Document:

Exhibit 10.1

 

EXECUTION COPY

 

SUBSCRIPTION AGREEMENT

 

Arch Therapeutics, Inc.

235 Walnut St., Suite 6

Framingham, MA 01702

 

Ladies and Gentlemen:

 

1.          Subscription.
The undersigned (the “Purchaser”), intending to be legally bound, hereby irrevocably agrees to purchase from
Arch Therapeutics, Inc., a Nevada corporation (the “Company”), the number of units (“Units”)
set forth on the signature page hereof (the “Subscribed Units”) at a purchase price of $0.36 per Unit. Each
Unit consists of (i) one share (“Shares”) of common stock, par value $0.001 per share, of the Company (the “Common
Stock”); and (ii) a Series E Warrant (“Series E Warrant”), in the form of Exhibit A
hereto, to purchase 0.75 shares of Common Stock at a per share exercise price equal to the last closing trade price price of the
Company’s Common Stock on the Principal Market (as defined herein) on the Closing Date (the “Exercise Price”)
.. The Series E Warrants are hereinafter referred to as the “Warrants” and the shares of Common Stock issuable
upon the exercise of the Warrants are hereinafter collectively referred to as the “Warrant Shares.” The Shares,
the Warrants and the Warrant Shares are hereinafter collectively referred to as the “Securities”.

 

2.          The
Offering. The Company is conducting a private placement of Units to accredited investors (the “Offering”).
This Subscription Agreement (this “Subscription Agreement”) is one in a series of similar subscription agreements
expected to be entered into pursuant to the Offering. The Company reserves the right to (A) terminate this Offering at any time
and for any reason without prior notice; (B) consummate multiple closings in connection with the Offering; and (C) change the terms
of the subscription agreement governing the subscription of Units by other investors from the terms of this Subscription Agreement;
provided, however, that no subscription agreement that the Company enters into with any other investor in connection with
the Offering shall (i) be at a lower per Unit purchase price; (ii) have a lower Exercise Price for the Warrant Shares; (iii) provide
more Warrant Shares for each Unit purchased; or (iv) provide any other terms to such other investor that are more favorable than
those granted to Purchaser herein. For the avoidance of doubt, the parties agree and acknowledge that with respect to any other
subscription agreement that the Company enters into with any other investor in connection with the Offering, (a) the Company shall
have the absolute right to alter the closing conditions set forth in such other subscription agreement; and (b) no such alteration
shall be deemed by the Purchaser as providing such other investor terms that are more favorable than those granted to Purchaser
herein.

 

3.          Placement
Agent. The Company has engaged Maxim Group LLC (“Maxim”) as its exclusive placement agent in connection
with the Offering, and in consideration for the services provided by it, Maxim will be entitled to receive cash fees equal to 5%
of the gross proceeds received by the Company at each Closing during the Offering, as well as reimbursement for all reasonable
expenses incurred by it in connection with its engagement.

 

     

     

    

  

4.          Deliveries
and Payment. Simultaneously with the execution hereof, the Purchaser shall deliver to the Company (i) a completed and executed
signature page to this Subscription Agreement; (ii) a completed Accredited Investor Certification in the form attached hereto as
Exhibit B; and (iii) a completed Investor Questionnaire in the form attached hereto as Exhibit C.

 

5.          Acceptance
of Subscription. The Purchaser understands and agrees that the Company, in its sole discretion, reserves the right to accept
or reject this subscription or any other subscription for Units, in whole or in part, notwithstanding prior receipt by the Purchaser
of notice of acceptance of this subscription. The Company shall have no obligation hereunder until the Company executes and delivers
to the Purchaser an executed copy of this Subscription Agreement. If this subscription is rejected in whole or the Offering is
terminated, all funds received from the Purchaser, if any, will be returned without interest or offset, and this Subscription Agreement
shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds received by the Company
with respect to the rejected portion of this subscription, if any, will be returned without interest or offset, and this Subscription
Agreement will continue in full force and effect to the extent this subscription was accepted.

 

6.          Closing.
The Shares and the Series E Warrants will be issued and sold by the Company to the Purchaser at a closing (the “Closing”)
that shall occur at the offices of Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020 at 10:00 a.m.
New York time, on a date no later than the 3rd Business Day following the date on which the conditions to the Closing
set forth in Section 7 below are satisfied or waived (or such later date as is mutually agreed to by the Company and each
Purchaser)(such date, the “Closing Date”). As used herein “Business Day” means any 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.

 

7.          Closing
Conditions. The obligation of the Company hereunder to issue and sell the Shares and the Series E Warrants to Purchaser and
the obligation of Purchaser to purchase such Shares and the Series E Warrants is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that any condition may be waived by the intended beneficiary
of such condition by providing the other party prior written notice of such wavier:

 

(a)          The
representations and warranties of each party hereto 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 date), and each such party hereto shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Subscription Agreement to be performed,
satisfied or complied with by such party at or prior to the Closing Date; and

 

(b)          The
Company, the Purchaser and each other Purchaser in the Offering shall have duly executed and delivered counterparts to the Registration
Rights Agreement.

 

8.          Certificates;
Legends. Within ten (10) calendar days of the Closing, the Company shall deliver to the Purchaser a stock certificate representing
the shares of Common Stock included in the Subscribed Units purchased on the Closing Date and the Warrants included in the Subscribed
Units purchased on the Closing Date, in each case bearing the following legend referring to the fact that the Securities were sold
in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”):

 

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THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED
UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES
MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

9.          Registration
Rights Agreement. On the Closing Date, the Company, Purchaser and each other Purchaser participating in such Closing shall
execute and deliver a counterpart signature page to the registration rights agreement, substantially in the form attached hereto
as Exhibit D (the “Registration Rights Agreement”). Following the Closing Date, the Company shall
effect the registration of the Shares and the Warrant Shares in accordance with the terms and conditions of the Registration Rights
Agreement.

 

10.         Representations
and Warranties of the Company. The Company represents and warrants that as of date hereof and as of the Closing Date:

 

(a)          The
Company has the requisite power and authority to enter into and perform its obligations under this Subscription Agreement and the
Warrants (the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of the Transaction Documents and the consummation by the Company of the transactions contemplated hereby
and thereby have been duly authorized by the Company’s board of directors and other than the Form 8-K Filing (as defined
below), a Form D pursuant to Regulation D promulgated under the Securities Act (“Regulation D”), and any other
filings as may be required by any state securities agencies, 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 to rights to indemnification
and to contribution as may be limited by federal or state securities law. For purposes of this Subscription Agreement, “Form
8-K Filing” means the Current Report on Form 8-K that the Company will file with the Securities and Exchange Commission
(the “SEC”) disclosing the material terms of the transactions contemplated hereby and attaching copies of the
form of Subscription Agreement, the form of Warrant, and the form of Registration Rights Agreement.

 

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(b)          The
Shares have been duly authorized by the Company and, when issued and paid for in accordance with the terms herein, will be validly
issued, fully paid and nonassessable. The Warrants have been duly authorized by the Company and upon the due exercise of such Warrants,
the Warrant Shares issuable upon such exercise will be validly issued, fully paid and non-assessable. The Company has reserved
a sufficient number of shares of Common Stock for issuance upon the exercise of the Warrants. Subject to the accuracy of the representations
and warranties of the Purchaser in this Subscription Agreement, the offer and issuance by the Company of the Securities is exempt
from registration under the Securities Act.

 

(c)          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 issuance of the Warrants and the Warrant Shares will not (i)
result in a violation of the Company’s articles of incorporation (including, without limitation, any certificates of designation
contained therein) or other organizational documents of the Company or any of its subsidiaries, any capital stock of the Company,
or bylaws; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
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 (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including, without limitation, federal and state securities laws and regulations and the rules and regulations
of the OTCQB tier of the OTC Marketplace (the “Principal Market”)) 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 except, in the case of clause
(ii) above, for such conflicts, defaults or rights that could not reasonably be expected to have a Material Adverse Effect (as
defined below).

 

(d)          The
Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with any court,
governmental agency or any regulatory or self-regulatory agency or any other Person (as defined below) in order for it to execute,
deliver or perform any of its 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 is required to obtain
at or prior to the Closing have been 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 from obtaining or effecting any of the registration,
application or filings contemplated by the Transaction Documents. The Company is not 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 therefrom in the foreseeable future. For purposes of this Subscription Agreement, “Person” means an individual,
a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

 

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(e)          Since
the date of the Company’s most recent audited financial statements contained in a Form 10-K (a “Form 10-K”)
filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), 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 such Closing,
will not be Insolvent (as defined below). For purposes of this Section 10(e), “Insolvent” means, (I)
with respect to the Company and its subsidiaries, on a consolidated basis; (a) 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; (b) 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, (1) 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; (2) 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 (3) 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.

 

(f)          Other
than this Offering, 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
any Purchaser’s investment hereunder; or (iii) could have a Material Adverse Effect. “Material Adverse Effect”
means any material adverse effect on (a) 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; (b) the transactions
contemplated hereby; or (c) the authority or ability of the Company or any of its subsidiaries to perform any of their respective
obligations under this Subscription Agreement or the Warrants.

 

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(g)          Neither
the Company, any of its subsidiaries or 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 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 Government Entity, as defined below, 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 Governmental
Official, for the purpose of: (i)(1) influencing any act or decision of such Government Official in his/her official capacity;
(2) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty; (3) securing any improper
advantage; or (4) inducing such Government official to influence or affect any act or decision of any Government Entity; or (ii)
assisting the Company or its subsidiary in obtaining or retaining business for or with, or directing business to, the Company or
its subsidiary. “Government Entity” as used in the previous paragraph means any government or any department,
agency or instrumentality thereof, including any entity or enterprise owned or controlled by a government, or a public international
organization.

 

(h)          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 believes that its and its subsidiaries’ relations with their respective employees are good. Other than with respect
to William Cotter, the Company’s former Chief Operating Officer who resigned from the Company effective June 15, 2015, no
executive officer (as defined in Rule 501(f) promulgated under the Securities 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.

 

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(i)          It
is understood and acknowledged by the Company that (i) following the public disclosure of the transactions contemplated by this
Subscription Agreement in connection with the Form 8-K Filing, in accordance with the terms thereof, the Purchaser has not been
asked by the Company or any of its subsidiaries to agree, nor has the Purchaser agreed with the Company or any of its subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) the Purchaser, and counterparties in “derivative” transactions to
which the Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock which
was established prior to the Purchaser’s knowledge of the transactions contemplated by this Subscription Agreement; and (iii)
the Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated
by this Subscription Agreement pursuant to the Form 8-K Filing, (a) the Purchaser may engage in hedging and/or trading activities
at various times during the period that the Securities are outstanding; and (b) such hedging and/or trading activities, if any,
can reduce the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging
and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities
do not constitute a breach of this Subscription Agreement or the Warrants or any of the documents executed in connection herewith
or therewith.

 

(j)          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) other than Maxim
Group LLC, 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 other than Maxim Group LLC any compensation for soliciting
another to purchase any other securities of the Company or any of its subsidiaries.

 

(k)          Except
as disclosed in the Form 8-K Filing, the Company confirms that neither it nor any other Person acting on its behalf has provided
the Purchaser or its attorney, accountant, purchaser representative and/or tax adviser, if any (collectively, “Advisers”)
with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning
the Company or any of its subsidiaries, other than the existence of the transactions contemplated by this Subscription Agreement.
The Company understands and confirms that the Purchaser will rely on the foregoing representations in effecting transactions in
securities of the Company. To the knowledge of the Company, all disclosure provided to the Purchaser regarding the Company and
its subsidiaries, their businesses and the transactions contemplated hereby, 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. To the knowledge of the Company, each press release issued by the Company or any of its subsidiaries during the twelve
(12) months preceding the date of this Subscription Agreement did not at the time of release contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they are made, not misleading. To the knowledge of the Company, 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. The Company acknowledges and agrees that the Purchaser does not make and has not made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 11.

 

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11.         Representations
and Warranties of the Purchaser.

 

The Purchaser hereby
represents and warrants to the Company as of the date hereof and as of the Closing Date as follows:

 

(a)          General.

 

(1)         The
Purchaser (i) if a natural person, has reached the age of 21 and has full power and authority to execute and deliver this Subscription
Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation,
partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization
or other entity, such entity was not formed for the specific purpose of acquiring Units, such entity is duly organized, validly
existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated
hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates
and to carry out the provisions hereof and thereof and to purchase and hold the Units (and the other Securities), the execution
and delivery of this Subscription Agreement has been duly authorized by all necessary action, this Subscription Agreement has been
duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing
this Subscription Agreement in a representative or fiduciary capacity, has full power and authority to execute and deliver this
Subscription Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation,
or limited liability company or partnership, or other entity for whom the Purchaser is executing this Subscription Agreement, and
such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has
full right and power to perform pursuant to this Subscription Agreement and make an investment in the Company, and agrees that
this Subscription Agreement constitutes a legal, valid and binding obligation of such entity;

 

(2)         The
execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment, injunction,
agreement or controlling document to which the Purchaser is a party or by which it is bound;

 

(3)         The
Purchaser is a resident of the state set forth on the signature page to this Subscription Agreement;

 

(4)         The
Purchaser has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or
the like relating to this Subscription Agreement or the transactions contemplated hereby (other than commissions payable by the
Company pursuant to the terms of any contract to which the Company is a party);

 

(5)         Any
information which the Purchaser has heretofore furnished or is furnishing herewith to the Company is complete and accurate and
may be relied upon by the Company in determining the availability of an exemption from registration under federal and state securities
laws in connection with the Offering, and the Purchaser will notify and supply corrective information to the Company immediately
upon the occurrence of any change therein occurring prior to the Company’s issuance of any of the Securities;

 

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(6)         Within
five (5) days after receipt of a request from the Company, the Purchaser will provide such information and deliver such documents
as may reasonably be necessary to comply with any and all laws and ordinances to which the Company is subject;

 

(b)          Information
Concerning the Company.

 

(1)         Prior
to the execution of this Subscription Agreement, the Purchaser and the Purchaser’s Advisors have received all documents,
records, and books requested by the Purchaser, have carefully reviewed them and understand the information contained therein;

 

(2)         The
Purchaser and its Advisers, if any, have had the opportunity to obtain any additional information, to the extent the Company has
such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy
of the information contained in all documents received or reviewed in connection with the purchase of the Units and have had the
opportunity to have representatives of the Company provide them with such additional information regarding the terms and conditions
of this particular investment and the financial condition, results of operations and business of the Company deemed relevant by
the Purchaser or its Advisers, if any, and all such requested information, to the extent the Company had such information in its
possession or could acquire it without unreasonable effort or expense, has been provided to the full satisfaction of the Purchaser
and its Advisers, if any;

 

(3)         The
Purchaser and its Advisers, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the Offering and the business, financial condition and results of operations
of the Company, and all such questions have been answered to the full satisfaction of the Purchaser and its Advisers, if any;

 

(4)         The
Purchaser acknowledges that (i) the Company files reports and other documents with the SEC pursuant to the requirements of the
Exchange Act (such reports and other documents, the “SEC Documents”); (ii) the Purchaser and its Advisers, if
any, have had access to the SEC Documents; and (iii) an investment in the Company is subject to substantial risks as disclosed
in the SEC Documents;

 

(5)         The
Purchaser is satisfied that the Purchaser has received adequate information with respect to all matters which it or its Advisers,
if any, consider material to its decision to make this investment;

 

(6)         The
Purchaser is unaware of, is in no way relying on, and did not become aware of the Offering through or as a result of, any form
of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media or broadcast over television, radio or the internet (including, without limitation,
internet “blogs,” bulletin boards, discussion groups and social networking sites) in connection with the Offering and
is not subscribing for the Units and did not become aware of the Offering through or as a result of any seminar or meeting to which
the Purchaser was invited by, or any solicitation of a subscription by, a person not previously known to the Purchaser in connection
with investments in securities generally;

 

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(7)         The
Purchaser understands and acknowledges that neither the SEC nor any state securities commission or other regulatory authority has
approved the Securities, or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined the adequacy
of any information provided by the Company to the Purchaser in connection with the Offering;

 

(c)          Non-Reliance.

 

(1)         In
making an investment decision, the Purchaser understands that it must rely on its own examination of the Company and the terms
of the Offering, including the merits and risks involved, and is aware that the Purchaser is required to bear the financial risks
of this investment for an indefinite period of time;

 

(2)         The
Purchaser is not relying on the Company or any of the Company’s employees or agents with respect to the legal, tax, economic
and related considerations of an investment in the Units, and the Purchaser has relied on the advice of, or has consulted with,
only its own Advisers;

 

(3)         In
evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or information
(oral or written) other than as stated in this Subscription Agreement;

 

(4)         The
Purchaser acknowledges that any estimates or forward-looking statements or projections included in any materials provided by or
on behalf of the Company to the Purchaser were prepared by the Company in good faith but that the attainment of any such projections,
estimates or forward-looking statements cannot be guaranteed by the Company and should not be relied upon;

 

(5)         The
Purchaser understands and acknowledges that the Company will have broad discretion with respect to the application of funds received
by the Company in the Offering and the Company may not use the proceeds effectively;

 

(d)          Restrictions
on Transfer or Sale of the Securities.

 

(1)         The
Purchaser is acquiring the Subscribed Units solely for such Purchaser’s own account and not with a view to or intent of resale
or distribution thereof, in whole or in part, in violation of the Securities Act. If and when the Purchaser exercises any Warrants,
the Purchaser will acquire the Warrant Shares solely for such Purchaser’s own account and not with a view to or intent of
resale or distribution thereof, in whole or in part, in violation of the Securities Act. The Purchaser has no agreement or arrangement,
formal or informal, with any person to sell or transfer all or any part of the Securities, and the Purchaser has no plans to enter
into any such agreement or arrangement;

 

    	-10- 

     

    

  

(2)         The
Purchaser understands that, except as provided in the Registration Rights Agreement (i) none of the Securities are registered under
the Securities Act, or any state securities laws; (ii) the offering and sale of the Units is intended to be exempt from registration
under the Securities Act by virtue of Section 4(a)(2) thereof based, in part, upon the representations, warranties and agreements
of the Purchaser contained in this Subscription Agreement; and (iii) consequently, the Securities may not be offered for sale,
sold, assigned or transferred unless (a) subsequently registered under the Registration Rights Agreement; (b) the Purchaser shall
have delivered to the Company (if requested by the Company) an opinion of counsel to the Purchaser, in a form reasonably acceptable
to the Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from registration under the Securities Act; or (c) the Purchaser provides the Company with reasonable assurance
(which may include customary stockholder representation letters) that such Securities can be sold, assigned or transferred pursuant
to Rule 144 promulgated under the Securities Act;

 

(3)         The
Purchaser understands that (i) it must bear the substantial economic risks of the investment in the Subscribed Units indefinitely
because none of the Securities may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities
Act and applicable state securities laws or an exemption from such registration is available; (ii) legends shall be placed on the
certificates representing the Common Stock and the Warrants included in the Subscribed Units and any Warrant Shares issued upon
exercise of the Warrants to the effect that they have not been registered under the Securities Act or applicable state securities
laws and appropriate notations thereof will be made in the Company’s books and records; (iii) stop transfer instructions
will be placed with any registrar or transfer agent of the Common Stock and the Warrants, if other than the Company; and (iv) there
can be no assurance any market will ever exist for resale of any of the Securities, nor can there be any assurance that any of
such Securities will be freely transferable at any time in the foreseeable future;

 

(e)          Status
of Purchaser.

 

(1)         The
Purchaser is an “accredited investor” as that term is defined under Rule 501(a) of Regulation D because the Purchaser
meets the requirements of at least one of the suitability standards for an “accredited investor” as that term is defined
in Regulation D and as set forth on the Accredited Investor Certification contained herein;

 

(2)         Neither
the Purchaser, nor any of its affiliates, nor any person claiming by or through any of them, is subject to any “bad actor”
disqualification specified in Rule 506(d) of Regulation D (a “Disqualification Event”). The Purchaser undertakes
to update the Company in the event that the Purchaser (or any of its affiliates, or any person claiming by or through any of them)
subsequently becomes subject to a Disqualification Event;

 

(3)         The
Purchaser, together with its Advisers, if any, has such knowledge and experience in financial, tax, and business matters, and,
in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with
the Offering to evaluate the merits and risks of an investment in the Units and the Company and to make an informed investment
decision with respect thereto;

 

    	-11- 

     

    

  

(4)         The
Purchaser has significant prior investment experience, including investment in non-listed and non-registered securities. The Purchaser
is knowledgeable about investment considerations in development-stage companies with limited operating histories. The Purchaser
has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The
Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of the Purchaser’s
net worth and financial circumstances and the purchase of the Subscribed Units will not cause such commitment to become excessive.
The investment is a suitable one for the Purchaser;

 

(5)         The
Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies and
has no need for liquidity from its investment in the Units for an indefinite period of time;

 

12.         Covenants.

 

(a)          Additional
Issuance of Securities. The Company agrees that for the period commencing on the date hereof and ending on the date immediately
following the sixty (60) day anniversary of the Applicable Date (provided that such period shall be extended by the number of days
during such period and any extension thereof contemplated by this proviso on which the Registration Statement (as defined in the
Registration Rights Agreement) is not effective or any prospectus contained therein is not available for use)(the “Restricted
Period”), neither the Company nor any of its subsidiaries shall directly or indirectly issue, offer, sell, grant any
option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase
or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity
security” (as that term is defined under Rule 405 promulgated under the Securities Act)), any Convertible Securities, any
debt, any preferred stock or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement (whether occurring
during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding
the foregoing, this Section 12(a) shall not apply in respect of the issuance of (A) shares of Common Stock or options to
purchase Common Stock or other equity awards issued to directors, officers, employees of, or consultants or advisors to, the Company
or its subsidiaries in their capacity as such pursuant to an Approved Share Plan (it being expressly understood and agreed for
all purposes of this Subscription Agreement that lawyers, law firms, accountants and accounting firms do not constitute consultants
or advisors), provided that the exercise price of any such options or such other equity awards is not lowered, none of such
options or such other equity awards are amended to increase the number of shares issuable thereunder and none of the terms or conditions
of any such options or such other equity awards are otherwise materially changed in any manner that adversely affects the Purchaser
or any other Person subscribing for Units in the Offering (collectively, the “Investors” and each such Person,
an “Investor”); (B) shares of Common Stock issued upon the conversion, exercise or exchange of Convertible Securities
(other than options to purchase Common Stock or such other equity awards issued pursuant to an Approved Share Plan that are covered
by clause (A) above) issued prior to the date hereof, provided that the conversion, exercise or exchange (as the case may
be) of any such Convertible Security is made solely pursuant to the conversion, exercise or exchange (as the case may be) provisions
of such Convertible Security that were in effect (and expressly set forth in such Convertible Security) on the date immediately
prior to the date of this Subscription Agreement, the conversion, exercise or exchange price of any such Convertible Securities
(other than options to purchase Common Stock or such other equity awards issued pursuant to an Approved Share Plan that are covered
by clause (A) above) is not lowered, none of such Convertible Securities are (other than options to purchase Common Stock or such
other equity awards issued pursuant to an Approved Share Plan that are covered by clause (A) above)(nor is any provision of any
such Convertible Securities) amended or waived in any manner (whether by the Company or the holder thereof) to increase, or which
results in an increase in, the number of shares issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than options to purchase Common Stock or such other equity awards issued pursuant to an Approved Share Plan that
are covered by clause (A) above) are otherwise materially changed or waived (whether by the Company or the holder thereof) in any
manner that adversely affects any of the Purchasers; (C) the Warrants; (D) the Warrant Shares; (E) shares of Common Stock issued
in connection with acquisitions, asset purchases, licenses, collaborations or strategic transactions involving the Company and
other Persons approved by the Company’s board of directors; provided that any such issuance shall only be to Strategic
Entity and shall provide to the Company additional benefits in addition to the investment of funds, and shall not include a transaction
in which the Company is issuing Common Stock or any other security primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities; and (F) shares of Common Stock issued to a Stategic Entity; provided that
the Company’s board of directors reasonable determines that such issuance shall provide to the Company additional benefits
in addition to the investment of funds (each of the foregoing in clauses (A) through (F), collectively the “Excluded Securities”).
For purposes of this Subscription Agreement, (1) “Applicable Date” means the first date on which the resale
by the Investors of all Registrable Securities (as defined in the Registration Rights Agreement) is covered by one or more effective
Registration Statements (and each prospectus contained therein is available for use on such date); (2) “Approved Share
Plan” means any employee benefit plan has been approved by the board of directors of the Company pursuant to which shares
of Common Stock and options to purchase Common Stock and other equity awards may be issued to any employee, officer or director
of, or consultants or advisors to, the Company or any of its subsidiaries for services provided to the Company or any of its subsidiaries
in their capacity as such including, but not limited to, the Company’s 2013 Stock Incentive Plan; (3) “Convertible
Securities” means any capital stock, note, debenture or other security of the Company or any of its subsidiaries that
is, or may become, at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable
for, or which otherwise entitles the holder thereof to acquire, any capital stock, note, debenture or other security of the Company
(including, without limitation, Common Stock) or any of its subsidiaries; and (4) “Strategic Entity” means a
Person which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the current business of the Company.

 

(b)          Participation
Right. From the date hereof through the six (6) month anniversary of the Applicable Date, neither the Company nor any of its
subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this
Section 12(b).

 

    	-12- 

     

    

  

(1)         At
least three (3) Business Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Investor
a written notice of its proposal or intention to effect a Subsequent Placement (each such notice, a “Pre-Notice”),
which Pre-Notice shall not contain any information other than: (i) a statement that the Company proposes or intends to effect a
Subsequent Placement, and (ii) a statement informing such Investor that it is entitled to receive an Offer Notice (as defined below)
with respect to such Subsequent Placement upon its written request. Upon the written request of a Investor within two (2) Business
Days after the Company’s delivery to such Investor of such Pre-Notice, and only upon a written request by such Investor,
the Company shall promptly, but no later than one (1) Business Day after such request, deliver to such Investor an irrevocable
written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall
(w) identify and describe the Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the Persons (if
known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged ; and (z) offer to issue and
sell to or exchange with such Investor in accordance with the terms of the Offer, Offered Securities with an aggregate purchase
price equal to such Investor’s Pro-Rata Share. For purposes of this Subscription Agreement, (1) “Pro Rata Share”
means, with respect to each Investor, a dollar amount equal to (I) the Investor Allocation multiplied by a fraction, the numerator
of which shall be the number Units purchased by such Investor in the Offering, and the denominator of which shall be the aggregate
number of Units purchased in the Offering by all Investors (such product, the Investor’s “Basic Amount”);
and (II) with respect to an Investor that elects to purchase its Basic Amount, any additional portion of the Offered Securities
attributable to the Basic Amounts of other Investors as such Investor shall indicate it will purchase or acquire should the other
Investors subscribe for less than their Basic Amounts (the “Undersubscription Amount”); and (2) “Investor
Allocation” means the lesser of (A) fifty percent (50%) of the aggregate value of the Offered Securities, and (B) the
aggregate purchase price of all Units purchased in the Offering.

 

(2)         To
accept an Offer, in whole or in part, such Investor must deliver a written notice to the Company prior to the end of the fifth
(5th) Business Day after such Investor’s receipt of the Offer Notice (the “Offer Period”),
setting forth the portion of such Investor’s Basic Amount that such Investor elects to purchase and, if such Investor shall
elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Investor elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Investors are less than the total
of all of the Basic Amounts, then such Investor who has set forth an Undersubscription Amount in its Notice of Acceptance shall
be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided,
however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and
the Basic Amounts subscribed for (the “Available Undersubscription Amount”), such Investor who has subscribed
for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the
Basic Amount of such Investor bears to the total Basic Amounts of all Investors that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires
to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to
such Investor a new Offer Notice and the Offer Period shall expire on the fifth (5th) Business Day after such Investor’s
receipt of such new Offer Notice.

 

    	-13- 

     

    

  

(3)         The
Company shall have five (5) Business Days from the expiration of the Offer Period above (i) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Investor (together with the remaining
portion the Offered Securities that were not offered to the Investors pursuant to Section 12(b)(1), the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only
to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to
the Company than those set forth in the Offer Notice; and (ii) to publicly announce (a) the execution of such Subsequent Placement
Agreement, and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the
termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such
Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.

 

(4)         In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 12(b)(3) above), then such Investor may, at its sole option and in its sole discretion, reduce
the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the
number or amount of the Offered Securities that such Investor elected to purchase pursuant to Section 12(b)(2) above multiplied
by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to
issue, sell or exchange (including Offered Securities to be issued or sold to Investors pursuant to this Section 12(b) prior
to such reduction); and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that
any Investor so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company
may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities
have again been offered to the Investors in accordance with Section 12(b)(1) above.

 

(5)         Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Investor shall acquire from
the Company, and the Company shall issue to such Investor, the number or amount of Offered Securities specified in its Notice of
Acceptance. Subject to Section 12(b)(7), the purchase by such Investor of any Offered Securities shall be made on the same
terms and conditions and subject to the same Subsequent Placement Agreement entered into between the Company and the purchasers
of the Refused Securities.

 

(6)         Any
Offered Securities not acquired by an Investor or other Persons in accordance with this Section 12(b) may not be issued,
sold or exchanged until they are again offered to such Investor under the procedures specified in this Subscription Agreement.

 

(7)         The
Company and the Purchaser agree that if any Investor elects to participate in the Offer, neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement
Documents”) shall include any term or provision whereby such Investor shall be required to agree to any restrictions
on trading as to any securities of the Company (other than restrictions required by applicable securities laws on the resale of
the specific “restricted securities” (as that term is defined under Rule 144) being issued in the Subsequent Placement)
or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection
with, any agreement previously entered into with the Company or any instrument received from the Company.

 

    	-14- 

     

    

  

(8)         Notwithstanding
anything to the contrary in this Section 12(b) and unless otherwise agreed to by such Investor, the Company shall either
confirm in writing to such Investor that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly
disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Investor will not be in
possession of any material, non-public information regarding the Company or any of its subsidiaries, by the fifth (5th)
Business Day following expiration of the Offer Period. If by such fifth (5th) Business Day, no public disclosure regarding
a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction
has been received by such Investor, such transaction shall be deemed to have been abandoned and such Investor shall not be in possession
of any material, non-public information regarding the Company or any of its subsidiaries. Should the Company decide to pursue such
transaction with respect to the Offered Securities, the Company shall provide such Investor with another Offer Notice in accordance
with, and subject to, the terms of this Section 12(b) and such Investor will again have the right of participation set forth
in this Section 12(b). The Company shall not be permitted to deliver more than one Offer Notice to such Investor in any
sixty (60) day period, except as expressly contemplated by the last sentence of Section 12(b)(2).

 

(9)         The
restrictions contained in this Section 12(b) shall not apply in connection with the issuance of any Excluded Securities.
The Company shall not circumvent the provisions of this Section 12(b) by providing terms or conditions to one Investor that
are not provided to all Investors.

 

(c)          Variable
Rate Transaction. Beginning on the date hereof and until the earlier of (a) the nine (9) month anniversary of the Applicable
Date; and (b) the date on which all of the Investors shall have sold all of the Registrable Securities, the Company and each subsidiary
shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction
(it being expressly understood and agreed that the foregoing shall not prohibit the Company from consummating the transactions
contemplated by this Agreement). “Variable Rate Transaction” means a transaction in which the Company or any
subsidiary (i) issues or sells any Convertible Securities either (A) at a conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of, or quotations for, the shares of Common Stock at any time after the
initial issuance of such Convertible Securities; or (B) with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such Convertible Securities or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock, other than pursuant to
a customary “weighted average” anti-dilution provision; or (ii) enters into any agreement (including, without limitation,
an “equity line of credit” or an “at-the-market offering”) whereby the Company or any subsidiary may sell
securities at a future determined price (other than standard and customary “preemptive” or “participation”
rights). Each Investor shall be entitled to obtain injunctive relief against the Company and its subsidiaries to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.

 

    	-15- 

     

    

  

13.         Indemnification
of Purchaser. Subject to the provisions of this Section 13, the Company will indemnify and hold Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Subscription Agreement or in the other Transaction Documents or (b) any action instituted
against the Purchaser Parties in any capacity, or any of them or their respective affiliates, by any stockholder of the Company
who is not an affiliate of such Purchaser Parties, with respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Parties may have with any such stockholder or any violations by such
Purchaser Parties of state or federal securities laws or any other conduct by such Purchaser Parties which constitutes fraud, gross
negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Subscription Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion
of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party under this Subscription Agreement (y) for any settlement by a Purchaser
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Subscription Agreement
or in the other Transaction Documents. The indemnification required by this Section 13 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.

 

    	-16- 

     

    

  

14.         Irrevocability;
Binding Effect. The Purchaser hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Purchaser,
except as required by applicable law, and that this Subscription Agreement shall survive the death or disability of the Purchaser
and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal
representatives, and permitted assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder shall
be joint and several and the agreements, representations, warranties, and acknowledgments herein shall be deemed to be made by
and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives,
and permitted assigns.

 

15.         Modification.
This Subscription Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom
any such modification or waiver is sought.

 

16.         Notices.
Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be deemed effectively
given: (i) upon personal delivery to the party notified; (ii) when sent by confirmed email or facsimile if sent during normal business
hours of the recipient, if not, then on the next business day; (iii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be sent to the parties at their respective
address, email or facsimile number set forth on the signature page hereto, or to such other address as such party shall have furnished
in writing in accordance with the provisions of this Section 16.

 

17.         Assignability.
This Subscription Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser
and the transfer or assignment of any Securities acquired by the Purchaser shall be made only in accordance with Section 11(d)(2)
of this Subscription Agreement and all applicable laws. Any purported attempt by the Purchaser to assign this Subscription Agreement,
any of the rights, interests or obligations hereunder, or any of the Securities in violation of this Section 17 shall be
null and void.

 

18.         Applicable
Law. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable
to contracts to be wholly- performed within said State.

 

19.         Dispute
Resolution. The parties (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of New York
located in New York county and to the jurisdiction of the United States District Court for the Southern District of New York for
the purpose of any suit, action or other proceeding arising out of or based upon this Subscription Agreement; (ii) agree not to
commence any suit, action or other proceeding arising out of or based upon this Subscription Agreement except in such courts; and
(iii) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Subscription Agreement or the subject matter hereof may not be enforced in or by
such court.

 

    	-17- 

     

    

  

20.         WAIVER
OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.
EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

21.         Blue
Sky Qualification. The purchase of Units under this Subscription Agreement and the exercise of the Warrants and the issuance
of the Warrant Shares are all expressly conditioned upon the exemption from qualification of the offer and sale thereof, as applicable,
from applicable federal and state securities laws. The Company shall not be required to qualify the Offering or any issuance of
Warrant Shares under the securities laws of any jurisdiction.

 

22.         Use
of Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to may require.

 

23.         Miscellaneous.

 

(a)          This
Subscription Agreement, including all attachments, schedules and exhibits thereto, constitutes the entire agreement between the
Purchaser and the Company with respect to the subject matter hereof and supersede all prior oral or written agreements and understandings,
if any, relating to the subject matter hereof.

 

(b)          The
representations and warranties of the Purchaser made in this Subscription Agreement shall survive the execution and delivery hereof
and delivery of the Common Stock and Warrants comprising the Subscribed Units.

 

(c)          Each
of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether or not the
transactions contemplated hereby are consummated.

 

(d)          This
Subscription Agreement may be executed in one or more counterparts (including electronic counterparts), each of which shall be
deemed an original, but all of which shall together constitute one and the same instrument.

 

(e)          Each
provision of this Subscription Agreement shall be considered separable and, if for any reason any provision or provisions hereof
are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or
affect the remaining portions of this Subscription Agreement.

 

(f)          Paragraph
and Section titles are for convenience and descriptive purposes only and are not to be considered in construing or interpreting
this Subscription Agreement.

 

    	-18- 

     

    

  

Arch Therapeutics, Inc.

 

SIGNATURE PAGE TO THE SUBSCRIPTION
AGREEMENT

 

Purchaser hereby elects to subscribe under
the Subscription Agreement for a total of _______ Units at a price of $0.36 per Unit at the Closing (NOTE: to be completed by Purchaser),
and, by execution and delivery hereof, Purchaser hereby executes the Subscription Agreement and agrees to be bound by the terms
and conditions of the Subscription Agreement.

 

Date (NOTE: To be completed by Purchaser): _______________________________

 

If the Purchaser is an INDIVIDUAL, and if purchased as JOINT
TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY: 

 

	 	 	 
	Print Name(s)	 	Social Security Number(s)
	 	 	 
	 	 	 
	Signature(s) of Purchaser(s)	 	 
	 	 	 
	 	 	 
	Date	 	Address
	 	 	 
	Fax Number	 	Email Address

 

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY or TRUST:

 

	 	 	 
	Name of Entity	 	Federal Tax Identification Number
	 	 	 
	By:	 	 	 
	Name:	 	State of Organization
	Title:	 	 
	 	 	 
	Date	 	Address
	 	 	 
	 	 	 
	Fax Number	 	Email Address

 

PURCHASER HEREBY ELECTS TO:

 

		___	Include a 4.99%/9.99% “beneficial ownership blocker provision” in its Series E Warrant

 

		___	Not include include a 4.99%/9.99% “beneficial ownership blocker provision” in its Series E Warrant

 

    	-19- 

     

    

  

Accepted:

 

ARCH THERAPEUTICS, INC.

 

	By:	 	 
	Authorized Officer:	 

 

235 Walnut St., Suite 6

Framingham, MA 01702

Fax Number: ___________________

Email Address:_________________

 

    	-20- 

     

    

  

EXHIBIT A

 

Form of Series E Warrant

 

    	A-1

     

    

  

EXHIBIT B

 

ARCH THERAPEUTICS, INC.

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

 

	
         

        Initial 
	 	I have an individual net worth, or joint net worth with my spouse, as of the date hereof in excess of $1 million.  For purposes of calculating net worth under this category, (i) the undersigned’s primary residence shall not be included as an asset, (ii) indebtedness that is secured by the undersigned’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability, (iii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iv) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.
	 	 	 
	Initial 	 	I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
	 	 	 
	Initial 	 	I am a director or executive officer of Arch Therapeutics, Inc. (the “Company”)
	 	 	 
	For Non-Individual Investors
	(all Non-Individual Investors must INITIAL where appropriate):
	 	 	 
	Initial 	 	The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
	 	 	 
	Initial 	 	The investor certifies that it is a partnership, corporation, limited liability company, any organization described in Section 501(c)(3) of the Internal Revenue Code, or Massachusetts or similar business trust that has total assets of at least $5 million and was not formed for the purpose of investing the Company.
	 	 	 
	Initial 	 	The investor certifies that it is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.

 

    	B-1

     

    

  

ARCH THERAPEUTICS, INC.

ACCREDITED INVESTOR CERTIFICATION

 

	Initial 	 	The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this certification.
	 	 	 
	Initial 	 	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
	 	 	 
	Initial 	 	The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
	 	 	 
	Initial 	 	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934, as amended.
	 	 	 
	Initial 	 	The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
	 	 	 
	Initial 	 	The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
	 	 	 
	Initial 	 	The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
	 	 	 
	Initial 	 	The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act, or a registered investment company.
	 	 	 
	Initial 	 	The investor certifies that it is an investment company registered under the Investment Company Act of 1940, as amended, or a business development company as defined in Section 2(a)(48) of that Act.
	 	 	 
	Initial 	 	The investor certifies that it is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended.
	 	 	 
	Initial 	 	The investor certifies that it is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.

 

    	B-2

     

    

  

EXHIBIT C

 

ARCH
THERAPEUTICS, INC.

INVESTOR QUESTIONNAIRE

 

Selling Stockholder Notice and Questionnaire

 

The undersigned is
subscribing for shares of common stock, par value $0.001 per share (“Common Stock”), and Series E Warrants (the
“Warrants”, and together with the Common Stock, the “Securities”) of Arch Therapeutics, Inc.,
(the “Company”), and understands that the Company intends to file with the Securities and Exchange Commission
(the “Commission”) a registration statement (the “Registration Statement”) for the registration
and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Common Stock
and the shares of Common Stock issuable upon exercise of the Series E Warrants (collectively, the “Registrable Securities”),
in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to be
entered into by the undersigned, the other purchasers of the Securities and the Company on the closing date of the offering pursuant
to which the Securities will be issued. A copy of the Registration Rights Agreement is available from the Company upon request
at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement.

 

Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial
owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement.

 

    	C-1

     

    

  

ARCH
THERAPEUTICS, INC.

INVESTOR QUESTIONNAIRE

 

The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

		1.	Name.

 

		(a)	Full Legal Name of Selling Stockholder

	 
	 

 

		(b)	Full Legal Name of Registered Holder (if not the same as
(a) above) through which Registrable Securities are held:

	 
	 

 

		(c)	Full Legal Name of Natural Control Person (which means
a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this
Questionnaire):

	 
	 

 

		2.	Address for Notices to Selling Stockholder:

 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

 

		3.	Broker-Dealer Status:

 

(a)          Are
you a broker-dealer?

 

Yes  ̈             No
 ̈

 

(b)          If
“yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services
to the Company?

 

Yes  ̈             No  ̈

 

Note:If “no”
to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration
Statement.

 

(c)          Are
you an affiliate of a broker-dealer?

 

Yes  ̈             No
 ̈

 

    	C-2

     

    

  

ARCH
THERAPEUTICS, INC.

INVESTOR QUESTIONNAIRE

 

(d)          If
you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of
business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings,
directly or indirectly, with any person to distribute the Registrable Securities?

 

Yes  ̈             No
 ̈

 

Note:If “no”
to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration
Statement.

 

		4.	Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.

 

Except as set forth below
in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities
issuable pursuant to the Subscription Agreement.

 

(a)          Type
and Amount of other securities beneficially owned by the Selling Stockholder:

 

	 
	 
	 
	 
	 
	 

 

		5.	Relationships with the Company:

 

Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

	 
	 
	 
	 
	 
	 
	 
	 

 

    	C-3

     

    

  

ARCH
THERAPEUTICS, INC.

INVESTOR QUESTIONNAIRE

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and
the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.
The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment
of the Registration Statement and the related prospectus and any amendments or supplements thereto.

 

IN WITNESS WHEREOF
the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person
or by its duly authorized agent.

 

	Date: ____________________________	 	Selling Stockholder:
	 	 	 
	 	 	[SELLING STOCKHOLDER]
	 	 	 
	 	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	C-4

     

    

  

EXHIBIT D

 

Form of Registration Rights Agreement

 

    	D-1Exhibit
10.2

  

EXECUTION
COPY

 

THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS
(I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY
BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

PURSUANT TO THE TERMS
OF SECTION 1 OF THIS WARRANT, ALL OR A PORTION OF THIS WARRANT MAY HAVE BEEN EXERCISED, AND THEREFORE THE ACTUAL NUMBER OF WARRANT
SHARES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE AMOUNT SET FORTH ON THE FACE HEREOF.

 

ARCH
THERaPEUTICS, INC.

 

Series
E Warrant To Purchase Common Stock

 

Warrant No.: E-               

Number of Shares of Common Stock:                

Date of Issuance: May 26, 2016 (“Issuance
Date”)

 

Arch Therapeutics, Inc.,
a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [INVESTOR NAME], the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase
Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date (the “Exercisability Date”), but not after 5:00 p.m., New
York time, on the Expiration Date (as defined below), [______________ (_____________)]
fully paid nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15. This Warrant
(this “Warrant”) is one of a series of Series E Warrants to purchase Common Stock (the “Warrants”)
issued pursuant to the Subscription Agreements (each a “Subscription Agreement”), entered into on or prior to
May 26, 2016 (the “Closing Date”), by the Company and each Purchaser party thereto.

 

     

     

    

 

1.    EXERCISE
OF WARRANT.

 

(a)  Mechanics
of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after
the Exercisability Date, in whole or in part (but not as to fractional shares), if an exemption from registration under the Securities
Act of 1933, as amended (the “Securities Act”) is available for the disposition of the Warrant and the acquisition
of the Warrant Shares by the Holder by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant; and (ii) in the event that (A) a registration statement
covering the Warrant Shares that are the subject of the Exercise Notice is available and effective; and (B) the Holder is requesting
certificates without a legend regarding restrictions on transferability, delivery of a “Certificate of Subsequent
Sale”, substantially in the form attached hereto as Exhibit B (as such form may be amended and/or supplemented
by the Company and the Transfer Agent (as defined below))(the items under (i) and, as applicable, (ii) above, the “Exercise
Delivery Documents”). Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall
deliver payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or wire transfer of immediately
available funds (a “Cash Exercise”) unless the Holder is electing a Cashless Exercise (as defined below) pursuant
to Section 1(c) of this Warrant. The Holder shall not be required to surrender this Warrant in order to effect an exercise
hereunder; provided, however, that in the event that this Warrant is exercised in full or for the remaining unexercised
portion hereof, the Holder shall deliver this Warrant to the Company for cancellation within a reasonable time after such exercise.
On or before the first Trading Day following the date on which the Company has received the Exercise Delivery Documents (the date
upon which the Company has received all of the Exercise Delivery Documents, the “Exercise Date”), the Company
shall transmit by facsimile or e-mail transmission an acknowledgment of confirmation of receipt of the Exercise Delivery Documents
to the Holder and the Company’s transfer agent for the Common Stock (the “Transfer Agent”). The Company
shall deliver any objection to the Exercise Delivery Documents on or before the second Trading Day following the date on which
the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”). Unless the Company
has previously delivered an objection to the Exercise Delivery Documents or the Holder has not delivered the applicable Aggregate
Exercise Price in the case of a Cash Exercise, in each case on or before the Share Delivery Date, the Company shall, (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program (the “FAST Program”) and so long as the certificates therefor are not required to bear a legend
regarding restrictions on transferability, upon the request of the Holder, credit such aggregate number of shares of Common Stock
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian service; or (Y), if the Transfer Agent is not participating in the FAST Program or
if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight courier
to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name
of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares
are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the
case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon
an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any such submission
and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number
of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant has been and/or is exercised. The Company shall pay any and all taxes and other expenses (including overnight
delivery charges) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant;
provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder or an affiliate
thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

 

    	 	-2-	 

     

    

 

(b)  Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.4380, subject to adjustment as provided herein.

 

(c)  Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement covering the Warrant Shares
that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”), or an exemption from registration,
is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant
in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

	Net Number =	(A x B) - (A x C)
	 	             B  

 

For purposes of the
foregoing formula:

 

A= the
total number of shares with respect to which this Warrant is then being exercised.

 

B= the
arithmetic average of the Closing Sale Prices of the shares of Common Stock for the five (5) consecutive Trading Days ending on
the date immediately preceding the date of the Exercise Notice.

 

C= the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

(d)  Rule
144. For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, assuming the Holder
is not an affiliate of the Company, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this
Warrant was originally issued pursuant to the Subscription Agreement.

 

    	 	-3-	 

     

    

 

(e)  Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed.

 

(f)  [Reserved]1[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 1 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Exercise Notice, 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 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act of 1934, as amended (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 1(f) 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 an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities
owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable,
in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this
Section 1(f), 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 Securities
and Exchange Commission (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% 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 1(f), 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 1(f) 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 1(f) 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.]2

 

 

1
Remove brackets and highlighting and delete the remaining text if the Holder has indicated in its Subscription Agreement that it
does not want the Ownership Limitation provisions to apply.

 

2
Remove brackets and highlighting and delete the “[Reserved]” text if the Holder has indicated in its
Subscription Agreement that it wants the Ownership Limitation provisions to apply.

 

    	 	-4-	 

     

    

 

(g)  Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while any Series E Warrant remains
outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve for issuance upon exercise of the Series E Warrants at least a number of shares of Common Stock equal to the number
of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the Series E Warrants then outstanding
(the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for all the Series E Warrants then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting or obtain
the written consent of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In
connection with such meeting or written consent, the Company shall provide each stockholder with a proxy or information statement
and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock
and to cause its board of directors to recommend to the stockholders that they approve such proposal.

 

    	 	-5-	 

     

    

 

2.    ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:

 

(a)  Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant 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.

 

(b)  Adjustment
upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Closing Date subdivides (by any
stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or
after the Closing Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased.
Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination
becomes effective.

 

(c)  Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights or phantom stock rights), then
the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares
so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

 

3.    RIGHTS
UPON DISTRIBUTION OF ASSETS.

 

(a)  If the
Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holders)
evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase
any security other than the Common Stock (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),
then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator
shall be the Weighted Average Price determined as of the record date mentioned above, and of which the numerator shall be such
Weighted Average Price on such record date less the then per share fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the
Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date
mentioned above.

 

    	 	-6-	 

     

    

 

4.    PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)  Purchase
Rights. In addition to any adjustments pursuant to Section 2
above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class 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 immediately prior to the record date fixed for determination of stockholders entitled to receive such grant, issuance
or sale of such Purchase Rights, or, if no such record date is established, 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.

 

(b)  Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing (unless the Company is the Successor Entity) all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 4(b), including agreements to deliver to each holder
of the Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant prior
to 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. Upon consummation of
the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise
of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of common stock or common shares (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. In addition to and not in
substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders
of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter
have the right to receive upon an exercise of this Warrant at any time after the consummation of the Corporate Event but prior
to the Expiration Date, in lieu of shares of Common Stock (or other securities, cash, assets or other property) purchasable upon
the exercise of this Warrant prior to such Corporate Event, such shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon
the happening of such Corporate Event had this Warrant been exercised immediately prior to such Corporate Event. The provisions
of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall
be applied without regard to any limitations on the exercise of this Warrant.

 

    	 	-7-	 

     

    

 

(c)  Applicability
to Successive Transactions. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant.

 

5.    NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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, and will
at all times in good faith comply with all the provisions of this Warrant and take all actions consistent with effectuating the
purposes of this Warrant. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect; (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant; and (iii) shall, so long as this Warrant is outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of this Warrant, 100% of the number of shares of Common Stock issuable upon exercise of this
Warrant then outstanding (without regard to any limitations on exercise).

 

6.    WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

 

    	 	-8-	 

     

    

 

7.    REISSUANCE
OF WARRANTS.

 

(a)  Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall (i) comply with the provisions set forth in Section 14;
and (ii) surrender this Warrant to the Company and deliver the completed and executed Assignment Form, in the form attached hereto
as Exhibit C, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance
with Section 7(d))), registered as the Holder may request, representing the right to purchase the number of Warrant Shares
being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred,
a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares
not being transferred.

 

(b)  Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)  Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase
the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such
portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no
Warrants for fractional shares of Common Stock shall be given.

 

(d)  Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant; (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant); (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date;
and (iv) shall have the same rights and conditions as this Warrant.

 

8.    NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the provisions of the Subscription Agreement.

 

    	 	-9-	 

     

    

 

9.    AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may not be amended or waived except upon the
execution and delivery of a written agreement executed by both the Company and the Holder; provided, however, that for the
avoidance of doubt, the Company may amend and/or supplement the form of Certificate of Subsequent Sale without the need to obtain
the consent of the Holder, and provided further, in the event that this Warrant is amended in accordance with this Section
9, the Company shall promptly offer all other holders of the Series E Warrants then outstanding the opportunity to make the
same amendment to their respective Series E Warrants.

 

10.   GOVERNING
LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law provisions thereof. The Company and, by accepting
this Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located
in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby. Service of process
in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods
as are specified for the giving of notices under this Warrant. The Company and, by accepting this Warrant, the Holder, each irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.
The Company and, by accepting this Warrant, the Holder, each irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY
WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

11.   CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.

 

12.   DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (i) the disputed determination of the Exercise Price to an independent, reputable investment
bank selected by the Company and approved by the Holder, which approval shall not be unreasonably withheld, conditioned or delayed;
or (ii) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company
shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify
the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations
or calculations. The prevailing party in any dispute resolved pursuant to this Section 12 shall be entitled to the full
amount of all reasonable expenses, including all costs and fees paid or incurred in good faith, in relation to the resolution of
such dispute. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.

 

    	 	-10-	 

     

    

 

13.   REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company
to comply with the terms of this Warrant.

 

14.   TRANSFER.
This Warrant may not be offered for sale, sold, transferred or assigned unless and until (i) the Holder shall have delivered to
the Company (if requested by the Company) an opinion of counsel to the Holder, in a form reasonably acceptable to the Company,
to the effect that such Warrant to be sold, transferred or assigned may be transferred or assigned pursuant to an exemption from
registration under the Securities Act; or (ii) the Holder provides the Company with reasonable assurance (which may include customary
representation letters) that such Warrant can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities
Act.

 

15.   CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)  “Affiliate”
means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such first Person. For purposes of this definition, “control” and, with
correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession,
directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of
voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly
or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity (or,
with respect to a limited partnership or other similar entity, its general partner or controlling entity).

 

(b)  “Bloomberg”
means Bloomberg Financial Markets.

 

(c)  “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.

 

    	 	-11-	 

     

    

 

(d)  “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
on the OTC Pink marketplace operated by OTC Markets Group Inc. If the Closing Bid Price or the Closing Sale Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case
may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All
such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

 

(e)  “Common
Stock” means (i) the Company’s shares of Common Stock, par value $0.001 per share; and (ii) any share capital
into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

 

(f)  “Common
Stock Equivalents” means any securities of the Company or its 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.

 

(g)  “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(h)  “Eligible
Market” means the Principal Market, The New York Stock Exchange, Inc., The NYSE MKT, The NASDAQ Capital Market, The NASDAQ
Global Market or The NASDAQ Global Select Market.

 

(i)  “Expiration
Date” means May 26, 2021 or, if such date falls on a day other than a Trading Day or on which trading does not take place
on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal
securities exchange or securities market on which the Common Stock is then traded (a “Holiday”), the next date
that is not a Holiday.

 

    	 	-12-	 

     

    

 

(j)  “Fundamental
Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person (but excluding a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of the Company); or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person; or (iii)
allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated
or affiliated with the Persons making or party to, such purchase, tender or exchange offer); or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person 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 purchase agreement or other business combination); (v) reorganize, recapitalize
or reclassify its Common Stock; or (vi) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock.

 

(k)  “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(l)  “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(m)  “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

(n)  “Principal
Market” means any market maintained by OTC Markets Group Inc. on which the Common Stock is traded on the Closing Date.

 

(o)  “Registration
Rights Agreement” means that certain Registration Rights Agreement dated as of the Issuance Date by and among the Company
and each party executing a Subscription Agreement.

 

(p)  “Required
Holders” means, as of any date, the holders of at least a majority of the Warrants outstanding as of such date.

 

(q)  “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

    	 	-13-	 

     

    

 

(r)  “Trading
Day” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock
are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading
during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

 

(s)  “Transaction
Documents” means, collectively, this Warrant, the Subscription Agreement, and the Registration Rights Agreement.

 

(t)  “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such
other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such security as reported on the OTC Pink marketplace operated
by OTC Markets Group Inc. If the Weighted Average Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12 with the term “Weighted Average Price” being substituted
for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation period.

 

[Signature Page Follows]

 

    	 	-14-	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Series E Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	ARCH THERAPEUTICS, INC.
	 	 
	 	By:	 	 
	 	Name:
	 	Title: 

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

SERIES E WARRANT TO PURCHASE COMMON STOCK

 

ARCH
THERAPEUTICS, INC.

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
Arch Therapeutics, Inc., a Nevada corporation (the “Company”), evidenced by the attached Series E Warrant to
Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

 

1.  Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

 

	 	____________	 	a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
	 	 	 	 
	 	____________	 	a “Cashless Exercise” with respect to _______________ Warrant Shares.

 

2.  Payment
of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.

 

3.  Delivery
of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant
and, after delivery of such Warrant Shares, _____________ Warrant Shares remain subject to the Warrant.

 

	Date: _____________________ __, ______	 
	 	 
	Name of Registered Holder	 
	 	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

 

    		A-1	 

     

    

 

EXHIBIT B

 

CERTIFICATE OF SUBSEQUENT SALE

 

Empire Stock Transfer

1859 Whitney Mesa Dr

Henderson, NV 89014

Via e-mail: info@empirestock.com

 

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, New York 10020

Via e-mail: jhogoboom@lowenstein.com

 

		Re:	Arch Therapeutics, Inc. – Removal of Legends on Shares of Common Stock

Resale Registration Statement on Form S-1 (File No. 333-_ _ _ _ _ _ _)

 

		1.	In connection with the Registration Statement on Form S-1
(File No. -_ _ _ _ _ _ _)(the “Registration Statement”), the undersigned hereby requests that Empire
Stock Transfer:

 

		 ̈	remove the restrictive legend from ________ shares of common stock, par value $0.001 per share, of
Arch Therapeutics, Inc. (“Common Stock”), evidenced by certificate number(s) _____, on the basis that such shares
of Common Stock have been registered for resale under the Registration Statement.

 

OR

 

		 ̈	in connection with the exercise of the undersigned’s Series E Warrant(s) to Purchase Common
Stock, issue __________ shares of Common Stock without a restrictive legend on the basis that such shares of Common Stock have
been registered for resale under the Registration Statement.

 

		2.	In connection with the foregoing request, the undersigned
hereby represents and warrants to Empire Stock Transfer and Lowenstein Sandler LLP that such shares of Common Stock were sold
in accordance with either the plan of distribution contained in the Registration Statement or Rule 144 promulgated under the Securities
Act of 1933 (“Securities Act”).

 

	 	 	 
	 	(Name of Selling Stockholder)	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

    		B-1	 

     

    

 

EXHIBIT C

 

ASSIGNMENT FORM

ARCH THERAPEUTICS, INC.

 

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

 

FOR VALUE RECEIVED,
and subject to the Holder’s compliance with the restrictions set forth in Section 14 of the foregoing Series E Warrant
to Purchase Common Stock (the “Warrant”), the Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	 
	 	(Please Print)
	Address:	 
	 	(Please Print)
	Dated: _______________ __, ______	 
	 	 
	Holder’s Signature:                                       	 
	 	 
	Holder’s Address:                                         	 

 

NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority
to assign the foregoing Warrant.

 

    		C-1

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