Document:

Exhibit
10.5

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

This Amended and Restated
Employment Agreement (this “Agreement”) is made and entered into as of April 3, 2019, to be effective
on January 1, 2019 (the “Effective Date”), by and among Sterling Bancorp, a Delaware corporation
(the “Company”), Sterling National Bank, a national banking association organized and existing under
the laws of the United States of America (the “Bank”; and together with the Company, “Sterling”),
and James P. Blose (“Executive”).

 

WITNESSETH:

 

WHEREAS, the
Company, the Bank and Executive are parties to that certain Employment Agreement dated as of October 31, 2016 (the “Prior
Agreement”); and

 

WHEREAS, the
Company, the Bank and Executive desire to amend and restate in its entirety the Prior Agreement to reflect the terms of Executive’s
continued employment with the Company and the Bank following the Effective Date.

 

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

 

1.             Employment.
Subject to the terms set forth herein, the Company and the Bank agree to employ Executive as Executive Vice President and
General Counsel of the Company and the Bank, and Executive hereby accepts such employment. As Executive Vice President and General
Counsel of the Company and the Bank, Executive shall have such authority, perform such duties, and fulfill such responsibilities
commonly incident to such positions, as well as those that are delegated to Executive by the Chief Executive Officer of the Bank.
While employed, Executive shall report to the Chief Executive Officer, and Executive shall devote his full business time and attention
to the business and affairs of the Company and the Bank, and shall use his best efforts to advance the interests of the Company
and the Bank; provided that, Executive may engage in outside activities in accordance with Section 5.

 

2.             Employment
Period.

 

(a)          Duration.
Executive’s period of employment with Sterling under this Agreement shall begin on the Effective Date and shall continue
until December 31, 2021 (or, if a Change in Control (as defined below) occurs prior to such anniversary, the second anniversary
of the date of the Change in Control, if later), unless terminated prior thereto by either Sterling or Executive in accordance
with Section 6 hereof (such period of employment being the “Employment Period”).

 

(b)          Employment
Following Termination of Employment Period. Nothing in this Agreement shall mandate or prohibit a continuation of Executive’s
employment following the expiration of the Employment Period upon such terms and conditions as the Company, the Bank and Executive
may agree.

 

    	 

     

    

 

3.             Compensation.
In exchange for the on-going services of Executive hereunder, the Bank shall provide the following:

 

(a)          Base
Salary. In consideration for the services performed by Executive during the Employment Period, effective January 1, 2019 the
Bank shall pay to Executive an annual salary (“Base Salary”) of $400,000. The Base Salary shall be paid in approximately
equal installments in accordance with the Bank’s customary payroll practices. Executive’s Base Salary shall be reviewed
at least annually during the Employment Period for possible upward adjustment, and Executive’s Base Salary shall not be reduced
without Executive’s consent. The term Base Salary, as utilized in this Agreement, shall refer to Base Salary as it may be
increased from time to time.

 

(b)          Annual
Bonus. For each fiscal year of the Company during the Employment Period, Executive shall be eligible to participate in the
Company’s Short-Term Incentive Plan (or any successor thereto) (the “Annual Bonus Plan”). Executive’s
target bonus under the Annual Bonus Plan shall be determined annually as of December 31 by the Compensation Committee of the Company
Board. As of the date of this Agreement, the Employee's target annual bonus under the Annual Bonus Plan shall be equal to sixty
percent (60%) of Employee’s Base Salary (the “Target Bonus”). The actual amount of Executive’s annual bonus
shall depend upon the achievement of performance goals established by the Compensation Committee of the Company Board, with the
actual bonus to be determined by the Compensation Committee of the Company Board. The terms and conditions of the Annual Bonus
Plan and the payments to Executive thereunder shall be applied on a basis not less favorable to Executive than to other similarly
situated senior executives of Sterling generally. The Compensation Committee of the Company Board shall periodically review Executive’s
Target Bonus percentage and may in its discretion increase Executive’s annual bonus opportunity. The term Target Bonus, as
utilized in this Agreement, shall refer to the Target Bonus as it may be increased. Annual bonuses awarded to Executive under the
Annual Bonus Plan are referred to herein as “Annual Bonuses.” The payment of any such Annual Bonus shall be
subject to all the terms and conditions of the applicable Annual Bonus Plan.

 

(c)          Long-Term
Compensation. During the Employment Period, Executive shall be eligible to participate in any equity and/or other long-term
compensation programs established by the Company from time to time for senior executive officers. Executive’s target annual
equity award opportunity shall be determined by the Compensation Committee of the Company Board and shall be no less favorable
than the target equity award opportunity available to other similarly situated senior executives of Sterling generally, with the
actual award to be determined by the Compensation Committee of the Company Board on a basis not less favorable to Executive than
to other similarly situated senior executives of Sterling generally. As of the date of this Agreement, the Employee's target equity
award opportunity shall be equal to seventy (70%) percent of Employee’s Base Salary.

 

    	 

     

    

 

(d)          Employee
Benefit Plans; Paid Time Off.

 

(i)          Benefit
Plans. During the Employment Period, Executive shall be an employee of the Company and the Bank, and shall be entitled to participate,
on terms and conditions not less favorable to Executive than other similarly situated senior executives of Sterling generally,
in Sterling’s (A) tax-qualified defined contribution retirement plans (currently, Sterling’s 401(k) and Profit
Sharing Plan); (B) group life, health and disability insurance plans; and (C) any other employee benefit plans and programs
and perquisites in accordance with Sterling’s customary practices with respect to other similarly situated senior executives
of Sterling generally; provided that Executive’s participation shall be subject to the terms of such plans and programs
(including being a member of the class of employees currently eligible to commence participation in the plan or program); and provided,
further, that nothing herein shall limit Sterling’s right to amend or terminate any such plans or programs.

 

(ii)         Paid
Time Off. Executive shall be entitled to five (5) weeks of paid vacation time each year during the Employment Period (measured
on a fiscal or calendar year basis, in accordance with Sterling’s usual practices), as well as sick leave, holidays and other
paid absences in accordance with Sterling’s policies and procedures for senior executives. Any unused paid time off during
an annual period may be carried forward into the following year to the extent permitted under Sterling’s policies and procedures
and Executive shall be compensated for any unused paid time off to the extent provided for under Sterling’s policies and
procedures as applicable to other similarly situated senior executives of Sterling generally.

 

(e)          Expenses.
The Bank shall reimburse Executive for Executive’s ordinary and necessary business expenses and travel and entertainment
expenses incurred in connection with the performance of Executive’s duties under this Agreement upon presentation to the
Bank of an itemized account of such expenses in such form as the Bank may reasonably require.

 

4.             Principal
Place of Employment. Executive’s principal place of employment during the Employment Period shall be at the Company’s
principal executive offices or at such other location upon which the Company and Executive may mutually agree, and subject to travel
to such other locations as shall be necessary to fulfill the employment duties.

 

5.             Outside
Activities and Board Memberships. During the Employment Period, Executive shall not provide services on behalf of any financial
institution or other entity or business that competes with the Company, the Bank or any of their affiliates (each, a “competitive
business”), or any subsidiary or affiliate of any such competitive business, as an employee, consultant, independent
contractor, agent, sole proprietor, partner, joint venturer, corporate officer or director; nor shall Executive acquire, by reason
of purchase during the Employment Period, the ownership of more than one percent (1%) of the outstanding equity interest in any
such competitive business. In addition, during the Employment Period, Executive shall not, directly or indirectly, acquire a beneficial
interest, or engage in any joint venture in real estate with Sterling. Subject to the foregoing, Executive may serve on boards
of directors of unaffiliated corporations, subject to approval by the Company Board, which shall not be unreasonably withheld,
and boards of directors of not-for-profit organizations and trade associations, subject to approval by the Company in accordance
with Sterling’s policies and procedures. Except as specifically set forth herein, Executive may engage in personal business
and investment activities, including real estate investments and personal investments in the stocks, securities and obligations
of other financial institutions (or their holding companies). Notwithstanding the foregoing, in no event shall Executive’s
outside activities, services, personal business and investments materially interfere with the performance of Executive’s
duties under this Agreement. Nothing in this Section 5 shall limit any of Executive’s obligations under Section 9
hereof.

 

    	 

     

    

 

6.             Termination
of Employment.

 

(a)          Termination
by Sterling without Cause.

 

(i)          Sterling
shall have the right to terminate Executive’s employment at any time during the Employment Period without Cause by giving
notice to Executive as described in Section 6(f). For sake of clarity, neither termination of Executive’s employment
pursuant to Section 6(e) nor upon or after expiration of the Employment Period shall constitute a termination without Cause
for purposes of this Section 6.

 

(ii)         In
the event that Sterling terminates Executive’s employment during the Employment Period without Cause:

 

(A)         The
Bank shall pay or provide to Executive any Accrued Obligations;

 

(B)         If
such termination occurs other than as provided in Section 6(a)(ii)(C) below, then, subject to Section 6(g), the Bank
shall pay to Executive, (I) within sixty (60) days following the date of termination, a lump sum cash payment (the “Severance
Payment”) in an amount equal to one (1) year of Executive’s Base Salary (in the amount in effect immediately prior
to termination of employment) and the amount of Executive’s Target Bonus for the fiscal year that includes Executive’s
date of termination of employment, and (II) eighteen (18) consecutive monthly cash payments (commencing with the first month
following Executive’s termination of employment, and continuing until the eighteenth month following Executive’s termination
of employment) each equal to the monthly COBRA premium in effect as of the date of Executive’s termination of employment
for the level of coverage in effect for Executive under Sterling’s group health plan (the “COBRA Payments”
and, together with the Severance Payment, the “Severance Benefits”); and

 

(C)         If
such termination occurs upon or within twenty-four (24) months after a Change in Control, or Executive reasonably demonstrates
(or the Company or Bank agrees) that such termination was at the request of a third party who had indicated an intention or taken
steps reasonably calculated to effect a Change in Control, then, subject to Section 6(g), the Bank shall (I) pay to Executive,
within sixty (60) days following the date of termination, a lump sum cash payment (the “CIC Severance Payment”)
equal to (i) two (2) times the sum of Executive’s Base Salary immediately prior to termination of employment, plus (ii)
two (2) times the amount of Executive’s Target Bonus for the fiscal year that includes Executive’s date of termination
of employment; (II) pay to Executive the Executive’s Target Bonus pro-rated for the number of days which the Executive was
employed by the Company or the Bank during the calendar year in which the Executive’s termination occurred following a Change
in Control; (III) pay to Executive any accrued vacation pay due under the terms of the Bank’s vacation policy to the extent
not theretofore paid; and (IV) pay to Executive on a monthly basis commencing with the first month following Executive’s
termination of employment, and continuing until the eighteenth month following Executive’s termination of employment, the
COBRA Payments (together with the CIC Severance Payment, the “CIC Severance Benefits”).

 

    	 

     

    

 

(D)         If
such termination occurs upon or within twenty-four (24) months after a Change in Control, or Executive reasonably demonstrates
(or the Company or Bank agrees) that such termination was at the request of a third party who had indicated an intention or taken
steps reasonably calculated to effect a Change in Control, then, subject to Section 6(g), any unvested Long-Term Incentive
Award of Executive will vest in accordance with the applicable grant or award agreement.

 

(b)          Termination
by the Company for Cause. Sterling shall have the right to terminate Executive’s employment at any time during the Employment
Period for Cause by giving notice to Executive as provided in Section 6(f) hereof. In the event Executive’s employment
is terminated for Cause, Sterling’s sole obligation shall be to pay or provide to Executive any Accrued Obligations.

 

(c)          Resignation
by Executive without Good Reason. Executive may resign from employment during the Employment Period without Good Reason at
any time by giving notice to the Bank as described in Section 6(f). In the event Executive resigns from employment without
Good Reason, Sterling’s sole obligation shall be to pay or provide to Executive any Accrued Obligations.

 

(d)          Resignation
by Executive for Good Reason. Executive may resign from employment under this Agreement for Good Reason by giving notice to
the Bank as described in Section 6(f). In the event Executive resigns from employment for Good Reason, (i) the Bank shall
pay or provide to Executive any Accrued Obligations, and (ii) if such resignation occurs upon or within twenty-four (24) months
after a Change in Control, Executive shall, subject to Section 6(g), be entitled to the CIC Severance Benefits to the same
extent as if Executive’s employment was terminated by Sterling without Cause pursuant to Section 6(a)(ii)(C) as of the
date of Executive’s termination of employment for Good Reason.

 

(e)          Termination
by Reason of Death or Disability of Executive.

 

(i)          In
the event of Executive’s death during the Employment Period, Sterling’s sole obligation shall be to pay to Executive’s
legal representatives any Accrued Obligations.

 

(ii)         Sterling
shall be entitled to terminate Executive’s employment due to Executive’s Disability. If Executive’s employment
hereunder is terminated due to Executive’s Disability, Sterling’s sole obligation shall be to pay or provide to Executive
any Accrued Obligations.

  

    	 

     

    

 

(f)          Notice;
Effective Date of Termination. Notice of termination of employment under this Agreement shall be communicated by or to Executive
(on one hand) or Sterling (on the other hand) in writing in accordance with Section 14. Termination of Executive’s employment
pursuant to this Agreement (the “Termination Date”) shall be effective on the earliest of:

 

(i)          immediately
after Sterling gives notice to Executive of Executive’s termination without Cause, unless the parties agree to a later date,
in which case, termination shall be effective as of such later date;

 

(ii)         immediately
upon approval by the Company Board of termination of Executive’s employment for Cause;

 

(iii)        immediately
upon Executive’s death;

 

(iv)        in
the case of termination by reason of Executive’s Disability, the date on which Executive is determined to be permanently
disabled for purposes of Sterling’s long-term disability plan or policy that covers Executive; or

 

(v)         thirty (30)
days after Executive gives written notice to Sterling of Executive’s resignation from employment under this Agreement (including
for Good Reason), provided that the Company or the Bank may set an earlier termination date at any time prior to the date
of termination of employment, in which case Executive’s resignation shall be effective as of such other date.

 

(g)          General
Release of Claims. Executive shall not be entitled to any of the Severance Benefits pursuant to Section 6(a)(ii)(B) or
the CIC Severance Benefits pursuant to Section 6(a)(ii)(C) or 6(d) in the event Executive’s employment terminates without
Cause or for Good Reason, unless, in each case, (A) Executive has executed and delivered to the Company a general release
of claims (in the form attached hereto as Exhibit A) (the “Release”) and (B) such Release has
become irrevocable under the Age Discrimination in Employment Act not later than fifty-six (56) days after the Termination
Date. Executive’s entitlement to the Severance Benefits or CIC Severance Benefits, as applicable, are further conditioned
upon complying with the terms of Sections 6(k), 8, 9(a) and 9(b) hereof, subject to written notice by the Bank and a reasonable
opportunity for Executive to cure, if subject to cure. Sterling shall deliver to Executive a copy of the Release not later than
three (3) days after the Termination Date pursuant to Section 6(a) or 6(d) hereof. In the event that the fifty-six (56)
day period referenced above begins and ends in different taxable years of Executive, any payments or benefits under this Agreement
that constitute nonqualified deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the payment or settlement of which is conditioned on the effectiveness of the Release shall be paid
in the later taxable year.

 

(h)          No
Other Severance Benefits. Executive acknowledges and agrees the Severance Benefits or CIC Severance Benefits, as applicable,
and other rights and benefits provided under this Agreement upon termination are in lieu of, and not in addition to, any payments
and/or benefits to which Executive may otherwise be entitled under any severance plan, policy or program of Sterling.

 

(i)          Payment
of Obligations. Notwithstanding anything to the contrary herein, any payment obligation of the Bank under this Agreement may
be satisfied in whole or in part by payment by the Company, the Bank or any affiliate, and any such payment shall, for purposes
of this Agreement, be treated as if made by the Bank.

 

    	 

     

    

 

(j)          Resignation
from Positions. Upon termination of Executive’s employment for any reason, Executive shall promptly (i) resign from
all positions (including, without limitation, any management, officer or director position) with Sterling and its affiliates and
(ii) relinquish any power of attorney, signing authority, trust authorization or bank account signatory authorization that
Executive may hold on behalf of Sterling or its affiliates. Executive’s execution of this Agreement shall be deemed the grant
by Executive to the officers of the Company and the Bank of a limited power of attorney to sign in Executive’s name and on
Executive’s behalf such documentation as may be necessary or appropriate for the limited purposes of effectuating such resignations
and relinquishments.

 

(k)          Return
of Property. On or before the Termination Date, Executive shall return to the Company any and all Company or Bank property,
including but not limited to any computer or other electronic equipment, and any documents, files, computer records, or other materials
belonging to, or containing confidential or proprietary information obtained from, the Company that are in Executive’s possession,
custody, or control, including but not limited to any such materials that may be at Executive’s home or that may be stored
on any electronic devices not belonging to the Company. Upon the Company’s request, Executive shall destroy any copies, including
electronic copies, of any Company information, including any Company confidential information, as described in Section 8 of this
Agreement.

 

(l)          Golden
Parachute Limit. Notwithstanding any other provision of this Agreement, in the event that any portion of the CIC Severance
Benefits or any other payment or benefit received or to be received by Executive in connection with a “change in ownership
or control” (within the meaning of Section 280G of the Code) of the Company occurring following the Effective Date (whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (collectively, the “Total Benefits”)
would be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Total
Benefits shall be reduced to the extent necessary so that no portion of the Total Benefits is subject to the Excise Tax; provided,
however, that no such reduction in the Total Benefits shall be made if by not making such reduction, Executive’s Retained
Amount (as hereinafter defined) would be greater than Executive’s Retained Amount if the Total Benefits are so reduced. All
determinations required to be made under this Section 6(l) shall be made by tax counsel or a nationally recognized certified
public accounting firm or other professional organization that is a certified public accounting firm recognized as an expert in
determinations and calculations for purposes of Section 280G of the Code selected by the Company prior to a Change in Control and
reasonably acceptable to Executive (“Tax Counsel”), which determinations shall be conclusive and binding on
Executive and the Company absent manifest error. All fees and expenses of Tax Counsel shall be borne solely by the Company. Prior
to any reduction in Executive’s Total Benefits pursuant to this Section 6(l), Tax Counsel shall provide Executive and
the Company with a report setting forth its calculations and containing related supporting information. In the event any such reduction
is required, the Total Benefits shall be reduced in the following order: (i) the COBRA Payments, (ii) the CIC Severance
Payment, (iii) any other portion of the Total Benefits that are not subject to Section 409A of the Code (other than Total
Benefits resulting from any accelerated vesting of equity awards), (iv) Total Benefits that are subject to Section 409A of
the Code in reverse order of payment, and (v) Total Benefits that are not subject to Section 409A and arise from any accelerated
vesting of equity awards. The parties hereby elect to use the applicable federal rate that is in effect on the date this Agreement
is entered into for purposes of determining the present value of any payments provided for hereunder for purposes of Section 280G
of the Code. “Retained Amount” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii)
and 280G(d)(4) of the Code) of the Total Benefits net of all federal, state and local taxes imposed on Executive with respect thereto.
In connection with making determinations under this Section 6(l), Tax Counsel shall take into account the value of any reasonable
compensation for services to be rendered by Executive before or after the Change in Control, including any noncompetition provisions
that may apply to Executive, and Sterling shall cooperate in the valuation of any such services, including any noncompetition provisions.

 

    	 

     

    

 

7.             Certain
Definitions.

 

(a)          “Accrued
Obligations” means (i) any accrued and unpaid Base Salary of Executive through the date of termination of employment,
payable pursuant to the Bank’s standard payroll policies, (ii)  any earned and unpaid bonus of Executive under the Annual
Bonus Plan for any completed fiscal year prior to the date of termination of employment, (iii) any compensation and benefits
to the extent payable to Executive based on Executive’s participation in any compensation or benefit plan, program or arrangement
of Sterling through the date of termination of employment, payable in accordance with the terms of such plan, program or arrangement,
and (iv) any expense reimbursement to which Executive is entitled under Sterling’s standard expense reimbursement policy
(as applicable) and Sections 3(e) and 10 hereof.

 

(b)          “Cause”
means Executive’s failure or refusal to substantially perform Executive’s duties hereunder, personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, breach of the Bank’s Code of Ethics, material violation
of the Sarbanes-Oxley requirements for officers of public companies that in the reasonable opinion of the Company Board will likely
cause substantial financial harm or substantial injury to the reputation of the Company or the Bank, willfully engaging in actions
that in the reasonable opinion of the Company Board will likely cause substantial financial harm or substantial injury to the business
reputation of the Company or the Bank, willful violation of any law, rule or regulation (other than routine traffic violations
or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement. The cessation of employment
of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Company Board at a meeting
of the Company Board called and held for such purpose (after reasonable notice is provided to Executive and Executive is given
an opportunity, together with counsel for Executive, to be heard before the Company Board), finding that, in the good faith opinion
of the Board, Executive is guilty of the conduct described in first sentence of this Section 7(b), and specifying the particulars
thereof in detail. For purposes hereof, no act or failure to act, on the part of Executive, shall be considered “willful”
unless it is done, or omitted to be done, by Executive in bad faith or without an objectively reasonable belief that Executive’s
action or omission was in the best interests of the Company and the Bank. Any act, or failure to act, based upon the direction
of the Company Board or the Bank Board based upon the advice of counsel for the Company or the Bank shall be conclusively presumed
to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company or the Bank.

 

    	 

     

    

 

(c)          “Change
in Control” means the occurrence of any of the following with respect to the Company occurring after the Effective Date:

 

(i)          any
“person” (as the term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than any employee benefit plan of Sterling or any affiliate, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of Company’s outstanding securities; or

 

(ii)         individuals
who constitute the Company Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute
at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved
by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s
stockholders was approved by the Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (ii),
considered as though such person were a member of the Incumbent Board; or

 

(iii)        the
Company consummates a merger, consolidation, share exchange, division or other reorganization or transaction of the Company (a
“Fundamental Transaction”) with any other corporation, other than a Fundamental Transaction that results in
the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power
immediately after such Fundamental Transaction of (A) the Company’s outstanding securities, (B) the surviving entity’s
outstanding securities, or (C) in the case of a division, the outstanding securities of each entity resulting from the division;
or

 

(iv)        the
shareholders of the Company approve a plan of complete liquidation or winding up of the Company; or

 

(v)         the
consummation of an agreement for the sale or disposition (in one transaction or a series of transactions) of all or substantially
all of the Company’s or the Bank’s assets.

 

(d)          “Disability”
means that Executive is deemed disabled for purposes of Sterling’s long-term disability plan or policy that covers Executive.

 

(e)          “Good
Reason” means the occurrence of any of the following events (without Executive’s consent):

 

(i)          a
material reduction of any element of the compensation and benefits required to be provided to Executive in accordance with any
of the provisions of Section 3;

 

(ii)         a
material adverse change in Executive’s functions, duties, or responsibilities with the Company or the Bank, which change
would cause Executive’s position to become one of materially lesser responsibility, importance or scope;

 

    	 

     

    

 

(iii)        Sterling
requiring Executive to be based at any office or location other than as provided in Section 4 resulting in an increase in
Executive’s commute of fifty (50) miles or more; or

 

(iv)        a
material breach of this Agreement by the Company or the Bank.

 

Notwithstanding the foregoing, no such
event shall constitute “Good Reason” unless (A) Executive shall have given written notice of such event to the
Bank within ninety (90) days after the initial occurrence thereof, (B) the Bank shall have failed to cure the situation within
thirty (30) days following the delivery of such notice (or such longer cure period as may be agreed upon by the parties), and (C)
Executive terminates employment within thirty (30) days after expiration of such cure period.

 

8.             Confidentiality.
In the course of Executive’s employment with and involvement with Sterling and its affiliates, Executive has obtained, or
may obtain, secret or confidential information, knowledge or data concerning Sterling’s and its affiliates’ businesses,
strategies, operations, clients, customers, prospects, financial affairs, organizational and personnel matters, policies, procedures
and other nonpublic matters, or concerning those of third parties. Executive shall hold in a fiduciary capacity for the benefit
of Sterling and its affiliates, all secret or confidential information, knowledge or data relating to Sterling or any of its affiliated
companies, and their respective businesses, which shall have been obtained by Executive during Executive’s employment by
Sterling or any of its affiliates and which shall not be or become public knowledge (other than by acts by Executive or representatives
of Executive in violation of this Agreement). All records, files, memoranda, reports, customer lists, documents and the like (whether
in paper or electronic format) that Executive has used or prepared during Executive’s employment shall remain the sole property
of Sterling and shall be promptly returned to Sterling’s premises upon any termination of employment. After termination of
Executive’s services with Sterling, Executive shall not, without the prior written consent of the Bank or as may otherwise
be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Bank
and those designated by it. The confidentiality provision contained herein is in addition to and not in limitation of Executive’s
duties as an officer and director under applicable law. For purposes of this Section 8 and Section 9, references to the
Company, the Bank, and their affiliates shall include their predecessor and any successor entities. Notwithstanding the foregoing,
Executive will not be held criminally or civilly liable under any federal or state trade secret law for a disclosure of a trade
secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or
to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and protected from public
disclosure. Further, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation
to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission,
Congress, and any federal Inspector General, or from making other disclosures that are protected under the whistleblower provisions
of federal law or regulation. Executive does not need the prior authorization of the Company to make any such reports or disclosures
and is not required to notify the Company that he has made such reports or disclosures.

 

    	 

     

    

 

9.             Nonsolicitation;
Noncompetition; Post-Termination Cooperation.

 

(a)          Executive
hereby covenants and agrees that, while employed and for a period of eighteen (18) months following his termination of
employment with Sterling for any reason, Executive shall not, without the prior written consent of the Bank, either directly or
indirectly, (i) induce or attempt to induce any employee or independent contractor of the Company, the Bank or any of their
respective affiliates to leave the Company, the Bank or any such affiliate, (ii) hire any person who was an employee or independent
contractor of the Company, the Bank or any of their respective affiliates until six (6) months after such individual’s
relationship with the Company, the Bank or such affiliate has been terminated, (iii) induce or attempt to induce any client, customer
or other business relation (whether (A) current, (B) former, within the six (6) months after such relationship has been terminated
or (C) prospective, provided that there are demonstrable efforts or plans to establish such relationship) of the Company,
the Bank or any of their respective affiliates to cease doing business or to reduce the amount of business they have customarily
done or contemplate doing with the Company, the Bank or any such affiliate, whether or not the relationship between the Company,
the Bank or any such affiliate and such client, customer or other business relation was originally established, in whole or in
part, through Executive’s efforts, or in any way interfere with the relationship between any such client, customer or business
relation, on the one hand, and the Company, the Bank or any such affiliate, on the other hand.

 

(b)          Executive
acknowledges that, in the course of Executive’s employment with the Company, the Bank and their respective affiliates (including
their predecessor and any successor entities), Executive has become familiar, or will become familiar, with the Company’s,
the Bank’s and their respective affiliates’ trade secrets and with other confidential information, knowledge or data
concerning the Company, the Bank, their respective affiliates and their respective predecessors, and that Executive’s services
have been and will be of special, unique and extraordinary value to the Company, the Bank and their respective affiliates. Therefore,
Executive agrees that, while employed and for a period of twelve (12) months following his termination of employment with
Sterling other than a resignation by the Executive for good reason prior to a change of control (the “Noncompetition Period”),
Executive shall not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, director consultant,
independent contractor or otherwise, and whether or not for compensation) or render services in any capacity to a Competing Business
(as defined below), in any country in which the Company, the Bank or any of their respective affiliates conducts business. For
purposes of this Agreement, a “Competing Business” shall mean any person, firm, corporation or other entity,
in whatever form, engaged in the business in which the Company, the Bank and their respective affiliates engage, including the
sale or servicing of banking and financial products and services, including business and consumer lending, asset-based financing,
residential mortgage warehouse funding, factoring/accounts receivable management services, equipment financing, commercial and
residential mortgage lending and brokerage, deposit services (including municipal deposit services) and trade financing, sale of
annuities, life and health insurance products, title insurance services, real estate investment trusts and investment advisory
services. Nothing herein shall prohibit Executive from being a passive owner of not more than one percent (1%) of the outstanding
equity interest in any entity which is publicly traded, so long as Executive has no active participation in the business of such
entity.

 

    	 

     

    

 

(c)          Executive
hereby agrees that prior to accepting employment with any other person or entity during the Noncompetition Period, Executive shall
provide such prospective employer with written notice of this Section 9, with a copy of such notice delivered promptly to
the Bank.

 

(d)          During
the Employment Period and following the cessation of Executive’s employment for any reason, Executive shall, upon reasonable
notice, (i) furnish such information and assistance to the Company, the Bank and/or their respective affiliates, as may reasonably
be requested by the Company, the Bank or such affiliates, with respect to any matter, project, initiative or effort for which Executive
is or was responsible or has relevant knowledge or had substantial involvement in while employed by the Company or the Bank under
this Agreement, and (ii) cooperate with the Company, the Bank and their respective affiliates during the course of all third-party
proceedings arising out of the Company, the Bank and their respective affiliates’ business about which Executive has knowledge
or information.

 

(e)          Executive
acknowledges and agrees that: (i) the purposes of the foregoing covenants, including without limitation the noncompetition covenant
of Section 9(b), are to protect the goodwill and trade secrets and confidential information of the Company, the Bank and their
respective affiliates; and (ii) because of the nature of the business in which the Company, the Bank and their respective affiliates
are engaged, and because of the nature of the trade secrets and confidential information to which Executive has access, it would
be impractical and excessively difficult to determine the actual damages of the Company and its affiliates in the event Executive
breached any of the covenants of Section 8 or this Section 9. Executive understands that the covenants may limit Executive’s
ability to earn a livelihood in a Competing Business during the Noncompetition Period. Executive acknowledges that the Company
would be irreparably injured by a violation of Section 8 or this Section 9, and that it is impossible to measure in money
the damages that will accrue to the Company by reason of a failure by Executive to perform any of Executive’s obligations
under Section 8 or this Section 9. Accordingly, if the Company or its affiliates institute any action or proceeding to
enforce any of the provisions of Section 8 or this Section 9, to the extent permitted by applicable law, Executive hereby waives
the claim or defense that the Company or its affiliates have an adequate remedy at law, and Executive shall not urge in any such
action or proceeding the defense that any such remedy exists at law. Furthermore, in addition to other remedies that may be available
(including, without limitation, termination of the obligation for the Company and the Bank to pay compensation or benefits hereunder
due to Executive’s failure to comply in all material respects with the restrictive covenants in Section 8, 9(a) or 9(b),
subject to written notice by the Bank and a reasonable opportunity for Executive to cure, if subject to cure), the Company and
its affiliates shall be entitled to specific performance and other injunctive relief, without the requirement to post a bond. If
any of the covenants set forth in Section 8 or this Section 9 are finally held to be invalid, illegal or unenforceable
(whether in whole or in part), such covenant shall be deemed modified to the extent, but only to the extent, of such invalidity,
illegality or unenforceability, and the remaining covenants shall not be affected thereby. Any termination of Executive’s
services or of this Agreement shall have no effect on the continuing operation of Section 8 and this Section 9, which
shall survive in accordance with their terms.

 

    	 

     

    

 

10.           Section
409A of the Code. This Agreement is intended to comply with the requirements of Section 409A of the Code (including
the exceptions thereto), to the extent applicable, and the Company shall administer and interpret this Agreement in accordance
with such requirements. If any provision contained in this Agreement conflicts with the requirements of Section 409A of the
Code (or the exemptions intended to apply under this Agreement), this Agreement shall be deemed to be reformed to comply with the
requirements of Section 409A of the Code (or the applicable exemptions thereto). Notwithstanding anything to the contrary
herein, for purposes of determining Executive’s entitlement to the payment or receipt of amounts or benefits that constitute
nonqualified deferred compensation within the meaning of Section 409A of the Code, Executive’s employment shall not
be deemed to have terminated unless and until Executive incurs a “separation from service” as defined in Section 409A
of the Code. Reimbursement of any expenses provided for in this Agreement shall be made promptly upon presentation of documentation
in accordance with Sterling’s policies with respect thereto as in effect from time to time (but in no event later than the
end of the calendar year following the year such expenses were incurred); provided, however, that in no event shall
the amount of expenses eligible for reimbursement hereunder during a calendar year affect the expenses eligible for reimbursement
in any other taxable year. Notwithstanding anything to the contrary herein, if a payment or benefit under this Agreement that constitutes
nonqualified deferred compensation within the meaning of Section 409A of the Code is payable or provided due to a “separation
from service” for purposes of the rules under Treas. Reg. § 1.409A-3(i)(2) (payments to specified employees upon a separation
from service) and Executive is determined to be a “specified employee” (as determined under Treas. Reg. § 1.409A-1(i)
and related Company procedures), such payment shall, to the extent necessary to comply with the requirements of Section 409A
of the Code, be made on the date that is six (6) months after the date of Executive’s separation from service (or, if earlier,
the date of Executive’s death). Any installment payments that are delayed pursuant to this Section 10 shall be accumulated
and paid in a lump sum on the first day of the seventh month following the date of Executive’s separation from service (or,
if earlier, upon Executive’s death), and the remaining installment payments shall begin on such date in accordance with the
schedule provided in this Agreement. The Severance Benefits and CIC Severance Benefits are intended not to constitute deferred
compensation subject to Section 409A of the Code to the extent such Severance Benefits or CIC Severance Benefits are covered
by (a) the “short-term deferral exception” set forth in Treas. Reg. § 1.409A-1(b)(4), (b) the “two
times severance exception” set forth in Treas. Reg. § 1.409A-1(b)(9)(iii), or (c) the “limited payments
exception” set forth in Treas. Reg. § 1.409A-1(b)(9)(v)(D). The short-term deferral exception, the two times severance
exception and the limited payments exception shall be applied to the Severance Benefits or CIC Severance Benefits, as applicable,
in order of payment in such manner as results in the maximum exclusion of such Severance Benefits or CIC Severance Benefits, as
applicable, from treatment as deferred compensation under Section 409A of the Code. Each installment of the Severance Benefits
or CIC Severance Benefits, as applicable, and any other payments or benefits that constitute nonqualified deferred compensation
within the meaning of Section 409A of the Code shall be deemed to be a separate payment for purposes of Section 409A of the
Code. In no event may Executive, directly or indirectly, designate the calendar year of any payment under this Agreement.

 

    	 

     

    

 

11.            Additional
Termination and Suspension Provisions

 

(a)          If
Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. §§ 1818(e)(3)
and (g)(1)), all obligations of the Company and the Bank under this Agreement shall be suspended as of the date of service unless
stayed by appropriate proceedings. If the charges in the notice are dismissed, the Company and the Bank may in their discretion
(but subject in all events to the requirements of Code Section 409A), (i) pay Executive all of the compensation withheld while
the Company’s and the Bank’s obligations under this Agreement were suspended and (ii) reinstate (in whole) any of the
Company’s and the Bank’s obligations which were suspended, and in exercising such discretion, the Company and the Bank
shall consider the facts and make a decision promptly following such dismissal of charges and act in good faith in deciding whether
to pay any withheld compensation to Executive, and to reinstate any suspended obligations of the Company and the Bank.

 

(b)          If
Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued
under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. §§ 1818(e)(4) or (g)(1)),
all obligations of the Company and the Bank under this Agreement shall terminate as of the effective date of the order, but vested
rights of the parties shall not be affected.

 

(c)          If
the Bank is in default, as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. §§ 1813(x)(1)),
all obligations of the Company and the Bank under this Agreement shall terminate as of the date of default, but this provision
shall not affect any vested rights of the parties.

 

(d)          All
obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank, (i) by the Office of the Comptroller of the Currency or other applicable banking regulator
(the “Regulator”), at the time the Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the Federal Deposit Insurance Act, as
amended; or (ii) by the Regulator, at the time the Regulator approves a supervisory merger to resolve problems related to operation
of the Bank or when the Bank is determined by the Regulator to be in an unsafe or unsound condition. Any rights of the parties
that have already vested, however, shall not be affected by such action.

 

(e)          If,
after the Effective Date:

 

(i)          any
regulation applicable to the Company or the Bank is amended or modified, or if any new regulation applicable to the Company or
the Bank becomes effective, and such amended, modified, or new regulation requires the inclusion in this Agreement of a provision
not presently included in this Agreement, then the foregoing provisions of this Section shall be deemed amended to the extent necessary
to give effect in this Agreement to any such amended, modified or new regulation; and

 

(ii)         any
regulation applicable to the Company or the Bank is amended or modified, or if any new regulation applicable to the Company or
the Bank becomes effective, and such amended, modified, or new regulation permits the exclusion of a limitation in this Agreement
on the payment to Executive of an amount or benefit provided for presently in this Agreement, then the foregoing provisions of
this Section shall be deemed amended to the extent permissible to exclude from this Agreement any such limitation previously required
to be included in this Agreement by a regulation prior to its amendment, modification or repeal.

 

    	 

     

    

 

12.           Arbitration.
Any dispute or controversy arising out of, under, in connection with, or relating to this Agreement or any amendment hereof shall
be submitted to binding arbitration before one arbitrator in New York County, New York, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association for expedited arbitration, and any judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.

 

13.           Indemnification
and Insurance

 

(a)          To
the extent that Sterling provides its senior executive officers with coverage under a directors’ and officers’ liability
insurance policy, Sterling shall provide such coverage to Executive on substantially the same basis. Sterling shall indemnify Executive
(and Executive’s heirs, executors and administrators) to the fullest extent permitted under applicable law against all expenses
and liabilities reasonably incurred by Executive in connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of Executive’s having been an officer of the Company or the Bank (whether or not Executive continues
to be an officer at the time of incurring such expenses or liabilities and for a period of six years following Executive’s
termination of employment with Sterling), such expenses and liabilities to include, but not be limited to, judgments, court costs
and attorneys’ fees and the cost of reasonable settlements (such settlements must be approved by the Company Board). Any
such indemnification shall be made consistent with Regulations and Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
§ 1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.

 

(b)          Notwithstanding
the foregoing, no indemnification shall be made by the Bank unless the Bank gives the Regulator, to the extent required, at least
sixty (60) days’ notice of its intention to make such indemnification. Such notice shall state the facts on which the
action arose, the terms of any settlement and any disposition of the action by a court. Such notice, a copy thereof, and a certified
copy of the resolution containing the required determination by the Company Board shall be sent to the Regulator, to the extent
required. The notice period for any such notice shall run from the date of such receipt. No such indemnification shall be made
if the Regulator advises the Bank in writing within such notice period of its objection thereto.

 

    	 

     

    

 

14.            Notices.
The persons or addresses to which notices, mailings or deliveries shall be made may change from time to time by notice given pursuant
to the provisions of this Section. Any notice or other communication given pursuant to the provisions of this Section shall be
deemed to have been given (a) if sent by messenger, upon personal delivery to the party to whom the notice is directed; (b) if
sent by reputable overnight courier, one business day after delivery to such courier; (c) if sent by facsimile or email, on the
date it is actually received; and (d) if sent by mail, three business days following deposit in the United States mail, properly
addressed, postage prepaid, certified or registered mail with return receipt requested. All notices required or permitted to be
given hereunder shall be addressed as follows:

 

	If to Executive:	At the address most recently on the books and records of the Bank.
	 	 
	If to the Company or the Bank:	
        Sterling Bancorp or Sterling
        National Bank, as applicable

        21 Scarsdale Road

        Yonkers, New York 10707

        Attention: General Counsel

 

15.            Amendment.
No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.

 

16.           Miscellaneous

 

(a)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon Executive, his legal representatives and estate
and intestate distributees, and the Company and the Bank and their successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets
and business of the Company or the Bank, as applicable, may be sold or otherwise transferred. Any such successor of the Company
or the Bank shall be deemed to have assumed this Agreement and to have become obligated hereunder to the same extent as the Company
or the Bank, as applicable, and Executive’s obligations hereunder shall continue in favor of such successor.

 

(b)          Severability.
A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability
of any other provision hereof.

 

(c)          Waiver.
Failure to insist upon strict compliance with any terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed
by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or
more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

 

(d)          Counterparts.
This Agreement may be executed in two or more counterparts by original signature, facsimile or any generally accepted electronic
means (including transmission of a pdf containing executed signature pages), each of which shall be deemed an original, and all
of which shall constitute one and the same Agreement.

 

(e)          Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
reference to conflicts of law principles, except to the extent governed by federal law in which case federal law shall govern.
Any payments made to Executive pursuant to this Agreement or otherwise are subject to all applicable banking laws and regulations,
including, without limitation, 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.

 

    	 

     

    

 

(f)          Withholding.
The Company and the Bank may withhold from any amounts payable to Executive hereunder all federal, state, city or other taxes that
the Company or the Bank may reasonably determine are required to be withheld pursuant to any applicable law or regulation (it being
understood, that Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

 

(g)          Headings
and Construction. The headings of sections in this Agreement are for convenience of reference only and are not intended to
qualify the meaning of any Section. Any reference to a Section number shall refer to a Section of this Agreement, unless otherwise
specified.

 

(h)          Entire
Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and supersedes
in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof, including
without limitation, the Prior Agreement and the “Change in Control Agreement” as defined in the Prior Agreement.

 

[Signature Page Follows]

 

    	 

     

    

 

IN WITNESS WHEREOF,
the Company and the Bank have caused this Agreement to be executed and Executive has hereunto set his hand, all as of the Effective
Date specified above.

 

	 	STERLING BANCORP
	 	 	 	 
	 	By:	/s/ Jack L. Kopnisky
	 	 	Name:	Jack L. Kopnisky
	 	 	Title:	President and Chief Executive Officer
	 	 	 	 
	 	STERLING NATIONAL BANK
	 	 	 	 
	 	By:	/s/ Jack L. Kopnisky
	 	 	Name:	Jack L. Kopnisky
	 	 	Title:	President and Chief Executive Officer

 

	 	EXECUTIVE
	 	 
	 	/s/ James P. Blose
	 	James P. Blose

 

    	 

     

    

 

Exhibit A

 

RELEASE
AGREEMENT

 

THIS RELEASE AGREEMENT (hereinafter “Agreement”)
is made and entered into on the [_____] day of [____________________], 20[__] by and between Sterling Bancorp (the “Company”)
and James P. Blose (“Executive”).

 

WHEREAS, the
Company and Executive are parties to an Employment Agreement, dated as of April 3, 2019 (the “Employment
Agreement”), pursuant to which Executive is eligible, subject to the terms and conditions set forth in the
Employment Agreement, to receive certain compensation and benefits in connection with certain terminations of
Executive’s services to the Company.

 

NOW, THEREFORE, in consideration of the Company
agreeing to provide the compensation and benefits under Section [__] of the Employment Agreement to Executive and of other
good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the parties, it is agreed as follows:

 

1.             In
exchange for the consideration referenced above, Executive hereby completely, irrevocably, and unconditionally releases and forever
discharges the Company, and any of its predecessor or affiliated companies, and each and all of their officers, agents, directors,
supervisors, employees, representatives, and their successors and assigns, and all persons acting by, through, under, for, or in
concert with them, or any of them, in any and all of their capacities (hereinafter individually or collectively, the “Released
Parties”), from any and all charges, complaints, claims, and liabilities of any kind or nature whatsoever, known or unknown,
suspected or unsuspected (hereinafter referred to as “claim” or “claims”) which Executive
at any time heretofore had or claimed to have or which Executive may have or claim to have regarding events that have occurred
as of the Effective Date of this Agreement, including, without limitation, those based on: any employee welfare benefit or pension
plan governed by the Employee Retirement Income Security Act of 1974, as amended (hereinafter “ERISA”) (provided
that this release does not extend to any vested benefits of Executive under Company’s pension and welfare benefit plans as
of the date of Executive’s termination of services); the Civil Rights Act of 1964, as amended (race, color, religion, sex
and national origin discrimination and harassment); the Civil Rights Act of 1966 (42 U.S.C. § 1981) (discrimination); the
Age Discrimination in Employment Act of 1967, as amended (hereinafter “ADEA”); the Older Workers Benefit Protection
Act, as amended; the Americans With Disabilities Act, as amended (hereinafter “ADA”); § 503 of the
Rehabilitation Act of 1973; the Fair Labor Standards Act, as amended (wage and hour matters); the Family and Medical Leave Act,
as amended (family leave matters); the Genetic Information Non-Discrimination Act; the Uniformed Service Employment and Reemployment
Rights Act; the Worker Adjustment and Retraining Notification Act; any other federal, state, or local laws or regulations regarding
employment discrimination or harassment, wages, insurance, leave, privacy or any other matter, including those of the State of
New York; any negligent or intentional tort; any contract, policy or practice (implied, oral, or written); or any other theory
of recovery under federal, state, or local law, including, but not limited to, any and all claims which Executive may now have
or may have had, arising from or in any way whatsoever connected with Executive’s employment, service, or contacts, or termination
of Executive’s employment, with the Company or any other of the Released Parties; as well as any and all claims for compensatory
or punitive damages, back pay, front pay, fringe benefits, attorneys’ fees, costs, expenses or other equitable relief.

 

    	 

     

    

 

Notwithstanding the foregoing, the released
claims do not include, and this Agreement does not release, any: (a) rights to compensation and benefits provided under Section [__]
of the Employment Agreement; and (b) rights to indemnification Executive may have under applicable law, the bylaws or certificate
of incorporation of the Company, any applicable director and officer liability policy or under the Employment Agreement, as a result
of having served as an officer or director of the Company or any of its affiliates. The Parties also agree that the release provided
by Executive in this Agreement does not include a release for (i) any rights or claims that arise after Executive signs this Agreement;
(ii) any claim to challenge the release under the ADEA; or (iii) any rights that cannot be waived by operation of law.

 

Executive further acknowledges and agrees
that he has not filed, assigned to others the right to file, reported, or provided information to a government agency, nor are
there pending, any complaints, charges, or lawsuits by or on his behalf against Sterling or any Released Party with any governmental
agency or any court, except for any filings, reports or information he may have made or provided pursuant to Section 21F of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other applicable whistleblower laws or regulations.
In addition, Executive understands that nothing contained in this Agreement limits Executive’s ability to report (by way
of filing a charge or complaint, or otherwise) possible violations of law or regulation, or make other legally-protected disclosures
under applicable whistleblower laws or regulations (including pursuant to Section 21F of the Exchange Act), without notice to or
consent from the Company, to the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board,
the Occupational Safety and Health Administration, the Department of Justice, the Securities and Exchange Commission (the “SEC”)
or any other federal, state or local governmental agency or commission (“Government Agencies”). Executive further understands
that this Agreement does not limit Executive’s ability to participate in any investigation or proceeding that may be conducted
by any Government Agency, including providing documents or other information to such Government Agencies, without notice to the
Company.

 

To the extent permitted by law, Executive
agrees that Executive will not cause or encourage any future legal proceedings to be maintained or instituted against any of the
Released Parties. To the extent permitted by law, Executive agrees that Executive will not accept any monetary remedy or recovery
arising from any charge filed or proceedings or investigation conducted by the EEOC or by any state or local human rights or employment
rights enforcement agency relating to any of the matters released in this Agreement. However, nothing in this Agreement prohibits
or shall be construed to prohibit Executive from receiving a reward from the SEC pursuant to Section 21F of the Exchange Act and
the regulations thereunder or, to the extent required by law, from another government agency pursuant to another applicable whistleblower
law or regulation in connection therewith.

 

    	 

     

    

 

2.             Older
Workers Benefit Protection Act /ADEA Waiver:

 

(a)          Executive
acknowledges that the Company has advised Executive in writing to consult with an attorney of Executive’s choice before signing
this Agreement, and Executive has been given the opportunity to consult with an attorney of Executive’s choice before signing
this Agreement.

 

(b)          Executive
acknowledges that Executive has been given the opportunity to review and consider this Agreement for a full twenty-one (21) days
before signing it, and that, if Executive has signed this Agreement in less than that time, Executive has done so voluntarily in
order to obtain sooner the benefits of this Agreement.

 

(c)          Executive
further acknowledges that Executive may revoke this Agreement within seven (7) days after signing it, provided that this Agreement
will not become effective until such seven (7) day period has expired. To be effective, any such revocation must be in writing
and delivered to Company’s principal place of business by the close of business on the seventh (7th) day after signing the
Agreement and must expressly state Executive’s intention to revoke this Agreement. Provided that Executive does not timely
revoke this Agreement, the eighth (8th) day following Executive’s execution hereof shall be deemed the “Effective Date”
of this Agreement.

 

3.             This
Agreement shall not in any way be construed as an admission by the Company of any acts of unlawful conduct, wrongdoing or discrimination
against Executive, and the Company specifically disclaims any liability to Executive on the part of itself, its employees, and
its agents.

 

4.             This
Agreement cannot be amended, modified, or supplemented in any respect except by written agreement entered into and signed by the
parties hereto.

 

5.             The
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles
of conflict of laws. Any disputes arising hereunder shall be resolved in accordance with Section 12 of the Employment Agreement.

 

6.             Executive
hereby acknowledges that Executive has read and understands the terms of this Agreement and that Executive signs it voluntarily
and without coercion. Executive further acknowledges that Executive was given an opportunity to consider and review this Agreement
and the waivers contained in this Agreement, that Executive has done so and that the waivers made herein are knowing, conscious
and with full appreciation that Executive is forever foreclosed from pursing any of the rights so waived.

 

7.             The
Agreement may be signed in counterparts, and each counterpart shall be considered an original for all purposes.

 

    	 

     

    

 

PLEASE READ THIS AGREEMENT CAREFULLY; IT
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

IN WITNESS WHEREOF, the Company has caused
this Agreement to be executed by its duly authorized officer, and Executive has executed this Agreement, as of the date first written
above.

 

	 	 
	 	James P. Blose
	 	 	 	 
	 	STERLING BANCORP
	 	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	STERLING NATIONAL BANK
	 	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:Exhibit 4.1

 

Pluristem Therapeutics Inc.

 

and

 

American Stock Transfer & Trust Company, LLC, as

Warrant Agent

 

 

Warrant Agent Agreement

 

Dated as of April 4, 2019

 

 

 

WARRANT AGENT AGREEMENT

 

WARRANT AGENT AGREEMENT, dated as of April __, 2019 (“Agreement”), between Pluristem Therapeutics Inc., a Nevada corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to a registered offering by the Company of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), together with warrants (the “Warrants”) to purchase shares of Common Stock, pursuant to an effective registration statement on Form S-3 (File No. 333-218916) (the “Registration Statement”), the Company wishes to issue Warrants in book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street name”, a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to 28,571,429 shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the “Offering”);

 

WHEREAS, the shares of Common Stock and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but will be purchased together in the Offering; and

 

WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s transfer agent, the delivery of the Warrant Shares.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

 

(a) “Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which the Nasdaq Stock Market is authorized or required by law or other governmental action to close.

 

(c) “Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

(e) “Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 

(f) “Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, representing such number of Warrant Shares as is indicated therein.

 

(g) “Warrant Shares” means the shares of Common Stock underlying the Warrants and issuable upon exercise of the Warrants.

 

All other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.

 

      Section 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint a Co-Warrant Agent as it may, in its sole discretion, deem necessary or desirable. The Warrant Agent shall have no duty to supervise, and will in no event be liable for the acts or omissions of, any co-Warrant Agent.

 

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Section 3. Global Warrants.

 

(a) The Warrants shall be issuable in book entry form (the “Global Warrants”). All of the Warrants shall initially be represented by one or more Global Warrants deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a “Participant”).  For purposes of Regulation SHO, a holder whose interest in a Global Warrant is a beneficial interest in certificate(s) representing such Warrant held in book-entry form through the Depositary shall be deemed to have exercised its interest in such Warrant upon instructing its broker that is a Participant to exercise its interest in such Warrant, provided that in each such case payment of the applicable aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following such instruction.

 

(b) If the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder a Warrant Certificate.

 

(c) A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s Global Warrants for a Warrant Certificate evidencing the same number of Warrants, which request shall be in the form attached hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder a Warrant Certificate for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Warrant Certificate shall be dated the original issue date of the Warrants, shall be manually executed by an authorized signatory of the Company, shall be in the form attached hereto as Exhibit 1, and shall be reasonably acceptable in all respects to such Holder. In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant Certificate to the Holder within three (3) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”).  If the Company fails for any reason to deliver to the Holder the Warrant Certificate subject to the Warrant Certificate Request Notice by the seventh Business Day following the Warrant Certificate Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Warrant Certificate (based on the VWAP (as defined in the Warrants) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day for each Business Day after such Warrant Certificate Delivery Date until such Warrant Certificate is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant Certificate and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes to contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement.

Section 4. Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock (“Notice of Exercise”) and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1 hereto.

 

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Section 5. Countersignature and Registration. The Warrant Certificates shall be executed on behalf of the Company by a Co-Chief Executive Officer or Chief Financial Officer, either manually or by facsimile signature, and, if applicable, have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Warrant Certificates shall be countersigned by the Warrant Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

 

The Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number of warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant Agent will create a special account for the issuance of Warrant Certificates.

 

Section 6. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect to the Global Warrant, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such surrender is applicable to the Holder of a Global Warrant. Any requested transfer of Warrants, whether in book-entry form or certificate form, shall be accompanied by reasonable evidence of authority of the party making such request that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Warrant Certificates. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by the parties hereto and provided separately on the date hereof.

 

Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss, theft or destruction, of indemnity in customary form and amount and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.

  

Section 7. Exercise of Warrants; Exercise Price; Termination Date.

 

(a) The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination Date. The Holder of a Warrant may exercise the Warrant in whole or in part in accordance with Section 2 of the Warrant Certificate.  The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will receive interest on any deposits or Exercise Price.

 

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(b) The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via telephone or electronic mail at the end of each day on which funds for the exercise of any Warrant are received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing.

 

(c) In case the Holder of any Warrant Certificate shall exercise fewer than all Warrants evidenced thereby, a new Warrant Certificate evidencing the number of Warrants equivalent to the number of Warrants remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to his duly authorized assigns in accordance with Section 2(d)(ii) of the Warrant Certificate, subject to the provisions of Section 6 hereof.

 

Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled certificates.

 

Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a) This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b) As of the date hereof, and excluding the shares of Common Stock and Warrants to be issued in the Offering, the authorized capital stock of the Company consists of  200,000,000 shares of Common Stock, of which 119,734,663 shares of Common Stock are issued and outstanding, and 28,571,429 shares of Common Stock are reserved for issuance upon exercise of the Warrants. Except as disclosed in the Registration Statement, there are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company any class of capital stock of the Company.

 

(c) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(d) The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Warrants.

 

(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.

 

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Section 10. Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date upon which the Notice of Exercise was delivered.

 

Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 3 of the Warrant Certificate, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall promptly deliver to the Holder by facsimile or e-mail a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

Section 13. Fractional Shares of Common Stock.

 

(a) The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down).

 

(b) The Company shall not issue fractions of shares or scrip representing fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.

 

Section 14. Conditions of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject:

(a) The Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 2 hereto for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred without gross negligence, bad faith or willful misconduct by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, including the reasonable costs and expenses of defending against any claim of such liability.

 

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

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

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

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

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

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

(h) The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

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

 

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

 

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In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

Section 16. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound:

 

(a) The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

 

(b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by either Co-Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

(c) Subject to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith, violation of law or willful misconduct, or for a breach by it of this Agreement.

 

(d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e) The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable.

  

(f) Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by any party of the provisions of this Agreement.

 

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(g) The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from either Co-Chief Executive Officer or the Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith or willful misconduct.

 

(h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

 

(i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

 

Section 17. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing sent to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

Section 18. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement.

  

Section 19. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

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(a) If to the Company, to:

 

Pluristem Therapeutics Inc.

MATAM Advanced Technology Park, Building No. 5

Haifa, Israel  31905

Attn: Chief Financial Officer

Fax:

Email: chenf@Pluristem.com

 

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

 

Zysman, Aharoni, Gayer and Sullivan & Worcester LLP

1633 Broadway, 32nd Floor

Attn: Oded Har-Even, Esq.

Fax: (212) 660-3001

Email: ohareven@zag-sw.com

 

(b) If to the Warrant Agent, to:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attention: Frank Ruggiero

email: FRuggiero@amstock.com

Facsimile: (718) 765-8713

 

For any notice delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c) If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

Section 20. Supplements and Amendments.

 

(a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrant certificates in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrant certificates or to surrender any rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely affect the interests of the Holders of the Global Warrant certificates in any material respect.

  

(b) In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority of the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the Holders of the Global Warrant certificates; provided, however, that no modification of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or reducing the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding warrant certificate affected thereby. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section 20.

 

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Section 21. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 22. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 23. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflicts of law principles thereof.

 

Section 24. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

Section 25. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 26.  Warrant Agent Agreement.  To the extent any provision of this Warrant Agent Agreement conflicts with the express provisions of the Warrant Certificate, the provisions of such Warrant Certificate shall govern and be controlling.

 

[Signature Page Follows]

 

 

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

 

	
 

	
PLURISTEM THERAPEUTICS INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name:

	 
	
 

	
Title:

	 

 

	
 

	
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name:

	 
	
 

	
Title:

	 

 

[Signature Page to Warrant Agent Agreement]

 

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Annex A: Form of Warrant Certificate Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: American Stock Transfer & Trust Company, LLC as Warrant Agent for Pluristem Therapeutics Inc. (the “Company”)

 

The undersigned Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:

 

	
 

	
  1.

	
Name of Holder of Warrants in form of Global Warrants: _____________________________

	
 

	
 

	
 

	
 

	
  2.

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

	
 

	
 

	
 

	
 

	
  3.

	
Number of Warrants in name of Holder in form of Global Warrants: ___________________

	
 

	
 

	
 

	
 

	
  4.

	
Number of Warrants for which Warrant Certificate shall be issued: __________________

	
 

	
 

	
 

	
 

	
  5.

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

	
 

	
 

	
 

	
 

	
  6.

	
Warrant Certificate shall be delivered to the following address:

 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

The undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:

_____________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity:

______________________________________________

 

Name of Authorized Signatory:

________________________________________________________________

 

Title of Authorized Signatory:

_________________________________________________________________

 

Date:

____________________________________________________________________________________

 

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Exhibit 1: Form of Warrant Certificate

 

COMMON STOCK PURCHASE WARRANT

 PLURISTEM THERAPEUTICS INC.

 

	
Warrant Shares: _______          

	
                         Initial Issuance Date: _________ __, 2019

Initial Exercise Date: _________ __, 2019

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CEDE & CO or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York time) on _____________1 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Pluristem Therapeutics Inc., a Nevada corporation (the “Company”), up to ______ shares of Common Stock (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agent Agreement, in which case this sentence shall not apply.

 

Section 1.          Definitions.  In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

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

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Board of Directors” means the board of directors of the Company and any authorized committee thereof.

 

1 Insert the date that is the five year anniversary of the Initial Exercise Date; provided, however, that, if such date is not a Trading Day, insert the immediately following Trading Day,

 

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

 

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

 

“Common Stock” means the common stock of the Company, par value $0.00001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

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

 

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

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

 

“Registration Statement” means the Company’s registration statement on Form S-1 (File No. 333- 218916).

 

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

 

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

 

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

 

“Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, 2nd Floor, Brooklyn, New York 11219, and any successor transfer agent of the Company.

 

 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrant Agent Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.

 

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“Warrant Agent” means the Transfer Agent and any successor warrant agent of the Company.

 

“Warrants” means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.

 

Section 2.          Exercise.

 

              a)         Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before 5:00 p.m. (New York City time) on the Termination Date by delivery to the Company or Warrant Agent of a duly executed facsimile copy or PDF copy submitted by e-mail of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company or the Warrant Agent until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company or Warrant Agent shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

Notwithstanding the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agent Agreement, in which case this sentence shall not apply.

 

              b)          Exercise Price.  The exercise price per share of Common Stock under this Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”).

 

              c)          Cashless Exercise. If at the time of exercise hereof, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

 (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

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

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

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company agrees not to take any position contrary to this Section 2(c).

 

Notwithstanding the foregoing, and without limiting the rights of the Holder under this Section 2(c) and Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.

 

d)            Mechanics of Exercise.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Section 3.            Certain Adjustments.

 

a)          Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

 

b)          Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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c)          Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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

 

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e)            Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)            Notice to Holder.

 

i.          Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

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

 

Section 4.            Transfer of Warrant.

 

a)          Transferability.  This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

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b)          New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)          Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company and the Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.            Miscellaneous.

 

a)          No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

 

b)          Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)          Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d)          Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

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Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

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

 

f)          Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)        Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

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h)          Notices.  Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at MATAM Advanced Technology Park, Building No. 5, Haifa, Israel, Attention: Chief Financial Officer, facsimile number: +972-74-710-8787, email address: chenf@pluristem.com, or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

i)          Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)          Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)          Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)            Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.

 

m)          Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)          Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

o)          Warrant Agent Agreement.  If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject to the Warrant Agent Agreement.  To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agent Agreement, the provisions of this Warrant shall govern and be controlling.

  

********************

(Signature Page Follows)

 

25

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	
PLURISTEM THERAPEUTICS INC.

 

	
By:__________________________________________

     Name:

     Title:

 

26

 

NOTICE OF EXERCISE

TO:          PLURISTEM THERAPEUTICS INC.

(1)          The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)          Payment shall take the form of (check applicable box):

 

☐ in lawful money of the United States; or

 

☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)          Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

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

_______________________________

_______________________________

_______________________________

 

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

ASSIGNMENT FORM

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

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
Name:

	______________________________________
	 	
(Please Print)

	
Address:

	 
	
 

Phone Number:

 

Email Address:

 

	
(Please Print)

______________________________________

______________________________________

	
Dated: _______________ __, ______

	 
	
Holder’s Signature: ______________________________________    

	 
	
Holder’s Address:  ______________________________________

	 

Exhibit 2 – Warrant Agent Compensation

 

 A monthly fee of $250.

 

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