PROXY THIS
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AEVI GENOMIC MEDICINE, INC.
The undersigned hereby appoints Michael F.
Cola and Sol J. Barer, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact
and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Aevi Genomic Medicine, Inc.
(the "Company") which the undersigned is entitled to vote and, in their discretion, to vote upon such other business
as may properly come before the Special Meeting of Stockholders of the Company to be held October 17, 2017 or any adjournment thereof, with
all powers which the undersigned would possess if present at the Meeting.
THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3 AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING. Continued and to be signed on reverse side
0000343740_2 R1.0.1.17
Appendix A
Securities Purchase Agreement
Execution Version
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase
Agreement (this “
Agreement
”) is dated as of August 9, 2017 by and among Aevi Genomic Medicine, Inc., a Delaware
corporation (the “
Company
”), and each purchaser listed on
Schedule A
attached hereto (each, including
its successors and assigns, a “
Purchaser
” and collectively, the “
Purchasers
”).
RECITALS
A. The
Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “
Securities Act
”), and Rule 506 of
Regulation D (“
Regulation D
”) as promulgated by the United States Securities and Exchange Commission (the “
Commission
”)
under the Securities Act.
B. Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, (i) that aggregate number of shares of common stock of the Company, par value $0.0001 per share (the “
Common
Stock
”), set forth below such Purchaser’s name on the signature page of this Agreement (which aggregate amount
for all Purchasers together shall be
22,222,222
shares of Common Stock and shall be collectively referred to herein as the “
Shares
”), and (ii) that aggregate
number of warrants, each in substantially the form attached hereto as Exhibit G (the “
Warrants
”), to acquire
shares of Common Stock (which Warrants for all Purchasers together shall be exercisable for an aggregate
3,953,904
shares of Common Stock) (the shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants collectively
are referred to herein as the “
Warrant Shares
”).
C. The
Shares, the Warrants and the Warrant Shares collectively are referred to herein as the “
Securities
”.
D. Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as
Exhibit A
(the “
Registration Rights Agreement
”), pursuant
to which, among other things, the Company will agree to provide certain registration rights with respect to the Shares and the
Warrant Shares under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.
NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser hereby agrees as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions
.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this
Section 1.1
:
“
Acquiring Person
”
has the meaning set forth in
Section 4.5
.
“
Action
”
means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation
pending and of which the Company has received notice or, to the Company’s Knowledge, threatened in writing against the Company,
any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting
in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator,
governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.
“
Affiliate
”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls,
is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.
“
Agreement
”
has the meaning set forth in the Preamble.
“
Board of Directors
” means the board of directors of the Company.
“
Business Day
”
means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other governmental action to close.
“
Buy-In
”
has the meaning set forth in
Section 4.1(f)
.
“
Buy-In Price
”
has the meaning set forth in
Section 4.1(f)
.
“
Closing
”
means the closing of the purchase and sale of the Shares and the Warrants pursuant to this Agreement.
“Closing Bid
Price”
means, for any security as of any date, (a) the last reported closing bid price per share of Common Stock on the
Principal Trading Market, as reported by Bloomberg Financial Markets, or, (b) if the Principal Trading Market begins to operate
on an extended hours basis and does not designate the closing bid price then the last bid price of such security prior to 4:00
P.M., New York City time, as reported by Bloomberg Financial Markets, or (c) if the foregoing do not apply, the last closing price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or (d) if no closing bid price is reported for such security by Bloomberg Financial Markets, the average of the bid prices
of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Closing Bid Price
cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security
on such date shall be the fair market value as mutually determined by the Company and the holder of such security. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the
applicable calculation period.
“
Closing Date
”
means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto,
and all of the conditions set forth in
Sections 2.1
,
2.2
,
5.1
and
5.2
hereof are satisfied or waived,
as the case may be, or such other date as the parties may agree.
“
Commission
”
has the meaning set forth in the Recitals.
“
Common Stock
”
has the meaning set forth in the Recitals, and also includes any other class of securities into which the Common Stock may hereafter
be reclassified or changed into.
“
Common Stock
Equivalents
” means any securities of the Company or any Subsidiary that would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument
that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or
other securities that entitle the holder to receive, directly or indirectly, Common Stock.
“
Company
”
has the meaning set forth in the Preamble.
“
Company Counsel
”
means Pepper Hamilton LLP located at 3000 Two Logan Square, Eighteenth and Arch Streets, Philadelphia, PA 19003.
“
Company Deliverables
”
has the meaning set forth in
Section 2.2(a)
.
“
Company
Intellectual Property
” has the meaning set forth in
Section 3.1(p)
.
“
Company’s Knowledge
”
means with respect to any statement made to the Company’s Knowledge, that the statement is based upon the actual knowledge
of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement.
“
Control
”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
“
Deadline Date
”
has the meaning set forth in
Section 4.1(f)
.
“
Effective Date
”
means the date on which the initial Registration Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.
“
Evaluation
Date
” has the meaning set forth in
Section 3.1(t)
.
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“
GAAP
”
means U.S. generally accepted accounting principles, as applied by the Company.
“
Intellectual
Property Rights
” has the meaning set forth in
Section 3.1(p)
.
“
Irrevocable
Transfer Agent Instructions
” means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in the
form of
Exhibit C
, executed by the Company and delivered to and acknowledged in writing by the Transfer Agent.
“
Lead Purchaser
”
shall mean The Children’s Hospital of Philadelphia Foundation, a Pennsylvania nonprofit corporation.
“
Legend Removal
Date
” has the meaning set forth in
Section 4.1(c)
.
“
Lien
”
means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of
any kind.
“
Material Adverse
Change
” means any (i) development or series of developments that is reasonably likely to cause the suspension, cessation
or termination of the clinical development of AEVI-001 or AEVI-002, or (ii) the termination of (a) the Sponsored Research Agreement,
dated as of November 12, 2014, between Medgenics Medical Israel Ltd. (the Company’s subsidiary) and the Lead Purchaser, (b)
the License Agreement, dated as of November 12, 2014, between Medgenics Medical Israel Ltd. (the Company’s subsidiary) and
the Lead Purchaser or (c) the License Agreement, dated as of September 9, 2015, between neuroFix, LLC (the Company’s subsidiary)
and the Lead Purchaser.
“
Material Adverse
Effect
” means (i) a material adverse effect on the results of operations, assets, business, financial condition or prospects
of the Company and the Subsidiaries, taken as a whole, including due to, among other reasons, the onset of any litigation or the
threat thereof, or (ii) an impairment in any material respect of the ability of the Company to perform its obligations under this
Agreement or to consummate any transactions contemplated by this Agreement, including the issuance or sale of the Securities by
the Company.
“
Material
Contract
” means any contract of the Company that has been filed or was required to have been filed as an exhibit to the
SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.
“
Material Permits
”
has the meaning set forth in
Section 3.1(n)
.
“
New York Courts
”
means the state and federal courts sitting in the City of New York, Borough of Manhattan.
“
OFAC
”
has the meaning set forth in
Section 3.1(kk)
.
“
Person
”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.
“
Press Release
”
has the meaning set forth in
Section 4.5
.
“
Principal Trading
Market
” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of
the date of this Agreement and the Closing Date, shall be the Nasdaq Global Market.
“
Proceeding
”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“
Purchase Price
”
means the price per Unit paid by each Purchaser, severally and not jointly, as set forth opposite such Purchaser’s name on
Schedule A
under the heading “Purchase Price.”
“
Purchaser
”
or “
Purchasers
” has the meaning set forth in the Recitals.
“
Purchaser Deliverables
”
has the meaning set forth in
Section 2.2(b)
.
“
Purchaser Party
”
has the meaning set forth in
Section 4.9
.
“Registration
Rights Agreement
” has the meaning set forth in the Recitals.
“
Registration
Statement
” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).
“
Regulation
D
” has the meaning set forth in the Recitals.
“
Rule 144
”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“
SEC Report
s”
has the meaning set forth in
Section 3.1(h)
.
“
Secretary’s
Certificate
” has the meaning set forth in
Section 2.2(a)(vi)
.
“
Securities
Act
” has the meaning set forth in the Recitals.
“
Shares
”
has the meaning set forth in the Recitals.
“
Short Sales
”
include, without limitation, (i) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and (ii) sales and other transactions through non-U.S. broker dealers
or foreign regulated brokers (but shall not be deemed to include the location and/or reservation of borrowable shares of Common
Stock).
“
Subscription
Amount
” means, with respect to each Purchaser, the aggregate amount to be paid for the Shares and Warrants purchased
hereunder as indicated opposite such Purchaser’s name on
Schedule A
to this Agreement under the heading “Aggregate
Purchase Price (Subscription Amount)” in United States dollars and in immediately available funds.
“
Subsidiary
”
means any subsidiary of the Company and shall, where applicable, include any subsidiary of the Company formed or acquired after
the date hereof.
“
Trading Affiliate
”
has the meaning set forth in
Section 3.2(g)
.
“
Trading Day
”
means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted
on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink
sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices);
provided
,
that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall
mean a Business Day.
“
Trading Market
”
means whichever of the New York Stock Exchange, the NYSE MKT (formerly the American Stock Exchange), the NASDAQ Global Select Market,
the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.
“
Transaction
Documents
” means this Agreement, the schedules and exhibits attached hereto, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions and any other documents or agreements explicitly contemplated hereunder.
“
Transfer Agent
”
means Corporate Stock Transfer, Inc., the current transfer agent of the Company, with a mailing address of 3200 Cherry Creek Drive
South, Suite 430, Denver, CO 80209, or any successor transfer agent for the Company.
A “
Unit
”
consists of one share of Common Stock and a Warrant to purchase 0.1779 shares of Common Stock.
“Warrants”
has the meaning set forth in the Recitals.
“Warrant Shares”
has the meaning set forth in the Recitals.
ARTICLE II.
PURCHASE AND SALE
(a)
Amount
.
Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company, such number of Units as indicated below such Purchaser’s
name on Schedule A, which Unit results from dividing (i) the Subscription Amount for such Purchaser by (ii) the Purchase Price
applicable to such Purchaser, rounded down. The Warrants shall have an exercise price equal to $2.84 per Warrant Share, subject
to adjustment as provided in such Warrants.
(b)
Closing
.
The Closing of the purchase and sale of the Shares and the Warrants shall take place at the offices of Pepper Hamilton LLP, 3000
Two Logan Square, Eighteenth and Arch Streets, Philadelphia, PA 19003, on the Closing Date or at such other locations or remotely
by facsimile transmission or other electronic means as the parties may mutually agree.
(c)
Form
of Payment
. Except as may otherwise be agreed to among the Company and one or more of the Purchasers as to such Purchaser(s),
on or prior to the Business Day immediately prior to the Closing Date, each Purchaser shall wire its Subscription Amount, in United
States dollars and in immediately available funds, to the Company pursuant to the wire instructions set forth on
Exhibit F
hereto. On the Closing Date, the Company shall (a) irrevocably instruct the Transfer Agent to enter in the name of each Purchaser
a book entry position, free and clear of all restrictive and other legends (except as expressly provided in
Section 4.1(b)
hereof), evidencing the number of Shares such Purchaser is purchasing as is set forth on Schedule A under the heading “Number
of Shares to be Acquired”, within three (3) Trading Days after the Closing (or, if the date of this Agreement is on or after
September 5, 2017, within two (2) Trading Days after the Closing), and (b) deliver to each Purchaser one or more Warrants, free
and clear of all restrictive and other legends (except as expressly provided in
Section 4.1(b)
hereof), evidencing the
number of Warrants such Purchaser is purchasing as is set forth on Schedule A under the heading “Underlying Shares Subject
to Warrant,” within three (3) Trading Days after the Closing (or, if the date of this Agreement is on or after September
5, 2017, within two (2) Trading Days after the Closing).
(a) On
or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “
Company
Deliverables
”):
(i) this
Agreement, duly executed by the Company;
(ii) evidence
of a book entry position, free and clear of all restrictive and other legends (except as provided in
Section 4.1(b)
hereof),
evidencing the Shares subscribed for by such Purchaser hereunder, registered in the name of such Purchaser as set forth on the
Securities Issuance Questionnaire included as
Exhibit B-2
hereto;
(iii) facsimile
copies of one or more Warrants, executed by the Company and registered in the name of such Purchaser as set forth on the Securities
Issuance Questionnaire included as Exhibit B-2 hereto, pursuant to which such Purchaser shall have the right to acquire such number
of Warrant Shares set forth on
Schedule A
, with the original Warrants delivered within three (3) Trading Days of Closing;
(iv) a
legal opinion of Company Counsel, dated as of the Closing Date, in form and substance satisfactory to the Purchasers, executed
by such counsel and addressed to the Purchasers;
(v) the
Registration Rights Agreement, duly executed by the Company;
(vi) duly
executed Irrevocable Transfer Agent Instructions acknowledged in writing by the Transfer Agent in the form attached hereto as
Exhibit
C
;
(vii) a
certificate of the Secretary of the Company (the “
Secretary’s Certificate
”), dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving
the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying
the current versions of the certificate of incorporation, as amended, and by-laws, as amended, of the Company, and (c) certifying
as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company,
in the form attached hereto as
Exhibit D
;
(viii) a
certificate signed by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the
fulfillment of the conditions specified in
Sections 5.1(a)
and
(b)
in the form attached hereto as
Exhibit E
;
(ix) a
certified copy of the Company’s certificate of incorporation, as amended, as certified by the Secretary of State of Delaware;
and
(x) a
certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of
State (or comparable office) of any applicable jurisdiction.
(b) On
or prior to the Closing, each Purchaser (except as specified in clause (vi) below) shall deliver or cause to be delivered to the
Company the following (the “
Purchaser Deliverables
”):
(i) this
Agreement, duly executed by such Purchaser;
(ii) its
Subscription Amount, in United States dollars and in immediately available funds, in the amount indicated on
Schedule A
hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer, pursuant to wire instructions
set forth on
Exhibit F
attached hereto;
(iii) the
Registration Rights Agreement, duly executed by such Purchaser;
(iv) a
fully completed and duly executed Selling Stockholder Questionnaire in the form attached as Annex B to the Registration Rights
Agreement;
(v) a
fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the Company, and Securities Issuance Questionnaire
in the forms attached hereto as
Exhibits B-1
and
B-2
, respectively; and
(vi) an
executed Lock-Up Agreement from the Lead Purchaser, substantially in the form of
Exhibit H
hereto (the “
Lock-Up
Agreement
”).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations
and Warranties of the Company
. The Company hereby represents and warrants as of the date hereof and as of the Closing Date
(except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each
of the Purchasers as follows:
(a) The
Company and each of its Subsidiaries have been duly organized and are validly existing as corporations or other legal entities
in good standing (or the foreign equivalent thereof) under the laws of their respective jurisdictions of organization. The Company
and each of its Subsidiaries are duly qualified to do business and are in good standing as foreign corporations or other legal
entities in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses
requires such qualification and have all power and authority (corporate or other) necessary to own or hold their respective properties
and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority
would not have, singularly or in the aggregate, a Material Adverse Effect. Other than ownership of its Subsidiaries, Medgenics
Medical (Israel) Ltd. and neuroFix, LLC, the Company does not own or control, directly or indirectly, any interest in any corporation,
partnership, limited liability partnership, limited liability corporation, association or other entity.
(b) Each
of the Transaction Documents has been duly authorized, executed and delivered by the Company and constitutes a valid, legal and
binding obligation of the Company, enforceable in accordance with its terms, except as rights to indemnity hereunder may be limited
by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject to general principles of equity. The Company has full corporate
power and authority to enter into each of the Transaction Documents and to consummate the transactions contemplated hereby and
thereby, including the authorization, issuance and sale of the Securities as contemplated hereby and thereby, except for the Stockholders
Consent as contemplated by
Section 4.16
.
(c) The
Shares to be issued and sold by the Company to the Purchasers hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and nonassessable and free
of any preemptive or similar rights. The Warrants have been duly authorized and, when issued and paid for in accordance with the
terms of the Transaction Documents, will be duly and validly issued, free and clear of all Liens, other than restrictions on transfer
provided for in the Transaction Documents or imposed by applicable securities laws. The Warrant Shares issuable upon exercise of
the Warrants have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents
and the Warrants, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens, other than restrictions
on transfer provided for in the Transaction Documents or imposed by applicable securities laws. As of the Closing Date, the Company
shall have reserved from its duly authorized capital stock the number of shares of Common Stock initially issuable upon exercise
of the Warrants.
(d)
The Company has an authorized capitalization as set forth in the SEC Reports. As of July 31, 2017, there were 37,110,043 shares
of Common Stock issued and 37,110,043 shares of Common Stock outstanding and 13,869,093 shares of Common Stock were issuable upon
the exercise of all options, warrants and convertible securities outstanding as of such date. Since such date, the Company has
not issued any securities other than Common Stock of the Company issued pursuant to the exercise of stock options previously outstanding
under the Company’s stock option plans. All of the Company’s options, warrants and other rights to purchase or exchange
any securities for shares of the Company’s capital stock have been duly authorized and validly issued and were issued in
compliance with federal and state securities laws. None of the outstanding shares of Common Stock was issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There
are no authorized or outstanding shares of capital stock, options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its Subsidiaries other than those described above or accurately described in the SEC Reports. The description
of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted
thereunder, as described in the SEC Reports accurately and fairly present the information required to be shown with respect to
such plans, arrangements, options and rights.
(e) All
the outstanding shares of capital stock (if any) of each Subsidiary of the Company have been duly authorized and validly issued,
are fully paid and nonassessable and, except to the extent set forth in the SEC Reports, are owned by the Company directly or indirectly
through one or more wholly-owned Subsidiaries, free and clear of any claim, lien, encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third party.
(f) Subject
to the receipt of the Stockholder Consent as contemplated in
Section 4.16
, the execution, delivery and performance of the
Transaction Documents by the Company, the issue and sale of the Securities by the Company and the consummation of the transactions
contemplated hereby and thereby will not (with or without notice or lapse of time or both) (i) conflict with or result in a breach
or violation of any of the terms or provisions of, constitute a default or a Debt Repayment Triggering Event (as defined below)
under, give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation or loss
of a benefit under, or give rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge upon
any property or assets of the Company or any Subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, (ii) result
in any violation of the provisions of the charter or by-laws (or analogous governing instruments, as applicable) of the Company
or any of its Subsidiaries or (iii) result in any violation of the provisions of any law, statute, rule, regulation, judgment,
order or decree of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of
its Subsidiaries or any of their properties or assets; except, in the case of clause (iii), to the extent that such event is not
reasonably expected to have a Material Adverse Effect. A “
Debt Repayment Triggering Event
” means any event or
condition that gives, or with the giving of notice or lapse of time would give the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company of any of its Subsidiaries.
(g) No
consent, approval, authorization or order of, or filing, qualification or registration (each an “
Authorization
”)
with, any court, governmental or non-governmental agency or body, foreign or domestic, which has not been made, obtained or taken
and is not in full force and effect, is required for the execution, delivery and performance of this Agreement by the Company,
the offer or sale of the Securities or the consummation of the transactions contemplated hereby, except for (i) the filing with
the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement,
(ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the
Commission under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or application(s) to the Principal
Trading Market for the issuance and sale of the Securities and the listing of the Shares and the Warrant Shares for trading or
quotation, as the case may be, thereon in the time and manner required thereby, (v) the filings required in accordance with
Section
4.5
of this Agreement, (vi) receipt of the Stockholder Consent, and (vii) those that have been made or obtained prior to the
date of this Agreement. No event has occurred that allows or results in, or after notice or lapse of time or both would allow or
result in, revocation, suspension, termination or invalidation of any such Authorization or any other impairment of the rights
of the holder or maker of any such Authorization. All corporate approvals (including those of stockholders) necessary for the Company
to consummate the transactions contemplated by the Transaction Documents have been obtained and are in effect.
(h) Ernst
& Young LLP, who have certified certain financial statements included or incorporated by reference in the SEC Reports, and
have audited the effectiveness of the Company’s internal control over financial reporting, is (x) an independent registered
public accounting firm within the meaning of Article 2-01 of Regulation S-X and the Public Company Accounting Oversight Board (United
States) (the “
PCAOB
”), (y) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley
Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “
Sarbanes-Oxley
Act
”)) and (z) in the performance of its work for the Company, not in violation of the auditor independence requirements
of the Sarbanes-Oxley Act.
(i) The
financial statements, together with the related notes and schedules, included in the SEC Reports fairly present the financial position
and the results of operations and changes in financial position of the Company and its consolidated Subsidiaries at the respective
dates or for the respective periods therein specified. Such statements and related notes have been prepared in accordance with
the generally accepted accounting principles in the United States (“
GAAP
”) applied on a consistent basis throughout
the periods involved except as may be set forth in the related notes included or incorporated by reference in the SEC Reports.
The financial statements, together with the related notes, included in the SEC Reports comply in all material respects with Regulation
S-X. No other financial statements or supporting schedules or exhibits are required by Regulation S-X to be described or incorporated
by reference in the SEC Reports. The selected financial data included or incorporated by reference in the SEC Reports fairly present
the information shown therein as at the respective dates and for the respective periods specified and are derived from the consolidated
financial statements incorporated by reference in the SEC Reports and other financial information. All information contained in
the SEC Reports regarding “non-GAAP financial measures” (as defined in Regulation G) complies with Regulation G and
Item 10 of Regulations S-K, to the extent applicable. Except as disclosed in the SEC Reports, there are no material off-balance
sheet arrangements (as defined in Regulation S-K under the Securities Act, Item 303(a)(4)(ii)) or any other relationships with
unconsolidated entities or other persons, that may have a material current or material future effect on the Company’s financial
condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenue or expenses.
(j) The
interactive data in eXtensible Business Reporting Language included or incorporated by reference in the SEC Reports fairly presents
the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines
applicable thereto.
(k) Neither
the Company nor any of its Subsidiaries has sustained, since the date of the latest audited financial statements included in the
SEC Reports, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the SEC Reports; and, since such date, there has not been any change in the capital stock or long-term debt of
the Company or any of its Subsidiaries, or any Material Adverse Effect or any development, including the onset of litigation or
the threat thereof, which would reasonably be expected to result in any Material Adverse Effect, otherwise than as set forth or
contemplated in the SEC Reports.
(l) Except
as set forth in the SEC Reports, there is no legal or governmental proceeding to which the Company or any of its Subsidiaries is
a party or of which any property or assets of the Company or any of its Subsidiaries or any officer or director of the Company,
in their roles as such, or any employee benefit plan sponsored by the Company is the subject, including any proceeding before the
United States Food and Drug Administration of the U.S. Department of Health and Human Services (“
FDA
”) or comparable
federal, state, local or foreign governmental bodies (including the Israeli Ministry of Health) (it being understood that the interaction
between the Company and the FDA and such comparable governmental bodies relating to the clinical development and product approval
process shall not be deemed proceedings for purposes of this representation), which is required to be described in the SEC Reports
and is not described therein, or which, singularly or in the aggregate, if determined adversely to the Company or any of its Subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and to the best of the Company’s knowledge after reasonable
investigation and due diligence inquiry (“
Knowledge
”), no such proceedings are threatened or contemplated by
governmental authorities or threatened by others. The Company is in compliance with all applicable federal, state, local and foreign
laws, regulations, orders and decrees governing its business as prescribed by the FDA, or any other federal, state or foreign agencies
or bodies engaged in the regulation of pharmaceuticals or biohazardous substances or materials, except where noncompliance would
not, singly or in the aggregate, have a Material Adverse Effect. All preclinical and clinical studies conducted by or on behalf
of the Company to support approval for commercialization of the Company’s products have been conducted by the Company, or
to the Company’s Knowledge by third parties, in compliance with all applicable federal, state or foreign laws, rules, orders
and regulations, except for such failure or failures to be in compliance as could not reasonably be expected to have, singly or
in the aggregate, a Material Adverse Effect.
(m) There
are no statutes or regulations that are required to be described in the SEC Reports that have not been so described.
(n) Neither
the Company nor any of its Subsidiaries (i) is in violation of its charter or by-laws (or analogous governing instrument, as applicable),
(ii) is in default in any respect, and no event has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of
its material property or assets is subject (including, without limitation, those administered by the FDA or by any foreign, federal,
state or local governmental or regulatory authority performing functions similar to those performed by the FDA); (iii) is in violation
in any respect of any law, ordinance, governmental rule, regulation or court order, decree or judgment to which it or its property
or assets may be subject, including the Sarbanes-Oxley Act; or (iv) is in violation of any applicable corporate governance requirements
set forth in the rules of the Exchange Act; except, in the case of clauses (ii) and (iii) of this paragraph (v), for any violations
or defaults which, singularly or in the aggregate, would not have a Material Adverse Effect.
(o) The
Company and each of its Subsidiaries possess all licenses, certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate local, state, federal or foreign regulatory agencies or bodies (including, without
limitation, those administered by the FDA or by any foreign, federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA) which are necessary for the ownership of their respective properties or the conduct
of their respective businesses as described in the SEC Reports (collectively, the “
Governmental Permits
”) except
where any failures to possess or make the same, singularly or in the aggregate, would not have a Material Adverse Effect. The Company
and its Subsidiaries are in compliance with all such Governmental Permits and all such Governmental Permits are valid and in full
force and effect, except where the noncompliance, validity or failure to be in full force and effect would not, singularly or in
the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has received notification of any revocation,
modification, suspension, termination or invalidation (or proceedings related thereto) of any such Governmental Permit and to the
Knowledge of the Company, no event has occurred that allows or results in, or after notice or lapse of time or both would allow
or result in, revocation, modification, suspension, termination or invalidation (or proceedings related thereto ) of any such Governmental
Permit and the Company has no reason to believe that any such Governmental Permit will not be renewed. The Company and its Subsidiaries
are members in good standing of each Federal, state or foreign exchange, board of trade, clearing house or association and self-regulatory
or similar organization, in each case as necessary to conduct their respective businesses as described in the SEC Reports. The
studies, tests and preclinical or clinical trials conducted by or on behalf of the Company that are described in the SEC Reports
(the “
Company Studies and Trials
”) were and, if still pending, are being, conducted in all material respects
in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional scientific
standards; the descriptions of the results of the Company Studies and Trials contained in the SEC Reports are accurate in all material
respects; the Company has not received any notices or correspondence with the FDA or any foreign, state or local governmental body
exercising comparable authority requiring the termination, suspension or material modification of any Company Studies or Trials
that would reasonably be expected to have a Material Adverse Effect; and the Company is not aware of any studies, tests or trials
the results of which the Company believes reasonably call into question the study, test, or trial results described or referred
to in the SEC Reports when viewed in the context in which such results are described and the clinical state of development. For
the avoidance of doubt, the Company makes no representation or warranty that the results of any studies, tests or preclinical or
clinical trials conducted by or on behalf of the Company will be sufficient to obtain governmental approval from the FDA or any
foreign, state or local governmental body exercising comparable authority or that additional studies, tests or preclinical or clinical
trials will reach similar results or conclusions.
(p) Except
as disclosed in the SEC Reports, the Company has not granted rights to develop, manufacture, produce, assemble, distribute, license,
market or sell its product candidates to any other person and is not bound by any agreement that affects the exclusive right of
the Company to develop, manufacture, produce, assemble, distribute, license, market or sell its products.
(q) Neither
the Company nor any of its Subsidiaries is or, after giving effect to the offering of the Securities and the application of the
net proceeds therefrom, will become an “investment company” within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder.
(r) The
Company and its Subsidiaries own or possess the right to use all (i) valid and enforceable patents, patent applications, trademarks,
trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights, copyright registrations,
licenses, trade secret rights (“
Intellectual Property Rights
”) and (ii) inventions, software, works of authorships,
trademarks, service marks, trade names, databases, formulae, know how, Internet domain names and other intellectual property (including
trade secrets and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures) (collectively,
“
Intellectual Property Assets
”) necessary to conduct their respective businesses as currently conducted, and
as proposed to be conducted and described in the SEC Reports. The Company and its Subsidiaries have not received any opinion from
their legal counsel concluding that any activities of their respective businesses infringe, misappropriate, or otherwise violate,
valid and enforceable Intellectual Property Rights of any other person, and have not received written notice of any challenge,
which is to their Knowledge still pending, by any other person to the rights of the Company and its Subsidiaries with respect to
any Intellectual Property Rights or Intellectual Property Assets owned or used by the Company or its Subsidiaries. To the Knowledge
of the Company, the Company and its Subsidiaries’ respective businesses as now conducted do not give rise to any infringement
of, any misappropriation of, or other violation of, any valid and enforceable Intellectual Property Rights of any other person.
All licenses for the use of the Intellectual Property Rights described in the SEC Reports are valid, binding upon, and enforceable
by or against the parties thereto in accordance to its terms. The Company has complied in all material respects with, and is not
in breach nor has received any asserted or threatened claim of breach of any Intellectual Property Rights or Intellectual Property
Assets license, and the Company has no knowledge of any breach or anticipated breach by any other person to any Intellectual Property
Rights or Intellectual Property Assets license. Except as described in the SEC Reports, no claim has been made against the Company
alleging the infringement by the Company of any patent, trademark, service mark, trade name, copyright, trade secret, license in
or other intellectual property right or franchise right of any person. The Company has taken all reasonable steps to protect, maintain
and safeguard its Intellectual Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements.
The consummation of the transactions contemplated by the Transaction Documents will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the consent of any other person in respect of, the Company’s
right to own, use, or hold for use any of the Intellectual Property Rights as owned, used or held for use in the conduct of the
business as currently conducted. The Company has at all times complied with all applicable laws relating to privacy, data protection,
and the collection and use of personal information collected, used, or held for use by the Company in the conduct of the Company’s
business. The Company has taken all necessary actions to obtain ownership of all works of authorship and inventions made by its
employees, consultants and contractors during the time they were employed by or under contract with the Company and which relate
to the Company’s business. All founders and key employees have signed confidentiality and invention assignment agreements
with the Company. To the Knowledge of the Company, the Company has complied with the United States Patent and Trademark Office’s
duty of candor, good faith and disclosure and best mode requirement for any patent applications filed by the Company, and all other
requirements for patentability and enforceability of any resultant patents, and has made no material misrepresentation in any such
applications. To the Company’s Knowledge, all material Intellectual Property Rights or Intellectual Property Assets owned
by or licensed to the Company is valid and enforceable.
(s) The
Company and each of its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise
use, all items of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole,
in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singularly or in the
aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such
property by the Company or any of its Subsidiaries; and all of the leases and subleases material to the business of the Company
and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described
in the SEC Reports, are in full force and effect, and neither the Company nor any Subsidiary has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession
of the leased or subleased premises under any such lease or sublease.
(t) There
is (i) no significant unfair labor practice complaint pending against the Company, or any of its Subsidiaries, nor to the Knowledge
of the Company, threatened against it or any of its Subsidiaries, before the National Labor Relations Board, any state or local
labor relation board or any foreign labor relations board, and no significant grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against the Company or any of its Subsidiaries, or, to the Knowledge
of the Company, threatened against it and (ii) no strike, lockout, work stoppage, slowdown, union organizing campaign, union demand
for recognition or union election petition is pending or, to the Company’s Knowledge, threatened, with respect to the employees
of the Company or any of its Subsidiaries, and, to the Company’s Knowledge, there is no existing or imminent strike, lockout,
work stoppage or slowdown by the employees of its Subsidiaries’ principal suppliers, manufacturers, customers or contractors,
that would reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect. No key employee or significant
group of employees of the Company or any Subsidiary has provided, or to the Company’s Knowledge, plans to provide, written
notice to the Company of intent to terminate employment with the Company or any such Subsidiary.
(u) No
“prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“
ERISA
”), or Section 4975 of the Internal
Revenue Code of 1986, as amended from time to time (the “
Code
”)) or “accumulated funding deficiency”
(as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect
to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be
expected to occur with respect to any employee benefit plan (as defined in Section 3(3) of ERISA) of the Company or any of its
Subsidiaries which could, singularly or in the aggregate, have a Material Adverse Effect. Each employee benefit plan (as defined
in Section 3(3) of ERISA) of the Company or any of its Subsidiaries is in compliance in all material respects with applicable law,
including ERISA and the Code. The Company and its Subsidiaries have not incurred and could not reasonably be expected to incur
liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in Section
3(2) of ERISA). Each pension plan that is intended to be qualified under Section 401(a) of the Code is so qualified, and to the
Company’s Knowledge, nothing has occurred, whether by action or by failure to act, which could, singularly or in the aggregate,
cause the loss of such qualification.
(v) The
Company and each of its Subsidiaries (i) is in compliance, in all material respects, with any and all applicable foreign, federal,
state and local laws, rules, regulations, treaties, statutes and codes promulgated by any and all governmental authorities (including
pursuant to the Occupational Health and Safety Act) relating to the protection of human health and safety in the workplace (“
Occupational
Laws
”), (ii) has received all material permits, licenses or other approvals required of it under applicable Occupational
Laws to conduct its business as currently conducted and (iii) is in compliance, in all material respects, with all terms and conditions
of such permit, license or approval. No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to
the Company’s knowledge, threatened against the Company or any of its Subsidiaries relating to Occupational Laws.
(w)
Except as otherwise described in the SEC Reports and except as would not, individually or in the aggregate, result in a Material
Adverse Effect, (i) neither the Company nor any of its Subsidiaries is in violation of any federal, state, local or foreign law
or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively, “
Materials of Environmental Concern
”),
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environment Concern (collectively, “
Environmental Laws
”), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of the
Company or its Subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has
the Company or any of its Subsidiaries received any written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company or any of its Subsidiaries is in violation of any Environmental Law; (ii)
there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which
the Company has received written notice, and no written notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys’
fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company or any of its Subsidiaries, now or in the past (collectively,
“
Environmental Claims
”), pending or, to the Company’s Knowledge, threatened against the Company or any
of its Subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any of its Subsidiaries
has retained or assumed either contractually or by operation of law; and (iii) to the Company’s Knowledge, there are no past
or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental
Law or form the basis of a potential Environmental Claim against the Company or any of its Subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any of its Subsidiaries has retained or assumed either contractually
or by operation of law.
(x) The
Company and its Subsidiaries each (i) have timely filed, or duly obtained extensions of the time for filing, all necessary federal,
state, local and foreign tax returns and all such returns were true, complete and correct, (ii) have paid all federal, state, local
and non-U.S. taxes due and payable for which it is liable, including, without limitation, all sales and use taxes and all taxes
which the Company or any of its Subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties,
other than, in each case, any taxes which the Company or any of its Subsidiaries is contesting in good faith and (iii) do not have
any tax deficiency that has been assessed or, to its Knowledge, proposed against any of them, except those, in each of the cases
described in clauses (i), (ii) and (iii) of this paragraph (gg), that would not, singularly or in the aggregate, have a Material
Adverse Effect. The Company and its Subsidiaries have not engaged in any “reportable transaction” within the meaning
of Section 6707A(c) of the Code and Treasury Regulations Section 1.6011-4(b). The accruals and reserves on the books and records
of the Company and its Subsidiaries in respect of tax liabilities for any taxable period not yet finally determined are adequate
in accordance with GAAP to meet any assessments and related liabilities for any such period, and since December 31, 2015, the Company
and its Subsidiaries have not incurred any liability for taxes other than in the ordinary course.
(y)
The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged
in similar businesses in similar industries. Neither the Company nor any of its Subsidiaries has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. All policies
of insurance owned by the Company or any of its Subsidiaries are, to the Company’s Knowledge, in full force and effect and
the Company and its Subsidiaries are in compliance in all material respects with the terms of such policies. Neither the Company
nor any of its Subsidiaries has received written notice from any insurer, agent of such insurer or the broker of the Company or
any of its Subsidiaries that any material capital improvements or any other material expenditures (other than premium payments)
are required or necessary to be made in order to continue such insurance. None of the Company or any of its Subsidiaries insures
risk of loss through any captive insurance, risk retention group, reciprocal group or by means of any fund or pool of assets specifically
set aside for contingent liabilities other than as described in the SEC Reports.
(z)
The Company and each of its Subsidiaries maintains a system of internal control over financial reporting (as such term is defined
in Rule 13a-15 of the General Rules and Regulations under the Exchange Act (the “
Exchange Act Rules
”)) that
complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and
principal financial officer, or under their supervision, to provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as
described in the SEC Reports, since the end of the Company’s most recent audited fiscal year, there has been (A) no material
weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the
Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting. The Company’s internal control over financial reporting is
overseen by the Audit Committee of the Board of Directors of the Company (the “
Audit Committee
”) in accordance
with the Exchange Act Rules. The Company has not publicly disclosed or reported to the Audit Committee or to the Board any material
weakness, change in internal control over financial reporting or fraud involving management or other employees who have a significant
role in the internal control over financial reporting (each an “
Internal Control Event
”), any violation of,
or failure to comply with, the U.S. Securities Laws, or any matter which if determined adversely, would have a Material Adverse
Effect.
(aa) A
member of the Audit Committee has confirmed to the Chief Executive Officer or Chief Financial Officer that, except as set forth
in the SEC Reports, the Audit Committee is not reviewing or investigating, and neither the Company’s independent auditors
nor its internal auditors have recommended that the Audit Committee review or investigate, (i) adding to, deleting, changing the
application of or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies,
(ii) any matter which could result in a restatement of the Company’s financial statements for any annual or interim period
during the current or prior three fiscal years, or (iii) any Internal Control Event.
(bb) The
Company maintains disclosure controls and procedures (as such is defined in Rule 13a-15 of the Exchange Act Rules) that comply
with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that information
required to be disclosed by the Company with respect to itself and its Subsidiaries in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company has utilized such controls and procedures in preparing and evaluating the disclosures in the SEC Reports.
The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures
as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date,
the “
Evaluation Date
”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control
over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.
(cc)
There is no franchise agreement, lease, contract, or other agreement or document required by the Securities Act or by the Rules
and Regulations to be described in the SEC Reports or to be filed as an exhibit thereto which is not so described or filed therein
as required; and all descriptions of any such franchise agreements, leases, contracts, or other agreements or documents contained
in the SEC Reports are accurate and complete descriptions of such documents in all material respects. Other than as described in
the SEC Reports, no such franchise agreement, lease, contract or other agreement has been suspended or terminated for convenience
or default by the Company or any of the other parties thereto, and neither the Company nor any of its Subsidiaries has received
notice of and the Company does not have Knowledge of any such pending or threatened suspension or termination.
(dd) No
relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders
(or analogous interest holders), customers or suppliers of the Company or any of its affiliates on the other hand, which is required
to be described in the SEC Reports which is not so described.
(ee) Other
than each of the Purchasers pursuant to the Registration Rights Agreement or as set forth in the SEC Reports, no Person has any
right to cause the Company to effect the registration under the Securities Act of any securities of the Company.
(ff) Other
than Jefferies LLC, in its role as financial advisor to the Company, no person or entity will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or a Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the
Company. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this paragraph pursuant to any agreement to which the Company is a party that
may be due in connection with the transactions contemplated by the Transaction Documents.
(gg) Except
as described in the SEC Reports, no Subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement
or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution
on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company
or from transferring any of such Subsidiary’s properties or assets to the Company or any other Subsidiary of the Company.
(hh) No
forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained
in the SEC Reports has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(ii)
The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and is listed on the
Principal Trading Market, and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the Principal Trading Market, nor
has the Company received any notification that the Commission or the Financial Industry Regulatory Authority, Inc. is contemplating
terminating such registration or listing. The Company is in compliance with all listing and maintenance requirements of the Principal
Trading Market on the date hereof. Upon receipt of the Stockholder Consent contemplated by
Section 4.16
, the issuance of
the Securities in the manner and on the terms contemplated by the Transaction Documents will not violate the rules of the Principal
Trading Market.
(jj) Neither
the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any employee or agent of the Company or any Subsidiary,
has (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political
activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds, (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended
or (iv) made any other unlawful payment.
(kk) There
are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term
is defined in Rule 405 of the Rules and Regulations) and any unconsolidated entity, including, but not limited to, any structured
finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s liquidity
or the availability of or requirements for its capital resources required to be described in the SEC Reports which have not been
described as required.
(ll)
There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company or any of its Subsidiaries to or for the benefit of any of the officers or directors of the Company,
any of its Subsidiaries or any of their respective family members. All transactions by the Company with office holders or control
persons of the Company have been duly approved by the board of directors of the Company, or duly appointed committees or officers
thereof, if and to the extent required under U.S. law.
(mm)
The statistical and market related data included in the SEC Reports are based on or derived from sources that the Company believes
to be reliable and accurate in all material respects and such data agree with the sources from which they are derived.
(nn)
The operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “
Money
Laundering Laws
”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending, or to
the Company’s Knowledge, threatened.
(oo)
Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any director, officer, agent, employee or
affiliate of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“
OFAC
”); and the Company will not directly or indirectly use
the net proceeds from the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to
any U.S. sanctions administered by OFAC.
(pp)
The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect
to the transactions contemplated hereby to occur on the Closing Date, will not be Insolvent (as defined below). For purposes of
this paragraph, “Insolvent” means, with respect to any person, (i) the present fair saleable value of such person’s
assets is less than the amount required to pay such person’s total Indebtedness, (ii) such person is unable to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such person
intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such
person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.
(qq) To
the knowledge of the Company, and except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company’s
manufacturing facilities and operations are in compliance with applicable regulations of the FDA, including current Good Manufacturing
Practices.
(rr) The
Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the foregoing materials, being
collectively referred to herein as the “
SEC Reports
”) on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Reports prior to the expiration of any such extension, except where the failure
to file on a timely basis would not have or reasonably be expected to result in a Material Adverse Effect (including, for this
purpose only, any failure to qualify to register the Shares and the Warrant Shares for resale on Form S-3 if then required by the
Registration Rights Agreement, or which would prevent any Purchaser from using Rule 144 to resell any Securities due to the
current public information requirements thereof). As of their respective filing dates, or to the extent corrected by a subsequent
amendment or restatement, the SEC Reports complied in all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated thereunder, as applicable, and none of the SEC Reports,
when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The Company has never been an issuer subject to Rule 144(i) under the Securities Act. Since the date of the financial statements
included its last periodic SEC Report filed with the Commission, and up to and including the date hereof, and other than as disclosed
in the SEC Reports, neither the Company nor any of its Subsidiaries has (i) issued or granted any securities other than options
to purchase common stock pursuant to the Company’s stock option plan, (ii) incurred any material liability or obligation,
direct or contingent, other than liabilities and obligations which were incurred in the ordinary course of business, (iii) entered
into any material transaction other than in the ordinary course of business, or (iv) declared or paid any dividend on its capital
stock.
(ss) Assuming
the accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2
of this Agreement and the
accuracy of the information disclosed in the Accredited Investor Questionnaires provided by the Purchasers, no registration under
the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers under the Transaction
Documents. Upon receipt of the Stockholder Consent, the issuance and sale of the Securities hereunder will not contravene the rules
and regulations of the Principal Trading Market.
(tt) The
Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision
under the Company's charter documents or the laws of its state of incorporation that is or could reasonably be expected to become
applicable to any of the Purchasers solely as a result of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including, without limitation, the Company's issuance of the Securities and the Purchasers'
ownership of the Securities.
(uu) The
Company confirms that it has not provided, and to the Company’s Knowledge, none of its officers or directors nor any other
Person acting on its or their behalf has provided, any Purchaser, other than the Lead Purchaser and its Affiliates, or such Purchaser’s
respective agents or counsel with any information that it believes constitutes material, non-public information except insofar
as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such
information, which information will be disclosed by the Company in the Press Release and/or Current Report on Form 8-K contemplated
by
Section 4.5
hereof. The Company understands and confirms that the Purchasers, other than the Lead Purchaser and its Affiliates,
will rely on the foregoing representations in effecting transactions in securities of the Company.
(vv) Assuming
the accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2
, none of the Company, its
Subsidiaries nor, to the Company’s Knowledge, any Person acting on their behalf has, directly or indirectly, at any time
within the past six (6) months, made any offers or sales of any Company security or solicited any offers to buy any security under
circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities
Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of
the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading
Market on which any of the securities of the Company are listed or designated.
(yy) Neither
the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising.
(ww) The
Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.
(xx) The
Company has not, and to the Company’s Knowledge, neither its directors or officers nor any person acting on its behalf has
(i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased or paid
any compensation for soliciting purchases of, any securities of the Company in violation of Regulation M under the Exchange Act
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.
(yy) None
of the Company, any predecessor or affiliated issuer of the Company nor, to the Company’s Knowledge, any director or executive
officer of the Company or any promoter connected with the Company in any capacity, is subject to any of the “bad actor”
disqualifications within the meaning of Rule 506(d) under the Securities Act, except for a disqualification event covered by Rule
506(d)(2) or (d)(3).
(zz) The
Baseline Cash Flow Projection Through Q2 2019 of the Company that was provided to the Purchasers in the Company’s electronic
data room created in connection with the offering of Securities contemplated by this Agreement (the “
Cash Flow Projection
”)
has been prepared by the Company in good faith. To the Knowledge of the Company, there is nothing that would cause such Cash Flow
Projection to conflict with the Company’s books and records. The assumptions used in preparation of such Cash Flow Projection
were fair and reasonable when made and continue to be fair and reasonable on the date hereof. The Company makes no representations
with regard to the Cash Flow Projection, including the expenses of the Company after the date hereof, other than those set forth
in this Section 3.1(zz).
3.2
Representations
and Warranties of the Purchasers
. Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows:
(a)
Organization;
Authority
. Except as to any Purchaser who is a natural person, such Purchaser is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and
authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder, and the execution and delivery of each of the Transaction Documents to which
it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary
corporate or other action on the part of such Purchaser. Each of the Transaction Documents to which it is a party has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the legal,
valid and binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
(b)
No
Conflicts
. The execution, delivery and performance by such Purchaser of the Transaction Documents to which it is a party and
the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Purchaser (except as to any Purchaser who is a natural person), (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party,
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities
laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability
of such Purchaser to perform its obligations hereunder.
(c)
Investment
Intent
. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law, and such Purchaser is acquiring the Shares and the Warrants and,
upon exercise of the Warrants, will acquire the Warrant Shares issuable upon exercise thereof, as principal for its own account
and not with a view to, or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities laws,
provided, however
, that, except to the extent provided in the Lock-Up Agreement,
by making the representations herein, such Purchaser does not agree to hold any of the Securities for any minimum period of time
and reserves the right, subject to the provisions of this Agreement and the Registration Rights Agreement, at all times to sell
or otherwise dispose of all or any part of such Securities pursuant to an effective registration statement under the Securities
Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. Such Purchaser
is acquiring the Securities hereunder for such Purchaser’s own account and, if such Purchaser is an entity, in the ordinary
course of its business, and not with a view to the resale or any distribution of any part thereof in violation of the Securities
Act, and such Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same
in violation of the Securities Act. Such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an
entity engaged in a business that would require it to be so registered as a broker-dealer.
(d)
Purchaser
Status
. At the time such Purchaser was offered the Securities, it was, at the date hereof it is, and on each date on which
it exercises the Warrants it will be an “accredited investor” as defined in Rule 501(a) under the Securities Act.
(e)
Experience of Such Purchaser
. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(f)
Access
to Information
. Such Purchaser acknowledges that it has had the opportunity to review the SEC Reports and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities;
(ii) access to information about the Company, its Subsidiaries and its financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf
of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser's right to rely on the truth,
accuracy and completeness of the Disclosure Materials and the Company's representations and warranties contained in the Transaction
Documents. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision
with respect to its acquisition of the Securities.
(g)
Certain
Trading Activities
. Other than with respect to the transactions contemplated herein, since the time that such Purchaser was
first contacted by the Company or any other Person regarding the transactions contemplated hereby, neither the Purchaser nor any
Affiliate of such Purchaser which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating
to such Purchaser’s investments or trading or information concerning such Purchaser’s investments, including in respect
of the Securities, and (z) is subject to such Purchaser’s review or input concerning such Affiliate’s investments or
trading (collectively, “
Trading Affiliate
s”) has directly or indirectly, nor has any Person acting on behalf
of or pursuant to any understanding with such Purchaser or Trading Affiliate, effected or agreed to effect any purchases or sales
of the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities). Notwithstanding
the foregoing, in the case of a Purchaser and/or Trading Affiliate that is, individually or collectively, a multi-managed investment
bank or vehicle whereby separate portfolio managers manage separate portions of such Purchaser's or Trading Affiliate’s assets
and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions
of such Purchaser's or Trading Affiliate’s assets, the representation set forth above shall apply only with respect to the
portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated by this Agreement.
Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing,
for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to the identification of the availability of, or securing of, available shares to borrow in order to effect short sales or similar
transactions in the future.
(h)
Brokers
and Finders
. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest
or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Purchaser.
(i)
Independent
Investment Decision
. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant
to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal,
tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the Securities.
(j)
Reliance
on Exemptions
. Such Purchaser understands that the Securities being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.
(k)
No
Governmental Review
. Such Purchaser understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(l)
Regulation
M
. Such Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Common
Stock and other activities with respect to the Common Stock by the Purchasers.
(m)
Residency
.
Such Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Securities
was made (if an entity) is or are located at the address immediately below such Purchaser’s name on its signature page hereto.
(n)
Bad
Actor Disqualification
. If such Purchaser is an officer of the Company or beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, such Purchaser is not subject to any of the “bad actor” disqualifications within
the meaning of Rule 506(d) under the Securities Act, except for a disqualification event covered by Rule 506(d)(2) or (d)(3).
(o)
Accuracy
of Accredited Investor Questionnaire
. The Accredited Investor Questionnaire delivered by such Purchaser in connection with
this Agreement is complete and accurate in all respects as of the date of this Agreement, and such Accredited Investor Questionnaire
and the Selling Stockholder Questionnaire delivered to the Company by such Purchaser will be complete and accurate as of the Closing
Date and the Effective Date; provided, that such Purchaser shall be entitled to update such information by providing written notice
thereof to the Company.
The Company and each
of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in this
Article III
and the Transaction
Documents.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
|
4.1
|
Transfer Restrictions
.
|
(a)
Compliance
with Laws
. Notwithstanding any other provision of this
Article IV
, each Purchaser covenants that the Securities may
be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, 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 compliance with any applicable state and federal securities laws. In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144 (
provided
that the Purchaser provides the Company with reasonable assurances (in the form of seller and, if applicable, broker representation
letters) that the securities may be sold pursuant to such rule) or (iv) in connection with a bona fide pledge as contemplated in
Section 4.1(b)
, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected
by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory
to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the
Registration Rights Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement
with respect to such transferred Securities.
(b)
Legends
.
Book entry notations evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state
and a restrictive legend in substantially the following form, until such time as they are not required under
Section 4.1(c)
:
NEITHER THESE SECURITIES NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES WITH
A REGISTERED BROKER-DEALER OR WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT .
The Company acknowledges
and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Securities
in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.
Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection
with a subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge. No notice shall be required
of such pledge, but Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure.
Each Purchaser acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security
interest in, any of the Securities or for any agreement, understanding or arrangement between any Purchaser and its pledgee or
secured party. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including
the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder following the Effective Date.
Each Purchaser acknowledges and agrees that, except as otherwise provided in
Section 4.1(c)
, any Securities subject to a
pledge or security interest as contemplated by this
Section 4.1(b)
shall continue to bear the legend set forth in this
Section
4.1(b)
and be subject to the restrictions on transfer set forth in
Section 4.1(a)
.
(c)
Removal
of Legends
. The legend set forth in
Section 4.1(b)
above shall be removed and the Company shall issue a certificate
(or uncertificated security) without such legend or any other legend to the holder (to the extent such holder is not an “affiliate”
of the Company as such term is defined under Rule 144 of the Securities Act) of the applicable Securities upon which it is stamped
if (i) such Securities are registered for resale under the Securities Act (provided that,
if
the Purchaser is selling pursuant to the effective registration statement registering the Securities for resale,
the Purchaser
agrees to only sell such Securities
during such time that such registration statement
is effective and not withdrawn or suspended, and only
as permitted by
such registration statement), and, in the case of Purchasers who are Affiliates of the Company, sold pursuant to an effective
registration statement, (ii) such Securities are sold or transferred pursuant to Rule 144, or (iii) other than with respect to
Affiliates of the Company, such Securities are eligible for sale under Rule 144 without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to such securities. Subject to the above qualifications,
following the earlier of (i) the Effective Date or (ii) Rule 144 becoming available for the resale of Securities, without the
requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities,
the Company shall cause Company Counsel to issue to the Transfer Agent the legal opinion referred to in the Irrevocable Transfer
Agent Instructions. Any fees (with respect to the Transfer Agent, Company Counsel or otherwise) associated with the issuance of
such opinion or the removal of such legend shall be borne by the Company. Following the Effective Date, or at such earlier time
as a legend is no longer required (in which case a Purchaser shall also be required to provide reasonable assurances in the form
of seller and, if applicable, broker representation letters) for certain Securities, the Company will no later than three (3)
Trading Days (or, if the date of this Agreement is on or after September 5, 2017, within two (2) Trading Days after the Closing)
following the delivery by a Purchaser to the Company (with notice to the Company) of (i) a legended certificate representing the
Shares or Warrant Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect
the reissuance and/or transfer) or book entry position representing the Shares or Warrant Shares or (ii) an Exercise Notice in
the manner stated in any Warrants to effect the exercise of such Warrants in accordance with their terms, and an opinion of counsel
to the extent required by
Section 4.1(a)
(such 3
rd
or 2
nd
Trading Day, as the case may be, the “
Legend
Removal Date
”), deliver or cause to be delivered to such Purchaser a certificate or book entry position representing
such Securities free from all restrictive and other legends. The Company may not make any notation on its records or give instructions
to the Transfer Agent that enlarge the restrictions on transfer set forth in this
Section 4.1(c)
. Certificates for Shares
and Warrant Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Purchasers by crediting
the account of the Purchaser’s prime broker with the Depository Trust Company as directed by such Purchaser. Each Purchaser
covenants that, following the Legend Removal Date, such Purchaser will only sell or otherwise transfer any Registrable Securities
that it then owns pursuant to the Registration Statement (provided that it is then effective and available for use) or pursuant
to Rule 144 (provided that it is then available to such holder) or another exemption from the registration requirements of the
Securities Act then available to such Purchaser.
(d)
Irrevocable
Transfer Agent Instructions
. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer
agent, in the form of
Exhibit C
attached hereto (the “
Irrevocable Transfer Agent Instructions
”). The
Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this
Section 4.1(d)
(or instructions that are consistent therewith) will be given by the Company to its transfer agent in connection
with this Agreement, and that the Securities shall otherwise be freely transferable on the books and records of the Company as
and to the extent provided in this Agreement and the other Transaction Documents and applicable law. The Company acknowledges
that a breach by it of its obligations under this
Section 4.1(d)
will cause irreparable harm to a Purchaser. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this
Section 4.1(d)
will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this
Section 4.1(d)
, that
a Purchaser shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach
and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security
being required.
(e)
Acknowledgement
.
Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise
transfer the Securities or any interest therein without complying with the requirements of the Securities Act. While the Registration
Statement remains effective, each Purchaser hereunder may sell the Shares and Warrant Shares in accordance with the plan of distribution
contained in the Registration Statement and if it does so it will comply therewith and with the related prospectus delivery requirements
unless an exemption therefrom is available. Each Purchaser, severally and not jointly with the other Purchasers, agrees that if
it is notified by the Company in writing at any time that the Registration Statement registering the resale of the Shares and the
Warrant Shares is not effective or that the prospectus included in such Registration Statement no longer complies with the requirements
of Section 10 of the Securities Act, the Purchaser will refrain from selling such Shares and/or Warrant Shares until such time
as the Purchaser is notified by the Company that such Registration Statement is effective or such prospectus is compliant with
Section 10 of the Securities Act, unless such Purchaser is able to, and does, sell such Shares and/or Warrant Shares pursuant to
an available exemption from the registration requirements of Section 5 of the Securities Act. Both the Company and its Transfer
Agent, and their respective directors, officers, employees and agents, may rely on this
Section 4.1(e)
and each Purchaser
hereunder will indemnify and hold harmless each of such persons from any breaches or violations of this
Section 4.1(e)
.
(f)
Buy-In
.
If the Company shall fail for any reason or for no reason to issue to a Purchaser unlegended shares of Common Stock within three
(3) Trading Days (or, if the date of this Agreement is on or after September 5, 2017, within two (2) Trading Days) of receipt of
all documents necessary for the removal of the legend set forth above (the “
Deadline Date
”), then, in addition
to all other remedies available to such Purchaser, if on or after the Trading Day immediately following such three (3) Trading
Day period (or, if the date of this Agreement is on or after September 5, 2017, within two (2) Trading Days), such Purchaser purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the holder of shares
of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend (a “
Buy-In
”),
then the Company shall, within three (3) Trading Days (or, if the date of this Agreement is on or after September 5, 2017, within
two (2) Trading Days) after such Purchaser’s request and in such Purchaser’s sole discretion, either (i) pay cash to
the Purchaser in an amount equal to such Purchaser’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “
Buy-In Price
”), at which point the Company’s obligation to deliver
such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to such Purchaser such shares of
Common Stock and pay cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In Price over the product of (a)
such number of shares of Common Stock, times (b) the Closing Bid Price on the Deadline Date.
4.2
Reservation
of Common Stock
. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose
of issuance from and after the Closing Date, the number of shares of Common Stock issuable upon exercise of the Warrants issued
at the Closing (without taking into account any limitations on exercise of the Warrants set forth in the Warrants).
4.3
Furnishing
of Information
. In order to enable the Purchasers to sell the Securities under Rule 144, for a period of twelve (12) months
from the Closing, the Company shall use its commercially reasonable efforts to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act. During such twelve (12) month period, if the Company is not required to file reports pursuant to the Exchange
Act, it will use commercially reasonable efforts to prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144.
4.4
Integration
.
The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers, or that will be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing
of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
4.5
Securities
Laws Disclosure; Publicity
. The Company shall (a) by 9:00 A.M., New York City time, on the Trading Day immediately following
the date hereof, issue a press release (the “
Press Release
”) disclosing all material terms of the transactions
contemplated hereby, and (b) furnish to and/or file with the Commission a Current Report on Form 8-K describing the terms of the
Transaction Documents (and including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including,
without limitation, this Agreement, the form of Warrant and the Registration Rights Agreement)) within the time required by the
Exchange Act. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser or an Affiliate
of any Purchaser, or include the name of any Purchaser or an Affiliate of any Purchaser in any press release or filing with the
Commission (other than the Registration Statement) or any regulatory agency or Trading Market, without the prior written consent
of such Purchaser, except (i) as required by federal securities laws in connection with (A) any registration statement contemplated
by the Registration Rights Agreement and (B) the filing of final Transaction Documents (including signature pages thereto) with
the Commission and (ii) to the extent such disclosure is required by law, request of the Staff of the Commission or Trading Market
regulations. From and after the issuance of the Press Release, no Purchaser shall be in possession of any material, non-public
information received from the Company, its Subsidiaries or any of their respective officers, directors, employees or agents, that
is not disclosed in the Press Release unless a Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time
as the transactions contemplated by this Agreement are required to be publicly disclosed by the Company as described in this
Section
4.5
, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction).
4.6
Shareholder
Rights Plan
. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Purchaser is an “
Acquiring Person
” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, in either case solely by virtue
of receiving Securities under the Transaction Documents or under any other written agreement between the Company and the Purchasers;
provided, however, that no such Purchaser owns any equity in the Company prior to its purchase of the Securities hereunder.
4.7
Non-Public
Information
. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
including this Agreement, or as expressly required by any applicable securities law, the Company covenants and agrees that neither
it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information regarding
the Company that the Company believes constitutes material non-public information without the express written consent of such Purchaser,
unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information.
The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.
4.8
Use
of Proceeds
. The Company shall use the net proceeds from the sale of the Securities hereunder primarily for the development
of its current pipeline and related general corporate purposes in furtherance of the Company’s business model as described
in the SEC Reports, and shall not use such proceeds for any other purpose.
4.9
Indemnification
of Purchasers
. Subject to the provisions of this
Section 4.9
, the Company will indemnify and hold each Purchaser
and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Person with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “
Purchaser Party
”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
a Purchaser in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based
upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements
or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities
laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance).
Promptly
after receipt by any Person (the “
Indemnified Person
”) of notice of any demand, claim or circumstances which
would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity
may be sought pursuant to this
Section 4.9
, such Indemnified Person shall promptly notify the Company in writing and the
Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person,
and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify
the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially
prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified
Person shall have mutually agreed to the retention of such counsel; (ii) the Company shall have failed promptly to assume the defense
of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the
reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned, or to the extent
fees and costs incurred pursuant to this
Section 4.9
are attributable to the Indemnified Person’s breach of any of
the representations, warranties covenants or agreements made by the Purchasers in this Agreement or the other Transaction Documents.
Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned,
the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.
4.10
Principal
Trading Market Listing
.
In the time and manner required by the Principal Trading Market, the
Company shall prepare and file with such Principal Trading Market an additional shares listing application covering all of the
Shares and Warrant Shares and shall use its commercially reasonable efforts to take all steps necessary to cause all of the Shares
and Warrant Shares to be approved for listing on the Principal Trading Market as promptly as possible thereafter.
4.11
Form D;
Blue Sky
. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D
and to provide a copy thereof, promptly upon the written request of any Purchaser. The Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify
the Securities for sale to the Purchasers under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly upon the written
request of any Purchaser.
4.12
Delivery
of Warrants After Closing
. The Company shall deliver, or cause to be delivered, in physical form the respective Warrants purchased
by each Purchaser to such Purchaser within three (3) Trading Days of the Closing Date (or, if the date of this Agreement is on
or after September 5, 2017, within two (2) Trading Days after the Closing).
4.13
Short
Sales and Confidentiality After the Date Hereof
. Such Purchaser shall not, and shall cause its Trading Affiliates not
to, engage, directly or indirectly, in any transactions in the Company’s securities (including, without limitation, any Short
Sales involving the Company’s securities) during the period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced as required by and described in
Section 4.5
or
(ii) this Agreement is terminated pursuant to
Section 6.18
. Notwithstanding the foregoing, no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in Short Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced as described in
Section 4.5
;
provided, however
, each
Purchaser agrees, severally and not jointly with any Purchasers, that they will not enter into any Net Short Sales (as hereinafter
defined) from the period commencing on the Closing Date and ending on the earliest of (x) the Effective Date of the initial Registration
Statement, or (y) the date that such Purchaser no longer holds any Securities. For purposes of this
Section 4.13
, a “
Net
Short Sale
” by any Purchaser shall mean a sale of Common Stock by such Purchaser that is marked as a short sale and that
is made at a time when there is no equivalent offsetting long position in Common Stock held by such Purchaser. Notwithstanding
the foregoing, in the event that a Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage separate
portions of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the representation set forth above shall apply only with
respect to the portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated
by this Agreement.
Moreover, notwithstanding the foregoing, in the event that a Purchaser has sold
Securities pursuant to Rule 144 prior to the Effective Date of the initial Registration Statement and the Company has failed to
deliver unlegended shares of Common Stock prior to the settlement date for such sale (assuming that such certificates or book entry
positions meet the requirements set forth in
Section 4.1(c)
for the removal of legends), the provisions of this
Section
4.13
shall not prohibit the Purchaser from entering into Net Short Sales for the purpose of delivering shares of Common Stock
in settlement of such sale.
Each Purchaser
understands and acknowledges, severally
and not jointly with any other Purchaser, that the Commission currently takes the position that covering a short position established
prior to effectiveness of a resale registration statement with shares included in such registration statement would be a violation
of Section 5 of the Securities Act, as set forth in Compliance and Disclosure Interpretation No. 239.10 with respect to the Securities
Act Section 5, dated Nov. 26, 2008, compiled by the Commission’s Division of Corporation Finance.
4.14
Company
Lock-Up
. From the date hereof until (i) the Effective Date or (ii), if the Lock-Up Agreements are no longer in effect, the
date that is thirty (30) days after the Effective Date, the Company shall not issue shares of Common Stock or Common Stock Equivalents;
provided, however, the thirty (30) day period set forth in clause (ii) shall be extended for the number of Trading Days during
such period in which (a) trading in the Common Stock is suspended by any Trading Market, or (b) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the Purchasers
for the resale of the Shares or the Warrant Shares. Notwithstanding the foregoing, in no event shall this
Section 4.14
prohibit
the Company from issuing (i) shares of Common Stock or Warrants hereunder, or Warrant Shares upon the exercise of the Warrants;
(ii) issuing Common Stock and options to purchase Common Stock, shares of Common Stock underlying options granted and other securities,
each pursuant to any director or employee stock option plan, stock ownership plan or dividend reinvestment plan of the Company
in effect on the date hereof; (iii) issuing Common Stock pursuant to the conversion of securities, including preferred stock and
non-voting common stock, or the exercise of warrants, which securities or warrants are outstanding on the date hereof; or (iv)
issuing Common Stock and warrants to purchase Common Stock pursuant to a financing pursuant to
Section 4.19
.
4.15
Confidentiality
.
The Company and the Lead Purchaser (each a “
Party
” and collectively the “
Parties
”), to protect
the confidentiality of certain information of the Parties to be disclosed solely for use in connection with the business and investment
relationship between the Parties as contemplated by this Agreement (the “
Permitted Use
”), and except as specified
elsewhere or otherwise subject to another confidentiality agreement and/or provision, agree that at all times, and notwithstanding
any termination or expiration of this Agreement, to hold in strict confidence and not disclose to any third party any Confidential
Information (as defined below) of the other Party, except as approved in writing by the other Party, and agree to use the Confidential
Information of the other Party for no purpose other than the Permitted Use, until there is no longer a person who was a Lead Purchaser
Nominee serving as a member (or observer) of the Board. Lead Purchaser Nominee shall be permitted to share the Confidential Information
with the Lead Purchaser, including all employees and agents thereof, consistent with this Section 4.15 and their respective obligations
under the federal securities laws.
(a) As
used herein, the “Confidential Information” of a Party means any and all technical and non-technical information disclosed
by such Party to the other Party, other than any portion of such information that:
(i) was
in the public domain at the time it was disclosed to the other Party;
(ii) was
publicly disclosed by the Company or otherwise entered the public domain subsequent to the time it was disclosed to the other Party,
through no fault of the other Party;
(iii) was
in the other Party’s possession free of any obligation of confidence at the time it was disclosed to the other Party;
(iv) was
rightfully communicated to the other Party free of any obligation of confidence subsequent to the time it was disclosed to the
other Party; or
(v) was
developed by employees or agents of the other Party who had no access to any Confidential Information.
(b) Notwithstanding
the above, a Party may disclose certain Confidential Information of the other Party, without violating the obligations of this
Agreement, to the extent such disclosure is required by a valid order of a court or other governmental body having jurisdiction.
4.16
Stockholder
Consent
. The Company shall use its best efforts to obtain the consent of its stockholders required by the Principal Trading
Market (the “
Stockholder Consent
”) as soon as practicable after the date hereof and in any case shall take all
action necessary to call a meeting of its stockholders (the “
Stockholders Meeting
”) to take place within 90
days (or within 110 days in the event the Commission reviews the Company’s proxy statement for soliciting Stockholder Consent)
hereof for the purpose of seeking approval of the Company’s stockholders for the issuance and sale of the Securities to the
Purchasers (the “
Proposal
”).
4.17
Lead
Purchaser Nominee
. Upon the Closing and so long thereafter as Lead Purchaser shall beneficially own 10% or more of the total
number of shares of Common Stock outstanding, the Lead Purchaser shall have the right (but not the obligation) pursuant to this
Agreement to nominate to the Board of Directors one (1) director, and the Company shall include, and shall use its best efforts
to cause the Board of Directors, whether acting through the Nominating and Corporate Governance Committee of the Board of Directors
or otherwise, to include, in the slate of nominees recommended to stockholders of the Company (the “
Stockholders
”)
for election as a director at the next annual or special meeting of the Stockholders (or, if permitted, by any action by written
consent of the Stockholders) at or by which directors of the Company are to be elected, the one individual, if any, identified
in advance of such meeting to the Company by the Lead Purchaser (the “
Lead Purchaser Nominee
”). In the event
that the Lead Purchaser shall not have nominated a Lead Purchaser Nominee by such date, then the Lead Purchaser shall have the
right, at any time thereafter, to nominate a Lead Purchaser Nominee, in which case the directors shall take all necessary corporate
action to (a) increase the size of the Board as required to enable the Lead Purchaser to so nominate such Lead Purchaser Nominee
and (b) designate such Lead Purchaser Nominee to fill such newly created vacancies. In all instances the Lead Purchaser shall give
the Company at least five (5) Business Days’ advance written notice of the Lead Purchaser Nominee and shall provide the Company
the opportunity to discuss any potential Lead Purchaser Nominees with Lead Purchaser prior to nomination. The Lead Purchaser shall
take such discussion under advisement, but shall have no obligation to modify its nomination as a result of such discussion. Vacancies
arising through the death, resignation or removal of any Lead Purchaser Nominee who was nominated to the Board pursuant to this
section may be filled by the Board only with a Lead Purchaser Nominee, and the director so chosen shall hold office until the next
election and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal.
Notwithstanding the foregoing, the Lead Purchaser shall not be entitled to designate a Person as a nominee to the Board upon a
written determination by the Nominating and Corporate Governance Committee of the Company (which determination shall set forth
in writing reasonable grounds for such determination) that such Person would not be qualified under any applicable law, rule or
regulation to serve as a director of the Company. In such an event, the Lead Purchaser shall be entitled to select a Person as
a replacement nominee and the Company shall use its best efforts to cause such Person to be nominated as the Lead Purchaser Nominee
at the same meeting (or, if permitted, pursuant to the same action by written consent of the Stockholders) as such initial Person
who was to nominated as the Lead Purchaser Nominee. Other than with respect to the issue set forth in the preceding sentence, neither
the Company nor any other party to this Agreement shall have the right to object to any Lead Purchaser Nominee. In the event that
the Lead Purchaser shall cease to have the right to designate a person to serve as a director pursuant to this section, the Lead
Purchaser shall use its best efforts to cause the applicable Lead Purchaser Nominee to resign immediately.
4.18
Further
Adjustments
. If, subsequent to the execution of this Agreement and on or prior to December 31, 2017, the Company completes
one or more equity financings (whether effected through a sale of Common Stock or any other class of Company’s capital stock,
or any securities convertible thereinto or exchangeable therefor, each a “
Subsequent Financing
”) of whatever
size, including any financings contemplated by
Section 4.19
(i) at a price per share of Common Stock or implied price per
share of Common Stock less than the Purchase Price, the Company shall rebate to each Purchaser party to this Agreement prior to
the date of such transaction in cash the difference between the Purchase Price and the price per share of Common Stock sold in
such other transaction multiplied by the number of shares of Common Stock acquired by such Purchaser pursuant hereto; (ii) with
a ratio of shares of Common Stock issuable upon warrants purchased in connection therewith at a ratio higher than that agreed to
pursuant to this Agreement, the Company shall issue to each Purchaser party to this Agreement prior to the date of such transaction
(without additional consideration) warrants to purchase such incremental number of shares of Common Stock equal to the difference
between the ratios and on terms otherwise consistent with such newly issued warrants; and (iii) on other terms superior to those
agreed to hereby, the Company shall make equitable adjustment in favor of the Purchasers party to this Agreement prior to the date
of such transaction to provide to such Purchasers consideration or other adjustment such that the Purchasers are in at least as
good a position as purchasers in such Subsequent Financing as if they had participated in such Subsequent Financing in the amount
of their commitment hereunder.
4.19
Subsequent
Equity Sales
. If, subsequent to the execution of this Agreement and on or prior to June 30, 2018, the Company consummates any
one Subsequent Financing, then the Lead Purchaser shall be obligated to purchase in such Subsequent Financing an amount of securities
sold in such offering equal to $25.0 million less the dollar amount of the Shares purchased hereunder by the Lead Investor on the
Closing Date (the “
Differential Amount
”);
provided,
that the Lead Investor shall not be obligated to
purchase a portion of any such Subsequent Financing greater than the percentage of outstanding Common Stock that it owns at such
time (without giving effect to any unexercised options or warrants or any unvested equity awards;
provided, further
, that
this
Section 4.19
shall only apply to the initial Subsequent Financing (if any); and,
provided, further
, that the
Lead Purchaser shall not be under any obligation to purchase securities in any Subsequent Financing if a Material Adverse Change
has occurred subsequent to the execution of this Agreement. The Lead Investor shall purchase an amount of securities in the initial
Subsequent Financing on the same terms and conditions, including the same price per share or price per unit, as the other investors
participating in such Subsequent Financing, and shall receive the same terms and conditions as to which such other investors may
be entitled, including any warrants sold to new investors alongside the common stock.
4.20
Press
Releases
. The Company covenants that at any time the Lead Purchaser holds at least 5.0% of the outstanding Common Stock and
so long as the Lead Purchaser owes a duty of trust or confidence to the Company or is otherwise subject to obligations of confidentiality
in favor of the Company, the Company will provide the Lead Purchaser with a copy of any planned press release or other public statement
that references the Lead Purchaser at least forty-eight (48) hours prior to such press release or public statement being made publicly
available. The Lead Purchaser shall be entitled to review and comment on such statement. The Company shall take the Lead Purchaser’s
comments under advisement.
ARTICLE V.
CONDITIONS PRECEDENT TO
CLOSING
5.1
Conditions
Precedent to the Obligations of the Purchasers to Purchase Securities
. The obligation of each Purchaser to acquire Shares and
Warrants at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date,
of each of the following conditions, any of which may be waived by such Purchaser (as to itself only):
(a)
Representations
and Warranties
. The representations and warranties of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as to materiality, in which case such representations
and warranties shall be true and correct in all respects) as of the date when made and as of the Closing Date, as though made on
and as of such date, except for such representations and warranties that speak as of a specific date.
(b)
Performance
.
The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.
(c)
No
Injunction
. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
(d)
Adverse
Changes
. Since the date of execution of this Agreement, no Material Adverse Change shall have occurred.
(e)
Consents
.
The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities, all of which shall be and remain so long as necessary in full force
and effect.
(f)
Listing
.
The Nasdaq Global Market shall have approved the listing of additional shares application for the Shares and Warrant Shares.
(g)
No
Suspensions of Trading in Common Stock
. The Common Stock shall not have been suspended, as of the Closing Date, by the Commission
or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal
Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.
(h)
Company
Deliverables
. The Company shall have delivered the Company Deliverables in accordance with
Section 2.2(a)
.
(i)
Termination
.
This Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.18
herein.
5.2
Conditions
Precedent to the Obligations of the Company to sell Securities
. The Company's obligation to sell and issue the Shares and Warrants
at the Closing to each Purchaser is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following conditions, any of which may be waived by the Company:
(a)
Representations
and Warranties
. The representations and warranties made by such Purchaser in
Section 3.2
hereof shall be true and correct
in all material respects (except for those representations and warranties which are qualified as to materiality, in which case
such representations and warranties shall be true and correct in all respects) as of the date when made, and as of the Closing
Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.
(b)
Performance
.
Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.
(c)
No
Injunction
. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
(d)
Consents
.
The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities, all of which shall be and remain so long as necessary in full force
and effect.
(e)
Purchasers
Deliverables
. Such Purchaser shall have delivered its Purchaser Deliverables in accordance with
Section 2.2(b)
.
(f)
Listing
.
The NASDAQ Global Market shall have approved the listing of additional shares application for the Shares and Warrant Shares.
(g)
Termination
.
This Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.18
herein.
ARTICLE VI.
MISCELLANEOUS
6.1
Fees
and Expenses
. The Purchasers shall pay all of their own fees and expenses, including the fees and expenses of their financial
and legal advisors, incurred in connection with the transactions contemplated by this Agreement and the other transaction documents
contemplated hereby; provided, however, if the Company or Purchasers terminate this Agreement after the Stockholders Meeting has
been convened as a result of the failure to obtain the Stockholder Consent, or if the Company fails to convene the Stockholders
Meeting on or prior to the 90
th
day following the date hereof, the Company shall reimburse the Purchasers for the Purchasers’
fees and expenses, including the fees and expenses of their financial and legal advisors, incurred in connection with the transactions
contemplated by this Agreement and the other transaction documents contemplated hereby up to an aggregate of $1.0 million, which
expenses shall be specified by and in the sole discretion of the Lead Purchaser and shall be reimbursed to the Lead Purchaser upon
presentation of applicable documentation. The Company shall pay all of its own fees and expenses, including any Transfer Agent
fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities to the Purchasers,
as well as the expenses of any blue sky counsel required in connection with the offering and sale of the securities.
6.2
Entire
Agreement
. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver
to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties
under the Transaction Documents.
6.3
Notices
.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number
specified in this
Section 6.3
prior to 5:00 P.M., New York City time, on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this
Section
6.3
on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified,
or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as follows:
If to the Company: Aevi
Genomic Medicine, Inc.
435 Devon
Park Drive, Suite 715
Wayne, PA
19087
Telephone No.:
(610) 254-4201
Facsimile
No.: (610) 717-3390
Attention: Brian
Piper, Chief Financial Officer
E-mail: brian.piper@aevigenomics.com
With a copy (which
shall not constitute notice) to:
Pepper Hamilton
LLP
3000 Two
Logan Square
Eighteenth and
Arch Streets
Philadelphia,
PA 19003
Telephone No.: (215) 981-4000
Facsimile No.: (877) 767-8438
Attention: Brian M. Katz
E-mail: katzb@pepperlaw.com
|
If to a Purchaser:
|
To the address set forth under such Purchaser’s name on the
signature page hereof; or such other address as may be designated in writing hereafter, in the same manner, by such
Person.
|
6.4
Amendments;
Waivers; No Additional Consideration
. No provision of this Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the Company and the Purchasers of at least a majority in interest
of the Securities still held by Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver
is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any
such right. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision
of any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Securities.
6.5
Construction
.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as
if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any provisions of this Agreement or any of the Transaction Documents.
6.6
Successors
and Assigns
. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors
and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior
written consent of each Purchaser holding or having rights to acquire the Securities at the time of such consent. Any Purchaser
may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in
compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with
respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchasers”.
6.7
No
Third-Party Beneficiaries
. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except
each
Purchaser Party is an intended third party beneficiary of
Section 4.9
.
6.8
Governing
Law
. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof (except Sections 5-1401 and 5-1402 of the General Obligations Law). Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively
in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that
such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.9
Survival
.
Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Securities.
6.10
Execution
.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission,
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page
were an original thereof.
6.11
Severability
.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.
6.12
Replacement
of Securities
. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer
Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that
fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith
or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent. The applicants for
a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance
of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance
of a replacement.
6.13
Remedies
.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the
foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at law would be adequate.
6.14
Payment
Set Aside
. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred; provided
however that the restoration of the obligation or part thereof shall not occur where the basis of any of the actions listed above
is the result of the obligation or part thereof being invalidated or dismissed.
6.15
Adjustments
in Share Numbers and Prices
. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing,
each reference in any Transaction Document to a number of shares or a price per share shall be deemed to be amended to appropriately
account for such event.
6.16
Independent
Nature of Purchasers' Obligations and Rights
. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under any Transaction Document, except as set forth in
Section 6.18
. The decision
of each Purchaser to purchase Securities pursuant to the Transaction Documents has been made by such Purchaser independently of
any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary
that may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and
any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from
any such information, materials, statement or opinions. Nothing contained herein or in any Transaction Document, and no action
taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that
no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser
will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights
under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for
any other Purchaser to be joined as an additional party in any proceeding for such purpose. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any Purchaser.
6.17
Termination
.
This Agreement may be terminated by any party and the sale and purchase of the Shares and the Warrants abandoned if the Stockholder
Consent has not been obtained on or prior to 5:00 P.M., New York City time, on the 90
th
day following the date hereof
(or the 110
th
day following the date hereof in the event the Commission reviews the Company’s proxy statement
for soliciting Stockholder Consent). Nothing in this
Section 6.18
shall be deemed to release any party from any liability
for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the
right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction
Documents. Upon a termination in accordance with this
Section 6.18
, the Company and the Purchaser(s) shall not have any
further obligation or liability (including arising from such termination) to the other except as provided in
Section 6.1
,
and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
|
AEVI GENOMIC MEDICINE, INC.
|
|
|
|
|
By:
|
/s/ Brian Piper
|
|
|
Name: Brian Piper
|
|
|
Title: Chief Financial Officer
|
[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK]
|
NAME OF PURCHASER:
|
|
The Children’s Hospital of Philadelphia Foundation
|
|
|
|
By:
|
/s/ Thomas J. Todorow
|
|
Name: Thomas J. Todorow
|
|
Title: Chief Financial Officer
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________
|
|
|
|
Tax ID No.: ______________
|
|
Telephone No.:
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
E-mail Address:
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
|
Adage Capital Partners, L.P.
|
|
|
|
By:
|
/s/ James Bardinelli
|
|
Name: James Bardinelli
|
|
Title: Chief Financial Officer
|
|
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________
|
|
|
|
Tax ID No.: _____________
|
|
|
|
Address for Notice:
|
|
|
|
|
|
|
|
|
|
Telephone No.:
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
E-mail Address:
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
|
667, L.P.
|
|
|
|
|
By: BAKER BROS. ADVISORS LP, management company and investment adviser to 667, L.P., pursuant to authority granted to it by Baker Biotech Capital, L.P., general partner to 667, L/P/, and not as the general partner.
|
|
|
|
|
By:
|
/s/ Scott L. Lessing
|
|
|
Name: Scott L. Lessing
|
|
|
Title: President
|
|
|
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
|
Number of Shares to be Acquired: _____________
|
|
Tax ID No.: _________________
|
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
Baker Brothers Life Sciences, L.P.
|
|
|
|
By:
Baker Bros. Advisors LP
, Management Company and Investment Advisor to Baker Brothers Life Sciences, L.P., pursuant to authority granted to it by Baker Brothers Life Science Capital, L.P., general partner to Baker Brothers Life Sciences, L.P., and not as the general partner.
|
|
|
|
|
By:
|
/s/ Scott L. Lessing
|
|
|
Name: Scott L. Lessing
|
|
|
Title: President
|
|
|
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
|
Number of Shares to be Acquired: ___________
|
|
Tax ID No.: ______________
|
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Sol J. Barer
|
|
By:
|
/s/ Sol J. Barer
|
|
Name: Sol J. Barer
|
|
Title: Chairman of the Board of Directors
|
|
|
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
Number of Shares to be Acquired: __________
|
|
|
Tax ID No.: _________________
|
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Eugene A. Bauer
|
|
By:
|
/s/ Eugene A. Bauer
|
|
|
Name: Eugene A. Bauer
|
|
|
Title: Director
|
|
|
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
Number of Shares to be Acquired: ___________
|
|
|
Tax ID No.: __________________
|
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Alastair Clemow
|
|
By:
|
/s/ Alastair Clemow
|
|
Name: Alastair Clemow
|
|
Title: Director
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________________
|
|
|
|
Tax ID No.: ____________________
|
|
|
|
Address for Notice:
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Michael F. Cola
|
|
By:
|
/s/ Michael F. Cola
|
|
Name: Michael F. Cola
|
|
Title: President, Chief Executive Officer and Director
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________________
|
|
|
|
Tax ID No.: ____________________
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Barbara G. Duncan
|
|
By:
|
/s/ Barbara G. Duncan
|
|
Name: Barbara G. Duncan
|
|
Title: Director
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________________
|
|
|
|
Tax ID No.: ____________________
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Wilbur H. Gantz Revocable Trust
|
|
By:
|
/s/ Wilbur H. Gantz
|
|
Name: Wilbur H. Gantz
|
|
Title: Director
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________________
|
|
|
|
Tax ID No.: ____________________
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Joseph J. Grano, Jr.
|
|
By
|
:/s/ Joseph J. Grano, Jr.
|
|
Name: Joseph J. Grano, Jr.
|
|
Title: Director
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________________
|
|
|
|
Tax ID No.: ____________________
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
|
NAME OF PURCHASER:
|
Garry A. Neil
|
|
By:
|
/s/ Garry A. Neil
|
|
Name: Garry A. Neil
|
|
Title: Chief Scientific Officer
|
|
Aggregate Purchase Price (Subscription Amount): $_____________
|
|
|
|
Number of Shares to be Acquired: ______________________
|
|
|
|
Tax ID No.: ____________________
|
|
Telephone No.:
|
|
|
|
|
|
Facsimile No.:
|
|
|
|
|
|
E-mail Address:
|
|
|
|
|
|
Attention:
|
|
Delivery Instructions:
|
|
(if different than above)
|
|
|
|
|
c/o
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Telephone No.:
|
|
|
SCHEDULE & EXHIBITS:
Schedule A:
|
Schedule of Purchasers
|
Exhibit A:
|
Form of Registration Rights Agreement
|
Exhibit B-1:
|
Accredited Investor Questionnaire
|
Exhibit B-2:
|
Securities Issuance Questionnaire
|
Exhibit C:
|
Form of Irrevocable Transfer Agent Instructions
|
Exhibit D:
|
Form of Secretary’s Certificate
|
Exhibit E:
|
Form of Officer’s Certificate
|
Exhibit F:
|
Wire Instructions
|
Exhibit G:
|
Form of Warrant
|
Exhibit H:
|
Form of Lock-Up Agreement
|
SCHEDULE A
SCHEDULE OF PURCHASERS
Exhibit
A
Form
of Registration Rights Agreement
Instruction
Sheet
(to be read in conjunction with the entire
Securities Purchase Agreement and Registration Rights Agreement)
|
A.
|
Complete the following items in the Securities Purchase
Agreement and/or Registration Rights Agreement:
|
|
1.
|
Provide the information regarding the Purchaser requested on the signature page.The Securities
Purchase Agreement and the Registration Rights Agreement must be executed by an individual authorized to bind the Purchaser.
|
|
2.
|
Exhibit B-1
– Accredited Investor Questionnaire:
|
|
|
Provide the information requested by the Accredited Investor Questionnaire
|
|
3.
|
Exhibit B-2
Securities Issuance Questionnaire:
|
|
|
Provide the information requested by the Securities Issuance Questionnaire
|
|
4.
|
Annex B
to the Registration Rights Agreement — Selling Securityholder Notice and Questionnaire
|
|
|
Provide the information requested by the Selling Securityholder Notice and Questionnaire
|
|
5.
|
Return by e-mail a copy of the signed Securities Purchase
Agreement and Registration Rights Agreement, and return the originals by overnight mail, to:
|
Pepper Hamilton
LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia,
PA 19003
Telephone No.: (215) 981-4000
Facsimile No.: (877) 767-8438
Attention: Brian M. Katz
|
|
E-mail: katzb@pepperlaw.com
|
|
B.
|
Instructions regarding the transfer of funds for the purchase of Shares and Warrants is set forth
on
Exhibit F
to the Securities Purchase Agreement.
|
EXHIBIT B-1
Accredited
Investor Questionnaire
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
|
To:
|
Aevi Genomic Medicine, Inc.
|
This Investor Questionnaire (“
Questionnaire
”)
must be completed by each potential investor in connection with the offer and sale of the shares of the common stock, par value
$0.0001 per share, and shares of common stock that may be issued upon exercise of certain warrants (collectively, the “
Securities
”),
of Aevi Genomic Medicine, Inc., a Delaware corporation (the “
Corporation
”). The Securities are being offered
and sold by the Corporation without registration under the Securities Act of 1933, as amended (the “
Act
”), and
the securities laws of certain states, in reliance on the exemptions contained in Section 4(a)(2) of the Act and on Regulation
D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Corporation must determine that
a potential investor meets certain suitability requirements before offering or selling Securities to such investor. The purpose
of this Questionnaire is to assure the Corporation that each investor will meet the applicable suitability requirements. The information
supplied by you will be used in determining whether you meet such criteria, and reliance upon the private offering exemptions from
registration is based in part on the information herein supplied.
This Questionnaire does not constitute
an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by
signing this Questionnaire, you will be authorizing the Corporation to provide a completed copy of this Questionnaire to such parties
as the Corporation deems appropriate in order to ensure that the offer and sale of the Securities will not result in a violation
of the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers
of the Securities. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire.
Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.
|
PART A.
|
BACKGROUND INFORMATION
|
Name of Beneficial Owner of the Securities:
|
|
Business Address:
|
|
|
(Number and Street)
|
|
|
|
(City)
|
(State)
|
(Zip Code)
|
If a corporation, partnership, limited
liability company, trust or other entity:
Type of entity:
|
|
State of formation:
|
__________________________________
|
Approximate Date of formation:
|
_______________________________
|
Were you formed
for the purpose of investing in the securities being offered?
If an individua
l:
Residence Address:
|
|
|
(Number and Street)
|
|
|
|
(City)
|
(State)
|
(Zip Code)
|
Age: __________
|
Citizenship: ____________
|
Where registered to vote: _______________
|
Set forth in the space provided below the
state(s), if any, in the United States in which you maintained your residence during the past two years and the dates during which
you resided in each state:
Are you a director
or executive officer of the Corporation?
Social Security or Taxpayer Identification No.
|
|
|
PART B.
|
ACCREDITED INVESTOR QUESTIONNAIRE
|
In order for the Company to offer and sell the Securities in conformance with state and federal securities laws, the following information must be obtained regarding your investor status. Please
initial each category
applicable to you as a Purchaser of Securities of the Company.
|
¨
|
(1)
|
A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
|
|
¨
|
(2)
|
A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;
|
|
¨
|
(3)
|
An insurance company as defined in Section 2(13) of the Securities Act;
|
|
¨
|
(4)
|
An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;
|
|
¨
|
(5)
|
A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;
|
|
¨
|
(6)
|
A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
|
|
¨
|
(7)
|
An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
|
|
¨
|
(8)
|
A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
|
|
¨
|
(9)
|
An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;
|
|
¨
|
(10)
|
A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company;
|
|
¨
|
(11)
|
A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000;
|
|
¨
|
(12)
|
A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;
|
|
|
|
|
|
¨
|
(13)
|
An executive officer or director of the Company;
|
|
¨
|
(14)
|
An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.
|
|
A.
|
FOR EXECUTION BY AN INDIVIDUAL:
|
______________________
|
By
|
|
Date
|
Print Name:
|
|
|
B.
|
FOR EXECUTION BY AN ENTITY:
|
|
Entity Name:
|
|
|
|
|
______________________
|
By
|
|
Date
|
|
|
|
Print Name:
|
|
|
Title:
|
|
|
C.
|
ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):
|
Entity Name:
|
|
|
|
|
|
______________________
|
By
|
|
Date
|
|
|
|
Print Name:
|
|
|
Title:
|
|
|
|
|
Entity Name:
|
|
|
|
|
|
______________________
|
By
|
|
Date
|
|
|
|
Print Name:
|
|
|
Title:
|
|
Exhibit
B-2
Securities
Issuance Questionnaire
Pursuant to
Section 2.2(b)
of the
Agreement, please provide us with the following information:
1.
|
The exact name in which the Securities are to be registered (this is the name that will appear in the Company’s stock register). You may use a nominee name if appropriate:
|
|
|
|
|
|
|
2.
|
The relationship between the Purchaser of the Securities and the Registered Holder listed in response to Item 1 above:
|
|
|
|
|
|
|
3.
|
The mailing address, telephone and telecopy number of the Registered Holder listed in response to Item 1 above:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
The Tax Identification Number (or, if an individual, the Social Security Number) of the Registered Holder listed in response to Item 1 above:
|
|
|
EXHIBIT
C
Form
of Irrevocable Transfer Agent Instructions
As of _________, ____
Corporate Stock Transfer, Inc.
3200 Cherry Creek Drive South
Suite 430
Denver, CO 80209
Attn: _________________
Ladies and Gentlemen:
Reference
is made to that certain Securities Purchase Agreement, dated as of August ___, 2017 (the “
Agreement
”), by and
among Aevi Genomic Medicine, Inc., a Delaware corporation (the “
Company
”), and the purchasers named on the signature
pages thereto (collectively, and including permitted transferees, the “
Holders
”), pursuant to which the Company
is issuing to the Holders shares (the “
Shares
”) of Common Stock of the Company, par value $0.0001 per share
(the “
Common Stock
”), and warrants (the “Warrants”), which are exercisable for shares of Common
Stock.
This
letter shall serve as our irrevocable authorization and direction to you (provided that you are the transfer agent of the Company
at such time and the conditions set forth in this letter are satisfied), subject to any stop transfer instructions that we may
issue to you from time to time, if any: (i) to issue certificates representing shares of Common Stock upon transfer or resale of
the Shares; and (ii) to issue shares of Common Stock upon the exercise of the Warrants (the “Warrant Shares”) to or
upon the order of a Holder from time to time upon delivery to you of a properly completed and duly executed Exercise Notice, in
the form attached hereto as Annex I, which has been acknowledged by the Company as indicated by the signature of a duly authorized
officer of the Company thereon together with indication of receipt of the exercise price therefor.
You acknowledge and
agree that so long as you have received (a) written confirmation from the Company’s legal counsel that (1) a registration
statement covering resales of the Shares and Warrant Shares has been declared effective by the Securities and Exchange Commission
(the “
Commission
”) under the Securities Act of 1933, as amended (the “
Securities Act
”), (2) the
Shares or Warrant Shares, as the case may be, have been sold in conformity with Rule 144 under the Securities Act (“
Rule 144
”)
or (3) other than with respect to Shares owned by an affiliate of the Company (as such terms is defined in Rule 144 under the Securities
Act), the Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such securities, and (b) if applicable, a copy of such registration statement,
then, unless otherwise required by law, within three (3) Trading Days (or, if on or after September 5, 2017, within two (2)
trading days) of your receipt of a notice of transfer, Shares or the Exercise Notice, you shall issue the certificates representing
the Shares and/or Warrant Shares (or a statement of ownership of uncertificated Shares and/or Warrant Shares) registered in the
names of such Holders or transferees, as the case may be, and such certificates shall not bear any legend restricting transfer
of the Shares and/or Warrant Shares thereby and should not be subject to any stop-transfer restriction;
provided, however
,
that if such Shares and/or Warrant Shares are not registered for resale under the Securities Act or able to be sold under Rule
144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as
to such securities, or if they are held by an affiliate of the Company (as such term is defined in Rule 144), then the certificates
for such Shares and/or Warrant Shares shall bear the following legend:
THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE
144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES WITH A REGISTERED BROKER-DEALER OR WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
A
form of written confirmation from the Company’s outside legal counsel that a registration statement covering resales of the
Shares and Warrant Shares has been declared effective by the Commission under the Securities Act is attached hereto as
Annex I
.
Please
be advised that the Holders are relying upon this letter as an inducement to enter into the Agreement and, accordingly, each Holder
is a third party beneficiary to these instructions.
Please
execute this letter in the space indicated to acknowledge your agreement to act in accordance with these instructions.
|
Very truly yours,
|
|
|
|
Aevi Genomic Medicine, Inc.
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Acknowledged and Agreed:
|
|
|
|
Corporate Stock Transfer, Inc.
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
Date:___________________,_______
|
|
Annex I
FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION
STATEMENT
Corporate Stock Transfer, Inc.
3200 Cherry Creek Drive South
Suite 430
Denver, CO 80209
Attn: _________________
Re:
Aevi Genomic
Medicine, Inc.
Ladies and Gentlemen:
We
are counsel to Aevi Genomic Medicine, Inc., a Delaware corporation (the “
Company
”), and have represented the
Company in connection with that certain Securities Purchase Agreement, dated as of August ___, 2017, entered into by and among
the Company and the purchasers named therein (collectively, the “
Purchasers
”) pursuant to which the Company
issued to the Purchasers shares of the Company’s common stock, $0.0001 par value per share (the “
Common Stock
”),
and warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to that certain Registration Rights
Agreement of even date, the Company agreed to register the resale of the Common Stock, including shares of Common Stock issuable
upon exercise of the Warrants (collectively, the “
Registrable Securities
”), under the Securities Act of 1933,
as amended (the “
Securities Act
”). In connection with the Company’s obligations under the Registration
Rights Agreement, on August ___, 2017, the Company filed a Registration Statement on Form S-3 (File No. 333-
)
(the “
Registration Statement
”) with the Securities and Exchange Commission (the “
Commission
”)
relating to the Registrable Securities, which names each of the Purchasers as a selling stockholder thereunder.
In
connection with the foregoing, we advise you that a member of the Commission’s staff has advised us by telephone that the
Commission has entered an order declaring the Registration Statement effective under the Securities Act at ____ [a.m.][p.m.] on
__________, 2017, and we have no knowledge, after telephonic inquiry of a member of the staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the Commission and
the Registrable Securities are available for resale under the Securities Act pursuant to the Registration Statement.
This
letter shall serve as our standing notice to you that the Common Stock may be freely transferred by the Purchasers pursuant to
the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance
of shares of Common Stock to the Purchasers or the transferees of the Purchasers, as the case may be, as contemplated by the Company’s
Irrevocable Transfer Agent Instructions, dated __________, 2017, provided at the time of such reissuance, the Company has not otherwise
notified you that the Registration Statement is unavailable for the resale of the Registrable Securities or that the Purchaser
is an affiliate of the Company. This letter shall serve as our standing instructions with regard to this matter.
|
Very truly yours,
|
|
|
|
Pepper Hamilton LLP
|
EXHIBIT D
Form
of Secretary’s Certificate
The undersigned hereby certifies that he is
the duly elected, qualified and acting Secretary of Aevi Genomic Medicine, Inc., a Delaware corporation (the “
Company
”),
and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection
with the Securities Purchase Agreement, dated as of August ___, 2017, by and among the Company and the investors party thereto
(the
“Securities Purchase Agreement”
), and further certifies in his official capacity, in the name and on behalf
of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth
in the Securities Purchase Agreement.
|
1.
|
Attached hereto as
Exhibit A
is a true, correct and complete copy of the resolutions duly
adopted by the Board of Directors of the Company at a meeting thereof held by unanimous written consent on ___________, 2017. Such
resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption
to and including the date hereof and are now in full force and effect.
|
|
2.
|
Attached hereto as
Exhibit B
is a true, correct and complete copy of the Amended and Restated
Certificate of Incorporation of the Company, together with any and all amendments thereto currently in effect, and no action has
been taken to further amend, modify or repeal such Restated Certificate of Incorporation, the same being in full force and effect
in the attached form as of the date hereof.
|
|
3.
|
Attached hereto as
Exhibit C
is a true, correct and complete copy of the Third Amended and
Restated Bylaws of the Company and any and all amendments thereto currently in effect, and no action has been taken to further
amend, modify or repeal such Third Amended and Restated Bylaws, the same being in full force and effect in the attached form as
of the date hereof.
|
|
4.
|
Each person listed below has been duly elected or appointed to the position(s) indicated opposite
his name and is duly authorized to sign the Securities Purchase Agreement and each of the Transaction Documents on behalf of the
Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.
|
Name
|
|
Position
|
|
Signature
|
|
|
|
|
|
Michael F. Cola
|
|
President and Chief Executive Officer
|
|
|
Brian D. Piper
|
|
Chief Financial Officer
|
|
|
IN WITNESS WHEREOF, the undersigned has hereunto
set his hand as of this ____ day of ____________, 2017.
I, Michael F. Cola, President and Chief Executive
Officer, hereby certify that ________________ is the duly elected, qualified and acting Secretary of the Company and that the signature
set forth above is his true signature.
|
|
|
|
President and Chief Executive Officer
|
|
EXHIBIT A
Resolutions
EXHIBIT B
Restated Certificate of Incorporation
EXHIBIT C
Amended and Restated Bylaws
EXHIBIT E
Form
of Officer’s Certificate
The undersigned, the President and Chief Executive
Officer of Aevi Genomic Medicine, Inc., a Delaware corporation (the “
Company
”), pursuant to
Section 2.2(a)(viii)
of the Securities Purchase Agreement, dated as of ____________, 2017, by and among the Company and the investors signatory thereto
(the “
Securities Purchase Agreement
”), hereby represents, warrants and certifies as follows (capitalized terms
used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement):
|
1.
|
The representations and warranties of the Company contained
in the Securities Purchase Agreement are true and correct in all material respects (except for those representations and warranties
which are qualified as to materiality, in which case, such representations and warranties shall be true and correct in all respects)
as of the date when made and as of the date hereof, as though made on and as of such date, except for such representations and
warranties that speak as of a specific date.
|
|
2.
|
The Company has performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied
or complied with by it at or prior to the date hereof.
|
IN WITNESS WHEREOF, the undersigned has executed
this certificate this ___ day of ____________, 2017.
|
|
|
Michael F. Cola
|
|
President and Chief Executive Officer
|
EXHIBIT F
Wire
Instructions
EXHIBIT G
FORM
OF WARRANT
EXHIBIT H
FORM OF LOCK-UP AGREEMENT
August [__], 2017
Aevi Genomic Medicine, Inc.
435 Devon Park Drive, Suite 715
Wayne, PA 19087
Re: Aevi Genomic Medicine, Inc. – Securities
Purchase Agreement for Shares of Common Stock
Dear Sir or Madam:
This
letter agreement (this “
Agreement
”) is being delivered to you in connection with the proposed Stock Purchase
Agreement (the “
Purchase Agreement
”) by and among
Aevi Genomic Medicine, Inc.
,
a Delaware corporation (the “
Company
”), and certain institutional investors, relating to the proposed
private placement (the “
Private Placement
”) of shares of the common stock, par value $0.0001 per share
(the “
Common Stock
”), of the Company.
In order to induce you
continue your efforts in connection with the Private Placement, and in light of the benefits that the Private Placement will confer
upon the undersigned in its capacity as a securityholder and/or an officer, director or employee of the Company, and for good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees with the Company that,
during the period beginning on the date hereof through and including the date that is the earliest of (i) June 30, 2018, (ii) two
business days after the Company’s initial release of data from the Phase 2 trial of AEVI-001 and (iii) the occurrence of
a Material Adverse Change, as such term is defined in the Purchase Agreement (the “
Lock-Up Period
”),
the undersigned will not, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, or announce the intention to otherwise dispose of, any shares of Common Stock (including, without limitation, Common
Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated
under the Securities Exchange Act of 1934, as amended (such shares, the “
Beneficially Owned Shares
,”
and such act, the “
Exchange Act
”)), or securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic
risk of ownership of the Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the
power of disposition, or (iii) engage in any short selling of the Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock.
The restrictions set forth in the preceding
paragraph shall not apply to:
(1) if
the undersigned is a natural person, any transfers made by the undersigned (a) as a bona fide gift to any member of the immediate
family (as defined below) of the undersigned or to a trust the direct or indirect beneficiaries of which are exclusively the undersigned
or members of the undersigned’s immediate family, (b) by will or intestate succession upon the death of the undersigned
or by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement or (c) as
a bona fide gift to a charity or educational institution;
(2) if
the undersigned is a corporation, partnership, limited liability company or other business entity, any transfers to any stockholder,
partner or member of, or owner of a similar equity interest in, the undersigned, as the case may be, if, in any such case, such
transfer is not for value;
(3) if
the undersigned is a corporation, partnership, limited liability company or other business entity, any transfer made by the undersigned
(a) in connection with the sale or other bona fide transfer in a single transaction of all or substantially all of the undersigned’s
capital stock, partnership interests, membership interests or other similar equity interests, as the case may be, or all or substantially
all of the undersigned’s assets, in any such case not undertaken for the purpose of avoiding the restrictions imposed by
this Agreement or (b) to another corporation, partnership, limited liability company or other business entity so long as the transferee
is an affiliate (as defined below) of the undersigned or to any investment fund or other entity that controls or manages the undersigned,
in each case in a transaction not involving a transfer for value;
(4) if the undersigned is a trust,
distributions of shares of Common Stock or any security directly or indirectly convertible into Common Stock to a trustee or the
beneficiaries or to the estate of a beneficiary of such trust in a transaction not involving a disposition for value;
provided
that no filing by the transferor or transferee under the
Exchange Act
, or other public
announcement shall be required or shall be made voluntarily in connection with such distribution until after the expiration of
the Lock-Up Period;
(5) transfers of shares of Common
Stock or other securities to the Company in connection with the vesting or exercise of any equity awards granted pursuant to the
Company’s equity incentive plans effective on the date hereof and held by the undersigned to the extent as may be necessary
to satisfy tax withholding obligations pursuant to the Company’s equity incentive or other plans;
provided
that in
the case of any such transfer, no filing under Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership
of shares of Common Stock shall be required, and no such filing shall be made voluntarily, in each case, prior to the expiration
of the Lock-Up Period;
(6) transfers to the Company
pursuant to agreements under which the Company has an option to repurchase such securities, or a right of first refusal with respect
to the transfers of such securities;
provided
that if the undersigned is required to file a report under the Exchange Act,
or any other public announcement, reporting such repurchase, the undersigned shall include a statement in such report to the effect
that such repurchase was made under terms of the Company’s repurchase rights upon termination of the undersigned;
(7) the establishment of a trading
plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Common Stock,
provided
that such plan does not provide
for the transfer of Common Stock during the Lock-Up Period, and
provided further
that no public announcement of the establishment
or existence of such plan, and no filing with the SEC or any other regulatory authority in respect thereof, shall be required,
and no such public announcement or filing shall be made voluntarily, in each case, prior to the expiration of the Lock-Up Period;
(8) transactions
relating to securities acquired in open market transactions after completion of the Private Placement; and
(10) transfers
pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of the
Company’s capital stock involving a Change of Control (as defined below) of the Company that is approved by the Board of
Directors of the Company (including, without limitation, the entry into any lock-up, voting or similar agreement pursuant to which
the undersigned may agree to transfer, sell, tender or otherwise dispose of Common Stock or other such securities in favor of any
such transaction, or vote any securities in favor of such transaction); provided
that in
the event that the tender offer, merger, consolidation or other such transaction is not completed, the Common Stock owned by the
undersigned shall remain subject to the restrictions contained in this Agreement
;
provided
,
however
, that in the
case of any transfer described in clause (1), (2), (3) or (4) above, it shall be a condition to the transfer that (A) the
transferee executes and delivers to the Placement Agent, not later than one (1) business day prior to such transfer, a written
agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family”
in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the
immediate family of the transferee) and otherwise satisfactory in form and substance to the Placement Agent, and (B) in the case
of any transfer described in clause (1), (2) or (3) above, if the undersigned is required to file a report under Section 16(a)
of the Exchange Act, reporting a reduction in beneficial ownership of shares of Common Stock or Beneficially Owned Shares or any
securities convertible into or exercisable or exchangeable for Common Stock or Beneficially Owned Shares during the Lock-Up Period,
the undersigned shall include a statement in such report to the effect that, (A) in the case of any transfer pursuant to clause (1)
above, such transfer is being made as a gift or by will or intestate succession or by operation of law, (B) in the case of any
transfer pursuant to clause (2) above, such transfer is being made to a stockholder, partner or member of, or owner of a similar
equity interest in, the undersigned and is not a transfer for value, and (C) in the case of any transfer pursuant to clause (3)
above, such transfer is being made either (a) in connection with the sale or other bona fide transfer in a single transaction of
all or substantially all of the undersigned’s capital stock, partnership interests, membership interests or other similar
equity interests, as the case may be, or all or substantially all of the undersigned’s assets or (b) to another corporation,
partnership, limited liability company or other business entity that is an affiliate of the undersigned and such transfer is not
for value.
For purposes of this Agreement,
“immediate family” shall mean a spouse, domestic partner, child, grandchild or other lineal descendant (including by
adoption), father, mother, brother or sister of the undersigned or other relationship not more remote than first cousin; and “affiliate”
shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended (the “
Securities Act
”).
For purposes of this Agreement, “
Change of Control
” shall mean the transfer (whether by tender offer,
merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group
of affiliated persons, of the Company’s voting securities if, after such transfer, such person or group of affiliated persons
would hold more than 90% of the outstanding voting securities of the Company (or the surviving entity).
For avoidance of doubt,
nothing in this Agreement prohibits the undersigned from exercising any options or warrants to purchase Common Stock (which exercises
may be effected on a cashless basis to the extent the instruments representing such options or warrants permit exercises on a cashless
basis), it being understood that any Common Stock issued upon such exercises will be subject to the restrictions of this Agreement.
In order to enable this
Agreement to be enforced, the undersigned hereby consents to the placing of legends or stop transfer instructions with the Company’s
transfer agent or other registrar with respect to any Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock.
The undersigned further
agrees that it will not, during the Lock-Up Period, make any demand or request for or exercise any right with respect to the registration
under the Securities Act, of any shares of Common Stock or other Beneficially Owned Shares or any securities convertible into or
exercisable or exchangeable for Common Stock or other Beneficially Owned Shares (other than any registration rights granted to
the undersigned in connection with the Private Placement). The undersigned hereby waives any and all preemptive rights, registration
rights, participation rights, resale rights, rights of first refusal or similar rights that the undersigned may have in connection
with the Private Placement (other than any registration rights granted to the undersigned in connection with the Private Placement)
or with any issuance or sale by the Company of any equity or other securities before such Private Placement. The undersigned further
waives any related notice requirements pursuant to any agreement, understanding, or otherwise to which the undersigned is a party.
This Agreement and all
authority herein conferred are irrevocable and shall survive the death or incapacity of the undersigned and shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
The undersigned hereby
represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this Agreement
has been duly authorized (if the undersigned is not a natural person), executed and delivered by the undersigned and is a valid
and binding agreement of the undersigned. This Agreement and all authority herein conferred are irrevocable and shall survive the
death or incapacity of the undersigned (if a natural person) and shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
The undersigned hereby
consents to receipt of this Agreement in electronic form and understands and agrees that execution and delivery of this Agreement
by facsimile transmission, electronic mail or other electronic transmission is legal, valid and binding for all purposes. This
Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements
made and to be performed in such state.
If the Purchase Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated for any reason prior to payment
for and delivery of any Common Stock to be sold thereunder, then this Agreement shall immediately be terminated and the undersigned
shall automatically be released from all of his or her obligations under this Agreement. The undersigned acknowledges and agrees
that whether or not any Private Placement of Common Stock actually occurs depends on a number of factors, including market conditions.
[
Signature page follows
]
|
Very truly yours,
|
|
|
|
|
|
(Name of Stockholder - Please Print)
|
|
|
|
|
|
(Signature)
|
|
|
|
|
|
(Name of Signatory if Stockholder is an entity - Please Print)
|
|
|
|
|
|
(Title of Signatory if Stockholder is an entity - Please Print)
|
|
|
Appendix B
Registration Rights Agreement
Execution Version
REGISTRATION
RIGHTS AGREEMENT
This Registration Rights
Agreement (this “
Agreement
”) is made and entered into as of August 9, 2017 by and among Aevi Genomic Medicine,
Inc., a Delaware corporation (the “
Company
”), and the several purchasers signatory hereto (each a “
Purchaser
”
and collectively, the “
Purchasers
”).
This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “
Purchase
Agreement
”).
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Company and each of the Purchasers agree as follows:
1.
Definitions
.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“
Advice
”
has the meaning set forth in
Section 6(d)
.
“
Affiliate
”
means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common
control with, such person.
“
Agreement
”
has the meaning set forth in the Preamble.
“
Business Day
”
means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.
“
Closing
”
has the meaning set forth in the Purchase Agreement.
“
Closing Date
”
has the meaning set forth in the Purchase Agreement.
“
Commission
”
means the Securities and Exchange Commission.
“
Common Stock
”
means the common stock of the Company, par value $0.0001 per share, and any securities into which such common stock may hereinafter
be reclassified.
“
Company
”
has the meaning set forth in the Preamble.
“
Effective Date
”
means the date that the Registration Statement filed pursuant to
Section 2(a)
is first declared effective by the Commission.
“
Effectiveness
Deadline
” means, with respect to the Initial Registration Statement or the New Registration Statement, the ninetieth
(90
th
) calendar day following the Closing Date (or the one-hundred and twentieth (120
th
) calendar day following
the Closing Date in the event of a full review by the Commission);
provided, however
, that if the Company is notified by
the Commission that the Initial Registration Statement or the New Registration Statement will not be reviewed or is no longer subject
to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth (5
th
)
Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above;
provided,
further
, that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business,
the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.
“
Effectiveness
Period
” has the meaning set forth in
Section 2(b)
.
“
Event
”
has the meaning set forth in
Section 2(c)
.
“
Event Date
”
has the meaning set forth in
Section 2(c)
.
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“
Filing Deadline
”
means, with respect to the Initial Registration Statement required to be filed pursuant to
Section 2(a)
, the sixtieth (60
th
)
calendar day following the Closing Date,
provided, however
, that if the Filing Deadline falls on a Saturday, Sunday or other
day that the Commission is closed for business, the Filing Deadline shall be extended to the next business day on which the Commission
is open for business.
“
Holder
”
or “
Holders
” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“
Indemnified
Party
” has the meaning set forth in
Section 5(c)
.
“
Indemnifying
Party
” has the meaning set forth in
Section 5(c)
.
“
Initial Registration
Statement
” means the initial Registration Statement filed pursuant to
Section 2(a)
of this Agreement.
“Losses
”
has the meaning set forth in
Section 5(a)
.
“
New Registration
Statement
” has the meaning set forth in
Section 2(a)
.
“
Person
”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“
Principal Market
”
means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Closing Date,
shall be the NASDAQ Global Market.
“
Proceeding
”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition), by or before any court or governmental, administrative or other regulatory body or the Commission, whether
commenced or threatened.
“
Prospectus
”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
“
Purchase Agreement
”
has the meaning set forth in the Recitals.
“
Purchaser
”
or “
Purchasers
” has the meaning set forth in the Preamble.
“
Registrable
Securities
” means all of (i) the Shares, (ii) the Warrant Shares and (iii) any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing,
provided
,
that the Holder has completed and delivered to the Company a Selling Stockholder Questionnaire; and
provided, further
, that
with respect to a particular Holder, such Holder’s Shares and Warrant Shares shall cease to be Registrable Securities upon
the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in
which case, only such security sold by the Holder shall cease to be a Registrable Security); or (B) becoming eligible for resale
by the Holder under Rule 144 without the requirement for the Company to be in compliance with the current public information requirement
thereunder and without volume or manner-of-sale restrictions, pursuant to a written opinion letter to such effect, addressed, delivered
and acceptable to the Transfer Agent.
“
Registration
Statements
” means any one or more registration statements of the Company filed under the Securities Act that covers the
resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial
Registration Statement, the New Registration Statement, any Remainder Registration Statements, a Demand Registration Statement
and a Piggyback Registration Statement), amendments and supplements to such Registration Statements, including post-effective amendments,
all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.
“
Remainder Registration
Statement
” has the meaning set forth in
Section 2(a)
.
“
Rule 144
”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“
Rule 415
”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“
Rule 424
”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“
SEC Guidance
”
means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii)
the Securities Act.
“
Securities
Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“
Selling Stockholder
Questionnaire
” means a questionnaire in the form attached as
Annex B
hereto, or such other form of questionnaire
as may reasonably be adopted by the Company from time to time.
“
Shares
”
means the shares of Common Stock issued or issuable to the Purchasers pursuant to the Purchase Agreement.
“
Trading Day
”
means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board),
or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock
is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on
any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices);
provided
, that
in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean
a Business Day.
“
Trading Market
”
means whichever of the New York Stock Exchange, the NYSE MKT (formerly the American Stock Exchange), the NASDAQ Global Select Market,
the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
on the date in question.
“
Warrants
”
means the Warrants issued pursuant to the Purchase Agreement.
“
Warrant Shares
”
means the shares of Common Stock issued or issuable upon exercise of the Warrants.
(a)
Shelf
Registration Statement
. On or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration
Statement covering the resale of all of the Registrable Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and
sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Holders may reasonably
specify (the “
Initial Registration Statement
”). The Initial Registration Statement shall be on Form S-3, provided
that the Company is then permitted to use such form for such purpose (and, if not, then Form S-1)
,
and shall contain (except
if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the
“Plan of Distribution” section substantially in the form attached hereto as
Annex A
(which may be modified to
respond to comments, if any, provided by the Commission). Notwithstanding the registration obligations set forth in this
Section
2
, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application
of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly
(i) inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration
Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file one or more new registration
statements (together, the “
New Registration Statement
”), in either case covering the maximum number of Registrable
Securities permitted to be registered by the Commission, on the applicable form;
provided, however
, that prior to filing
such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate
with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without
limitation, the Compliance and Disclosure Interpretation 612.09 with respect to the Securities Act Rule 415, dated Jan. 26, 2009,
compiled by the Commission’s Division of Corporation Finance. Notwithstanding any other provision of this Agreement, if any
SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular Registration
Statement as a secondary offering (and notwithstanding that the Company used commercially reasonable efforts to advocate with the
Commission for the registration of all or a greater number of Registrable Securities), unless otherwise directed in writing by
a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement
will first be reduced by Registrable Securities not acquired pursuant to the Purchase Agreement (whether pursuant to registration
rights or otherwise), and second by Registrable Securities represented by holders of Warrant Shares (applied, in the case that
some Warrant Shares may be registered, to such Holders on a pro rata basis based on the number of unregistered Warrant Shares held
by such Holders), and third by Registrable Securities represented by Shares (applied, in the case that some Shares may be registered,
to such Holders on a pro rata basis based on the number of unregistered Shares held by such Holders), subject to a determination
by the Commission that certain Holders must be reduced first based on the number of Shares and Warrant Shares held by such Holders.
In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as
allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration
statements on the applicable form (the “
Remainder Registration Statements
”).
(b) The
Company shall use its commercially reasonable efforts to cause the Initial Registration Statement, any New Registration Statement
and any Remainder Registration Statement to be declared effective by the Commission as soon as practicable and, with respect to
the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline (including
filing with the Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities
Act), and shall use its commercially reasonable efforts to keep each such Registration Statement continuously effective under the
Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Registration Statement have
been publicly sold by the Holders or (ii) the date that all Registrable Securities covered by such Registration Statement may be
sold by non-affiliates without volume or manner-of-sale restrictions pursuant to Rule 144, without the requirement for the
Company to be in compliance with the current public information requirement under Rule 144 as determined by counsel to the
Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer
agent (the “
Effectiveness Period
”). The Company shall telephonically request effectiveness of a Registration
Statement as of 5:00 P.M. New York City time on a Trading Day. The Company shall promptly notify the Holders via facsimile or electronic
mail of a “.pdf” format data file of the effectiveness of such Registration Statement on or before the first Trading
Day after the date that the Company telephonically confirms effectiveness with the Commission, which date of confirmation shall
initially be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 A.M. New York City
time on the first Trading Day after the Effective Date, file a final Prospectus with the Commission, as required by Rule 424(b).
(c) Each
Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire not more than five (5) Trading Days following
the date of this Agreement. At least ten (10) Trading Days prior to the first anticipated filing date of a Registration Statement
for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that
Holder other than the information contained in the Selling Stockholder Questionnaire, if any, which shall be completed and delivered
to the Company promptly upon request and, in any event, within three (3) Trading Days prior to the applicable anticipated filing
date. Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement
or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company
a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as described in
the previous sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for further
information, in either case, after its respective deadline, the Company shall use its commercially reasonable efforts to take such
actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or
post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable
Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges
and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this
Section 2(c)
will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion
of such information in the Registration Statement.
(d)
Demand
Registrations
. If the Company shall receive at any time a written notice from Holders holding at least fifty percent (50%)
of the outstanding Registrable Securities, requesting that the Company effect a registration statement (each, a “
Demand
Registration Statement
”) under the Securities Act with respect to all or a part of the Registrable Securities held by
such Holders, then the Company shall: (i) within ten (10) days of the receipt thereof, give written notice of such request to all
Holders; and (ii) effect as soon as practicable, and in any event within ninety (90) days of the receipt of such request, the registration
under the Act of all Registrable Securities which such Holders request to be registered by notice to the Company within thirty
(30) days of the mailing of the notice sent by the Company (each such registration, a “
Demand Registration
”).
If the Holders initiating
the Demand Registration request (the “
Initiating Holders
”) intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company as a part of their request made and the Company
shall include such information in the written notice to all Holders referred to in the preceding paragraph. The underwriter will
be selected by such Holders and shall be reasonably acceptable to Company. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting. Notwithstanding any other provision of this section, if the underwriter advises
the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then
the Initiating Holders shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto,
and the number of Registrable Securities that may be included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities owned by each
Holder;
provided, however,
that the number of Registrable Securities to be included in such underwriting shall not be reduced
unless all other securities (including primary securities) are first excluded in their entirety from the underwriting.
Notwithstanding the foregoing,
if the Company shall furnish to Holders requesting a Demand Registration a certificate signed by the Chief Executive Officer of
the Company stating that in the good faith judgment of the Board of Directors of the Company it would be seriously detrimental
to the Company and its stockholders for a registration statement to be filed and it is therefore essential to defer the filing
of such registration statement, then the Company shall have the right to defer taking action with respect to such filing for a
period of not more than thirty (30) days in the aggregate. In addition, the Company shall not be obligated to effect, or to take
any action to effect, any Demand Registration after the Company has effected four (4) Demand Registrations, such registration statements
have been declared effective and the sales of Registrable Securities under such Demand Registrations have closed. No incidental
right under this Section 2(e) shall be construed to limit any other registration required hereunder.
(e)
“Piggy-Back”
Registration
. If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its Common Stock or other securities under the Securities
Act in connection with the public offering of such securities solely for cash, other than (i) the initial registration of any series
or class of the Company’s securities, (ii) a registration relating solely to the sale of securities to participants in a
stock plan, (iii) a registration on any form which does not include substantially the same information as would be required to
be included in a registration statement covering the sale of the Registrable Securities, or (iv) a registration on Form S-4 (or
any successor form) relating solely to a transaction pursuant to the SEC’s Rule 145, the Company shall, at such time, promptly
give each Holder written notice of such registration. Upon the written request by a Holder given to the Company within twenty (20)
days after such notice by the Company, the Company shall, subject to the following paragraph, cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has requested to be registered (each such registration,
a “
Piggyback Registration
”) on such registration statement (each, a “
Piggyback Registration Statement
”).
In connection with any
Piggyback Registration involving a primary sale of Common Stock, the Company shall not be required to include any of the Holders’
securities in such underwriting unless such Holders accept the terms of the underwriting as agreed upon between the Company and
the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount
of securities, including Registrable Securities, requested by Holders to be included in such offering exceeds the amount of securities
to be sold (other than by the Company) that the underwriters determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required to include in such offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering;
provided, however,
there shall first be excluded from such registration statement all shares of Common Stock sought to be
included therein by any director, consultant, officer or employee of the Company or any subsidiary. If after such shares are excluded,
the underwriters shall determine in their sole discretion that the number of securities which remain to be included in such offering
exceeds the amount of securities to be sold that the underwriters determine is compatible with the success of the offering, then
the Registrable Securities to be included, if any, shall be apportioned
pro rata
among the Holders providing notice of their
desire to participate in the offering according to the total amount of securities entitled to be included therein owned by each
selling Holder or in such other proportions as shall mutually be agreed to by such Holders.
No incidental right under
this Section 2(e) shall be construed to limit any other registration required hereunder.
|
3.
|
Registration Procedures
|
In connection with the
Company's registration obligations hereunder, the Company shall:
(a) Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K, and Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), (i) furnish to the Holder or their
designated counsel copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed,
which documents will be subject to the review of such Holder (it being acknowledged and agreed that if a Holder does not object
to or comment on the aforementioned documents within such five (5) Trading Day or one (1) Trading Day period, as the case may be,
then the Holder shall be deemed to have consented to and approved the use of such documents) and (ii) use commercially reasonable
efforts to cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries
as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within
the meaning of the Securities Act. The Company shall not file any Registration Statement or amendment or supplement thereto in
a form to which a Holder reasonably objects in good faith, provided that, the Company is notified of such objection in writing
within the five (5) Trading Day or one (1) Trading Day period described above, as applicable.
(b) Use
commercially reasonable efforts to (i) prepare and file with the Commission such amendments (including post-effective amendments)
and supplements, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement),
and, as so supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably practicable to any
comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as
reasonably possible, provide the Holders or their designated counsel true and complete copies of all correspondence from and to
the Commission relating to such Registration Statement that pertains to the Holders as “Selling Stockholders” but not
any comments that would result in the disclosure to the Holders of material and non-public information concerning the Company;
and (iv) during the Effectiveness Period, comply with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities
shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by
the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented;
provided,
however
, that each Holder shall be responsible for the delivery of the Prospectus to the Persons to whom such Holder sells
any of the Shares or the Warrant Shares (including in accordance with Rule 172 under the Securities Act), and each Holder agrees
to dispose of Registrable Securities in compliance with the “Plan of Distribution” described in the Registration Statement
and otherwise in compliance with applicable federal and state securities laws. In the case of amendments and supplements to a Registration
Statement which are required to be filed pursuant to this Agreement (including pursuant to this
Section 3(b)
) by reason
of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company
shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments
or supplements with the Commission on the same day on which the Exchange Act report that created the requirement for the Company
to amend or supplement such Registration Statement was filed with the Commission.
(c) Notify
the Holders or their designated counsel (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably practicable
via electronic mail (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested
by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day: (i)(A) when a Prospectus
or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments
in writing on any Registration Statement (in which case the Company shall provide to each of the Holders true and complete copies
of all comments that pertain to the Holders as a “Selling Stockholder” or to the “Plan of Distribution”
and all written responses thereto, but not information that the Company believes would constitute material and non-public information);
and (C) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of
any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information that pertains to the Holders as “Selling Stockholders” or the
“Plan of Distribution”; (iii) of the issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that
makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such
Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case
of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of any
Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading,
and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes
may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued
availability of a Registration Statement or Prospectus,
provided
that, any and all such information shall remain confidential
to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law; and
provided
,
further
, that notwithstanding each Holder’s agreement to keep such information confidential, each such Holder makes
no acknowledgement that any such information is material, non-public information.
(d) Use
commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, as soon as practicable.
(e) If
requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each
amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission;
provided
, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system.
(f) Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification)
of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each Registration Statement;
provided
, that the Company shall
not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company
to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in
any such jurisdiction.
(g) If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates or book entry
statements representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates
or book entry statements shall be free, to the extent permitted by the Purchase Agreement and under law, of all restrictive legends,
and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably
request.
(h) Following
the occurrence of any event contemplated by
Section 3(c)
, as promptly as reasonably practicable (taking into account the
Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure
of such event), prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they
were made), not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of
Section 3(c)
above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall
suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus
may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this
Section 3(h)
to suspend the availability of a Registration Statement and Prospectus for a period not to exceed sixty (60) calendar days (which
need not be consecutive days) in any twelve (12) month period.
(i) The
Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of shares of Common
Stock beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“
FINRA
”)
affiliations, (iii) any natural persons who have the power to vote or dispose of the common stock and (iv) any other information
as may be requested by the Commission, FINRA or any state securities commission.
(j) The
Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting
a filing with FINRA pursuant to FINRA Rules 5110 and/or 5190 as requested by any such Holder and the Company shall pay the filing
fee required for the first such filing promptly and in any case within the time period then required by FINRA.
4.
Registration
Expenses
. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this
Agreement (excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel for any
Holder) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement.
The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market
on which the Common Stock is then listed for trading, (B) with respect to compliance with applicable state securities or Blue Sky
laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications
or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under
the laws of such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company pursuant to
Section
3(j)
above, with respect to any filing that may be required to be made by any broker through which a Holder intends to make
sales of Registrable Securities with FINRA pursuant to the FINRA Rules 5110 and/or 5190, so long as the broker is receiving no
more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably
requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance,
if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement. The Company shall also pay all expenses incurred in connection
with each Piggyback Registration and Demand Registration by each Holder, including all registration, filing and qualification fees,
printers and accounting fees relating or apportionable thereto, and the fees and disbursements of one counsel for the selling Holders
selected by them in each such offering, but excluding stock transfer taxes, underwriting discounts and commissions relating to
the Registrable Securities. In addition, the Company shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event
shall the Company be responsible for any underwriting, broker or similar fees or commissions of any Holder or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the Holders.
In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
(a)
Indemnification
by the Company
. The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, partners, members, managers, stockholders, Affiliates and employees of each of them, each
Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, partners, members, managers, stockholders, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and investigation and reasonable attorneys' fees) and expenses (collectively,
“
Losses
”), as incurred, that arise out of or are based upon (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii) any violation or alleged
violation by the Company of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder,
in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that
(A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and approved
in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder has approved
Annex A
hereto for this purpose), or
(B) in the case of an occurrence of an event of the type specified in
Section 3(c)(iii)
-
(vi)
, related to the use
by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice contemplated and defined in
Section 6(d)
below,
to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected
or (C) to the extent that any such Losses arise out of the Holder’s (or any other indemnified Person’s) failure to
send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required, pursuant to Rule 172 under
the Securities Act (or any successor rule) to the Persons asserting an untrue statement or alleged untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities
to such Person if such statement or omission was corrected in such Prospectus or supplement. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated
by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of an Indemnified Party (as defined in
Section 5(c)
) and shall survive the transfer of the Registrable
Securities by the Holders.
(b)
Indemnification
by Holders
. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents, stockholders, Affiliates and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, partners, members, managers, stockholders, agents or employees
of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising
out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading (i) to the extent that such untrue statements or omissions are based upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved
in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved
Annex
A
hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii) in
the case of an occurrence of an event of the type specified in
Section 3(c)(iii)
-
(vi)
, to the extent related to the
use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in
Section 6(d)
. In no event
shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by
such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.
(c)
Conduct
of Indemnification Proceedings
. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “
Indemnified Party
”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “
Indemnifying Party
”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable
fees and expenses incurred in connection with defense thereof;
provided
, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject
to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of
such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have
the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party);
provided
, that
the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for
all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without
its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
Subject to the terms
of this Agreement, all fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this
Section 5
)
shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying
Party;
provided
, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees
and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder). The failure to deliver written notice to the Indemnifying Party within a reasonable time of the commencement
of any such action shall not relieve such Indemnifying Party of any liability to the Indemnified Party under this
Section 5
,
except to the extent that the Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.
(d)
Contribution
.
If a claim for indemnification under
Section 5(a)
or
5(b)
is unavailable to an Indemnified Party or insufficient
to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable
attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this
Section 5
was available
to such party in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution pursuant to this
Section 5(d)
were determined
by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d)
, (A) no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such
Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder
has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission
and (B) no contribution will be made under circumstances where the maker of such contribution
would not have been required to indemnify the Indemnified Party under the fault standards set forth in this
Section 5.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution
agreements contained in this
Section 5
are in addition to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.
(a)
Remedies
.
In the event of a breach by the Company or by a Holder of any of its obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that
monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions
of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.
(b)
No
Piggyback by non-Holders on Registration Statements Filed Pursuant Hereto; Prohibition on Filing Other Registration Statements
.
Except and to the extent specified in the SEC Reports or the Purchase Agreement, neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement (except
a Piggyback Registration Statement) other than the Registrable Securities, and the Company shall not prior to the Effective Date
enter into any agreement providing any such right to any of its security holders (other than this Agreement). The Company shall
not file with the Commission a registration statement relating to an offering for its own account under the Securities Act of any
of its equity securities other than a registration statement on Form S-8 or, in connection with an acquisition, on Form S-4 until
the earlier of (i) the date that is thirty (30) days after the Effective Date or (ii) the date that all Registrable Securities
are eligible for resale by non-affiliates without the requirement for the Company to be in compliance with the current public information
requirements under Rule 144 and by affiliates within the applicable volume limitations of Rule 144. For the avoidance of doubt,
the Company shall not be prohibited from preparing and filing with the Commission a registration statement relating to an offering
of Common Stock by existing stockholders of the Company under the Securities Act pursuant to the terms of registration rights held
by such stockholder or from filing amendments to registration statements filed prior to the date of this Agreement.
(c)
Compliance
.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration
Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration
Statement.
(d)
Discontinued
Disposition
. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in
Section 3(c)(iii)
-
(vi)
, such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “
Advice
”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.
The Company may provide stock transfer orders to enforce the provisions of this
Section 6(d)
. The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall
be subject to the provisions of
Section 2(c)
.
(e)
No
Inconsistent Agreements
. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that
would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof.
(f)
Amendments
and Waivers
. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
or waived unless the same shall be in writing and signed by the Company and Holders holding no less than a majority of the then
outstanding Registrable Securities, in which case such amendment, modification, supplement or waiver shall be binding on all Holders,
provided that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect
the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates;
provided
,
however
, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(g)
Notices
.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.
(h)
Successors
and Assigns
. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except
by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations
hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may
assign its respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement; provided in
each case that (i) the Holder agrees in writing with the transferee or assignee to assign such rights and related obligations
under this Agreement, and for the transferee or assignee to assume such obligations, and a copy of such agreement is furnished
to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer
or assignment, furnished with written notice of the name and address of such transferee or assignee and the securities with respect
to which such registration rights are being transferred or assigned, (iii) at or before the time the Company received the
written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company
to be bound by all of the provisions contained herein and (iv) the transferee is an “accredited investor,” as
that term is defined in Rule 501 of Regulation D.
(i)
Execution
and Counterparts
. This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.
(j)
Governing
Law
. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
(k)
Cumulative
Remedies
. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(l)
Severability
.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith reasonable
efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m)
Headings
.
The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.
(n)
Independent
Nature of Purchasers’ Obligations and Rights
. The obligations of each Purchaser under this Agreement are several and
not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the Securities pursuant to the
Transaction Documents has been made independently of each other Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities
or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided
with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and not because it
was required or requested to do so by any Purchaser.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
AEVI GENOMIC MEDICINE, INC.
|
|
|
|
|
By:
|
/s/ Brian Piper
|
|
|
Name: Brian Piper
|
|
|
Title: Chief Financial Officer
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
The Children’s Hospital of Philadelphia Foundation
|
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Thomas J. Todorow
|
|
Name:
|
Thomas J. Todorow
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
Adage Capital Partners, L.P.
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ James Bardinelli
|
|
Name:
|
James Bardinelli
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
667, L.P.
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By: BAKER BROS. ADVISORS LP, management company and investment adviser to 667, L.P., pursuant to authority granted to it by Baker Biotech Capital, L.P., general partner to 667, L/P/, and not as the general partner.
|
|
|
|
By:
|
/s/ Scott L. Lessing
|
|
Name:
|
Scott L. Lessing
|
|
Title:
|
President
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
Baker Brothers Life Sciences, L.P.
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
Baker Bros. Advisors LP
, Management Company and Investment Advisor to Baker Brothers Life Sciences, L.P., pursuant to authority granted to it by Baker Brothers Life Science Capital, L.P., general partner to Baker Brothers Life Sciences, L.P., and not as the general partner.
|
|
|
|
|
By:
|
/s/ Scott L. Lessing
|
|
Name:
|
Scott L. Lessing
|
|
Title:
|
President
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
Sol J. Barer
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
By:
|
/s/ Sol J. Barer
|
|
Name:
|
Sol J. Barer
|
|
Title:
|
Chairman of the Board of Directors
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
|
Eugene A. Bauer
|
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Eugene A. Bauer
|
|
Name:
|
Eugene A. Bauer
|
|
Title:
|
Director
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
|
Alastair Clemow
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Alastair Clemow
|
|
Name:
|
Alastair Clemow
|
|
Title:
|
Director
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
Michael F. Cola
|
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Michael F. Cola
|
|
Name:
|
Michael F. Cola
|
|
Title:
|
President, Chief Executive Officer and Director
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
|
Barbara G. Duncan
|
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Barbara G. Duncan
|
|
Name:
|
Barbara G. Duncan
|
|
Title:
|
Director
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
|
Wilbur H. Gantz Revocable Trust
|
|
|
|
|
AUTHORIZED
|
SIGNATORY
|
|
|
|
|
By:
|
/s/ Wilbur H. Gantz
|
|
Name:
|
Wilbur H. Gantz
|
|
Title:
|
Director
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
Joseph J. Grano, Jr.
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Joseph J. Grano, Jr.
|
|
Name:
|
Jospeh J. Grano, Jr.
|
|
Title:
|
Director
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
|
NAME OF INVESTING ENTITY
|
|
|
|
|
Garry A. Neil
|
|
|
|
AUTHORIZED SIGNATORY
|
|
|
|
|
By:
|
/s/ Garry A. Neil
|
|
Name:
|
Garry A. Neil
|
|
Title:
|
Chief Scientific Officer
|
|
|
|
|
ADDRESS FOR NOTICE
|
|
|
|
|
c/o:
|
|
|
|
|
|
Street:
|
|
|
|
|
|
City/State/Zip:
|
|
|
|
|
|
Attention:
|
|
|
|
|
|
Tel:
|
|
|
|
|
|
Fax:
|
|
|
|
|
|
Email:
|
|
Annex
A
PLAN OF DISTRIBUTION
We are registering
the shares of Common Stock issued to the selling stockholders and issuable upon exercise of the warrants issued to the selling
stockholders to permit the resale of those shares of Common Stock by such holders of Common Stock and warrants from time to time
after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares
of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock.
The selling stockholders
may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of Common
Stock may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter
market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses
or block transactions. The selling stockholders may use any one or more of the following methods when selling shares:
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
·
|
block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
|
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
·
|
an exchange distribution in accordance with the rules of the applicable exchange;
|
|
·
|
privately negotiated transactions;
|
|
·
|
settlement of short sales entered into after the effective date of the registration statement of
which this prospectus is a part;
|
|
·
|
broker-dealers may agree with the selling stockholders to sell a specified number of such shares
at a stipulated price per share;
|
|
·
|
through the writing or settlement of options or other hedging transactions, whether such options
are listed on an options exchange or otherwise;
|
|
·
|
a combination of any such methods of sale; and
|
|
·
|
any other method permitted pursuant to applicable law.
|
The selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act,
as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided
that they meet the criteria and conform to the requirements of those provisions.
Broker-dealers engaged
by the selling stockholders may arrange for other broker-dealers to participate in sales. If the selling stockholders effect such
transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers
or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions
from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal. Such commissions
will be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121 and Supplementary Material .01 and
Supplementary Material .02 thereto.
In connection with
sales of the shares of Common Stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the shares of Common Stock in the course of hedging
in positions they assume. The selling stockholders may also sell shares of Common Stock short and if such short sale shall take
place after the date that this Registration Statement is declared effective by the Commission, the selling stockholders may deliver
shares of Common Stock covered by this prospectus to close out short positions and to return borrowed shares in connection with
such short sales. The selling stockholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may sell
such shares, to the extent permitted by applicable law. The selling stockholders may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding
the foregoing, the selling stockholders have been advised that they may not use shares registered on this registration statement
to cover short sales of our common stock made prior to the date the registration statement, of which this prospectus forms a part,
has been declared effective by the SEC.
The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of the warrants or shares of Common Stock owned by them
and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares
of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include
the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees
or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders
and any broker-dealer or agents participating in the distribution of the shares of Common Stock may be deemed to be “underwriters”
within the meaning of Section 2(a)(11) of the Securities Act in connection with such sales. In such event, any commissions paid,
or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased
by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling Stockholders who are "underwriters"
within the meaning of Section 2(a)(11) of the Securities Act will be subject to the applicable prospectus delivery requirements
of the Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities of, including but not limited
to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or
the Exchange Act.
Each selling stockholder
has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. Upon the Company being notified in writing by a selling
stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block
trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling
stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares
of Common Stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable,
(v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference
in this prospectus, and (vi) other facts material to the transaction. In no event shall any broker-dealer receive fees, commissions
and markups, which, in the aggregate, would exceed eight percent (8.0%).
Under the securities
laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance
that any selling stockholder will sell any or all of the shares of Common Stock registered pursuant to the shelf registration statement,
of which this prospectus forms a part.
Each selling stockholder
and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may
limit the timing of purchases and sales of any of the shares of Common Stock by the selling stockholder and any other participating
person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares
of Common Stock to engage in market-making activities with respect to the shares of Common Stock. All of the foregoing may affect
the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making activities with
respect to the shares of Common Stock.
We will pay all expenses
of the registration of the shares of Common Stock pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws;
provided
,
however
, that each selling stockholder will pay all underwriting discounts and selling commissions, if
any, and any related legal expenses incurred by it. We will indemnify the selling stockholders against certain liabilities, including
some liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling stockholders will
be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities
under the Securities Act, that may arise from any written information furnished to us by the selling stockholders specifically
for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.
Annex
B
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
The undersigned holder
of shares of the common stock, par value $0.0001 per share of Aevi Genomic Medicine, Inc. (the “
Company
”) issued
pursuant to a certain Securities Purchase Agreement by and among the Company and the Purchasers named therein, dated as of August
__, 2017 (the “
Agreement
”), understands that the Company intends to file with the Securities and Exchange Commission
a registration statement on Form S-3 (the “
Resale Registration Statemen
t”) for the registration and the resale
under Rule 415 of the Securities Act of 1933, as amended (the “
Securities Act
”), of the Registrable Securities
in accordance with the terms of the Agreement. All capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Agreement.
In order to sell or
otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable Securities
generally will be required to be named as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented,
the “
Prospectus
”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant to Rule
172 under the Securities Act) and be bound by the provisions of the Agreement (including certain indemnification provisions, as
described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling stockholders
in the Prospectus.
Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire within
three (3) Trading Days following the date of the Agreement (1) will not be named as selling stockholders in the Resale Registration
Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.
Certain legal consequences
arise from being named as a selling stockholder in the Resale Registration Statement and the Prospectus. Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a
selling stockholder in the Resale Registration Statement and the Prospectus.
NOTICE
The undersigned holder
(the “
Selling Stockholder
”) of Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in Item
(3), pursuant to the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands
and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Agreement.
The undersigned hereby
provides the following information to the Company and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
|
(a)
|
Full Legal Name of Selling Stockholder:
|
|
|
|
|
|
|
|
(b)
|
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
|
|
|
|
|
|
|
|
(c)
|
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):
|
|
|
|
|
|
|
|
2.
|
Address for Notices to Selling Stockholder:
|
E-mail address of Contact Person:
|
|
|
3.
|
Beneficial Ownership of Registrable Securities Issuable
Pursuant to the Purchase Agreement:
|
|
(a)
|
Type and Number of Registrable Securities beneficially owned and issued pursuant to the Agreement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Number of shares of Common Stock to be registered pursuant to this Notice for resale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Are you a broker-dealer?
|
|
(b)
|
If “yes” to Section 4(a), did you receive your
Registrable Securities as compensation for investment banking services to the Company?
|
|
Note:
|
If no, the Commission’s staff has indicated that you should be identified as an underwriter
in the Registration Statement.
|
|
(c)
|
Are you an affiliate of a broker-dealer?
|
|
Note:
|
If yes, provide a narrative explanation below:
|
|
|
|
|
|
|
|
|
|
|
(c)
|
If you are an affiliate of a broker-dealer, do you certify
that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable
Securities?
|
|
Note:
|
If no, the Commission’s staff has indicated that
you should be identified as an underwriter in the Registration Statement.
|
|
5.
|
Beneficial Ownership of Other Securities of the Company
Owned by the Selling Stockholder.
|
Except as set forth below
in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
Type and amount of other securities
beneficially owned:
|
6.
|
Relationships with the Company:
|
Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
The undersigned has reviewed
the form of Plan of Distribution attached as Annex A to the Registration Rights Agreement, and hereby confirms that, except as
set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.
State any exceptions here:
***********
The undersigned agrees to promptly notify
the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and
prior to the effective date of any applicable Resale Registration Statement. All notices hereunder and pursuant to the Agreement
shall be made in writing, by hand delivery, confirmed or facsimile transmission, first-class mail or air courier guaranteeing overnight
delivery at the address set forth below. In the absence of any such notification, the Company shall be entitled to continue to
rely on the accuracy of the information in this Notice and Questionnaire.
By signing below, the undersigned consents
to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information
in the Resale Registration Statement and the Prospectus. The undersigned understands that such information will be relied upon
by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus.
By signing below, the undersigned acknowledges
that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules
and regulations thereunder, particularly Regulation M in connection with any offering of Registrable Securities pursuant to the
Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire are
furnished for use in connection with Registration Statements filed pursuant to the Registration Rights Agreement and any amendments
or supplements thereto filed with the Commission pursuant to the Securities Act.
The undersigned hereby acknowledges and
is advised of the following Compliance and Disclosure Interpretation 239.10 with respect to the Securities Act Section 5, dated
Nov. 26, 2008, compiled by the Commission’s Division of Corporation Finance, regarding short selling:
“An issuer filed a Form S-3 registration
statement for a secondary offering of common stock which is not yet effective. One of the selling shareholders wanted to do a short
sale of common stock “against the box” and cover the short sale with registered shares after the effective date. The
issuer was advised that the short sale could not be made before the registration statement becomes effective, because the shares
underlying the short sale are deemed to be sold at the time such sale is made. There would, therefore, be a violation of Section
5 if the shares were effectively sold prior to the effective date.”
By returning this Questionnaire, the undersigned
will be deemed to be aware of the foregoing interpretation.
I confirm that, to the best of my knowledge and belief, the
foregoing statements (including without limitation the answers to this Questionnaire) are correct.
IN WITNESS WHEREOF the undersigned, by authority duly given,
has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.
PLEASE E-MAIL A COPY OF THE COMPLETED AND EXECUTED NOTICE
AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Pepper Hamilton
LLP
3000 Two Logan
Square
Eighteenth and
Arch Streets
Philadelphia,
PA 19003
Telephone No.:
(215) 981-4000
Facsimile No.:
(877) 767-8438
Attention: Brian
M. Katz
E-mail: katzb@pepperlaw.com
Appendix C
Form of Warrant
NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES WITH
A REGISTERED BROKER-DEALER OR WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT
.
AEVI GENOMIC MEDICINE, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No. ___________________
|
|
Original Issue Date: _______________ 2017
|
Aevi
Genomic Medicine, Inc., a Delaware corporation (the “
Company
”), hereby certifies that, for value received,
___________________
or its permitted registered assigns (the “
Holder
”),
is entitled to purchase from the Company up to a total of
___________________
shares
of common stock, $0.0001 par value per share (the “
Common Stock
”), of the Company (each such share, a “
Warrant
Share
” and all such shares, the “
Warrant Shares
”) at an exercise price per share equal to $2.84 per
share (as adjusted from time to time as provided in
Section 9
herein, the “
Exercise Price
”), at any time
and from time to time through and including 5:30 P.M., New York City time, on _______________, 2022 (the “
Expiration Date
”);,
and subject to the following terms and conditions:
This Warrant (this “
Warrant
”)
is one of a series of similar warrants issued pursuant to that certain Securities Purchase Agreement, dated August ___, 2017 by
and among the Company and the Purchasers identified therein (the “
Purchase Agreement
”). All such Warrants are
referred to herein, collectively, as the “
Warrants
.”
1.
Definitions
.
In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Purchase Agreement.
2.
Registration
of Warrants
. 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 (which shall be the initial Holder set forth above or, as the case may be,
any registered assignee to which this Warrant is permissibly assigned hereunder) 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.
3.
Registration
of Transfers
. Subject to the restrictions on transfer set forth in
Section 4.1
of the Purchase Agreement and compliance
with all applicable securities laws, the Company shall register the transfer of all or any portion of this Warrant in the Warrant
Register, upon surrender of this Warrant, with the Form of Assignment attached as
Schedule 2
hereto duly completed and signed,
to the Company’s transfer agent or to the Company at its address specified in the Purchase Agreement and (x) delivery, at
the request of the Company, of an opinion of counsel reasonably satisfactory to the Company to the effect that the transfer of
such portion of this Warrant may be made pursuant to an available exemption from the registration requirements of the Securities
Act and all applicable state securities or blue sky laws and (y) delivery by the transferee of a written statement to the Company
certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities Act and making
the representations and certifications set forth in Sections 3.2(c), (e) and (f) of the Purchase Agreement, to the Company at its
address specified in the Purchase Agreement. Upon any such registration or transfer, a new warrant to purchase Common Stock in
substantially the form of this Warrant (any such new warrant, a “
New Warrant
”) evidencing the portion of this
Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not
so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder
has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense any New Warrant under this
Section
3
.
|
4.
|
Exercise and Duration of Warrants
.
|
(a) All
or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by
Section 10
of this
Warrant at any time and from time to time through and including 5:30 P.M. New York City time, on the Expiration Date. At 5:30 P.M.,
New York City time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and
of no value and this Warrant shall be terminated and no longer outstanding.
(b) The
Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as
Schedule 1
hereto (the “
Exercise Notice
”), completed and duly signed, and (ii) payment of the Exercise Price for the number
of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if
so indicated in the Exercise Notice and if a “cashless exercise” may occur at such time pursuant to
Section 10
below), and the date on which the last of such items is delivered to the Company (as determined in accordance with the notice provisions
hereof) is an “
Exercise Date
.” The delivery by (or on behalf of) the Holder of the Exercise Notice and the applicable
Exercise Price as provided above shall constitute the Holder’s certification to the Company that its representations contained
in Sections 3.2(c), (d), (e) and (f) of the Purchase Agreement are true and correct as of the Exercise Date as if remade in their
entirety (or, in the case of any transferee Holder that is not a party to the Purchase Agreement, such transferee Holder’s
certification to the Company that such representations are true and correct as to such assignee Holder as of the Exercise Date).
The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery
of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares (if any).
|
5.
|
Delivery of Warrant Shares
.
|
(a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than three (3) Trading Days after the Exercise Date)
issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the
Holder may designate (provided that, if the Registration Statement is not effective and the Holder directs the Company to deliver
a certificate for the Warrant Shares (or uncertificated Warrant Shares) in a name other than that of the Holder or an Affiliate
of the Holder, it shall deliver to the Company on the Exercise Date an opinion of counsel reasonably satisfactory to the Company
to the effect that the issuance of such Warrant Shares in such other name may be made pursuant to an available exemption from the
registration requirements of the Securities Act and all applicable state securities or blue sky laws), (i) a certificate for the
Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to
the Holder’s account at the Depository Trust Company (“
DTC
”) or a similar organization, unless in the
case of clause (i) and (ii) a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling
stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume and manner of sale
restrictions pursuant to Rule 144 under the Securities Act or the Holder is an affiliate of the Company within the meaning of such
term under Rule 144, in which case such Holder shall receive a certificate for the Warrant Shares (or uncertificated Warrant Shares)
issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder
to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date.
If the Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the Holder,
use its commercially reasonable efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through DTC
or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will
not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through
such a clearing corporation.
(b) If
by the close of the third (3
rd
) Trading Day or, on and after September 5, 2017, the second (2
nd
) Trading
Day, after delivery of an Exercise Notice and the payment of the aggregate exercise price in any manner permitted by
Section
10
of this Warrant, the Company fails to deliver to the Holder a certificate representing the required number of Warrant Shares
(or such number of uncertificated Warrant Shares) in the manner required pursuant to
Section 5(a)
, and if after such third
(3
rd
) Trading Day or second (2
nd
)
Trading Day, as the case may be. and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “
Buy-In
”), then the Company shall, within three (3) Trading Days
or two (2) Trading Days, as the case may be, after the Holder’s request and in the Holder’s sole discretion, either
(1) pay in cash to the Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased, at which point the Company’s obligation to deliver such Warrant Shares
shall terminate or (2) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such
Warrant Shares (or such Warrant Shares in uncertificated form) and pay cash to the Holder in an amount equal to the excess (if
any) of
Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased in
the Buy-In over the product of (A)
the
number of shares
of Common Stock purchased in the Buy-In
, times (B) the
closing bid price of a share of Common Stock on the Exercise Date.
(c) To
the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with and subject
to the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or
any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing the Warrant Shares (or uncertificated Warrant
Shares) as required pursuant to the terms hereof.
6.
Charges,
Taxes and Expenses
. Issuance and delivery of certificates for Warrant Shares (or uncertificated Warrant Shares) issuable upon
exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates (or uncertificated shares of Common Stock), all of which
taxes and expenses shall be paid by the Company;
provided, however
, that the Company shall not be required to pay any tax
that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares (or uncertificated
Warrant Shares) or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible
for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.
7.
Replacement
of Warrant
. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case,
a customary and reasonable indemnity and surety bond, if requested by the Company. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the
Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver
such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.
8.
Reservation
of Warrant Shares
. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise
of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise
of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking
into account the adjustments and restrictions of
Section 9
). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly
and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be reasonably necessary
to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.
9.
Certain
Adjustments
. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this
Section 9
.
(a)
Stock
Dividends and Splits
. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
its outstanding shares of Common Stock into a larger number of shares, (iii) combines its outstanding shares of Common Stock into
a smaller number of shares or (iv) issues by reclassification of shares of Common Stock any shares of capital of the Company, then
in each such case the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii), (iii) or (iv) of this paragraph shall become effective immediately after the effective date of such subdivision,
combination or reclassification.
(b)
Pro
Rata Distributions
. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock
for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by
the preceding paragraph) or (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each
case, “
Distributed Property
”), then, upon any exercise of this Warrant that occurs after the record date fixed
for determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive, in addition to
the Warrant Shares otherwise issuable upon such exercise (if applicable), the Distributed Property that such Holder would have
been entitled to receive in respect of such number of Warrant Shares had the Holder been the record holder of such Warrant Shares
immediately prior to such record date without regard to any limitation on exercise contained therein.
(c)
Fundamental
Transactions
. If, at any time while this Warrant is outstanding (i) the Company effects any merger or consolidation of the
Company with or into another Person, in which the Company is not the survivor or the stockholders of the Company immediately prior
to such merger or consolidation do not own, directly or indirectly, at least 50% of the voting securities of the surviving entity,
(ii) the Company effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a
third party, in each case in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted
to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification 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 (other than as a result of a subdivision or combination of shares of Common Stock covered
by
Section 9(a)
above) (in any such case, a “
Fundamental Transaction
”), then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, only the same amount and kind of securities, cash or property (net
of the Exercise Price per Warrant Share then in effect) as it would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant without regard to any limitations on exercise contained herein (the “
Alternate
Consideration
”). The Company shall not effect any such Fundamental Transaction unless any successor to the Company, surviving
entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or Person shall assume
the obligation to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Holder
may be entitled to receive, and the other obligations under this Warrant. The provisions of this paragraph (c) shall similarly
apply to subsequent transactions analogous of a Fundamental Transaction type.
(d)
Number
of Warrant Shares
. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this
Section 9
,
the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.
(e)
Calculations
.
All calculations under this
Section 9
shall be made to the nearest cent or the nearest share, as applicable.
(f)
Notice
of Adjustments
. Upon the occurrence of each adjustment pursuant to this
Section 9
, the Company at its expense will,
at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number
or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the
Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.
(g)
Notice
of Corporate Events
. If, while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution
of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company or any subsidiary, (ii) authorizes or approves, enters
into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then, except if such notice and the contents thereof shall
be deemed to constitute material non-public information, the Company shall deliver to the Holder a notice of such transaction
at least ten (10) Trading Days prior to the applicable record or effective date on which a Person would need to hold Common Stock
in order to participate in or vote with respect to such transaction;
provided, however
, that the failure to deliver such
notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.
To
the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company
or any of its subsidiaries, the Company shall simultaneously file such notice with the Commission (as defined in the Purchase
Agreement) pursuant to a Current Report on Form 8-K.
10.
Payment
of Exercise Price
. The Holder shall pay the Exercise Price in immediately available funds;
provided, however
, that if,
on any Exercise Date there is not an effective Registration Statement (as defined in that certain Registration Rights Agreement,
of even date herewith, by and among the Company and the several Purchasers signatory thereto) registering, or no current prospectus
available for, the resale of the Warrant Shares by the Holder, then the Holder may, in its sole discretion, satisfy its obligation
to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number
of Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
“X”
equals the number of Warrant Shares to be issued to the Holder;
“Y” equals
the total number of Warrant Shares with respect to which this Warrant is being exercised;
“A”
equals the average of the Closing Sale Prices of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the
five (5) consecutive Trading Days ending on the date immediately preceding the Exercise Date; and
“B” equals
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
For purposes of this Warrant, “
Closing
Sale Price
” means, for any security as of any date, the last trade price for such security on the Principal Trading Market
for such security, as reported by Bloomberg Financial Markets, or, if such Principal Trading Market begins to operate on an extended
hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M., New York
City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security
in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or,
if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid prices, or the ask
prices, respectively, of any market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (or
its successor entity). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then the Board of
Directors of the Company shall use its good faith judgment to determine the fair market value. The Board of Directors’ determination
shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
For purposes of Rule 144 promulgated under
the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a “cashless exercise”
transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed
to have commenced, on the date this Warrant was originally issued pursuant to the Purchase Agreement (provided that the Commission
continues to take the position that such treatment is proper at the time of such exercise).
11.
No
Fractional Shares
. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of
any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the
next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any
such fractional shares.
12.
Notices
.
Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall
be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 5:30 P.M., New York City time,
on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in the Purchase Agreement on a day that is not a Trading Day or later than 5:30 P.M., New York
City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight
courier service specifying next business day delivery, or (iv) upon actual receipt by the Person to whom such notice is required
to be given, if by hand delivery. The address and facsimile number of a Person for such notices or communications shall be as set
forth in the Purchase Agreement unless changed by such Person by two (2) Trading Days’ prior notice to the other Persons
in accordance with this
Section 12
.
13.
Warrant Agent
. The Company shall serve as warrant agent under this Warrant. Upon thirty
(30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or
any new warrant agent may be merged, any corporation resulting from any consolidation to which the Company or any new warrant
agent shall be a party, or any corporation to which the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business, shall be a successor warrant agent under this Warrant without any further
act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first
class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
(a) The
Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to
confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon
the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities
on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether
such liabilities are asserted by the Company or by creditors of the Company.
(b) 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.
(c) Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amend 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 (a) 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, (b) 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 (c) 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.
(d) 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.
15.
Successors
and Assigns
.
Subject to the restrictions on transfer set forth
in this Warrant and in Section 4.1 of the Purchase Agreement, and compliance with applicable securities laws, this Warrant may
be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of the Holder except to
a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit of the Company
and the Holder and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be
construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under
this Warrant.
16.
Amendment
and Waiver
. Except as otherwise provided herein, this Warrant may be amended only (i) in writing signed by the Company and
the Holder, or their respective successors and assigns, or (ii) if the Company has obtained the written consent of the Holders
of Warrants representing no less than a majority of the Warrant Shares obtainable upon exercise of the Warrants then outstanding,
and in either case the Company may thereafter take any action herein prohibited, or omit to perform any act herein required to
be performed by it, pursuant to the terms of any such amendment.
17.
Acceptance
.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.
18.
Governing
Law; Jurisdiction
.
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW). EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT
IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR
NOTICES TO IT UNDER THE PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS
AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.
19.
Headings
.
The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
20.
Severability
.
In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the Company and
the Holder will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its authorized officer as of the date first indicated above.
|
AEVI GENOMIC MEDICINE, INC.
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
SCHEDULE 1
FORM OF EXERCISE NOTICE
[To be executed by the Holder to purchase
shares of Common Stock under the Warrant]
Ladies and Gentlemen:
(1) The
undersigned is the Holder of Warrant No. __________ (the “
Warrant
”) issued by Aevi Genomic Medicine, Inc., a
Delaware corporation (the “
Company
”). Capitalized terms used herein and not otherwise defined herein have the
respective meanings set forth in the Warrant.
(2) The
undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to the Warrant.
(3) The
Holder intends that payment of the Exercise Price shall be made as (check one):
|
¨
|
“Cashless
Exercise” under
Section 10
of the Warrant
|
(4) If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $___________ in immediately available funds to the Company
in accordance with the terms of the Warrant.
(5) Pursuant
to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the
Warrant.
(Signature must conform in all respects
to name of Holder as specified on the face of the Warrant)
SCHEDULE 2
FORM OF ASSIGNMENT
[To be completed and executed by the Holder
only upon transfer of the Warrant]
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
(the “
Transferee
”) the right represented by the within Warrant to purchase
shares of Common Stock of Aevi Genomic Medicine, Inc. (the “
Company
”) to which the within Warrant relates and
appoints
as attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith,
the undersigned represents, warrants, covenants and agrees to and with the Company that:
|
(a)
|
the offer and sale of the Warrant contemplated hereby is
being made in compliance with Section 4(a)(1) of the United States Securities Act of 1933, as amended (the “
Securities
Act
”) or another valid exemption from the registration requirements of Section 5 of the Securities Act and in compliance
with all applicable securities laws of the states of the United States;
|
|
(b)
|
the undersigned has not offered to sell the Warrant by
any form of general solicitation or general advertising, including, but not limited to, any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or broadcast over television or radio, and any seminar
or meeting whose attendees have been invited by any general solicitation or general advertising;
|
|
(c)
|
the undersigned has read the Transferee’s investment
letter included herewith, and to its actual knowledge, the statements made therein are true and correct; and
|
|
(d)
|
the undersigned understands that the Company may condition
the transfer of the Warrant contemplated hereby upon the delivery to the Company by the undersigned or the Transferee, as the
case may be, of a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under
applicable securities laws of the states of the United States.
|
Dated:
|
|
|
|
|
|
(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
|
|
|
|
|
|
|
|
|
Address of Transferee
|
|
|
|
|
|
|
|
|
|
|
|
|
In the presence of:
|
|
Appendix D
Form of Certificate of Amendment
CERTIFICATE OF AMENDMENT
OF THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AEVI GENOMIC MEDICINE, INC.
P
ursuant
to Section 242 of the General Corporation Law of the State of Delaware, Aevi Genomic Medicine, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify:
1. The name of the
corporation is Aevi Genomic Medicine, Inc.
2. This Certificate
of Amendment amends the provisions of the corporation’s Amended and Restated Certificate of Incorporation, which was previously
filed with the Secretary of State of the State of Delaware on December 3, 2007, and amended by that certain Certificate of Amendment
to the Amended and Restated Certificate of Incorporation, which was previously filed with the Secretary of State of the State of
Delaware on June 4, 2009, and further amended by that certain Certificate of Amendment to the Amended and Restated Certificate
of Incorporation, which was previously filed with the Secretary of State of the State of Delaware on February 14, 2011, and further
amended by that certain Certificate of Amendment to the Amended and Restated Certificate of Incorporation, which was previously
filed with the Secretary of State of the State of Delaware on December 14, 2016 (collectively, the “Certificate of Incorporation”).
3. The Certificate
of Incorporation is hereby amended to effect a change to the authorized stock of the Corporation. Article IV of the Certificate
of Incorporation is hereby deleted in its entirety, and the following shall be substituted in lieu thereof:
ARTICLE IV
AUTHORIZED STOCK
The total number of shares of all classes
of stock which the corporation shall have the authority to issue is 200,000,000 all of which shall be shares of common stock, $0.0001
par value per share (“Common Stock”).
4. The amendment set
forth in this Certificate of Amendment was duly adopted by (i) the Board of Directors of the Corporation in accordance with Section
242(b)(1) of the General Corporation Law of the State of Delaware (the “DGCL”) and (ii) the stockholders of the Corporation
in accordance with Section 242(b)(2) of the DGCL.
5. This amendment shall
be effective as of 12:01 a.m. Eastern Time on _________, 2017.
IN WITNESS WHEREOF
,
Aevi Genomic Medicine, Inc. has caused this Certificate of Amendment to be executed by its duly authorized officer on this _____
day of _________, 2017.
|
Aevi Genomic Medicine, Inc.
|
|
|
|
By:
|
|
|
Name: Michael F. Cola
|
|
Title: President and Chief Executive Officer
|