Document:

Exhibit 10.2

 

EXECUTION VERSION

 

SECOND AMENDMENT

 

Dated as of June 21, 2018

 

to

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

iSTAR INC.,
  as Borrower,

 

The Several Banks from Time to Time Parties Thereto,

 

JPMORGAN CHASE BANK, N.A.,
 as Administrative Agent

 

Dated as of September 27, 2017

 

J.P. MORGAN SECURITIES LLC,

 

MERRILL LYNCH, PIERCE, FENNER & SMITH 
          INCORPORATED,

 

and

 

BARCLAYS BANK PLC,

 

as Joint Lead Arrangers and Joint Bookrunners

 

 

SECOND AMENDMENT

 

SECOND AMENDMENT, dated as of June 21, 2018 (this “Amendment”), among iSTAR INC. (the “Borrower”), the Banks (as defined below) listed on the signature pages hereof and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”).  J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Barclays Bank PLC are acting as joint lead arrangers and joint bookrunners in connection with this Amendment (collectively, the “Joint Lead Arrangers”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, reference is hereby made to the Amended and Restated Credit Agreement dated as of September 27, 2017 (as amended pursuant to the Letter Agreement dated as of December 22, 2017, the “Existing Credit Agreement” and, as amended by this Amendment and as further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among others, the Borrower, the several lenders from time to time parties thereto (the “Banks”) and the Administrative Agent;

 

WHEREAS, the Borrower has requested that the Banks agree to certain amendments to the Credit Agreement; and

 

WHEREAS, the Banks are willing to agree to the requested amendments based upon the terms and conditions set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the premises contained herein, the parties hereto agree as follows:

 

SECTION 1.                            Defined Terms.  Unless otherwise defined herein, capitalized terms are used herein as defined in the Credit Agreement as amended hereby.

 

SECTION 2.                            Amendments of the Existing Credit Agreement.

 

(a)                                 The Existing Credit Agreement is hereby amended effective as of the Amendment Effective Date as follows:

 

(i)                                     Section 1.1 of the Existing Credit Agreement is hereby amended by adding thereto the following new definitions in their appropriate alphabetical order:

 

““Approved Electronic Platform” has the meaning assigned to it in Section 7.11(a).

 

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations  or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“Communications” has the meaning assigned to it in Section 7.10(c).”.

 

 

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

 

(ii)                                  The definition of “Assignment and Assumption” under Section 1.1 of the Existing Credit Agreement is hereby amended by adding at the end thereof the following:

 

“or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.”.

 

(iii)                               The definition of “Construction Loans” under Section 1.1 of the Existing Credit Agreement is hereby amended by replacing such definition in its entirety with the following:

 

““Construction Loans” means a loan or participation in a loan made for the construction or development of real property owned by the borrower thereof and secured at such time by a Mortgage on such real property or secured by an interest in a special purpose entity substantially similar to the organizational and corporate structure and documentation of the Covered Subsidiaries that directly or indirectly owns the real property, in each case the term of which loan shall not exceed five years; provided, that upon issuance of a temporary certificate of occupancy related to the underlying real property, the loan shall qualify as a Loan Asset that is not a Construction Loan for so long as a temporary or final certificate of occupancy is in effect (including pursuant to any renewals thereof).”.

 

(iv)                              The definition of “Excluded Assets” under Section 1.1 of the Existing Credit Agreement is hereby amended by replacing such definition in its entirety with the following:

 

““Excluded Assets” means the assets owned by the Covered Subsidiaries identified from time to time on Schedule 1.1D, none of which shall constitute a Covered Asset.”.

 

(v)                                 The definition of “LTC” under Section 1.1 of the Existing Credit Agreement is hereby amended by adding immediately after the word “project” contained in such definition:

 

“(including all material and labor costs, land acquisition costs, and architectural, engineering, development, financing, and legal fees, and other pre- and post-construction expenses)”.

 

(vi)                              The definition of “Plan” under Section 1.1 of the Existing Credit Agreement is hereby amended by replacing such definition in its entirety with the following:

 

““Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained, or contributed to, by any member of the ERISA Group , (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a

 

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member of the ERISA Group or (iii) to which any member of the ERISA Group has had liability within the previous five years.”.

 

(vii)                           The definition of “Prime Rate” under Section 1.1 of the Existing Credit Agreement is hereby amended by replacing such definition in its entirety with the following:

 

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent in consultation with the Borrower) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent in consultation with the Borrower). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.”.

 

(viii)                        The definition of “Sanctioned Country” under Section 1.1 of the Existing Credit Agreement is hereby amended by replacing such definition in its entirety with the following:

 

““Sanctioned Country” means at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Cuba, the Crimea region of the Ukraine, Iran, North Korea and Syria).”.

 

(ix)                              The definition of “Termination Event” under Section 1.1 of the Existing Credit Agreement is amended by deleting clause (ii) contained in such definition and renumbering the clauses immediately following such deleted clause (ii) accordingly.

 

(x)                                 The second paragraph of Section 2.6(a) of the Existing Credit Agreement is hereby amended by replacing the first sentence of such paragraph in its entirety with the following:

 

“Each such election shall be made by delivering a notice in a form approved by the Administrative Agent (a “Notice of Interest Rate Election”) to the Administrative Agent at least three (3) Eurodollar Business Days prior to, but excluding, the effective date of the conversion or continuation selected in such notice.”.

 

(xi)                              Section 4.6(a) of the Existing Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

 

“(a)  Except as set forth on Schedule 4.6(a) attached hereto, neither the ERISA Group nor any other Covered Party is a member of or has entered into, maintained, contributed to, or been required to contribute to, or may incur any liability with respect to any Plan or Multiemployer Plan.  Except as could not be reasonably expected to have a Material Adverse

 

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Effect individually or in the aggregate (i) there has been no filing pursuant to Section 412 of the Code or Section 302 of ERISA of an application for a waiver of the minimum funding standards with respect to any Plan; (ii) there has been no failure to make by its due date any required installment under Section 430(j) of the Code with respect to any Plan nor a failure by the Borrower nor any member of the ERISA Group to make any required contribution to a Multiemployer Plan; (iii) there has been no determination that any Plan is or is expected to be in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (iv) the present value of all accrued benefits under each Plan (determined based on the assumptions used by such Plans pursuant to Section 430(h) of the Code) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed by more than an immaterial amount the value of the assets of such Plan (as determined pursuant to Section 430(g) of the Code) allocable to such accrued benefits, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of ASC Topic 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than an immaterial amount the fair market value of the assets of all such underfunded Plans; (v) no liability to the PBGC (other than required premium payments), the Internal Revenue Service, any Plan or any trust established under Title IV of ERISA has been or is expected to be incurred by any member of the ERISA Group other than in the ordinary course; and (vi) no Termination Event has occurred or is reasonably expected to occur.  The Borrower and its Subsidiaries have no contingent liabilities with respect to any post retirement benefits under a Welfare Plan, other than liability for continuation coverage described in article 6 of Title 1 of ERISA, and except as would not be reasonably expected to have a Material Adverse Effect.  In the event that at any time after the Closing Date, the Borrower or any other Covered Party shall sponsor or contribute to any other material Plan or Multiemployer Plan, the Borrower promptly shall notify the Administrative Agent thereof (and from and after such notice, Schedule 4.6(a) shall be deemed modified thereby).”.

 

(xii)                           Section 5.1 of the Existing Credit Agreement is hereby amended by adding the following new subsection (o) in such Section as follows:

 

“(o)  promptly following any reasonable request therefor, information and documentation reasonably requested by the Administrative Agent or any Bank for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.”.

 

(xiii)                        Section 5.10(a) of the Existing Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

 

“(a) The Borrower shall not, and shall not permit its Subsidiaries to, declare and/or pay (or incur any obligation (contingent or otherwise) to declare and/or pay) dividends (whether in the form of cash, common

 

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stock or other equity interests) on its equity interests or declare and/or make (and incur any obligation (contingent or otherwise) to declare and/or make) distributions with respect thereto; provided that, (x) the Borrower shall be permitted to declare and/or pay (and incur any obligation (contingent or otherwise) to declare and/or pay) dividends (which may, for the avoidance of doubt, be in the form of cash, common stock or other equity interests) on its equity interests or declare and/or make (and incur any obligation (contingent or otherwise) to declare and/or make) distributions with respect thereto in an amount for any Fiscal Year equal to such amount as is necessary for the Borrower to (i) maintain its qualification as a REIT and (ii) so long as no Event of Default is continuing or would result therefrom, avoid payment or imposition of any entity-level tax on the Borrower (including pursuant to Section 4981 of the Code) that could be avoided by reason of a distribution by the Borrower; and (y) in addition to the dividends and distributions permitted to be made under clause (x), the Borrower and each Subsidiary may declare and/or make (and incur any obligation (contingent or otherwise) to declare and/or make) any other dividends or distributions (except dividends or distributions of Loan Assets, Real Property Assets or Securities that are Collateral, Covered Assets or equity interests in a Pledged Subsidiary or Covered Subsidiary), provided that such other dividends or distributions may only be made if at the time of such dividends or distributions, (i) no Material Default or Event of Default shall have occurred and be continuing or result therefrom and (ii) taking into account such dividend or distribution, the Borrower and its Subsidiaries shall be in compliance, on a pro forma basis, with the provisions of Article V (Affirmative and Negative Covenants).”.

 

(xiv)                       Article VII of the Existing Credit Agreement is hereby amended by adding the following new Section 7.11 as follows:

 

“Section 7.11.                    Posting of Communications.  (a) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make any Communications available to the Banks by posting the Communications on IntraLinksTM, DebtDomain, SyndTrak, ClearPar or any other electronic platform chosen by the Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).

 

(b) Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Banks and the Borrower acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Bank that are added to the Approved Electronic Platform, and that there are confidentiality and other risks associated with such distribution. Each of the Banks and the Borrower hereby approves

 

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distribution of the Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

 

(c) THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY OTHER AGENT OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, “APPLICABLE PARTIES”) HAVE ANY LIABILITY TO ANY COVERED PARTY, ANY BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY COVERED PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

 

“Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower or any other Covered Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent or any Bank by means of electronic communications pursuant to this Section, including through an Approved Electronic Platform.

 

(d) Each Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall constitute effective delivery of the Communications to such Bank for purposes of the Loan Documents. Each Bank agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Bank’s email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.

 

(e) Each of the Banks and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not

 

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be obligated to, store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.

 

(f) Nothing herein shall prejudice the right of the Administrative Agent or any Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.”.

 

(xv)                          Article VII of the Existing Credit Agreement is hereby amended by adding the following new Section 7.12 as follows:

 

“Section 7.12.                    Certain ERISA Matters. (a) Each Bank (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent, and each other Agent and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

 

(i) such Bank is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans or the Commitments,

 

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, and the conditions for exemptive relief thereunder are and will continue to be satisfied in connection therewith,

 

(iii) (A) such Bank is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Bank to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Bank, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such

 

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Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or

 

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Bank.

 

(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Bank or such Bank has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Bank further (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent, and each other Agent and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Covered Party, that:

 

(i) none of the Administrative Agent, or any other Agent or any of their respective Affiliates is a fiduciary with respect to the assets of such Bank (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),

 

(ii) the Person making the investment decision on behalf of such Bank with respect to the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended from time to time) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

 

(iii) the Person making the investment decision on behalf of such Bank with respect to the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the obligations),

 

(iv) the Person making the investment decision on behalf of such Bank with respect to the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

 

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(v) no fee or other compensation is being paid directly to the Administrative Agent, or any other Agent or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Commitments or this Agreement.

 

(c) The Administrative Agent, and each other Agent hereby informs the Banks that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans or the Commitments for an amount less than the amount being paid for an interest in the Loans or the Commitments by such Bank or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.”.

 

(xvi)                       Section 8.1(b) of the Existing Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

 

“(b) If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in paragraph (a)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in paragraph (a)(i) have not arisen but either (w) the supervisor for the administrator of the Screen Rate has made a public statement that the administrator of the Screen Rate is insolvent (and there is no successor administrator that will continue publication of the Screen Rate), (x) the administrator of the Screen Rate has made a public statement identifying a specific date after which the Screen Rate will permanently or indefinitely cease to be published by it (and there is no successor administrator that will continue publication of the Screen Rate), (y) the supervisor for the administrator of the Screen Rate has made a public statement identifying a specific date after which the Screen Rate will permanently or indefinitely cease to be published or (z) the supervisor for the administrator of the Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Screen Rate may no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the Eurodollar Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and

 

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shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable. Notwithstanding anything to the contrary in Section 9.5, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Banks, a written notice from the Required Banks stating that such Required Banks object to such amendment. Until an alternate rate of interest shall be determined in accordance with this clause (b) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 8.1(b), only to the extent the Screen Rate for Dollars and such Interest Period is not available or published at such time on a current basis), (x) any Notice of Interest Rate Election that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (y) if any Notice of Borrowing requests a Eurodollar Borrowing, such Borrowing shall be made as an Base Rate Borrowing; provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.”.

 

(xvii)                    Section 8.3(a) of the Existing Credit Agreement is hereby amended by deleting the term “Non-Excluded” from the parenthetical immediately before clause (ii) of such Section.

 

(xviii)                 Section 8.4(a) of the Existing Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

 

“(a) Any and all payments made by or on behalf of the Borrower to or for the account of any Bank or the Administrative Agent hereunder or under any other Loan Document shall be made free and clear of and without deduction for or on account of any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding (i) in the case of each Bank and the Administrative Agent, taxes imposed on its income, and franchise taxes imposed on it, by (A) the jurisdiction under the laws of which such Bank or the Administrative Agent (as the case may be) is organized or any political subdivision thereof, (B) in the case of each Bank, the jurisdiction of such Bank’s Applicable Lending Office or any political subdivision thereof or (C) any other jurisdiction (or any political subdivision thereof) as a result of a present or former connection between such Bank or the Administrative Agent and such other jurisdiction, except to the extent that such connection would not have arisen but for entering into the transactions contemplated hereby and (ii) U.S. federal withholding taxes imposed under FATCA (all such non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Non-Excluded Taxes”); provided that, if any Non-Excluded Taxes are required to be deducted from or in respect of any sum payable hereunder or under any other Loan Document, as determined in good faith by the applicable withholding agent, (w) the sum payable by the Borrower shall be increased as necessary so that after making all required deductions of Non-Excluded Taxes (including, without limitation, deductions of Non-Excluded Taxes applicable to additional sums payable under this Section 8.4) such Bank or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions

 

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been made, (x) the Borrower shall make or cause to be made all deductions as required by applicable law, (y) the Borrower shall pay or cause to be paid the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (z) the Borrower shall furnish to the Administrative Agent, at its address referred to in Section 9.1, the original or a certified copy of a receipt evidencing payment thereof.”

 

(xix)                       Section 9.1 of the Existing Credit Agreement is hereby amended by adding a reference therein to “(a)” immediately before the first sentence in such Section and adding the following new sentence at the end of such Section:

 

“Notices delivered through Approved Electronic Platforms, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).”.

 

(xx)                          Section 9.1 of the Existing Credit Agreement is hereby amended by adding the following new paragraphs (b), (c) and (d) in such Section as follows:

 

“(b)  Notices and other communications to the Banks hereunder may be delivered or furnished by using Approved Electronic Platforms pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Bank.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

(c)  Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

(d)  Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.”.

 

(xxi)                       Section 9.6(c)(ii)(B) of the Existing Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

 

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“(1) the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500 (other than in the case of an assignment to the Borrower as contemplated by Section 2.13) and (2) the assigning Bank shall have paid in full any amounts owing by it to the Administrative Agent; and”.

 

(xxii)                    The Existing Credit Agreement is hereby amended by replacing all references to “J.P. Morgan Securities, LLC” with “JPMorgan Chase Bank, N.A.”

 

(b)                                 The amendments of the Existing Credit Agreement set forth in this Section 2 is subject to the satisfaction of the conditions set forth in Section 4 of this Amendment.

 

SECTION 3.                            Representations and Warranties.  On and as of the date hereof, the Borrower hereby confirms, reaffirms and restates that each of the representations and warranties set forth in Article IV of the Credit Agreement and Section III of the Security Agreement are, after giving effect to this Amendment, true and correct in all material respects except to the extent that such representations and warranties expressly relate solely to a specific earlier date, and except for any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect,” or similar language, in which case the Borrower hereby confirms, reaffirms and restates that such representations and warranties are true and correct in all respects.

 

SECTION 4.                            Conditions to Effectiveness.  The effectiveness of this Amendment is subject to the satisfaction of each of the following conditions (the date on which such conditions are satisfied, the “Amendment Effective Date”):

 

(a)                                 the Borrower, the Administrative Agent and the requested Bank shall have executed and delivered to the Administrative Agent a duly executed original of this Amendment;

 

(b)                                 the Administrative Agent shall have received, on or before the Amendment Effective Date, (i) (x) all fees due and payable required to be paid by the Borrower on or before the Amendment Effective Date and (y) all other fees required to be paid and all expenses for which invoices have been presented and (ii) the reasonable and documented fees and expenses accrued through the Amendment Effective Date of Simpson Thacher & Bartlett LLP;

 

(c)                                  no Default or Event of Default shall have occurred and be continuing before or immediately after giving effect to the transactions contemplated hereby; and

 

(d)                                 the Administrative Agent shall have received (x) the Collateral and Covered Assets List, which shall be in form and substance reasonably satisfactory to the Administrative Agent and (y) a Borrowing Base Certificate, dated as of, and after giving effect to, the Amendment Effective Date and duly executed by a financial officer of the Borrower, reflecting a Borrowing Base as of the Amendment Effective Date of not less than $325,000,000.

 

SECTION 5.                            Continuing Effect; No Other Amendments or Consents.

 

(a)                                 Except as expressly provided herein, all of the terms and provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force and effect.  The

 

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amendments provided for herein are limited to the specific sections of the Existing Credit Agreement specified herein and shall not constitute a consent, waiver or amendment of, or an indication of the Administrative Agent’s or the Banks’ willingness to consent to any action requiring consent under any other provisions of the Existing Credit Agreement or the same section for any other date or time period. Upon the effectiveness of the amendments set forth herein, on and after the Amendment Effective Date, each reference in the Credit Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.

 

(b)                                 The Borrower and the other parties hereto acknowledge and agree that this Amendment shall constitute a Loan Document.

 

(c)                                  This Amendment shall not extinguish the obligations outstanding under the Credit Agreement, the Collateral Documents or the other Loan Documents or discharge or release the lien or priority of the Collateral Documents or the other Loan Documents.  Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Credit Agreement, the Collateral Documents, the other Loan Documents or instruments securing the same or the other Loan Documents, which shall remain in full force and effect, except to any extent modified hereby or by instruments executed concurrently herewith.  Nothing implied in this Amendment, the Credit Agreement, the Collateral Documents, the other Loan Documents or in any other document contemplated hereby or thereby shall be construed as a release or other discharge of any of Borrower or any other Covered Party from any of its obligations and liabilities as a “Borrower,” or “Covered Party,” under the Credit Agreement, the Collateral Documents or the other Loan Documents.  Each of the Credit Agreement, the Collateral Documents and the other Loan Documents shall remain in full force and effect, until (as applicable) and except to any extent modified hereby or in connection herewith.

 

SECTION 6.                            Expenses.  The Borrower agrees to pay and reimburse the Administrative Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the preparation and delivery of this Amendment, and any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of one firm of counsel to the Administrative Agent in accordance with the terms in the Credit Agreement.

 

SECTION 7.                            Counterparts.  This Amendment may be executed in any number of counterparts by the parties hereto (including by facsimile and electronic (e.g. “.pdf”, or “.tif”) transmission), each of which counterparts when so executed shall be an original, but all the counterparts shall together constitute one and the same instrument.

 

SECTION 8.                            GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

[Remainder of page intentionally left blank.]

 

13

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

	
 
    	
iSTAR INC., as the Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/Geoffrey M. Dugan
    
	
 
    	
 
    	
Name: Geoffrey M. Dugan
    
	
 
    	
 
    	
Title: General Counsel and Secretary
    

 

Signature Page to Second Amendment to Revolving Credit Agreement

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A., as Administrative   Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Authorized Signatory
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Second Amendment to Revolving Credit Agreement

 

 

	
 
    	
BANK OF   AMERICA, N.A., 
    
	
 
    	
as a Bank
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
				

 

Signature Page to Second Amendment to Revolving Credit Agreement

 

 

	
 
    	
BARCLAYS   BANK PLC,
    
	
 
    	
as a Bank
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
				

 

Signature Page to Second Amendment to Revolving Credit Agreement

 

 

	
 
    	
MORGAN   STANLEY SENIOR FUNDING, INC.,
    
	
 
    	
as a Bank
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
				

 

Signature Page to Second Amendment to Revolving Credit Agreementfcscexhibit41july2018rdo

                                                                    Exhibit 4.1                                           NEITHER  THIS  SECURITY  NOR  THE  SECURITIES  FOR  WHICH  THIS  SECURITY  IS  EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION  OR  THE  SECURITIES  COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM  REGISTRATION  UNDER  THE  SECURITIES       ACT  OF  1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO  AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT  OR  PURSUANT  TO  AN  AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION  REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH  APPLICABLE  STATE  SECURITIES  LAWS.   THIS  SECURITY  AND  THE  SECURITIES  ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION  WITH  A  BONA  FIDE  MARGIN  ACCOUNT  OR  OTHER  LOAN     SECURED  BY  SUCH  SECURITIES.                      COMMON STOCK PURCHASE WARRANT                            FIBROCELL SCIENCE, INC.   Warrant Shares: _______                         Issue Date:______, 2018                                                   Initial Exercise Date: _______, 2018                                                                             THIS  COMMON  STOCK  PURCHASE  WARRANT  (the  “Warrant”)  certifies  that, for value received, _____________ 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 City  time)  on  ______________  (the  “Termination  Date”)  but  not  thereafter,  to  subscribe  for  and  purchase from Fibrocell Science, Inc., a Delaware corporation (the “Company”), up to ______  shares  (as  subject  to  adjustment hereunder, the  “Warrant  Shares”) of the Company’s common  stock, par value $0.001  per share (the  “Common Stock”). The purchase price of one share of  Common Stock under this  Warrant  shall be equal  to  the Exercise Price, as  defined in  Section  2(b).                 Section 1.  Definitions.  Capitalized  terms  used  and  not  otherwise  defined        herein  shall  have  the  meanings  set  forth  in  that  certain  Securities  Purchase  Agreement        (the “Purchase Agreement”), dated July 2, 2018, among the Company and the purchasers        signatory thereto.          Section 2.  Exercise.               a)    Exercise of Warrant.  Exercise of the purchase rights represented by this        Warrant  may be made, in  whole or in  part, at  any time or times on or after the  Initial        Exercise Date and on or before the Termination Date by delivery to the Company of a        duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of        the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).  Within the        earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the                                         1    

 

                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  Warrant  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  be  required.   Notwithstanding  anything  herein  to  the  contrary,  the  Holder  shall  not  be  required  to  physically surrender this Warrant to the Company until the Holder has purchased all of  the  Warrant  Shares  available  hereunder  and  the  Warrant  has  been  exercised  in  full,  in  which  case,  the  Holder  shall  surrender  this  Warrant  to  the  Company  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 shall deliver any objection to any Notice of  Exercise  within  one  (1)  Trading  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.         b)    Exercise Price.  The exercise price per share of Common Stock under this  Warrant shall be $2.70, subject to adjustment hereunder (the “Exercise Price”).         c)    Cashless Exercise. Subject to the Holder’s compliance with Section 4.15  of the Purchase Agreement, if at any time after the six-month anniversary of the  Closing  Date,  there  is  no  effective  registration  statement  registering,  or  no  current  prospectus  available for, the resale of the Warrant Shares by the Holder, then this Warrant may also  be exercised, in whole or in part, at such time by means of a “cashless exercise” in which  the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient  obtained by dividing [(A-B) (X)] by (A), where:         (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the             date of the applicable Notice of Exercise if such Notice of Exercise is (1)             both executed and delivered pursuant to Section 2(a) hereof on a day that is             not a Trading Day or (2) both executed and delivered pursuant to Section             2(a)  hereof  on  a  Trading  Day  prior  to  the  opening  of  “regular  trading             hours”  (as  defined  in  Rule  600(b)(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                                   2                 

 

                           trading  hours”  on  a  Trading  Day  and  is  delivered  within  two  (2)  hours             thereafter (including until two (2) hours after the close of “regular trading             hours”  on  a  Trading  Day)  pursuant  to  Section  2(a)  hereof  or  (iii)  the             VWAP on the date of the applicable Notice of Exercise if the date of such             Notice of Exercise is a Trading Day and such Notice of Exercise is both             executed  and  delivered  pursuant  to  Section  2(a)  hereof  after  the  close  of             “regular trading hours” on such Trading Day;                (B) = the Exercise Price of this Warrant, as adjusted hereunder; and                 (X) = the number of Warrant Shares that would be issuable upon exercise of this             Warrant in accordance with the terms of this Warrant if such exercise were             by means of a cash exercise rather than a cashless exercise.                “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  Securities  then  outstanding  and  reasonably  acceptable  to  the  Company,  the  fees  and  expenses of which shall be paid by 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  Securities  then  outstanding  and  reasonably  acceptable  to  the  Company,  the  fees  and expenses of which shall be paid by the Company.                                   3                 

 

                      For the avoidance of doubt, if the Holder does not timely provide the Company  with  a  Selling  Stockholder  Questionnaire  pursuant  to  Section  4.15  of  the  Purchase  Agreement, then this Warrant shall not be eligible to be exercised via “cashless exercise”  as set forth above.         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 characteristics of the Warrants being exercised, and the holding  period of the Warrant Shares being issued may be tacked on to the holding period of this  Warrant.  The Company agrees not to take any position contrary to this Section 2(c).         Notwithstanding  anything  herein  to  the  contrary,  on  the  Termination  Date,  this  Warrant  shall be  automatically  exercised via  cashless exercise pursuant  to this  Section  2(c).                d)    Mechanics of Exercise.                    i.   Delivery  of  Warrant  Shares  Upon  Exercise.   The  Company              shall cause the Warrant Shares purchased hereunder to be transmitted by              the Transfer Agent to the Holder by crediting the account of the Holder’s              or  its  designee’s  balance  account  with  The  Depository  Trust  Company              through its Deposit or Withdrawal at Custodian system (“DWAC”) if the              Company is  then a participant in  such system  and either (A) there is  an              effective  registration  statement  permitting  the  issuance  of  the  Warrant              Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant              Shares are eligible for resale by the Holder without volume or manner-of-             sale limitations pursuant to  Rule 144  (assuming  cashless  exercise of the              Warrants), 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 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,  provided  that  payment  of  the  aggregate  Exercise  Price              (other than in the case of a cashless exercise) is received by the Warrant              Share Delivery Date.  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                                   4                 

 

                Stock on the date of the applicable Notice of Exercise), $10 per Trading  Day  (increasing  to  $20  per  Trading  Day  on  the  fifth  Trading  Day  after  such liquidated damages begin to accrue) for each Trading Day after such  Warrant Share Delivery Date until such Warrant Shares are delivered or  Holder rescinds such exercise. The Company agrees to maintain a transfer  agent  that is  a participant in  the FAST  program so  long as  this Warrant  remains outstanding and exercisable. As used herein, “Standard Settlement  Period” means  the standard settlement  period, expressed in  a number of  Trading Days, on the Company’s primary Trading Market with respect to  the Common Stock as  in  effect  on the date of  delivery of the Notice of  Exercise.       ii.  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, 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                       5                 

 

                            hereunder.  For example, if the Holder purchases Common Stock having a              total purchase  price  of  $11,000  to  cover  a  Buy-In  with  respect  to  an              attempted  exercise  of  shares  of  Common  Stock  with  an  aggregate  sale              price giving rise to such purchase obligation of $10,000, under clause (A)              of the immediately preceding sentence the Company shall be required to              pay  the  Holder  $1,000.  The  Holder  shall  provide  the  Company  written              notice indicating the amounts payable to the Holder in respect of the Buy-             In and, upon request of the Company, evidence of the amount of such loss.               Nothing herein shall limit a Holder’s right to pursue any other remedies              available to it hereunder, at law or in equity including, without limitation,              a  decree  of  specific  performance  and/or  injunctive  relief  with  respect  to              the  Company’s  failure  to  timely  deliver  shares  of Common  Stock  upon              exercise of the Warrant as required pursuant to the terms hereof.                   v.   No  Fractional  Shares  or  Scrip.   No  fractional  shares  or  scrip              representing  fractional  shares  shall  be  issued  upon  the  exercise  of  this              Warrant.  As to any fraction of a share which the Holder would otherwise              be  entitled  to  purchase  upon  such  exercise,  the  Company  shall,  at  its              election, either pay a cash adjustment in respect of such final fraction in an              amount equal to such fraction multiplied by the Exercise Price or round up              to the next whole share.                  vi.   Charges,  Taxes  and  Expenses.   Issuance  of  Warrant  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                                   6                 

 

                (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 (1) 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%/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                                   7                 

 

                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.   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)    Reserved.          c)    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                                   8                 

 

                record  is  taken  for  the  grant,  issuance  or  sale  of  such  Purchase  Rights,  or,  if  no  such  record is taken, the date as of which the record holders of shares of Common Stock are to  be determined for the grant, issue or sale of such Purchase Rights (provided, however,  that to the extent that the Holder’s right to participate in any such Purchase Right would  result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall  not  be  entitled  to  participate  in  such  Purchase  Right  to  such  extent  (or  beneficial  ownership of such shares of Common Stock as a result of such Purchase Right to such  extent) and such Purchase Right to such extent shall be held in abeyance for the Holder  until such time, if ever, as its right thereto would not result in the Holder exceeding the  Beneficial Ownership Limitation).          d)    Pro Rata Distributions.  During such time as this Warrant is outstanding, if  the  Company  shall  declare  or  make  any  dividend  or  other  distribution  of its  assets  (or  rights to acquire its assets) to holders of shares of Common Stock, by way of return of  capital or otherwise (including, without limitation, any distribution of cash, stock or other  securities, property or options by way of a dividend, spin off, reclassification, corporate  rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at  any time after the issuance of this Warrant, then, in each such case, the Holder shall be  entitled to participate in such Distribution to the same extent that the Holder would have  participated  therein  if  the  Holder  had  held  the  number  of  shares  of  Common  Stock  acquirable upon complete exercise of this Warrant (without regard to any limitations on  exercise  hereof,  including  without  limitation,  the  Beneficial  Ownership  Limitation)  immediately before the  date of which a record is  taken for such Distribution, or, if no  such record is taken, the date as of which the record holders of shares of Common Stock  are to be determined for the participation in such Distribution (provided, however, that to  the extent that the Holder's right to participate in any such Distribution would result in the  Holder  exceeding  the  Beneficial  Ownership  Limitation,  then  the  Holder  shall  not  be  entitled to participate in such Distribution to such extent (or in the beneficial ownership  of any shares of Common Stock as a result of such Distribution to such extent) and the  portion of such Distribution shall be held in abeyance for the benefit of the Holder until  such  time,  if  ever,  as  its  right  thereto  would  not  result  in  the  Holder  exceeding  the  Beneficial Ownership Limitation).           e)    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                                   9                 

 

                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  be  given  the  same  choice  as  to  the  Alternate  Consideration it receives upon any exercise of this Warrant following such Fundamental  Transaction.  Notwithstanding  anything  to  the  contrary,  in  the  event  of  a  Fundamental  Transaction (other than a Fundamental Transaction that was not approved by, or required  to  be  approved  by,  the  board  of  directors  of  the  Company,  in  which  case  the  right  to  receive cash equal to the Black Scholes Value of the remaining unexercised portion of  this Warrant described below shall not apply), 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 of the remaining unexercised portion of this Warrant on the date of  the consummation of such Fundamental Transaction.  Notwithstanding anything herein to  the  contrary,  the  Holder  may  not  require  the  Company  or  any  Successor  Entity  to  repurchase  the  Warrants  for  the  Black  Scholes  Value  solely  in  connection  with  a  Fundamental  Transaction  that  solely  is  (i)  not  approved  by  the  Company’s  board  of  directors and (ii) not within the Company’s control.  “Black Scholes Value” means the  value  of  this  Warrant  based  on  the  Black  and  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                                   10                 

 

                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 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 (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 by delivery of such other consideration, as applicable)  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  and the other Transaction Documents in accordance with the provisions of this Section  3(e) 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  and  the  other  Transaction  Documents 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  and  the  other  Transaction  Documents  with the same effect as if such Successor Entity had been named as the Company herein.          f)    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.         g)    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                                   11                 

 

                            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.                                    12                 

 

                      a)    Transferability.  Subject to compliance with any applicable securities laws  and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of  the  Purchase  Agreement,  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 two (2) Trading Days of the date on which the Holder  delivers an assignment form to the Company assigning this Warrant in full.  The Warrant,  if properly assigned in accordance herewith, may be exercised by a new holder for the  purchase of Warrant Shares without having a new Warrant issued.           b)    New  Warrants.  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 Issue 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 Company for that purpose (the “Warrant Register”), in the name  of the record Holder hereof from time to time.  The Company 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.         d)    Transfer  Restrictions.  If,  at  the  time  of  the  surrender  of  this  Warrant  in  connection  with  any  transfer  of  this  Warrant, the  transfer  of  this  Warrant  shall  not  be  either  (i)  registered  pursuant  to  an  effective  registration  statement  under  the  Securities  Act  and  under  applicable  state  securities  or  blue  sky  laws  or  (ii)  eligible  for  resale  without volume or manner-of-sale restrictions or current public information requirements  pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,  that  the  Holder  or  transferee  of  this  Warrant,  as  the  case  may  be,  comply  with  the  provisions of Section 5.7 of the Purchase Agreement.                                    13                 

 

                      e)    Representation  by  the  Holder.   The  Holder,  by  the  acceptance  hereof,  represents and warrants that it is acquiring this Warrant and, upon any exercise hereof,  will acquire the Warrant Shares issuable upon such exercise, for its own account and not  with a view to or for distributing or reselling such Warrant Shares or any part thereof in  violation of the Securities Act or any applicable state securities law, except pursuant to  sales registered or exempted under the Securities Act.   Section 5.  Miscellaneous.         a)    No  Rights  as  Stockholder  Until  Exercise;  No  Settlement  in  Cash.   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.   Without  limiting  the  rights  of  a  Holder  to  receive  Warrant  Shares  on  a  “cashless  exercise,”  and  to  receive  the  cash  payments  contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be  required to net cash settle a Warrant exercise.           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                                   14                 

 

                      and payment for such Warrant Shares in accordance herewith, be duly authorized,        validly  issued,  fully  paid  and  nonassessable  and  free  from  all  taxes,  liens  and        charges created by the Company in respect of the issue thereof (other than taxes in        respect of any transfer occurring contemporaneously with such issue).                 Except  and  to  the  extent  as  waived  or  consented  to  by  the  Holder,  the        Company  shall  not  by  any  action,  including,  without  limitation,  amending  its        certificate  of  incorporation  or  through  any  reorganization,  transfer  of  assets,        consolidation,  merger,  dissolution,  issue  or  sale  of  securities  or  any  other        voluntary action, avoid or seek to avoid the observance or performance of any of        the terms of this Warrant, but will at all times in good faith assist in the carrying        out of all such terms and in the taking of all such actions as may be necessary or        appropriate  to  protect  the  rights  of  Holder  as  set  forth  in  this  Warrant  against        impairment.  Without limiting the generality of the foregoing, the Company will        (i) not  increase the par  value of any Warrant  Shares  above the amount payable        therefor upon such exercise immediately prior to such increase in par value, (ii)        take all such action as may be necessary or appropriate in order that the Company        may validly and legally issue fully paid and nonassessable Warrant Shares upon        the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain        all such authorizations, exemptions or consents from any public regulatory body        having  jurisdiction  thereof,  as  may  be,  necessary  to  enable  the  Company  to        perform its obligations under this Warrant.               Before  taking  any  action  which  would  result  in  an  adjustment  in  the        number of Warrant Shares for which this Warrant is exercisable or in the Exercise        Price, the Company shall obtain all such authorizations or exemptions thereof, or        consents thereto, as may be necessary from any public regulatory body or bodies        having jurisdiction thereof.         e)    Jurisdiction.  All  questions  concerning  the  construction,  validity,  enforcement and interpretation of this Warrant shall be determined in accordance with the  provisions of the Purchase Agreement.           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 or the Purchase Agreement, 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                                    15                 

 

                Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its  rights, powers or remedies hereunder.         h)    Notices.  Any notice, request or other document required or permitted to  be given or delivered to the Holder by the Company shall be delivered in accordance with  the notice provisions of the Purchase Agreement.         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 and the Holder.         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.                                         ********************                                                           (Signature Page Follows)                                                         16                 

 

                 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.                                                                        FIBROCELL SCIENCE, INC.                                                                                                      By:__________________________________________                                       Name:                                       Title:                                                                            17    

 

                                           NOTICE OF EXERCISE    TO:   FIBROCELL SCIENCE, 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:                      _______________________________                                        _______________________________                                        _______________________________                  (4)  Accredited  Investor.   The  undersigned  is  an  “accredited  investor”  as  defined  in  Regulation D promulgated under the Securities Act of 1933, as amended.    [SIGNATURE OF HOLDER]          Name of Investing Entity: ________________________________________________________________________  Signature of Authorized Signatory of Investing Entity: _________________________________________________  Name of Authorized Signatory: ___________________________________________________________________  Title of Authorized Signatory: ____________________________________________________________________  Date: ________________________________________________________________________________________                                    \\PH - 036137/000007 - 388261 v4    

 

                                                                     EXHIBIT B                                        ASSIGNMENT FORM    (To assign the foregoing Warrant, execute this form and supply required information.  Do not use this  form to purchase shares.)   FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to  Name:                                                                                                                   (Please Print)   Address:                                                                                                                (Please Print)   Phone Number:                           ______________________________________   Email Address:                          ______________________________________   Dated: _______________ __, ______          Holder’s Signature:                        Holder’s Address:                                     \\PH - 036137/000007 - 388261 v4

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