Document:

Exhibit 10.2 License Agreement

EXHIBIT 10.2

INTER-COMPANY PATENT LICENSE AGREEMENT

This INTER-COMPANY PATENT LICENSE AGREEMENT (this “Agreement”) is entered into as of November 28th, 2016, by and between Conagen Inc., a corporation organized and existing under the laws of the State of Massachusetts (“Licensor”), and SweeGen, Inc., a corporation organized and existing under the laws of the State of Nevada (“Licensee” and, together with Licensor, the “Parties” and each individually, a “Party”).

WHEREAS, Licensor is the owner of or in control of certain know-how, technology and intellectual property relating to the discovery, development, production, distribution, advertising, marketing, commercialization and sale of compounds, substances, products and services related to the Stevia plant for use in flavorings for food and beverages;

WHEREAS, Licensee desires to secure from Licensor and Licensor desires to grant to Licensee pursuant to the terms set forth in this Agreement the right to use and sublicense such know-how, technology and intellectual property owned and/or controlled by Licensor within the Licensed Field (see definition below); and

NOW, THEREFORE, the parties, in consideration of the mutual premises set forth above and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, agree as follows:

1.

DEFINITIONS.

1.1

“Affiliate” shall mean any person and/or entity that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the person or entity specified.

1.2

“Licensed Know-How” shall mean all patented or unpatented inventions, discoveries, technical data, trade secrets, methods, processes, apparatus and techniques that are owned or controlled by Licensor and are necessary or useful for the marketing, sale, distribution and support of Licensed Products in Licensed Field.

1.3

“Licensed Field” shall mean application of the Licensed Technology in the fields of flavoring for foods and beverages.

1.4

“Licensed Patents” shall mean, to the extent owned or controlled by Licensor during the Term, (a) all patents and patent applications related to the Licensed Field including, without limitation, those patents and patent applications listed on Exhibit A attached hereto, (b) all divisional, continuation, and continuation-in-part applications of any such patent applications, (c) all patents issuing from any of the foregoing applications, (d) all reissues, reexaminations and extensions of any of the foregoing patents, and (e) all patents and patent applications anywhere in the world, at any time, claiming priority from any of the foregoing patent applications.

1.5

“Licensed Products” shall mean those products which incorporate or utilize Licensed Technology and those products whose manufacture, use or sale would, in the absence of the license granted by this Agreement, infringe or misappropriate any intellectual property rights embodied in Licensed Technology.

1.6

“Licensed Technology” shall mean the Licensed Patents and the Licensed Know-How.

1.7

“Net Sales” shall mean, as applicable, the gross sales price for Licensed Products invoiced by and paid to Licensee or its Sublicensee(s) from any third parties for sales or other transfers or dispositions for consideration of Licensed Products, less Licensee’s or Sublicensee(s)’:

(i) documented discounts (including customary trade, quantity, or other promotional incentives), retroactive price reductions, charge-back payments and rebates granted; (ii) credits for returns, such as unrecoverable damaged goods or rejections and including Licensed Products returned in connection with recalls or withdrawals; (iii) costs (inclusive of third parties professional service charges) to apply and register Licensed Products with government authorities as required by relevant laws and regulations; (iv) transportation charges including insurance; and (v) any value added taxes or governmental charges, including custom duties, levied on the sale of Licensed Products.

1.8

“Territory” shall mean worldwide.

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

2.

GRANT OF LICENSES.

2.1

License to Use Licensed Technology. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee an exclusive, perpetual and sub-licensable license to use Licensed Technology in the research, development, make, have made, marketing, sale (inclusive of importing and exporting), distribution and support of Licensed Products in the Licensed Field and the Licensed Territory.

2.2

Sublicenses. The licenses granted to Licensee pursuant to this Section 2 and the other rights granted under this Agreement include Licensee’s right to grant further sublicenses, to sublicensee(s) of Licensee’s choice (“Sublicensee(s)”), for the purpose of development, make, have made, marketing, sale (inclusive of importing and exporting), distribution and support of Licensed Products in the Licensed Field and the Licensed Territory.

2.3

Reservation of Rights by Licensor. The licenses granted by Licensor in this Agreement are subject to a reserved license by Licensor to use and practice the Licensed Technology in the Licensed Field for Licensor’s internal research and development purposes including, without limitation, collaborative arrangements with third parties whereby any and all proprietary interest and information as a result of Licensor’s internal research and development and such collaboration are within the scope of and also considered Licensed Technology.

2.4

Technical Support. Licensor agrees to provide reasonable levels of ongoing technical support to Licensee at no cost for Licensee’s use of the Licensed Technology in the Licensed Field for production of the Licensed Products. Thereafter, any technical support provided by Licensor to Licensee shall be pursuant to a separate written agreement mutually agreed by the Parties.

3.

ROYALTIES AND LICENSED PATENTS MAINTENANCE.

3.1

Royalty Obligation. Licensee shall pay royalties to Licensor as follows until this Agreement expires or is terminated:

(a)

Minimum Royalties: Licensee must pay to Licensor a minimum royalty (“Minimum Royalties”) of $2,000,000 per calendar year, starting from the calendar year in which there is a first commercial sale of Licensed Products (“FCS”). For the year of FCS, the Minimum Royalties shall be pro-rated from the month after the first commercial sale invoice is paid for.

(b)

Earned Royalties: Licensee will pay to Licensor royalties at the following percentages for Licensed Products that are sold or otherwise disposed of by Licensee and Sublicensees (“Earned Royalties”):

·

10% of Net Sales for the year of FCS (pro-rated, if necessary).

·

9% of Net Sales for the first year after FCS.

·

8% of Net Sales for the second year after FCS.

·

7% of Net Sales for the third year after FCS.

·

6% of Net Sales for the fourth year after FCS.

·

5% of Net Sales for the fifth year and all following years after FCS.

3.2

Calculation and Payment of Royalties. Royalties shall be calculated and paid semi- annually. Earned Royalties payable hereunder shall be due and payable within sixty (60) days following the end of each semi annum for all Net Sales made and paid for during such period. Only one payment of Earned Royalties hereunder shall be due and payable to Licensor on any Licensed Product regardless of the number of transfers between entities that such Licensed Product undergoes in the course of its commercialization and regardless of the number of patents or patent applications practiced by Licensee and its sublicensee(s) in connection with the production and commercialization of the Licensed Product. By way of example and not limitation, where a Sublicensee sells Licensed Products to a distributor or retailer who in turn resells such product to end-users, the Earned Royalties payable hereunder will be paid solely on such first sale of the Licensed Products by such Sublicensee. Any Minimum Royalties paid to Licensor shall be credited against and counted towards any Earned Royalties due and owing with respect to Net Sales made and paid for during the semi annum in which such Minimum Royalties should be calculated and paid.

3.3

US Dollars. All payments due by either Party under this Agreement shall be made in U.S. Dollars (whether or not the amount payable is mentioned in U.S. Dollars or in any other currency in this Agreement).

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

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3.4

Licensed Patents Maintenance. Licensor shall remain responsible for any and all costs associated with the application and prosecution of the Licensed Patents.

4.

RECORDS AND REPORTS

4.1

Records. Licensee shall keep full, complete and accurate books of account containing all particulars that may be reasonably necessary for determining the royalties payable to Licensor for a period of two (2) years following each calendar year in sufficient detail to enable the accurate determination of royalties hereunder by Licensee. Said books of account shall be kept at Licensee’s principal place of business.

4.2

Audit. The records described in Section 4.1 above shall be available for inspection by an independent certified public accountant retained by Licensor at Licensor’s expense during normal business hours, upon reasonable notice, for as long as this Agreement is not terminated and for two (2) years following the end of such calendar year, for the purpose of verifying Licensee’s royalty statements.

4.3

Reports. Concurrently with the royalty payments required under this Agreement, Licensee shall deliver true and accurate royalty and revenue reports to Licensor, giving such particulars of the business conducted by the Licensee and Sublicensee(s) during the preceding quarter as are pertinent to a royalty accounting under this Agreement. These reports shall include at least the following: (a) the quantity and types of Licensed Products sold on a country-by-country basis; (b) total Net Sales price for Licensed Products sold; (c) adjustments used to calculate Net Sales; and (d) total royalties due.

5.

LITIGATION

5.1

Notice of Infringement. Each Party shall promptly notify the other Party in writing of any suspected infringement(s) or misappropriation(s) of Licensed Technology and shall inform the other Party of any evidence of such infringement(s) or misappropriation(s).

5.2

First Right to Sue. Licensee shall have the first right to institute and prosecute at its own expense suit for infringement(s) or misappropriations of Licensed Technology within the Licensed Field (“First Right to Sue”). Licensee may assign its First Right to Sue to any Sublicensee of its choice. Licensor agrees to join as a party plaintiff in any such lawsuit initiated by Licensee or the Sublicensee assigned with such First Right to Sue, if requested by Licensee, with all costs, attorneys’ fees and expenses to be paid by Licensee. However, if Licensee or such Sublicensee does not institute suit for material infringement(s) within one hundred eighty (180) days of receipt of written notice from Licensor of Licensor’s desire to bring suit for infringement in its own name and on its own behalf, then Licensor may, at its own expense, after good faith negotiations with Licensee and the Sublicensee with the First Right to Sue regarding the appropriateness of such a suit, bring suit or take any other appropriate action. In such event, Licensee agrees to join or shall cause the Sublicensee with the First Right to Sue to join as a party plaintiff in any such lawsuit initiated by Licensor, if requested by Licensor, with all costs, attorneys’ fees and expenses to be paid by Licensor.

5.3

Settlements. Neither Party may settle with an infringer without the prior approval of the other Party if such settlement would affect the rights of the other Party, provided, however, Licensee shall be entitled to settle any claim or suit for infringement related to the Licensed Products by granting the infringing party a sublicense under the terms and conditions of Section 2 of this Agreement.

6.

CONFIDENTIALITY.

6.1

Acknowledgments and Covenants. Licensee acknowledges, understands and agrees that: (i) Licensor has expended substantial time, money and effort researching and developing the Licensed Technology; (ii) the Licensed Technology provides Licensor with a significant competitive advantage in the marketplace; (iii) the Licensed Technology, together with all improvements, enhancements and modifications thereto, is the confidential, proprietary and trade and industrial secret information and property of Licensor; (iv) if the Licensed Technology was disclosed or misused, Licensor would suffer substantial irreparable harm and likely lose its competitive advantage in the marketplace; (v) as of the date of this Agreement, Licensee is not aware of any facts or allegations which would, in any way or manner, compromise the confidentiality, propriety and trade and industrial secret status of any of the Licensed Technology; and (vi) Licensee will not make any use of any portion of the Licensed Technology in a manner inconsistent with the provisions of this Agreement.

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

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6.2

Security Measures. Licensee agrees it will use commercially reasonable security measures and efforts to ensure that the Licensed Technology is kept and retained in confidence and secret; however, in no event shall the degree of care exercised by Licensee be any less than the degree of care it employs to maintain and protect the confidentiality of its own confidential or proprietary information.

6.3

No Disclosure. Licensee agrees that it will not disclose or reveal to any other person or entity (except as permitted herein) the Licensed Technology, subject to the provisions of Sections 6.4 and 6.6.

6.4

Permitted Disclosure; Improvements. Licensee agrees that it will only disclose the Licensed Technology to its customers, Sublicensee(s), employees, agents, officers, and directors which have a need to know such information in connection with the purpose of any licenses granted Licensee herein. All rights in and to any inventions, improvements, enhancements and modifications made by Licensee and any customer and Sublicense of Licensee, including any intellectual property rights therein, are owned by and are hereby transferred to Licensor but shall be within the scope of and considered Licensed Technology.

6.5

Breach or Threatened Breach. In the event of a breach or threatened breach of any of Licensee’s duties and obligations under the terms and provisions of this Section 6, Licensor shall be entitled, in addition to any other legal or equitable remedies that it may be entitled to (including any rights to damages that such party may suffer), temporary, preliminary and permanent injunctive relief restraining such breach or threatened breach.

6.6

Exceptions. Notwithstanding any other provision of this Agreement, Licensee shall not have any obligations respecting, nor be liable for, the use and disclosure of information relating to the Licensor or the Licensed Technology, if Licensee can prove that the information: (a) was known to the trade or public at the time that the information was disclosed to it; or (b) is or becomes generally known to the trade or public through no fault on the recipient Party’s part; or (c) is independently generated after the date of this Agreement by employees of a Party, or on its behalf by its agents, contractors, or consultants, without the use or benefit of any Licensed Technology; or (d) is legally required to be disclosed by Licensee under non-confidential circumstances pursuant to applicable law or legal process only so long as Licensee: (i) first provides Licensor with reasonable advance written notice of any such impending disclosure and/or service of legal process; and (ii) Licensee takes all necessary steps to ensure that Licensed Technology retains its confidential status through the implementation of, among other things, the use and/or entry of appropriate confidentiality agreements and/or protective orders.

7.

WARRANTIES.

7.1

Licensed Technology. Licensee understands, acknowledges and agrees that Licensor has not made and does not make, and expressly disclaims any and all, representations or warranties (and Licensee expressly waives and releases Licensor from any and all representations or warranties), express or implied, regarding Licensor’s and/or Licensee’s right to make, use, offer for sale, license, and/or sell any of the rights transferred, granted and/or licensed to Licensee under this Agreement, and/or any goods and/or services employing any of the rights transferred, granted and/or licensed to Licensee under this Agreement, including, but not limited to, any implied warranties of title, claims of superior rights, infringement, right to use, or the like, in or to any of Licensed Technology. Nothing in this Agreement will be construed as:

(a)

A warranty or representation by Licensor as to the validity or scope of any Licensed Patent; or

(b)

A warranty or representation that anything made, used, sold, or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of patents of third parties; or

(c)

A requirement that Licensor will file any patent application, secure any patent, or maintain any patent in force; or

(d)

An obligation to bring or prosecute actions or suits against third parties for infringement.

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

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7.2

Licensor Liability. Licensee understands, acknowledges and agrees that in no event shall Licensor be liable to Licensee and Sublicensee(s) under this Agreement, and/or any other persons or entities, regardless of the form of a cause of action, whether in contract, tort or under a statute, including, but not limited to, negligence, strict liability, product liability, environmental liability, patent infringement, misappropriation of trade secrets, trademark infringement, copyright infringement, unfair competition, or the like, which in any way arises out of and/or is related to Licensee’s, Sublicensee(s)’ and/or any other person’s and/or entity’s, manufacture, use, offer for sale, license, and/or sale of any of the rights granted or licensed to Licensee under this Agreement, and/or any goods and/or services employing any of the rights granted or licensed to Licensee under this Agreement.

8.

TERMINATION.

8.1

Termination upon Mutual Agreement. Notwithstanding any other provision of this Agreement, the Parties by mutual consent may terminate this Agreement at any time.

8.2

Termination for Cause. This Agreement shall, unless the Parties otherwise agree, terminate upon the occurrence of any of the following:

(a)

If Licensee delays to make any due payment for more than ninety (90) days;

(b)

If Licensee breaches the observance or performance of any of the provisions of this Agreement, unless such breach is cured within sixty (60) days after notice in writing of said breach;

(c)

The dissolution of Licensee or if Licensee otherwise ceases to do business as an ongoing concern; or

(d)

If Licensee makes an assignment of assets or business for the benefit of its creditors, a trustee or receiver is appointed to administer or conduct its business or affairs, it is adjudged in any proceeding to be bankrupt or insolvent or it is unable to pay its debts when said debts become due in the ordinary course of business.

8.3

Effect of Termination. Upon termination of this Agreement for any reason whatsoever:

(a)

All amounts unpaid by Licensee shall accrue and immediately become due and payable to Licensor and Licensee’s right to use Licensed Technology shall terminate immediately;

(b)

Licensee will promptly execute and deliver to Licensor within thirty (30) days following the date of termination all assignment documents and instruments deemed necessary by Licensor to divest Licensee of any and all rights or claims to Licensed Technology under or arising out of this Agreement; and

(c)

Licensee shall immediately cease and desist from all use of any of Licensed Technology in case of termination of this Agreement due to reasons attributable to the Licensee, other than that Licensee shall have the right to continue to sell Licensed Products for an additional one hundred and twenty (120) days after the termination of this Agreement

8.3

Survivability. After termination of this Agreement all provisions relating to payment shall survive until completion of required payments. In addition to those provisions and to any provisions which specifically provide for survival beyond termination, Sections 5 and 6 shall survive indefinitely or until the expiration of any time period specified elsewhere in this Agreement with respect to the provision in question.

9.

INDEPENDENT CONTRACTOR. This Agreement shall not make or constitute Licensee the legal representative or agent of Licensor, nor shall Licensee have the right or authority to assume, create or incur any liability or obligation of any kind, expressed or implied, against the interest or in the name of Licensor.

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

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10.

NON-WAIVER OF RIGHTS. Neither Party shall be deemed to have waived or impaired any right, power or option created or reserved by this Agreement (including without limitation, each Party’s right to demand compliance with every term herein, or to declare any breach a default and exercise its rights in accordance with the terms hereof) by virtue of: (i) any custom or practice of the Parties at variance with the terms hereof; (ii) any failure, refusal or neglect to exercise any right hereunder, or to insist upon compliance with any term; (iii) any waiver, forbearance, delay, failure or omission to exercise any right or option, whether of the same, similar or different natures, under this Agreement or in any other circumstances; or (iv) the acceptance by either Party of any payment or other consideration from the other following any breach of this Agreement.

11.

NOTICES. All notices required under this Agreement shall be in writing and may be sent via facsimile or international air courier and shall be deemed to be properly delivered upon receipt by the appropriate Party.

If to Licensor at:

Conagen Inc.

15 DeAngelo Drive, Bedford, MA 01730 Attention: 

If to Licensee at:

SweeGen, Inc.

30321 Esperanza Avenue, Rancho Santa Margarita, CA 92688 Attention: 

or to such other address as either Party may from time to time designate to the other Party in writing.

12.

ENTIRE AGREEMENT. This Agreement and the Exhibits attached hereto constitute the entire agreement between Licensee and Licensor in connection with the subject matter hereof and supersedes all documents and correspondence entered into prior to the date hereof.

13.

AMENDMENT. This Agreement may only be amended pursuant to a written agreement between the Parties.

14.

CUMULATIVE REMEDIES. The rights and remedies set forth in this Agreement are in addition to any other rights or remedies which may be granted by law.

15.

SEVERABILITY. If any obligation or provision of this Agreement or the application thereof shall, to any extent, be invalid or unenforceable, then the remainder of the Agreement or application of such obligation or provision other than that which is held invalid or unenforceable, shall be given full force and effect.

16.

GOVERNING LAW. The construction, interpretation and performance of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

6

[Signature page only]

IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Agreement on the day and year first above set forth.

Conagen Inc.

SweeGen, Inc.

By: /s/ Steven Chen

By: /s/ Steven Chen

Name: Steven Chen

Name: Steven Chen

Title: President

Title: CEO & President

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

7

EXHIBIT A

LICENSED PATENTS

List of Reb D and Reb M patents to be exclusively licensed from Conagen to SweeGen

[**redacted]

** Information marked as "[**redacted]" has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

8Blueprint

 

Exhibit 4.1

 

Warrant
Certificate No. ___

 

 

NEITHER
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS
AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF
SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.

 

 

	
 Effective Date: [
], 2016

	
 Void After: [ ],
2021

 

ADGERO BIOPHARMACEUTICALS HOLDINGS,
INC.

 

WARRANT
TO PURCHASE COMMON STOCK

 

Adgero Biopharmaceuticals Holdings, Inc., a Delaware corporation
(the “Company”),
for value received on [ ], 2016 (the “Effective Date”), hereby issues to
[ ] (the “Holder” or “Warrant Holder”) this Warrant (the
“Warrant”) to
purchase, [ ] shares (each
such share as from time to time adjusted as hereinafter provided
being a “Warrant
Share” and all such shares being the
“Warrant
Shares”) of the Company’s Common Stock (as
defined below), at the Exercise Price (as defined below), as
adjusted from time to time as provided herein, on or before [ ],
2021 (the “Expiration
Date”), all subject to the following terms and
conditions. This Warrant is one of a series of warrants of like
tenor that have been issued in connection with the Company’s
private offering solely to accredited investors of units in
accordance with, and subject to, the terms and conditions described
in the Subscription Agreement, attached to the Confidential Private
Placement Memorandum of the Company dated January 11, 2016, as the
same may be amended and supplemented from time to time (the
“Subscription
Agreement” and the “Private Placement Memorandum”
respectively).

As used
in this Warrant, (i) “Business Day” means any day other
than Saturday, Sunday or any other day on which commercial banks in
the City of New York, New York, are authorized or required by law
or executive order to close; (ii) “Common Stock” means the common
stock of the Company, par value $0.0001 per share, including any
securities issued or issuable with respect thereto or into which or
for which such shares may be exchanged for, or converted into,
pursuant to any stock dividend, stock split, stock combination,
recapitalization, reclassification, reorganization or other similar
event; (iii) “Exercise
Price” means $5.00
per share of Common Stock, subject to adjustment as provided
herein; (iv) “Trading
Day” means any day on which the Common Stock is traded
(or available for trading) on its principal trading
market; (v) “Affiliate” means any person that, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, a person, as such
terms are used and construed in Rule 144 promulgated under the
Securities Act of 1933, as amended (the “Securities
Act”) and (vi)
“Warrantholders”
means the holders of Warrants issued pursuant to the Subscription
Agreement and Private Placement Memorandum.

 

 

1

 

1. DURATION AND EXERCISE OF
WARRANTS

 

(a)  Exercise
Period. The Holder may exercise
this Warrant in whole or in part on any Business Day on or before
5:00 P.M., Eastern Time, on the Expiration Date, at which time this
Warrant shall become void and of no value.

 

(b)  Exercise
Procedures.

 

(i)  While this Warrant remains outstanding and
exercisable in accordance with Section 1(a), in addition to the
manner set forth in Section 1(b)(ii) below, the Holder may exercise
this Warrant in whole or in part at any time and from time to time
by:

 

(A)  delivery to the Company of a duly executed copy of
the Notice of Exercise attached as Exhibit A;

 

(B)  surrender of this Warrant to the Secretary of the
Company at its principal offices or at such other office or agency
as the Company may specify in writing to the Holder;
and

 

(C)  payment of the then-applicable Exercise Price per
share multiplied by the number of Warrant Shares being purchased
upon exercise of the Warrant (such amount, the
“Aggregate Exercise
Price”) made in the form
of cash, or by certified check, bank draft or money order payable
in lawful money of the United States of America or in the form of a
Cashless Exercise to the extent permitted in Section 1(b)(ii)
below.

 

(ii)  In
addition to the provisions of Section 1(b)(i) above, if any time
after the Registration Default Date (as defined in the Registration
Rights Agreement of even date herewith, by and among the
Company, the Holder and the other subscribers of the
Company’s securities pursuant to the Subscription Agreements
(the “Registration Rights
Agreement”)), a
registration statement covering the resale of the Warrant Shares by
the Holder is not effective with the Securities and Exchange
Commission (the “SEC”), the Holder may, in its sole discretion,
exercise all or any part of the Warrant in a “cashless”
or “net-issue” exercise (a “Cashless
Exercise”) by delivering
to the Company (1) the Notice of Exercise and (2) the original
Warrant, pursuant to which the Holder shall surrender the right to
receive upon exercise of this Warrant, a number of Warrant Shares
having a value (as determined below) equal to the Aggregate
Exercise Price, in which case, the number of Warrant Shares to be
issued to the Holder upon such exercise shall be calculated using
the following formula:

 

 

2

 

 

X              =              Y
* (A - B)

       A

 

	
 

	with:	X=	
 the number of Warrant Shares to be issued to the
Holder

	
 

	
 

	
 

	
 

	
 

	
 

	
Y=

	
 the
number of Warrant Shares with respect to which the Warrant is being
exercised

	
 

	
 

	
 

	
 

	
 

	
 

	A=	
 the
fair value per share of Common Stock on the date of exercise of
this Warrant

	
 

	
 

	
 

	
 

	
 

	
 

	
B=

	
 the then-current Exercise Price of the
Warrant

 

Solely for the purposes of this paragraph,
“fair
value” per share of
Common Stock shall mean the average Closing Price (as defined
below) per share of Common Stock for the twenty (20) trading days
immediately preceding the date on which the Notice of Exercise is
deemed to have been sent to the Company. “Closing
Price” means, for any
date, the price determined by the first of the following clauses
that applies:  (a) if the Common Stock is then listed or
quoted on the New York Stock Exchange, the NYSE MKT, the NASDAQ
Global Select Market, the NASDAQ Global Market or the NASDAQ
Capital Market or any other national securities exchange, the
closing price per share of the Common Stock for such date (or the
nearest preceding date) on the primary eligible market or exchange
on which the Common Stock is then listed or quoted; (b) if prices
for the Common Stock are then quoted on the OTC Bulletin Board or
any tier of the OTC Markets, the closing bid price per share of the
Common Stock for such date (or the nearest preceding date) so
quoted; or (c) if prices for the Common Stock are then reported in
the “Pink Sheets” published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent closing bid
price per share of the Common Stock so reported. If the Common
Stock is not publicly traded as set forth above, the “fair
value” per share of Common Stock shall be reasonably and in
good faith determined by the Board of Directors of the Company as
of the date which the Notice of Exercise is deemed to have been
sent to the Company.

 

Notwithstanding
the foregoing, provided that a registration statement (including
any post-effective amendment) covering the resale of the Warrant
Shares by the Holder has (x) been declared effective by the SEC and
(y) has been effective for an aggregate period of one year, any
Cashless Exercise right hereunder shall thereupon
terminate.

 

For
purposes of Rule 144 promulgated under the Securities Act, it is
intended, understood and acknowledged that the Warrant Shares
issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for such shares
shall be deemed to have commenced, on the date this Warrant was
originally issued.

 

(iii)           Upon
the exercise of this Warrant in compliance with the provisions of
this Section 1(b), and except as limited pursuant to the last
paragraph of Section 1(b)(ii), the Company shall promptly issue and
cause to be delivered to the Holder a certificate for the Warrant
Shares purchased by the Holder. Each exercise of this Warrant shall
be effective immediately prior to the close of business on the date
(the “Date of
Exercise”) that the
conditions set forth in Section 1(b) have been satisfied, as the
case may be. On the first Business Day following the date on which
the Company has received each of the Notice of Exercise and the
Aggregate Exercise Price (or notice of a Cashless Exercise in
accordance with Section 1(b)(ii)) (the “Exercise Delivery
Documents”), the Company
shall transmit an acknowledgment of receipt of the Exercise
Delivery Documents to the Company’s transfer agent (the
“Transfer
Agent”). On or before the
third Business Day following the date on which the Company has
received all of the Exercise Delivery Documents (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, 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 Agent Commission system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer
Program, issue and dispatch by overnight courier to the address as
specified in the Notice of Exercise, 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 of delivery of the certificates
evidencing such Warrant Shares.

 

 

3

 

(iv)           If
the Company shall fail for any reason or for no reason to issue to
the Holder, within three (3) Business Days of receipt of the
Exercise Delivery Documents, a certificate for the number of shares
of Common Stock to which the Holder is entitled and register such
shares of Common Stock on the Company’s share register or to
credit the Holder’s balance account with DTC for such number
of shares of Common Stock to which the Holder is entitled upon the
Holder’s exercise of this Warrant, and if on or after such
Business Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock issuable upon such
exercise that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, (A) pay in cash
to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased (the
“Buy-In
Amount”) plus the amount
paid by the Holder to the Company as the exercise price for the
Warrant Shares exceeds (y) the amount obtained by multiplying (1)
the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock, and paid the Company $5,000 as the exercise
price, the Holder’s cash outlay would be a total of $16,000;
and if the aggregate sales price of the shares giving rise to such
Buy-In obligation was $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$6,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.

 

 

4

 

 

(c)  Partial
Exercise. This Warrant shall be
exercisable, either in its entirety or, from time to time, for part
only of the number of Warrant Shares referenced by this Warrant. If
this Warrant is submitted in connection with any exercise pursuant
to Section 1 and the number of Warrant Shares represented by this
Warrant submitted for exercise is greater than the actual number of
Warrant Shares being acquired upon such an exercise, then the Company shall as soon as
practicable and in no event later than five (5) Business Days after
any exercise and at its own expense, issue a new Warrant of like
tenor 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 is exercised.

 

(d) 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 and resolve such dispute in accordance with Section
16.

 

2. ISSUANCE OF WARRANT SHARES

 

(a) The
Company covenants that all Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be (i) duly authorized,
fully paid and non-assessable, and (ii) free from all liens,
charges and security interests, with the exception of claims
arising through the acts or omissions of any Holder and except as
arising from applicable Federal and state securities
laws.

 

(b) The
Company shall register this Warrant upon records to be maintained
by the Company for that purpose in the name of the record holder of
such Warrant from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner thereof for
the purpose of any exercise thereof, any distribution to the Holder
thereof and for all other purposes.

 

(c) The
Company will not, by amendment of its certificate of incorporation,
by-laws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant
and in the taking of all action necessary or appropriate in order
to protect the rights of the Holder to exercise this Warrant, or
against impairment of such rights.

 

 

5

 

3.            ADJUSTMENTS
OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT
SHARES

 

(a) The Exercise Price and the number of shares
purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events
described in this Section 3; provided,
that notwithstanding the provisions of this Section 3, the Company
shall not be required to make any adjustment if and to the extent
that such adjustment would require the Company to issue a number of
shares of Common Stock in excess of its authorized but unissued
shares of Common Stock, less all amounts of Common Stock that have
been reserved for issue upon the conversion of all outstanding
securities convertible into shares of Common Stock and the exercise
of all outstanding options, warrants and other rights exercisable
for shares of Common Stock. If the Company does not have the
requisite number of authorized but unissued shares of Common Stock
to make any adjustment, the Company shall use its commercially best
efforts to obtain the necessary stockholder consent to increase the
authorized number of shares of Common Stock to make such an
adjustment pursuant to this Section 3.

 

(i) Subdivision or
Combination of Stock. In case
the Company shall at any time subdivide (whether by way of stock
dividend, stock split or otherwise) its outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in
effect immediately prior to such subdivision shall be
proportionately reduced and the number of Warrant Shares shall be
proportionately increased, and conversely, in case the outstanding
shares of Common Stock of the Company shall be combined (whether by
way of stock combination, reverse stock split or otherwise) into a
smaller number of shares, the Exercise Price in effect immediately
prior to such combination shall be proportionately increased and
the number of Warrant Shares shall be proportionately decreased.
The Exercise Price and the Warrant Shares, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive
event or events described in this Section
3(a)(i).

 

(ii) Dividends in Stock,
Property, Reclassification. If
at any time, or from time to time, all of the holders of Common
Stock (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received
or become entitled to receive, without payment
therefore:

 

(A) any shares of stock or other securities that
are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to
subscribe for, purchase or otherwise acquire any of the foregoing
by way of dividend or other distribution, or

 

(B) additional stock or other securities or
property (including cash) by way of spin-off, split-up,
reclassification, combination of shares or similar corporate
rearrangement (other than shares of Common Stock issued as a stock
split or adjustments in respect of which shall be covered by the
terms of Section 3(a)(i) above),

 

then and in each such case, the Exercise Price and
the number of Warrant Shares to be obtained upon exercise of this
Warrant shall be adjusted proportionately, and the Holder hereof
shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property
(including cash in the cases referred to above) that such Holder
would hold on the date of such exercise had such Holder been the
holder of record of such Common Stock as of the date on which
holders of Common Stock received or became entitled to receive such
shares or all other additional stock and other securities and
property. The Exercise Price and the Warrant Shares, as so
adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described in this Section
3(a)(ii).

 

 

6

 

(iii)           Reorganization,
Reclassification, Consolidation, Merger or Sale. If any recapitalization,
reclassification or reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets
or other transaction shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities, or
other assets or property (an “Organic
Change”), then, as a condition of
such Organic Change, lawful and adequate provisions shall be made
by the Company whereby the Holder hereof shall thereafter have the
right to purchase and receive (in lieu of the shares of the Common
Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented by this
Warrant) such shares of stock, securities or other assets or
property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Common Stock equal to
the number of shares of such stock immediately theretofore
purchasable and receivable assuming the full exercise of the rights
represented by this Warrant. In the event of any Organic Change,
appropriate provision shall be made by the Company with respect to
the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation,
provisions for adjustments of the Exercise Price and of the number
of shares purchasable and receivable upon the exercise of this
Warrant and registration rights) shall thereafter be applicable, in
relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company will not affect
any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor corporation (if other than the
Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written
instrument reasonably satisfactory in form and substance to the
Holder executed and mailed or delivered to the registered Holder
hereof at the last address of such Holder appearing on the books of
the Company, the obligation to deliver to such Holder such shares
of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase. If there is an
Organic Change, then the Company shall cause to be mailed to the
Holder at its last address as it shall appear on the books and
records of the Company, at least 10 calendar days before the
effective date of the Organic Change, a notice stating the date on
which such Organic Change is expected to become effective or close,
and the date as of which it is expected that holders of the Common
Stock of record shall be entitled to exchange their shares for
securities, cash, or other property delivered upon such Organic
Change; provided, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such
notice. The Holder is entitled to exercise this Warrant during the
10-day period commencing on the date of such notice to the
effective date of the event triggering such notice. In any event,
the successor corporation (if other than the Company) resulting
from such consolidation or merger or the corporation purchasing
such assets shall be deemed to assume such obligation to deliver to
such Holder such shares of stock, securities or assets even in the
absence of a written instrument assuming such obligation to the
extent such assumption occurs by operation of
law.

 

 

7

 

(b)           Certificate
as to Adjustments. Upon the
occurrence of each adjustment or readjustment pursuant to this
Section 3, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and
furnish to each Holder of this Warrant a certificate setting forth
such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company
shall promptly furnish or cause to be furnished to such Holder a
like certificate setting forth: (i) such adjustments and
readjustments; and (ii) the number of shares and the amount, if
any, of other property which at the time would be received upon the
exercise of the Warrant.

 

(c)           Certain
Events. If any event occurs as
to which the other provisions of this Section 3 are not strictly
applicable but the lack of any adjustment would not fairly protect
the purchase rights of the Holder under this Warrant in accordance
with the basic intent and principles of such provisions, or if
strictly applicable would not fairly protect the purchase rights of
the Holder under this Warrant in accordance with the basic intent
and principles of such provisions, then the Company's Board of
Directors will, in good faith, make an appropriate adjustment to
protect the rights of the Holder; provided,
that no such adjustment pursuant to this Section 3(c) will increase
the Exercise Price or decrease the number of Warrant Shares as
otherwise determined pursuant to this Section
3.

 

4.            REDEMPTION
OF WARRANTS

(a)           General.
Prior to the Expiration Date, the Company shall have the option,
subject to the conditions set forth herein, to redeem all of the
Warrants then outstanding upon not less than thirty (30) days nor
more than sixty (60) days prior written notice to the Warrant
Holders at any time provided that, at the time of delivery of such
notice (i) there is an effective registration statement
covering the resale of the Warrant Shares, and (ii) the Closing Price of the
Company’s Common Stock for each of the twenty (20)
consecutive Trading Days prior to the date of the notice of
redemption is at least $12.50, as proportionately adjusted to
reflect any stock splits, stock dividends, combination of shares or
like events. It is contemplated that Aegis Capital Corp. will be
retained as solicitation agent in the event the Company elects to
redeem the Warrants and shall be paid a fee of 5% of the gross
proceeds derived from the exercise of the Warrants in such
event.

 

(b)           Notice.
Notice of redemption will be effective upon mailing in accordance
with this Section and such date may be referred to below as the
“Notice Date.” Notice of redemption shall be mailed by
first class mail, postage prepaid, by the Company not less than 30
days prior to the date fixed for redemption to the Holders of the
Warrants to be redeemed at their last addresses as they shall
appear on the registration books. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly
given whether or not the Holder received such
notice.

 

(c)           Redemption
Date and Redemption Price. The
notice of redemption shall state the date set for redemption, which
date shall be not less than thirty (30) days, or more than sixty
(60) days, from the Notice Date (the “Redemption
Date”). The Company shall
not mail the notice of redemption unless all funds necessary to pay
for redemption of the Warrants to be redeemed shall have first been
set aside by the Company for the benefit of the Warrant Holders so
as to be and continue to be available therefor. The redemption
price to be paid to the Warrant Holders will be $0.0001 for each
share of Common Stock of the Company to which the Warrant Holder
would then be entitled upon exercise of the Warrant being redeemed,
as adjusted from time to time as provided herein (the
“Redemption
Price”).

 

 

8

 

 

(d) Exercise.
Following the Notice Date, the Warrant Holders may exercise their
Warrants in accordance with Section 1 of this Warrant between the
Notice Date and 5:00 p.m. Eastern Time on the Redemption Date and
such exercise shall be timely if the form of election to purchase
duly executed and the Warrant Exercise Price for the shares of
Common Stock to be purchased are actually received by the Company
at its principal offices prior to 5:00 p.m. Eastern Time on the
Redemption Date.

 

(e) Mailing.
If any Warrant Holder does not wish to exercise any Warrant being
redeemed, he should mail such Warrant to the Company at its
principal offices after receiving the notice of redemption. On and
after 5:00 p.m. Eastern Time on the Redemption Date,
notwithstanding that any Warrant subject to redemption shall not
have been surrendered for redemption, the obligation evidenced by
all Warrants not surrendered for redemption or effectively
exercised shall be deemed no longer outstanding, and all rights
with respect thereto shall forthwith cease and terminate, except
only the right of the holder of each Warrant subject to redemption
to receive the Redemption Price for each share of Common Stock to
which he would be entitled if he exercised the Warrant upon
receiving notice of redemption of the Warrant subject to redemption
held by him.

 

5. TRANSFERS AND EXCHANGES OF WARRANT AND WARRANT
SHARES

 

(a) Registration of
Transfers and Exchanges.
Subject to Section 5(c), upon the Holder’s surrender of this
Warrant, with a duly executed copy of the Form of Assignment
attached as Exhibit B, to the Secretary of the Company at its principal
offices or at such other office or agency as the Company may
specify in writing to the Holder, the Company shall register the
transfer of all or any portion of this Warrant. Upon such
registration of transfer, the Company shall issue a new Warrant, in
substantially the form of this Warrant, evidencing the acquisition
rights transferred to the transferee and a new Warrant, in similar
form, evidencing the remaining acquisition rights not transferred,
to the Holder requesting the transfer.

 

(b) Warrant Exchangeable
for Different Denominations.
The Holder may exchange this Warrant for a new Warrant or Warrants,
in substantially the form of this Warrant, evidencing in the
aggregate the right to purchase the number of Warrant Shares which
may then be purchased hereunder, each of such new Warrants to be
dated the date of such exchange and to represent the right to
purchase such number of Warrant Shares as shall be designated by
the Holder. The Holder shall surrender this Warrant with duly
executed instructions regarding such re-certification of this
Warrant to the Secretary of the Company at its principal offices or
at such other office or agency as the Company may specify in
writing to the Holder.

 

 

9

 

(c)           Restrictions
on Transfers. This Warrant may
not be transferred at any time without (i) registration under the
Securities Act or (ii) an exemption from such registration and a
written opinion of legal counsel addressed to the Company that the
proposed transfer of the Warrant may be effected without
registration under the Securities Act, which opinion will be in
form and from counsel reasonably satisfactory to the
Company.

 

(d)           Permitted
Transfers and Assignments.
Notwithstanding any provision to the contrary in this Section 5,
the Holder may transfer, with or without consideration, this
Warrant or any of the Warrant Shares (or a portion thereof) to the
Holder’s Affiliates (as such term is defined under Rule 144
of the Securities Act) without obtaining the opinion from counsel
that may be required by Section 5(c)(ii), provided,
that the Holder delivers to the
Company and its counsel certification, documentation, and other
assurances reasonably required by the Company’s counsel to
enable the Company’s counsel to render an opinion to the
Company’s Transfer Agent that such transfer does not violate
applicable securities laws.

 

6. MUTILATED OR MISSING WARRANT
CERTIFICATE

 

If this Warrant is mutilated, lost, stolen or
destroyed, upon request by the Holder, the Company will, at its
expense, issue, in exchange for and upon cancellation of the
mutilated Warrant, or in substitution for the lost, stolen or
destroyed Warrant, a new Warrant, in substantially the form of this
Warrant, representing the right to acquire the equivalent number of
Warrant Shares; provided,
that, as a prerequisite to the issuance of a substitute Warrant,
the Company may require satisfactory evidence of loss, theft or
destruction as well as an indemnity from the Holder of a lost,
stolen or destroyed Warrant.

 

7. PAYMENT OF TAXES

 

The Company will pay all transfer and stock
issuance taxes attributable to the preparation, issuance and
delivery of this Warrant and the Warrant Shares (and replacement
Warrants) including, without limitation, all documentary and stamp
taxes; provided,
however,
that the Company shall not be required to pay any tax in respect of
the transfer of this Warrant, or the issuance or delivery of
certificates for Warrant Shares or other securities in respect of
the Warrant Shares to any person or entity other than to the
Holder.

 

8.            FRACTIONAL
WARRANT SHARES

 

No
fractional Warrant Shares shall be issued upon exercise of this
Warrant. The Company, in lieu of issuing any fractional Warrant
Share, shall round up the number of Warrant Shares issuable to
nearest whole share.

 

9. NO
STOCK RIGHTS AND LEGEND

 

No
holder of this Warrant, as such, shall be entitled to vote or be
deemed the holder of any other securities of the Company that may
at any time be issuable on the exercise hereof, nor shall anything
contained herein be construed to confer upon the holder of this
Warrant, as such, the rights of a stockholder of the Company or the
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or give or
withhold consent to any corporate action or to receive notice of
meetings or other actions affecting stockholders (except as
provided herein), or to receive dividends or subscription rights or
otherwise (except as provide herein).

 

 

10

 

Each
certificate for Warrant Shares initially issued upon the exercise
of this Warrant, and each certificate for Warrant Shares issued to
any subsequent transferee of any such certificate, shall be stamped
or otherwise imprinted with a legend in substantially the following
form:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH
REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL
TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAWS.”

 

10. REGISTRATION RIGHTS

 

The
Holder shall be entitled to the registration rights as are
contained in the Registration Rights Agreement with respect to the
Warrant Shares, the provisions of which are deemed incorporated
herein by reference.  

 

11. NOTICES

 

All notices, consents, waivers, and other
communications under this Warrant must be in writing and will be
deemed given to a party when (a) delivered to the appropriate
address by hand or by nationally recognized overnight courier
service (costs prepaid); (b) sent by facsimile or e-mail with
confirmation of transmission by the transmitting equipment; (c)
received or rejected by the addressee, if sent by certified mail,
return receipt requested, if to the registered Holder hereof; or
(d) seven days after the placement of the notice into the mails
(first class postage prepaid), to the Holder at the address,
facsimile number, or e-mail address furnished by the registered
Holder to the Company in accordance with the Subscription Agreement
by and between the Company and the Holder, or if to the Company, to
it at 301 N. Harrison St., Suite 9F #459, Princeton, NJ
08540, Attn: Frank Pilkiewicz, CEO (or to such other address, facsimile number, or
e-mail address as the Holder or the Company as a party may
designate by notice the other party).

 

 

11

 

12. SEVERABILITY

 

If
a court of competent jurisdiction holds any provision of this
Warrant invalid or unenforceable, the other provisions of this
Warrant will remain in full force and effect. Any provision of this
Warrant held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.

 

13. BINDING
EFFECT

 

This
Warrant shall be binding upon and inure to the sole and exclusive
benefit of the Company, its successors and assigns, the registered
Holder or Holders from time to time of this Warrant and the Warrant
Shares.

 

14. SURVIVAL OF RIGHTS AND
DUTIES

 

This
Warrant shall terminate and be of no further force and effect on
the earlier of 5:00 P.M., Eastern Time, on the Expiration Date or
the date on which this Warrant has been exercised in
full.

 

15. GOVERNING LAW

 

This
Warrant will be governed by and construed under the laws of the
State of New York without regard to conflicts of laws principles
that would require the application of any other law.

 

16. 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 Business Days of receipt of the Notice of
Exercise 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 Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the
Company shall, within two Business Days, submit via facsimile (a)
the disputed determination of the Exercise Price to an independent,
reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the
Warrant Shares to the Company’s independent, outside
accountant. The Company shall cause at its expense 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. Such
investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties
absent demonstrable error.

 

17. NOTICES OF RECORD DATE

 

Upon
(a) any establishment by the Company of a record date of the
holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or
other distribution, or right or option to acquire securities of the
Company, or any other right, or (b) any capital reorganization,
reclassification, recapitalization, merger or consolidation of the
Company with or into any other corporation, any transfer of all or
substantially all the assets of the Company, or any voluntary or
involuntary dissolution, liquidation or winding up of the Company,
or the sale, in a single transaction, of a majority of the
Company’s voting stock (whether newly issued, or from
treasury, or previously issued and then outstanding, or any
combination thereof), the Company shall mail to the Holder at least
ten (10) Business Days, or such longer period as may be required by
law, prior to the record date specified therein, a notice
specifying (i) the date established as the record date for the
purpose of such dividend, distribution, option or right and a
description of such dividend, option or right, (ii) the date on
which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up, or
sale is expected to become effective and (iii) the date, if any,
fixed as to when the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization,
reclassification, transfer, consolation, merger, dissolution,
liquidation or winding up.

 

 

12

 

18. RESERVATION OF SHARES

 

The
Company shall reserve and keep available out of its authorized but
unissued shares of Common Stock for issuance upon the exercise of
this Warrant, free from pre-emptive rights, such number of shares
of Common Stock for which this Warrant shall from time to time be
exercisable. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued
as provided herein without violation of any applicable law or
regulation. Without limiting the generality of the foregoing, the
Company covenants that it will use commercially reasonable efforts
to take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant and
use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents, including but not limited
to consents from the Company’s stockholders or Board of
Directors or any public regulatory body, as may be necessary to
enable the Company to perform its obligations under this
Warrant.

 

19. NO
THIRD PARTY RIGHTS

 

This
Warrant is not intended, and will not be construed, to create any
rights in any parties other than the Company and the Holder, and no
person or entity may assert any rights as third-party beneficiary
hereunder.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

13

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first set forth above.

 

 

ADGERO
BIOPHARMACEUTICALS HOLDINGS, INC.

 

 

By:
___________________________

  Name: Frank Pilkiewicz

  Title: Chief Executive Officer

 

 

 

 

14

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

(To be executed by the Holder of Warrant if such Holder desires to
exercise Warrant)

 

To Adgero Biopharmaceuticals Holdings, Inc.:

 

The undersigned hereby irrevocably elects to
exercise this Warrant and to purchase thereunder,
___________________ full shares of Adgero Biopharmaceuticals
Holdings, Inc. common stock issuable upon exercise of the Warrant
and delivery of:

 

(1)                 $_________
(in cash as provided for in the foregoing Warrant) and any
applicable taxes payable by the undersigned pursuant to such
Warrant; and

 

(2)                 __________
shares of Common Stock (pursuant to a Cashless Exercise in
accordance with Section 1(b)(ii) of the Warrant) (check here if the
undersigned desires to deliver an unspecified number of shares
equal the number sufficient to effect a Cashless Exercise
[___]).

 

The
undersigned requests that certificates for such shares be issued in
the name of:

 

_________________________________________

(Please print name, address and social security or federal
employer

identification number (if applicable))

 

_________________________________________

 

_________________________________________

 

The undersigned hereby reaffirms all of the
representations and warranties made in the subscription agreement
submitted to Adgero Biopharmaceuticals Holdings, Inc. to acquire the Warrant, including
that the undersigned is an accredited investor as defined under
Rule 501 of Regulation D of the Securities Act of
1933.

 

If
the shares issuable upon this exercise of the Warrant are not all
of the Warrant Shares which the Holder is entitled to acquire upon
the exercise of the Warrant, the undersigned requests that a new
Warrant evidencing the rights not so exercised be issued in the
name of and delivered to:

 

_________________________________________

(Please print name, address and social security or federal
employer

identification number (if applicable))

 

_________________________________________

 

_________________________________________

 

Name
of Holder (print): ________________________

(Signature):
___________________________________

(By:)
_________________________________________

(Title:)
________________________________________

Dated:
________________________________________

 

15

 

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

FOR
VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers to each assignee set forth below all of the
rights of the undersigned under the Warrant (as defined in and
evidenced by the attached Warrant) to acquire the number of Warrant
Shares set opposite the name of such assignee below and in and to
the foregoing Warrant with respect to said acquisition rights and
the shares issuable upon exercise of the Warrant:

 

	

Name of Assignee

	

Address

	

Number of Shares

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

If
the total of the Warrant Shares are not all of the Warrant Shares
evidenced by the foregoing Warrant, the undersigned requests that a
new Warrant evidencing the right to acquire the Warrant Shares not
so assigned be issued in the name of and delivered to the
undersigned.

 

Name
of Holder (print): ________________________

(Signature):
___________________________________

(By:)
_________________________________________

(Title:)
________________________________________

Dated:
________________________________________

 

 

16

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