 1933 Act, whether through integration
with the offering of the Common Shares to the Buyer hereunder pursuant to the Registration Statement, any prior offering of securities
of the Company or otherwise.

 

(i)            Dilutive
Effect. The Company understands and acknowledges that the number of Warrant Shares will increase in certain circumstances.
The Company further acknowledges that its obligation to issue the Warrant Shares upon exercise of the Warrant in accordance with
this Agreement and the Warrant, in each case is absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.

 

(j)            Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti- takeover provision
under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation
or otherwise which is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and the Buyer’s ownership of the Securities. The
Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights
plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control
of the Company or any of its Subsidiaries.

 

    -8-

     

    

  

(k)           SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein
and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred
to as the “SEC Documents”). The Company has delivered or has made available to the Buyer or its representatives
true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, 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.
As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect
as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles
(“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the
aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon
facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued
by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided
for by the Company in its financial statements or otherwise. No other information provided by or on behalf of the Company to the
Buyer which is not included in the SEC Documents (including, without limitation, information in the disclosure schedules to this
Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the
statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not currently
contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of the
independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”),
nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial
Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations
of the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate
any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.

 

    -9-

     

    

 

(l)            Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties,
operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries.
Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company
nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate,
outside of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside
of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant
to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the
Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its
Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l),
 “Insolvent” means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, the present
fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s
and its Subsidiaries’ total Indebtedness (as defined below), the Company and its Subsidiaries are unable to pay their debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the
Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as
such debts mature; and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable
value of the Company’s or such Subsidiary’s (as the case may be) assets is less than the amount required to pay its
respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the
Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its
respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business or
in any transaction, and is not about to engage in any business or in any transaction, for which the Company’s or such Subsidiary’s
remaining assets constitute unreasonably small capital with which to conduct the business in which it is engaged as such business
is now conducted and is proposed to be conducted.

  

(m)           No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that
(i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1
filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced,
(ii) could have a material adverse effect on the Buyer’s investment hereunder or (iii) could have a Material Adverse
Effect.

 

    -10-

     

    

 

(n)           Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company, or any organizational charter, certificate of formation, memorandum of association, articles
of association, certificate of incorporation or bylaws of any of the Subsidiaries. Neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or
any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the
foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse
Effect. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company
nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any
of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to
have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition
of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently
conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to
have a Material Adverse Effect on the Company or any of its Subsidiaries.

  

(o)           Foreign
Corrupt Practices. Neither the Company, any of its Subsidiaries or to the knowledge of the Company, any director, officer,
agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company
Affiliate”) have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable
anti-bribery or anti- corruption laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment
of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any
other person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate
for political office (individually and collectively, a “Government Official”) or to any person under circumstances
where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would
be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:

 

(i)            (A) influencing
any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to do
or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such
Government Official to influence or affect any act or decision of any Governmental Entity, or

 

(ii)           assisting
the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its Subsidiaries.

 

(p)           Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance in all material respects with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.

 

    -11-

     

    

 

(q)           Transactions
With Affiliates. Except as disclosed in the SEC Documents, no current or former employee, partner, director, officer or stockholder
(direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate of
any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently, or has
ever been, (i) a party to any material transaction with the Company or its Subsidiaries (including any contract, agreement
or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring
payments to, any such director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for
ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct
or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor, supplier
or customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common
stock of a company whose securities are traded on or quoted through an Eligible Market (as defined below)), nor does any such Person
receive income from any source other than the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries
or should properly accrue to the Company or its Subsidiaries. No employee, officer, stockholder or director of the Company or any
of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be,
nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them,
other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf
of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives (including
stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).

  

(r)            Equity
Capitalization.

 

(i)            Definitions:

 

(A)            “Common
Stock” means (x) the Company’s shares of common stock, $0.0001 par value per share, and (y) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common
stock.

 

(B)           “Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.0001 par value per share, the terms of which
may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into
which such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock
(other than a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).

 

(ii)           Authorized
and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 100,000,000
shares of Common Stock, of which, 8,923,374 are issued and outstanding (excluding the Common Shares) and 3,277,300 shares are reserved
for issuance pursuant to Convertible Securities (as defined below) (excluding the Warrant Shares issuable upon exercise of the
Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (B)  60,000,000 shares of Preferred
Stock, 0 of which are issued and outstanding. 0 shares of Common Stock are held in the treasury of the Company.

 

    -12-

     

    

  

(iii)          Valid
Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of
Common Stock that are (A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Warrants)
and (B) that are, as of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of
the 1933 Act and calculated based on the assumption that only officers, directors and holders of at least 10% of the Company’s
issued and outstanding Common Stock are “affiliates” without conceding that any such Persons are “affiliates”
for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the Company’s knowledge, no Person
owns 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption that
all Convertible Securities (as defined below), whether or not presently exercisable or convertible, have been fully exercised or
converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”) contained
therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).

 

(iv)          Existing
Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by
the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of
the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or
capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to
this Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of any or
all of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement.

 

    -13-

     

    

 

(v)          Organizational
Documents. The Company has furnished to the Buyer true, correct and complete copies of the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities
and the material rights of the holders thereof in respect thereto.

  

(s)           Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, except as set forth in the SEC Documents, has any outstanding
debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness
of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii) is
a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) has any financing
statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (iv) is in
violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is a
party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s
officers, has or is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries have any liabilities
or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually
or in the aggregate, do not or could not have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases”
in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice),
(C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments,
(D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired
with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event
of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease,
(G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts
and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable
for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others
of the kinds referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means,
as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental
Entity or any department or agency thereof.

 

    -14-

     

    

 

 

 

 

(t)        Litigation.
There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any court, public
board, other Governmental Entity, self- regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, which is outside of the
ordinary course of business or individually or in the aggregate material to the Company or any of its Subsidiaries. To the Company’s
knowledge, no director, officer or employee of the Company or any of its Subsidiaries has willfully violated 18 U.S.C. §1519
or engaged in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and
to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any
of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries. The SEC has not issued
any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act
or the 1934 Act, including, without limitation, the Registration Statement. After reasonable inquiry of its employees, the Company
is not aware of any fact which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry
or other proceeding. Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity.

 

(u)       Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable 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 at a cost that would not have a Material Adverse Effect.

 

(v)       Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer
(as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries
has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other key employee of
the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement
or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may
be) 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 federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

    -15-

     

    

 

(w)       Title.

 

(i)         Real
Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens
for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated
use of the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

 

(ii)        Fixtures
and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in,
the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used
by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which
they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient
for the conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior
to the Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except
for (a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the
present or anticipated use of the property subject thereto.

 

(x)        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.

 

    -16-

     

    

 

(y)       Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as
now conducted. None of the Company's Intellectual Property Rights have expired or terminated or have been abandoned or are expected
to expire or terminate or are expected to be abandoned, within three years from the date of this Agreement. The Company does not
have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others. There is no
claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened,
against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries
is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings.
The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all
of their Intellectual Property Rights.

 

(z)        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.

 

    -17-

     

    

 

(aa)      [Intentionally
Omitted.]

 

(bb) Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and
all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely 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, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all 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 and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”).

 

(cc) Internal
Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including 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 and liability accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization, (iv) the recorded accountability for assets
and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference and (v) the interactive data in XBRL included or incorporated by references in the Registration
Statement, the Prospectus and the Prospectus Supplement fairly present the information called for in all material respects and
are prepared in accordance with the SEC’s rules and guidelines applicable thereto. The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a- 15(e) under the 1934 Act) that are effective in ensuring
that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management, including its principal
executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding
required disclosure. Except as disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries has received any
notice or correspondence from any accountant, Governmental Entity or other Person relating to any potential material weakness or
significant deficiency in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.

 

    -18-

     

    

 

(dd) Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings
and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

(ee) Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company” as
such terms are defined in the Investment Company Act of 1940, as amended.

 

(ff) Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries 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, (iii) paid
or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or any of
its Subsidiaries or (iv) paid or agreed to pay any Person for research services with respect to any securities of the Company
or any of its Subsidiaries.

 

(gg) U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by the Buyer, shall become, a U.S. real property holding corporation within the meaning of Section 897
of the Code, and the Company and each Subsidiary shall so certify upon the Buyer’s request.

 

(hh) Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to the Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(ii)        Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.

 

    -19-

     

    

 

(jj) Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(kk) Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the Company’s
knowledge, any of the officers, directors, employees, agents or other representatives of the Company or any of its Subsidiaries
or any other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated or associated, has,
directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the
holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving
the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

(ll) Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the
laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
without limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any
regulations contained in 31 CFR, Subtitle B, Chapter V.

 

(mm) Management.
Except as set forth in Schedule 3(mm) hereto, during the past five year period, no current or former officer or director
or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries
has been the subject of:

 

(i)            a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii)            a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the influence);

 

(iii)            any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

    -20-

     

    

 

(1)            Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2)            Engaging
in any particular type of business practice; or

 

(3)            Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv)            any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v)            a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)            a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

(nn) Stock
Option Plans. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable
stock option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock
on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's
stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice
of the Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results
or prospects.

 

(oo) No
Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof,
the Company had discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions,
the Company has no reason to believe that it will need to restate any such financial statements or any part thereof.

 

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(pp) No
Additional Agreements. The Company does not have any agreement or understanding with the Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(qq) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the 1933 Act of any
securities of the Company or any Subsidiary.

 

(rr)     XBRL.
The interactive data in eXtensible Business Reporting Language (“XBRL”) included or incorporated by reference
in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance
with the SEC’s rules and guidelines applicable thereto.

 

(ss) Disclosure.
All disclosure provided to the Buyer regarding the Company and its Subsidiaries, their businesses and the transactions contemplated
hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries 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 the light of the circumstances under which they were made, not misleading. All of the written
information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to the Buyer pursuant to
or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material
respects as of the date on which such information is so provided and will 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 the light of the circumstances under
which they were made, not misleading. The press releases disseminated by the Company during the twelve (12) months preceding the
date of this Agreement, taken as a whole, are true and correct in all material respects. No event or circumstance has occurred
or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities,
prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or
regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly
disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company or any of its Subsidiaries
and made available to the Buyer have been prepared in good faith based upon reasonable assumptions and represented, at the time
each such financial projection or forecast was delivered to the Buyer, the Company’s best estimate of future financial performance
(it being recognized that such financial projections or forecasts are not to be viewed as facts and that the actual results during
the period or periods covered by any such financial projections or forecasts may differ from the projected or forecasted results).
The Company acknowledges and agrees that the Buyer has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 2.

 

(tt) Accountants.
Mayer Hoffman & McCann, P.C. (“MHM”), whose report dated April 8, 2020 relating to the financial
statements of the Company is filed with the SEC as part of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019 filed with the Commission and incorporated by reference into the Registration Statement and the Prospectus,
are and, during the periods covered by their report, were an independent registered public accounting firm within the meaning of
the 1933 Act and the Public Company Accounting Oversight Board (United States).

 

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(uu) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the 1934 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 Stock under the 1934 Act nor has the Company received any notification that the SEC is contemplating terminating such registration.
The Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of
any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in
the foreseeable future. Except as disclosed in the SEC Documents, during the two years prior to the date hereof, (i) the Common
Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended
by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the
Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Common Stock is 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.

 

(vv) Public
Float Calculation. As of the close of trading on the Principal Market on October 12, 2020, the aggregate market value
of the outstanding voting and non-voting common equity (as defined in Rule 405) of the Company held by persons other than
affiliates of the Company (pursuant to Rule 144, those that directly, or indirectly through one or more intermediaries, control,
or are controlled by, or are under common control with, the Company) (the “Non-Affiliate Shares”), was approximately
$59,860,436 (calculated by multiplying (x) the price at which the common equity of the Company was last sold on the Principal
Market October 5, 2020 by (y) the number of Non-Affiliate Shares outstanding on October 12, 2020).

 

(ww) No
Disqualification Events. With respect to the Warrants to be offered, issued and sold hereunder and under the Warrant, respectively
and as applicable, in reliance on Rule 506(b) of Regulation D, 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, any beneficial owner
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 1933 Act) connected with the Company in any capacity at the time of sale (each,
an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications described in
Rule 506(d)(1)(i) to (viii) of Regulation D (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3) of Regulation D. 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) of Regulation D, and has furnished to the Buyer a copy of any disclosures
provided thereunder.

 

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4.            COVENANTS.

 

(a)            Reasonable
Best Efforts. The Buyer shall use its reasonable best efforts to timely satisfy each of the covenants hereunder and conditions
to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its reasonable best efforts to timely
satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b)            Form D
and Blue Sky. The Company agrees to file with the SEC a Form D with respect to the Warrants as required under Regulation
D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take
such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities
for sale to the Buyer at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action
so taken to the Buyer on or prior to the Closing Date. The Company shall make any filings and reports relating to the offer and
sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following
the Closing Date.

 

(c)            Reporting
Status. Until the earlier of (i) the date on which the Buyer shall have sold all of the Securities and (ii) none
of the Warrants remain outstanding (the “Reporting Period”), the Company shall timely file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file
reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise
permit such termination.

 

(d)            Use
of Proceeds. The Company will use the proceeds from the sale of the Securities as described in the Prospectus Supplement, but
not, directly or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company
or any of its Subsidiaries, except for any repayment of the Company’s Payroll Protection Program loan, if necessary, (ii) the
redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding
litigation.

 

(e)            Financial
Information. The Company agrees to send the following to the Buyer during the Reporting Period (i) unless the following
are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day
after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q,
any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow
statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than on
Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through
EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the
release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless
the following are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.

 

(f)            Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying Securities
(as defined below) upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is
then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing
or designation for quotation (as the case may be) of all Underlying Securities on such national securities exchange or automated
quotation system. The Company shall maintain the Common Stock’s listing or authorization for quotation (as the case may be)
on the Principal Market, The New York Stock Exchange, the NYSE American, The Nasdaq Global Market or The Nasdaq Global Select Market
(each, an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall take any action which could
be reasonably expected to result in the delisting or suspension of the Common Stock (including, without limitation, the Underlying
Securities) on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under
this Section 4(f). “Underlying Securities” means the (i) the Common Shares and (ii) Warrant Shares
issuable upon exercise of the Warrant and (iv) any capital stock of the Company issued or issuable with respect to the Common
Shares, the Warrant, or the Warrant Shares, including, without limitation, (1) as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the shares
of Common Stock are converted or exchanged and shares of capital stock of a Successor Entity (as defined in the Warrants) into
which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations on exercise of the
Warrants.

 

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(g)            Fees.
The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees,
DTC fees or broker’s commissions (other than for Persons engaged by the Buyer) relating to or arising out of the transactions
contemplated by the Transaction Documents. The Company shall pay, and hold the Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorneys’ fees and out-of- pocket expenses) arising in connection with any claim
relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear
its own expenses in connection with the sale of the Securities to the Buyer.

 

(h)            Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by the Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees
to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of
the Securities to such pledgee by the Buyer.

 

(i)            Intentionally
omitted.

 

(j)            Disclosure
of Transactions and Other Material Information.

 

(i)            Disclosure
of Transaction. The Company shall, on or before 9:00 a.m., New York time, on the (i) first (1st) Business Day after the
date of this Agreement, issue a press release (the “Press Release”) reasonably acceptable to the Buyers disclosing
all the material terms of the transactions contemplated by the Transaction Documents and (ii) the second (2nd)
Business Day after the date of this Agreement file with the SEC a Current Report on Form 8-K reasonably acceptable to the
Buyers describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by
the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules
to this Agreement) and the form of the Warrant) (including all attachments, the “8- K Filing”), and file with
the SEC the Prospectus Supplement pursuant to Rule 424(b) under the 1933 Act specifically relating to the transactions
contemplated by, and describing the material terms and conditions of, the Transaction Documents, containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430B under the Securities Act, and
disclosing all information relating to the transactions contemplated hereby required to be disclosed in the Registration Statement
and the Prospectus as of the date of the Prospectus Supplement, including, without limitation, information required to be disclosed
in the section captioned “Plan of Distribution” in the Prospectus. The Company shall permit the Buyers to review and
comment upon the Press Release, the Current Report and the Prospectus Supplement within a reasonable time prior to their filing
with the SEC, the Company shall give reasonable consideration to all such comments, and the Company shall not issue the Press Release
or file the Current Report or the Prospectus Supplement with the SEC in a form to which either Buyer reasonably objects. Each Buyer
shall furnish to the Company such information regarding itself, the Securities beneficially owned by it and the intended method
of distribution thereof, including any arrangement between each Buyer and any other Person relating to the sale or distribution
of the Securities, as shall be reasonably requested by the Company in connection with the preparation and issuance of the Press
Release and the preparation and filing of the Current Report and the Prospectus Supplement, and shall otherwise cooperate with
the Company as reasonably requested by the Company in connection with the preparation and issuance of the Press Release and the
preparation and filing of the Current Report and the Prospectus Supplement with the SEC. From and after the issuance of the Press
Release, the Company shall have disclosed all material, non- public information (if any) provided to any of the Buyer 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 the 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, affiliates, employees or agents, on the one hand, and any
of the Buyer or any of their affiliates, on the other hand, shall terminate.

 

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(ii)            Limitations
on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide the Buyers with any material, non-public information regarding the Company
or any of its Subsidiaries from and after the issuance of the Press Release without the express prior written consent of the Buyers
(which may be granted or withheld in the Buyer’s sole discretion). To the extent that the Company delivers any material,
non-public information to any of the Buyers without the Buyer's consent, the Company hereby covenants and agrees that such Buyer
shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information.
Subject to the foregoing, neither the Company nor any of its Subsidiaries shall issue any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval
of such Buyer, to issue any press release or other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided
that in the case of clause (i) such Buyer shall be consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of the Buyers (which may be granted or withheld in the
Buyer’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose
the name of the Buyers in any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement
to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees
that the Buyers shall not have (unless expressly agreed to by the Buyers after the date hereof in a written definitive and binding
agreement executed by the Company and the Buyers) any duty of confidentiality with respect to, or a duty not to trade on the basis
of, any material, non-public information regarding the Company or any of its Subsidiaries.

 

    -26-

     

    

 

(d)            Additional
Issuance of Securities. So long as any of the Buyers beneficially owns any Securities, the Company will not, without the prior
written consent of either of the Buyers (which may be granted or withheld in the Buyer’s sole discretion), (i) issue
any other securities that would cause a breach or default under any of the Warrants or (ii) in the nine months following the
date hereof, issue securities using Form S-3 pursuant to General Instruction I.B.6 of Form S-3.

 

(e)            Reservation
of Shares. So long as any portion of any of the Warrants remains outstanding, the Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the sum of the maximum number of Warrant
Shares issuable upon exercise in full of the Warrants, respectively (without regard to any limitations on the exercise of the Warrants
set forth therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the number
of shares of Common Stock reserved pursuant to this Section 4(k) be reduced other than proportionally in connection with
any exercise of the Warrants. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient
to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient
number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet
the Company's obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain
stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor
of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the
Required Reserve Amount.

 

    -27-

     

    

 

(f)            Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.

 

(g)            Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective
businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company
within the meaning of Section 1297 of the Code.

 

(h)            Corporate
Existence. So long as any Buyer beneficially owns any portion of any of the Warrants, the Company shall not be party to any
Fundamental Transaction (as defined in the Warrant) unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Warrants.

 

(i)             Exercise
and Conversion Procedures. The form of Exercise Notice (as defined in the Warrants) included in the Warrants sets forth the
totality of the procedures required of the Buyer in order to exercise the Warrants. No legal opinion or other information or instructions
shall be required of the Buyer to exercise any portion of the Warrants. The Company shall honor exercises of the Warrants and shall
deliver the applicable number of Warrant Shares in accordance with the terms, conditions and time periods set forth in the Warrants.
Without limiting the preceding sentences, no ink-original Exercise Notice shall be required, nor shall any medallion guarantee
(or other type of guarantee or notarization) of any Exercise Notice form be required in order to exercise any portion of any of
the Warrants.

 

(j)             Regulation
M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.

 

(k)            Passive
Foreign Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not
be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the Code.

 

(l)            General
Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Warrants or any Warrant Shares
by means of any form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any
advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over
television or radio; and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general
advertising.

 

(m)           Integration.
None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that
would (i) require registration of the offer, issuance or sale of the Warrant or any of the Warrant Shares under the 1933 Act,
(ii) cause the offer, issuance or sale of the Common Shares to the Buyer hereunder pursuant to the Registration Statement
to be integrated with any other offering of securities of the Company (including, without limitation, the offer, issuance or sale
of the Warrant or any of the Warrant Shares, any prior or other offering of securities of the Company or otherwise), or (iii) cause
the offer, issuance or sale of the Warrant or the Warrant Shares to be integrated with any other offering of securities of the
Company (including, without limitation, the offer, issuance or sale of the Common Shares to the Buyers hereunder pursuant to the
Registration Statement, any prior or other offering of securities of the Company or otherwise).

 

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(n)            Notice
of Disqualification Events. The Company will notify the Buyers 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.

 

(o)            Subsequent
Equity Sales. Beginning on the date hereof, if the Company or any Subsidiary shall enter into a Subsequent Financing (as defined
herein) other than an Exempt Transaction (as defined herein), entitling any person or entity to acquire shares of Common Stock
at an effective price per share less than the Purchase Price (subject to prior adjustment for reverse and forward stock splits
and the like) (the “Discounted Purchase Price,” as further defined below), the Company shall issue to such Buyer
that number of additional Shares equal to (a) the Purchase Price paid by such Buyer at the Closing divided by the Discounted
Purchase Price, less (b) the Shares issued to such Buyer at the Closing pursuant to this Agreement and pursuant to this Section 4(o).
 “Subsequent Financing” means the next sale by the Company of Common Stock or Common Stock Equivalents (or any
combinations of such securities) after the date hereof with gross proceeds to the Company of up to $10,000,000. Any additional
Shares issued pursuant to this section shall, if possible, be registered under the Securities Act at the time of such issuance
The term “Discounted Purchase Price” shall mean the amount actually paid in new cash consideration by third
parties for each share of Common Stock; provided that the Discounted Purchase Price shall be no lower than $5.50 per share. The
sale of Common Stock Equivalents shall be deemed to have occurred at the time of the issuance of the Common Stock Equivalents and
the Discounted Purchase Price covered thereby shall also include the actual exercise or conversion price thereof at the time of
the conversion or exercise (in addition to the consideration per share of Common Stock underlying the Common Stock Equivalents
received by the Company upon such sale or issuance of the Common Stock Equivalents). If shares are issued for a consideration other
than cash, the per share selling price shall be the fair value of such consideration as determined in good faith by the Board of
Directors of the Company. Notwithstanding anything to the contrary herein, this Section 4(o) shall not apply in respect
of an Exempt Issuance. Additionally, prior to any issuance to a Buyer pursuant to this Section 4(o), such Buyer shall have
the right to irrevocably defer such issuances to such Buyer under this Section 4(o), in whole or in part, for continuous periods
of not less than 75 days. The Purchaser’s rights under this Section 4(o) shall terminate upon the Company completing
a Subsequent Financing. “Exempt Transaction” means the issuance of (a) shares of Common Stock or options
to employees, officers, consultants or directors of the Company 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, (b) 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 and (c) shares of Common Stock issued pursuant to the Sales
Agreement dated September 3, 2019 between the Company and Cantor Fitzgerald & Co. (the “Sales Agreement”).

 

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(p)            Sales
Agreement. For ninety (90) days after the date hereof (the “Restricted Period”), without the consent of
a majority in interest of the Buyers who hold a majority of the Common Shares, the Company agrees that it will not sell any shares
of Common Stock pursuant to the Sales Agreement in an amount in excess of $4,000,000 for the forty-five (45) day period beginning
after the date hereof (the ”Initial Period”) and no amount in excess of an additional $3,000,000 for the forty-five
(45) day period beginning after the Initial Period until the end of the Restricted Period. Notwithstanding the foregoing, during
the Restricted Period, the Company will not sell any shares of Common Stock pursuant to the Sales Agreement at a price below the
Purchase Price.

 

5.            REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a)           Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Common Shares, the Warrants in which the Company shall record the name
and address of the Person in whose name the Common Shares and the Warrants have been issued (including the name and address of
each transferee) and the number of Common Shares held by such Person. The Company shall keep the register open and available at
all times during business hours for inspection of the Buyers or its legal representatives.

 

(b)            Registration.
The Company shall use commercially reasonable efforts to file with the SEC a registration statement on Form S-1, S-3 or any
other appropriate form in the sole discretion of the Company (the “Registration Statement”), registering for resale
on a continuous or delayed basis in accordance with Securities Act of 1933, as amended, (the “Securities Act”) Rule 415(a)(i) the
Warrant Shares issued to the Buyers, and the Company shall use its commercially reasonable efforts to cause the Registration Statement
to become effective as promptly as practicable following the date the Registration Statement is initially filed with the SEC. The
Company shall cause the Registration Statement to remain effective through and until such time as the Warrant Shares may be available
for resale by the Buyers pursuant to Rule 144 or its other subsections (or any successor thereto) under the Securities Act.
The Company shall bear the expenses incurred in connection with the filing of the Registration Statement and all reasonable costs
associated with the resale of the Warrant Shares (pursuant to the Registration Statement or otherwise).

 

(c)              Legends.
Certificates and any other instruments evidencing the Common Shares shall not bear any restrictive or other legend. The Buyers
understand that the Warrant and the Warrant Shares are being issued pursuant to an exemption from registration or qualification
under the 1933 Act and applicable state securities laws, and except as set forth below, the Warrant and the Warrant Shares shall
bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

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THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF
REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

 

(d)           Removal
of Legends

 

Certificates evidencing the Warrant
Shares shall not be required to contain the legend set forth in Section 5(c) above or any other legend (i) while
a registration statement covering the resale of such Warrant Shares is effective under the 1933 Act, (ii) following any sale
of such Warrant Shares pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such
Warrant Shares are eligible to be sold, assigned or transferred under Rule 144 (provided that the Buyer provides the Company
with reasonable assurances that such Warrant Shares are eligible for sale, assignment or transfer under Rule 144 which shall
not include an opinion of counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144),
provided that the Buyer provides the Company with an opinion of counsel to the Buyer, in a generally acceptable form, to the effect
that such sale, assignment or transfer of the Warrant Shares may be made without registration under the applicable requirements
of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation,
controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing,
the Company shall no later than two (2) Trading Days following the delivery by the Buyer to the Company or the transfer agent
(with notice to the Company) of a legended certificate representing such Warrant Shares (endorsed or with stock powers attached,
signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with
any other deliveries from the Buyer as may be required above in this Section 5(c), as directed by the Buyer, either: (A) provided
that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program, credit the aggregate
number of Warrant Shares to which the Buyer shall be entitled to the Buyer’s or its designee’s balance account with
DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in
the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the Buyer, a certificate
representing such Warrant Shares that is free from all restrictive and other legends, registered in the name of the Buyer or its
designee (the date by which such credit is so required to be made to the balance account of the Buyer’s or the Buyer’s
nominee with DTC or such certificate is required to be delivered to the Buyer pursuant to the foregoing is referred to herein as
the “Required Delivery Date”).

 

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(e)          Buy-In.
If the Company fails to so properly deliver such unlegended certificates representing the aggregate number of Warrant Shares to
which the Buyer shall be entitled, or so properly credit the aggregate number of Warrant Shares to which the Buyer shall be entitled
to the Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, in each
case by the Required Delivery Date, then, in addition to all other remedies available to the Buyer, (i) the Company shall,
pay to the Buyer, in cash, 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 Warrant Shares are submitted to the Transfer Agent) delivered for removal of the restrictive
legend and subject to Section 5(d), $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 or such credit to such balance account with DTC is made and (ii) if after the Legend Removal Date the Buyer purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Buyer 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 the Buyer anticipated receiving from the Company without any restrictive legend,
then an amount equal to the excess of the Buyer’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 the Buyer 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 the Buyer to the Company of the applicable
Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this Section 5(e).

 

(f)           FAST
Compliance. While any portion of any of the Warrants remains outstanding, the Company shall maintain a transfer agent that
participates in the DTC Fast Automated Securities Transfer Program.

 

6.            CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

 

The obligation of the Company
hereunder to issue and sell the Common Shares and the Warrants to the Buyer at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing the Buyer with prior written notice thereof:

 

(a)           The
Buyer shall have executed this Agreement and delivered the same to the Company.

 

(b)           The
Buyer shall have delivered to the Company the Purchase Price for the Common Shares and the Warrants being purchased by the Buyer
at the Closing by wire transfer of immediately available funds in accordance with the Flow of Funds Letter.

 

(c)            The
representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specific date), and the Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied
with by the Buyer at or prior to the Closing Date.

 

7.            CONDITIONS
TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The obligation of the Buyer hereunder
to purchase the Common Shares and the Warrants at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the
Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(a)           The
Company shall have duly executed and delivered to each Buyer each of the Transaction Documents, and the Company shall have (A) caused
the Transfer Agent to credit an aggregate 1,134,470 Common Shares to the Buyers’ or its designees’ balance account
with DTC through its Deposit/Withdrawal at Custodian system and (B) deliver to the Buyers’ the Warrants (initially for
an aggregate of up to 567,234 Warrant Shares), duly executed on behalf of the Company and registered in the name of the respective
Buyers or its designee.

 

    -32-

     

    

 

(b)        The
Buyers shall have received the opinion of Sheppard, Mullin, Richter and Hampton LLP, the Company’s counsel, dated as of the
Closing Date, in the form reasonably acceptable to the Buyers.

 

(c)         The
Company shall have delivered to the Buyers a certificate evidencing the formation and good standing of the Company and each of
its Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office)
of such jurisdiction of formation as of a date within ten (10) days of the Closing Date.

 

(d)         The
Company shall have delivered to the Buyers a certificate evidencing the Company’s qualification as a foreign corporation
and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business
and is required to so qualify, as of a date within ten (10) days of the Closing Date.

 

(e)         The
Company shall have delivered to the Buyers a certificate, in the form acceptable to the Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the
Company’s board of directors in a form reasonably acceptable to the Buyers, (ii) the Certificate of Incorporation of
the Company and (iii) the Bylaws of the Company, each as in effect at the Closing.

 

(f)           Each
and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall
be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with
the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the
Closing Date. The Buyers shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated
as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyers in the
form acceptable to the Buyer.

 

(g)          The
Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not
have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC
or the Principal Market or (II) by falling below the minimum maintenance requirements of the Principal Market.

 

(h)           The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.

 

(i)             No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(j)             Since
the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.

 

(k)            The
Company shall have notified the Principal Market to list or designate for quotation (as the case may be) the Common Shares and
the Warrant Shares.

 

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(l)          The
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire transfer instructions of the Company (the “Flow of Funds Letter”).

 

(m)         From
the date hereof to the Closing Date, (i) trading in the Common Stock shall not have been suspended by the SEC or the Principal
Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), and, (ii) 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 the Principal 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 the Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

(n)           The
Registration Statement shall be effective and available for the issuance and sale to the Buyer s hereunder of an aggregate 1,085,884
Common Shares.

 

(o)           The
Company shall have delivered to the Buyers the Prospectus and the Prospectus Supplement (which may be delivered in accordance with
Rule 172 under the 1933 Act).

 

(p)           The
Company and its Subsidiaries shall have delivered to the Buyers such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as the Buyers or its counsel may reasonably request.

 

8.            TERMINATION.

 

In the event that the Closing
shall not have occurred within five (5) days of the date hereof, then the Buyers shall have the right to terminate its obligations
under this Agreement at any time on or after the close of business on such date without liability of the Buyers to the Company;
provided, however, the right to terminate this Agreement under this Section 8 shall not be available to the Buyers if the
failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of the Buyer’s
breach of this Agreement, provided further that no such termination shall affect any obligation of the Company under this Agreement
to reimburse the Buyers for the expenses described in Section 4(g) above. Nothing contained in this Section 8 shall
be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or
the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations
under this Agreement or the other Transaction Documents.

 

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	9.		MISCELLANEOUS.

 

 (a)          Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company 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 under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such 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 manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Buyer or to enforce a judgment or other court ruling in favor of the Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

 (b)           Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page 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 signature page were an original thereof.

 

 (c)            Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

 

 (d)           Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyer, under the Transaction Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to the Buyer, or collection by the Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of the Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of the Buyer, the amount of interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to the Buyer under the Transaction Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or received by the Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

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 (e)          Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company, its Subsidiaries, their affiliates and Persons acting on their behalf, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any provision of any other agreements the Buyer has entered into with, or any instruments the Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by the Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company, or any rights of or benefits to the Buyer or any other Person, in any other agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and the Buyer, or in any instruments the Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof, and all such binding provisions contained in all such other agreements and instruments shall continue in full force and effect. Except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. Provisions of this Agreement may be amended only with the written consent of the Company and the Buyer, and any amendment of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding upon the Buyer and the Company. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on the waiving party. The Company has not, directly or indirectly, made any agreements with the Buyer relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, the Buyer has not made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement for the Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (i) no due diligence or other investigation or inquiry conducted by the Buyer, any of its advisors or any of its representatives shall affect the Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document, (ii) nothing contained in the Registration Statement, the Prospectus or the Prospectus Supplement shall affect the Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document and (iii) unless a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect the Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document.

 

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 (f)           Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or electronic mail; or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

 

If to the Company:

 

Aridis Pharmaceuticals, Inc.

5941 Optical Ct., San Jose,
CA 95138

Telephone: (408) 385-1742

Facsimile: (408) 960-3822 Attention:
Chief Executive Officer E-Mail: truongv@aridispharma.com

 

With a copy (for informational
purposes only) to:

 

Sheppard, Mullin, Richter &
Hampton LLP 30 Rockefeller Plaza, 38th Floor

New York, NY 10112 Telephone:
(212) 653-8700

Facsimile: (212) 653-8701
Attention: Jeffrey J. Fessler, Esq.

E-Mail: jfessler@sheppardmullin.com

 

If to the Transfer Agent:

 

Philadelphia Stock Transfer, Inc.
2320 Haverford Rd., Suite 230

Ardmore, PA 19003

Telephone: (484) 416-3124

Facsimile: (484) 416-3597
Attention: Bob Winterle

E-Mail: bwinterle@philadelphiastocktransfer.com
If to the Buyer:

 

or to such other address, e-mail
address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the
sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile
transmission, an image of the first page of such transmission or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause
(i), (ii) or (iii) above, respectively.

 

 (g)           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any subsequent purchasers of any of the Warrants (but excluding any purchasers of Underlying Securities, unless pursuant to a written assignment by the Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyers, including, without limitation, by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Warrants). The Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to be the Buyer hereunder with respect to such assigned rights.

 

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 (h)          No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in Section 9(k).

 

 (i)           Survival. The representations, warranties, agreements and covenants shall survive the Closing.

 

 (j)           Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

	(k)	Indemnification.

 

(i)            In
consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities and in addition to all
of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless the Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation
of the Company contained in any of the Transaction Documents, (iii) any cause of action, suit, proceeding or claim brought
or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company
or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery,
performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) the status of the Buyer or holder
of the Securities either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or
as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for
injunctive or other equitable relief), or (D) with respect to any registration statement of the Company providing for the
resale by the Buyer of any Warrant Shares issued and issuable upon exercise of the Warrants, respectively, filed by the Company
with the SEC, (1) any untrue or alleged untrue statement of a material fact contained in such registration statement, any
prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading,
except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding
the Buyer furnished in writing to the Company by the Buyer expressly for use therein or (2) any violation or alleged violation
by the Company of the 1933 Act, the 1934 Act or any state securities law, or any rule or regulation thereunder in connection
therewith. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law.

 

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(ii)          Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof
is to be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof,
and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company
has agreed in writing to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense of such
Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the
named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company,
and such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were
to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects
to employ separate counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Company), provided further, that in the case of clause (C) above the Company
shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees.
The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or
Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which
relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of
any action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably
withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to
entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability
or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Company
within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee
under this Section 9(k), except to the extent that the Company is materially and adversely prejudiced in its ability to defend
such action.

 

(iii)           The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.

 

(iv)            The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against
the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.

 

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 (l)           Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement. It is expressly understood and agreed that for all purposes of this Agreement, and without implication that the contrary would otherwise be true, neither transactions nor purchases nor sales shall include the location and/or reservation of borrowable shares of Common Stock.

 

 (m)           Remedies. The Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of any Securities, shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyer. The Company therefore agrees that the Buyer shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).

 

 (n)             Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever the Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary does not timely perform its related obligations within the periods therein provided, then the Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), 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 the Warrant, the Buyer shall be required to return any Warrant Shares, respectively, subject to any such rescinded exercise notice concurrently with the return to the Buyer of the aggregate exercise price paid to the Company for such Warrant Shares and the restoration of the Buyer’s right to acquire such Warrant Shares pursuant to such Warrant (including, issuance of a replacement warrant certificate evidencing such restored right), respectively.

 

(o)             Payment Set Aside; Currency. To the extent that
the Company makes a payment or payments to the Buyer hereunder or pursuant to any of the other Transaction Documents or the
Buyer enforce or exercise their rights hereunder or 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, foreign, 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. Unless otherwise expressly indicated, all dollar amounts referred to in
this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated
in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate
on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted
into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the
relevant date of calculation.

 

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(p)          Judgment
Currency. If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any
other Transaction Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other
currency being hereinafter in this Section 9(p) referred to as the “Judgment Currency”) an amount
due in US Dollars under this Agreement, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:

 

 (1)          the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction that will give effect to such conversion being made on such date: or

 

 (2)           the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 9(p)(i)(1) being hereinafter referred to as the “Judgment Conversion Date”).

 

(i)          If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(1) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

(ii)          Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.

 

 (q)         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.

 

[signature pages follow]

 

    -41-

     

    

 

IN WITNESS WHEREOF, this
Securities Purchase Agreement is executed as of the Effective Date.

 

	Number of shares of Common Stock Subscribed For:	 	     
	 	 	 
	Number of Warrants Subscribed For:	 	     
	 	 	 
	Total Purchase Price:	 	     
	 	 	 
	Signature of Authorized Signatory:	 	       
	 	 	 
	Address of Subscriber:	 	         
	 	 	 
	 	 	 
	 	 	 
	Subscriber’s tax ID#:	 	   
	 	 	 
	Subscriber’s Email Address:	 	   
	 	 
	ACCEPTED BY:	 	 
	 	 
	ARIDIS PHARMACEUTICALS, INC., a Delaware corporation	 	 
	 	 
	Signature of Authorized Signatory:	 	 	 
	 	 
	Name of Authorized Signatory:	 	 	 
	 	 	 
	Title of Authorized Signatory:	 		 

 

    -42-

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