0001176309
false
0001176309
2023-09-21
2023-09-21
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
September 21, 2023
ORAMED PHARMACEUTICALS INC.
(Exact name of registrant as specified in its
charter)
delaware |
|
001-35813 |
|
98-0376008 |
(State or Other Jurisdiction |
|
(Commission File Number) |
|
(IRS Employer |
of Incorporation) |
|
|
|
Identification No.) |
1185 Avenue of the Americas,
Third Floor, New York, New York |
|
10036 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
844-967-2633
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section
12(b) of the Act:
Title of each class |
|
Trading symbol |
|
Name of each exchange on which registered |
Common Stock, par value $0.012 |
|
ORMP |
|
The Nasdaq Capital Market,
Tel Aviv Stock Exchange |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement |
As previously disclosed, on
August 7, 2023, Oramed Pharmaceuticals Inc., a Delaware corporation (the “Company”), entered into a Stock Purchase Agreement
(as subsequently amended on August 9, 2023 and August 21, 2023, the “Sorrento SPA”) with Sorrento Therapeutics, Inc. (“Sorrento”),
pursuant to which, subject to the terms and conditions set forth in the Sorrento SPA, the Company agreed to acquire certain equity securities
of Scilex Holding Company (“Scilex”) owned by Sorrento (the “Purchased Securities”) for a purchase price of $105
million. Sorrento and its affiliated debtor, Scintilla Pharmaceuticals, Inc. (“Scintilla” and together with Sorrento, the
“Debtors”) are in Chapter 11 bankruptcy proceedings (the “Chapter 11 Cases”) pending before the United States
Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), which commenced on February 13, 2023.
As previously disclosed,
the Company and Sorrento entered into a Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement (the “Senior
DIP Loan Agreement”) on August 9, 2023, by and among the Debtors, the Company and the guarantors from time to time party thereto,
pursuant to which the Company provided to the Debtors a non-amortizing super-priority senior secured debtor-in-possession term loan financing
facility in an aggregate principal amount of $100 million (the “Senior DIP Loan Facility”), which amount was subsequently
drawn in full by the Debtors.
As previously disclosed, following
the conclusion of the auction that commenced on August 14, 2023 (the “Auction”), on August 17, 2023, Sorrento filed a Notice
of (I) Successful Bidder and Successful Bid, (II) Reset of Sale Hearing, and (III) Sale Objection Deadline announcing the Company as the
successful bidder in the Auction. On August 25, 2023, the Bankruptcy Court approved such transactions on the record at a hearing and in
an order entered on August 30, 2023. Thereafter, the Company and Sorrento continued discussions and negotiations relating to the sale
contemplated under the Sorrento SPA.
As previously disclosed,
on September 11, 2023, the Company, Sorrento and Scilex entered into non-binding term sheets (the “Term Sheets”) relating
to, among other things, the Note (as defined below).
On September 21, 2023,
the Company and Scilex entered into definitive documentation relating to the Note, and the Company, Sorrento and Scilex consummated
the transactions contemplated by the Term Sheets (collectively, the “Transaction”). In connection with the Transaction,
the Company and Sorrento mutually agreed to terminate the Sorrento SPA as further described below, and Scilex was declared the
winning bidder for the purchase of the Purchased Securities.
Securities Purchase Agreement
On September 21, 2023 (the
“Closing Date”), the Company entered into, and consummated the transactions contemplated by, a Securities Purchase Agreement
(the “Scilex SPA”) with Scilex and the Agent (as defined below). Pursuant to the Scilex SPA, in exchange for Scilex assuming
Sorrento’s outstanding obligations under the Senior DIP Loan Agreement (the “DIP Assumption”) and for the ability to
credit bid the amounts assumed under the DIP Assumption in exchange for 60,068,585 shares of common stock of Scilex, par value $0.0001
per share (“Scilex Common Stock”), 29,057,097 shares of Series A preferred stock of Sorrento, and warrants exercisable for
4,490,617 shares of Scilex Common Stock owned by Sorrento, Scilex (i) issued to the Company (A) a Senior Secured Promissory Note due 18
months from the date of issuance in the principal amount of $101,875,000 (the “Note”), (B) a warrant to purchase up to an
aggregate of 4,500,000 shares of Scilex Common Stock, with an exercise price of $0.01 per share and containing certain restrictions on
exercisability (the “Closing Penny Warrant”), and (C) warrants to purchase up to an aggregate of 8,500,00 shares of Scilex
Common Stock (the “Subsequent Penny Warrants” and together with the Closing Penny Warrant, the “Penny Warrants”),
each with an exercise price of $0.01 per share and each with certain restrictions on exercisability, and (ii) caused certain outstanding
warrants to purchase up to an aggregate of 4,000,000 shares of Scilex Common Stock with an exercise price of $11.50 per share to be transferred
to the Company (the “Transferred Warrants” and together with the Penny Warrants, the “Warrants”).
Pursuant to the terms of the
Scilex SPA, Scilex agreed that, until such time as the Company no longer holds any of the Warrants, Scilex will not effect or enter into
an agreement to effect any issuance of shares of Scilex Common Stock or Scilex Common Stock equivalents involving an at-the-market offering
or variable rate transaction; provided that the foregoing restriction will not apply to Scilex’s ATM Program (if implemented) or
ELOCS (each as defined in the Note).
Pursuant to the terms
and conditions of the Scilex SPA, Scilex agreed to reimburse the Company for up to $2,910,000 of legal and other advisor costs,
fees, and expenses incurred by the Company in connection with the Sorrento SPA, the Senior DIP Loan Facility, the Scilex SPA, and
certain other transaction documents, $1,910,000 of which was paid to the Company’s designated recipients in cash on the
Closing Date, and $1,000,000 of which was included in the principal amount of the Note.
Senior Secured Promissory Note
The Note issued to the Company
pursuant to the Scilex SPA matures on March 21, 2025 or upon an uncured event of default, subject to certain mandatory prepayments, and
bears interest at a rate per annum equal to Term SOFR (as defined in the Note) plus 8.5% (subject to a Term SOFR floor of 4.0%), to be
paid in-kind, by being capitalized and added to the principal amount of the Note on a monthly basis. The Scilex SPA provides for principal
payments of (i) $5 million on December 21, 2023, (ii) $15 million on March 21, 2024, and (iii) $20 million on each of June 21, 2024, September
21, 2024, and December 21, 2024, and for the entire remaining principal balance of the Note payable on March 21, 2025. If the Note is
not repaid in full on or prior to March 21, 2024, an exit fee equal to $3,056,250 shall be payable upon repayment of the Note in full.
The Note constitutes senior
secured indebtedness of Scilex and is guaranteed by all existing or future formed, direct and indirect, domestic subsidiaries of Scilex
(the “Guarantors” and, together with Scilex, the “Note Parties”) pursuant to a subsidiary guarantee (the “Subsidiary
Guarantee”) with Acquiom Agency Services LLC, as the collateral agent for the holders of the Note (the “Agent”). On
September 21, 2023, the Company, Scilex, the Guarantors and the Agent also entered into a security agreement (the “Security Agreement”)
pursuant to which the Note is secured by a first priority security interest in and liens on all of the assets of the Note Parties (the
“Collateral”), subject to customary and mutually agreed permitted liens and except for (a) proceeds of the ELOCs or Sales
Agreement (as defined below) securing any Acceptable Indebtedness (as defined below), and (b) certain assets of Scilex that secure the
accounts receivable credit facility of Scilex Pharmaceuticals Inc. with eCapital Heathcare Corp. (“eCapital”) (the “AR
Line”) (which assets in clauses (a) and (b) shall secure the obligations under the Note on a second priority security interest basis).
The Collateral in which the Company has a first priority security interest includes all material intellectual property of the Note Parties
as well as all equity in the Guarantors along with proxy rights related thereto. The Note is senior in right of payment to all of Scilex’s
and its subsidiaries’ existing and future indebtedness, except (A) Acceptable Indebtedness (as defined below), not to exceed $30
million in the aggregate and (B) payment of the AR Line (which may not exceed $30 million in aggregate principal amount outstanding at
any time).
Mandatory prepayments
under the Note are required following the earlier of (a) April 1, 2024 and (b) the date upon which all of (i) Scilex’s
outstanding convertible debentures issued to YA II PN, Ltd. and any other indebtedness incurred by Scilex owing to Yorkville, (ii)
any indebtedness owed by Scilex to B. Riley Securities and (iii) any indebtedness incurred by Scilex owing to a third-party
financing provider reasonably acceptable to the Company (clauses (i)-(iii) collectively, the “Acceptable Indebtedness”),
are repaid in full, which mandatory prepayments will consist of: (A) 70% of the net cash proceeds to which Scilex is entitled to
from advances made under the ELOCs, and (B) 70% of the net cash proceeds received by Scilex from any debt or equity financing other
than (I) the AR Line, (II) the ELOCs, (III) subordinated debt in an aggregate principal amount not to exceed $30 million at any
time, and (IV) the Acceptable Indebtedness (the “Mandatory Prepayment Sweep”). Voluntary prepayments may be made at
Scilex’s discretion; provided that, if made prior to the one-year anniversary of the Closing Date, Scilex will also be
required to pay a customary 50% interest make-whole on the portion of the Note so prepaid.
The Note contains customary
representations and warranties and customary covenants, including restrictions on Scilex’s and its subsidiaries’ ability to
incur or guarantee other indebtedness and that Scilex will maintain minimum liquidity in the amount of at least $1 million for the first
60 days following the Closing Date, $3 million from the 61st day following the Closing Date until the 180th day thereafter, and $5 million
at all times thereafter, among others.
The Note includes customary
events of default, including, without limitation a cross-default to other specified indebtedness or any other indebtedness involving an
obligation of greater than $1 million, as well as an event of default upon a Change of Control Transaction or Fundamental Transaction
(in each case, as defined in the Note), upon which the Note will bear interest at a default rate of Term SOFR plus 15.0%, which shall
be payable in-kind, by being capitalized and added to the principal amount of the Note on a monthly basis. The Note also contains additional
events of default with respect to certain events relating to Scilex’s obligations under the Registration Rights Agreement (as defined
below) and relating to the Warrants and/or the shares underlying the Warrants, in each case as more fully set forth in the Note. If the
Note is accelerated upon an event of default, Scilex is required to repay the principal amount of the Note at a mandatory default rate
of 125% of such principal amount (together with 100% of accrued and unpaid interest thereon and all other amounts due in respect of the
Note).
Until the obligations
under the Note are repaid in full, the Company will have the right to designate one non-voting observer (the “Board
Observer”) to attend meetings of the board of directors and committees of Scilex and its subsidiaries. The Board Observer will
be subject to confidentiality obligations and will have customary information rights. Scilex (i) will reimburse the Board Observer
up to $10,000 per year for reasonable and documented out-of-pocket expenses incurred by the Board Observer and (ii) will pay the
Board Observer a fee equivalent to the fees paid to independent directors of Scilex, provided that such fees will be capped at
$80,000 per year (provided that such amounts are subject to increase upon terms and conditions more fully set forth in the
Note).
Warrants
The Closing Penny Warrant
will be exercisable upon the earliest of (i) March 14, 2025, (ii) the date on which the Note has been repaid in full and (iii) the Management
Sale Trigger Date (as defined therein), if any, and will expire on the date that is the fifth anniversary of the issuance date. For purposes
of the Penny Warrants, the Management Sale Trigger Date is generally the first date that either Dr. Henry Ji, Scilex’s Executive
Chairperson, or Mr. Jaisim Shah, Scilex’s Chief Executive Officer and President and a member of Scilex’s Board of Directors,
engages in certain sales or other similar transfers of shares of Scilex Common Stock or other of Scilex’s or any of its subsidiaries’
securities, subject to certain exceptions as are customary for lock-up agreements executed by directors and officers in connection with
financings or similar transactions.
Scilex issued four Subsequent
Penny Warrants, each for 2,125,000 shares of Scilex Common Stock, which shall vest and become exercisable on the date that is the later
of (i) March 19, 2024, June 17, 2024, September 15, 2024 or December 14, 2024, respectively (the “Subsequent Penny Warrant Vesting
Date”), and (ii) the earliest of (A) March 14, 2025, (B) the date on which the Note has been repaid in full and (C) the Management
Sale Trigger Date (as defined therein), if any. Each Subsequent Penny Warrant will expire on the date that is the fifth anniversary of
the issuance date; provided that, if the Note is repaid in full prior to the Subsequent Penny Warrant Vesting Date applicable to such
Subsequent Penny Warrant, such Subsequent Penny Warrant will expire on the date the Note is repaid in full.
The exercise price and number
of shares of Scilex Common Stock issuable upon the exercise of the Penny Warrants will be subject to adjustment in the event of any stock
dividend, stock split, recapitalization, reorganization or similar transaction, as described in the Penny Warrants; provided that there
shall not be any adjustment to the exercise price of the Penny Warrants in the event Scilex combines (by combination, reverse stock split
or otherwise) the Scilex Common Stock into a smaller number of shares. The Company may exercise the Penny Warrants by means of a “cashless
exercise”.
The Penny Warrants may not
be exercised if the Company, together with its affiliates, would beneficially own in excess of 9.9% of the number of shares of Scilex
Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided,
however, that upon 61 days’ prior notice to Scilex, the Company may increase or decrease the Beneficial Ownership Limitation.
The Transferred Warrants are
listed on Nasdaq, have an exercise price of $11.50 per share, are fully exercisable, and expire on November 10, 2027. The exercise price
and number of shares of Scilex Common Stock issuable upon the exercise of the Transferred Warrants will be subject to adjustment in the
event of any stock dividend, stock split, recapitalization, reorganization or similar transaction, and are subject to certain redemption
rights by Scilex, as described in the Transferred Warrants.
Registration Rights Agreement
In connection with the Scilex
SPA, on September 21, 2023, the Company entered into a registration rights agreement with Scilex (the “Registration Rights Agreement”),
pursuant to which Scilex granted the Company certain registration rights applicable to the resale of the shares underlying the Warrants.
Pursuant to the Registration Rights Agreement, Scilex must file (i) no more than 15 days following the Closing Date, a prospectus supplement
to its registration statement on Form S-1 previously filed with the Securities and Exchange Commission (the “SEC”) to reflect
the transfer of the Transferred Warrants to the Company and to add the Company as a “Selling Stockholder” thereunder, and
(ii) no more than 30 days following the Closing Date, a registration statement (the “Initial Registration Statement”) covering
the resale of the shares of Scilex Common Stock underlying the Penny Warrants. The Initial Registration Statement must be declared effective
as promptly as possible after the filing thereof, but in any event no later than the date that is 60 days following the Closing Date,
or, if Scilex is notified that the SEC will review the Initial Registration Statement, 90 days following the Closing Date.
The Registration Rights Agreement
provides that, in the event that a registration statement has not been filed or declared effective in accordance with the terms of the
Registration Rights Agreement, Scilex will pay to the Company liquidated damages for every 30-day period following the date that is 30
days from the Closing Date until such date that the registration statement is filed or declared effective. Such liquidated damages will
be equal to the product of 2.0% multiplied by the sum of (x) the aggregate principal amount outstanding under the Note and (y) the aggregate
Exercise Price (as defined in the Closing Warrant) of the Closing Warrants issued to such holder for which the underlying shares issuable
pursuant to such Closing Warrants are included in such Registration Statement. The Company and Scilex agreed to cap the liquidated damages
under the Registration Rights Agreement at 12.0% of the aggregate subscription amount paid by the Company under the Scilex SPA.
The foregoing descriptions
of the Scilex SPA, the Note, the Warrants, the Registration Rights Agreement, the Subsidiary Guarantee, and the Security Agreement are
qualified in their entirety by reference to the full text of such documents. A copy of the Scilex SPA, the Note, the Warrants, the Registration
Rights Agreement, the Subsidiary Guarantee, and the Security Agreement are attached to this Current Report on Form 8-K as Exhibits 10.1,
10.2. 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10 and 10.11 and are incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement |
On September 21, 2023, the
Company and Sorrento entered into a Termination Agreement (the “Termination Agreement”), whereby they mutually agreed to terminate
the Sorrento SPA. The Company and Sorrento mutually released any and all claims they may have against one another with regards
to the Sorrento SPA, and no termination penalties were incurred by either the Company or Sorrento in connection with the termination
of the Sorrento SPA.
The foregoing descriptions
of the Termination Agreement is qualified in its entirety by reference to the full text of such document. A copy of the Termination Agreement
is attached to this Current Report on Form 8-K as Exhibit 10.12 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure |
On
September 21, 2023, the Company issued a press release announcing the closing of the Transaction. A copy of the press release is attached
hereto as Exhibit 99.1 and incorporated into this Item 7.01 by reference. The information in this
Item 7.01 of the Current Report (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of
the Exchange Act or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial
Statements and Exhibits. |
10.1* |
Securities Purchase Agreement, dated September 21, 2023 by and between Scilex Holding Company and Oramed Pharmaceuticals Inc. |
10.2 |
Senior Secured Promissory Note, dated September 21, 2023 issued to Oramed Pharmaceuticals Inc. by Scilex Holding Company |
10.3 |
Warrant No. ORMP CS-1 to Purchase Common Stock of Scilex Holding Company |
10.4 |
Warrant No. ORMP CS-2 to Purchase Common Stock of Scilex Holding Company |
10.5 |
Warrant No. ORMP CS-3 to Purchase Common Stock of Scilex Holding Company |
10.6 |
Warrant No. ORMP CS-4 to Purchase Common Stock of Scilex Holding Company |
10.7 |
Warrant No. ORMP CS-5 to Purchase Common Stock of Scilex Holding Company |
10.8 |
Scilex Holding Company Specimen Warrant Certificate |
10.9 |
Registration Rights Agreement, dated September 21, 2023, by and between Oramed Pharmaceuticals Inc. and Scilex Holding Company. |
10.10* |
Subsidiary Guarantee, dated September 21, 2023, by and among Oramed Pharmaceuticals, Acquiom Agency Services LLC, Scilex Holding Company, and certain subsidiaries of Scilex Holding Company party thereto |
10.11 |
Security Agreement, dated September 21, 2023, by and among Oramed Pharmaceuticals, Acquiom Agency Services LLC, Scilex Holding Company, and certain subsidiaries of Scilex Holding Company party thereto |
10.12 |
Mutual Termination and Release Agreement, dated September 21, 2023, by and between Sorrento Therapeutics, Inc. and Oramed Pharmaceuticals, Inc. |
99.1 |
Press Release, dated September 21, 2023 |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Certain exhibits and similar
attachments to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit or
other attachment will be furnished supplementally to the SEC upon request.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
ORAMED PHARMACEUTICALS INC. |
By: |
/s/ Nadav Kidron |
|
Name: |
Nadav Kidron |
|
Title: |
President and CEO |
|
September 26, 2023
5
Exhibit 10.1
EXECUTION VERSION
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of September 21, 2023, between Scilex Holding Company, a Delaware corporation (the
“Company”), Oramed Pharmaceuticals, Inc., a Delaware corporation as the initial purchaser (the “Initial Purchaser”),
and the Agent.
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below), and Rule 506 promulgated
thereunder, the Company desires to issue and sell to the Initial Purchaser, and the Initial Purchaser, desires to purchase from the Company,
a promissory note and certain Warrants of the Company as more fully described in this Agreement; and
WHEREAS, contemporaneous with
the execution of this Agreement, (i) the Initial Purchaser, Sorrento, Scintilla Pharmaceuticals, Inc. and the Company entered into that
certain Assignment, Assumption and Release Agreement (the “DIP Assignment Agreement”), dated as of September 21, 2023,
pursuant to which, among other things, the Company assumed the indebtedness obligations of the debtors relating to the Senior DIP Facility,
and (ii) the Initial Purchaser and Sorrento entered into that certain Mutual Termination and Release Agreement (the “Oramed SPA
Termination”), dated as of September 21, 2023, pursuant to which, among other things, the parties thereto terminated all rights
and obligations relating to the Oramed SPA.
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 the Initial Purchaser agree as follows:
Article I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Note (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:
“Account
Control Agreement(s)” shall have the meaning ascribed to such term in the Note.
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Agent”
means Acquiom Agency Services LLC, a Colorado limited liability company, as collateral agent for the Note Holders.
“Agent
Fee Letter” means the Agent Fee Letter, dated as of September 21, 2023, between the Agent and the Company.
“Agent
Indemnitees” shall have the meaning ascribed to such term in Section 5.23.
“AR Facility”
shall have the meaning ascribed to such term in the Note.
“Bankruptcy
Case” means the Seller’s voluntary proceedings under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, which
are being jointly administered under the caption In re Sorrento Therapeutics, Inc., et al, Case No. 23-90085 (Bankr. S.D. Tex.).
“Bankruptcy
Court” means the United States Bankruptcy Court for the Southern District of Texas or such other court having competent jurisdiction
over the Bankruptcy Case.
“Board
of Directors” means the board of directors of the Company.
“BRE”
shall have the meaning ascribed to such term in the Note.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by Law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by Law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent set forth in Section 2.3, in each case, have been satisfied or waived, but in no event prior
to 9:30 a.m. on September 21, 2023.
“Closing
Warrant” means the warrant to purchase Common Stock delivered to the Initial Purchaser at the Closing in accordance with Section 2.2(a)(iv)(A),
which warrant shall have an exercise price of $0.01 per Warrant Share, and be exercisable for 4,500,000 Warrant Shares, in the form of
Exhibit C attached hereto.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company
Counsel” means Paul Hastings LLP with offices located at 200 Park Ave, New York, New York, 10166.
“DIP Assignment
Agreement” shall have the meaning ascribed to such term in the Recitals.
“DIP Assumption”
means the Senior DIP Assumption (as defined in the DIP Assignment Agreement) and the other transactions contemplated by the DIP Assignment
Agreement.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the
date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any
Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof.
“Effective
Date” means the earliest of the date that (a) a Registration Statement covering the resale of all of the Registrable Securities
(as defined in the Registration Rights Agreement) has been declared effective by the Commission, or (b) all of the Warrant Shares
have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, and Company Counsel
has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Warrant Shares
pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock, or options or other equity awards to employees, officers, or
directors or consultants of the Company pursuant to any stock, equity or option plan or agreement duly adopted for such purpose, by a
majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose for services rendered to the Company, and provided, that the aggregate number of shares of Common Stock subject to such
stock, equity or option plans or agreements do not exceed 5% of the Company’s issued and outstanding shares of Common Stock on the
date of the Purchase Agreement, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder
and any securities upon exercise of securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration
statement in connection therewith, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person)
that is not an officer or director of the Company or any of their Affiliates, and which such Person is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) shares of
Common Stock issued and sold pursuant to the ATM Program (as defined in the Note) or the ELOCs (as defined in the Note).
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“Fees and
Expenses Reimbursement” shall have the meaning ascribed to such term in Section 5.2.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“HB Settlement
Agreement” shall have the meaning ascribed to such term in Section 4.10.
“Hudson
Bay” means Hudson Bay Capital Management LP, HBC Investments LLC, Cove Lane Onshore Fund LLC, and any of their respective Affiliates.
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(bb).
“Initial
Purchaser Party” shall have the meaning ascribed to such term in Section 4.10.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Law”
means applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, other applicable laws, statutes, ordinances,
rules, regulations, judgments, injunctions, orders and decrees of general application.
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Management
Sale Letters” means, collectively, (i) that certain Management Sale Letter Agreement, dated as of the September 21, 2023, by
and among, the Company, Oramed and Henry Ji, and (ii) that certain Management Sale Letter Agreement, dated as of the September 21, 2023,
by and among, the Company, Oramed and Jaisim Shah.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.
“Note”
means the Senior Secured Promissory Note due, subject to the terms herein and therein, 18 months from the date of issuance, issued by
the Company to the Initial Purchaser hereunder, in the form of Exhibit A attached hereto.
“Note Holder”
shall have the meaning ascribed to such term in the Note.
“Oramed
SPA” means that certain Stock Purchase Agreement, dated as of August 7, 2023, by and between the Initial Purchaser and Sorrento,
as amended.
“Oramed
SPA Termination” shall have the meaning ascribed to such term in the Recitals.
“Perfection
Certificate” means a perfection certificate to be executed and delivered by the Company in a form acceptable to the Initial
Purchaser.
“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.
“Pledged
Securities” means any and all certificates and other instruments representing or evidencing all of the capital stock and other
equity interests of the Subsidiaries.
“Principal
Amount” means the amount to be paid by the Initial Purchaser for the Note and Warrants purchased hereunder set forth below the
Initial Purchaser’s signature block on the signature pages hereto next to the heading “Principal Amount,” in United
States Dollars, which shall equal $101,875,000.00. For the avoidance of doubt, the Principal Amount set forth in the foregoing sentence
is inclusive of (and not in addition to) the amount of the Initial Rolled Expense Amount.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).
“Registration
Rights Agreement” means a Registration Rights Agreement, to be entered into, among the Company and the Initial Purchaser, in
the form attached hereto as Exhibit B.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale of the Warrant Shares by the Initial Purchaser as provided for in the Registration Rights Agreement.
“Related
Parties” means, with respect to any Person, such Person’s affiliates and the partners, officers, directors, trustees,
employees, shareholders, members, attorneys and other advisors, agents and controlling persons of such Person and of such Person’s
affiliates and “Related Party” shall mean any of them.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Required
Holders” shall have the meaning ascribed to such term in the Note.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such
Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such
Rule.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Notes, the Warrants and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Security
Agreement” means a Security Agreement, to be entered into, among the Company, the Company’s Subsidiaries and the Agent,
acceptable to the Initial Purchaser in form and substance in its sole discretion.
“Security
Documents” shall mean, collectively, the Security Agreement, the Perfection Certificate, the Subsidiary Guarantee, any original
certificated Pledged Securities, along with executed blank stock powers to the Pledged Securities to the extent such Pledged Securities
are certificated, the Account Control Agreements, and any other documents and filing required thereunder in order to grant the Note Holders
a first priority security interest in the assets of the Company and the Subsidiaries as provided in the Security Agreement, including
all UCC-1 filing receipts.
“Senior
DIP Facility” means that certain Senior Secured, Superpriority Debtor-In-Possession Loan and Security Agreement, dated as of
August 8, 2023, by and among Sorrento, Scintilla Pharmaceuticals, Inc. and the Initial Purchaser, as amended. As of the Closing Date,
the aggregate outstanding amount of the Senior DIP Facility is $101,875,000, comprised of $100,000,000 principal, $875,000 accrued and
unpaid interest and $1,000,000 fees and expenses payable under the Senior DIP Facility (the “DIP Facility Obligations”).
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not
be deemed to include locating and/or borrowing shares of Common Stock).
“Sorrento”
means Sorrento Therapeutics, Inc., a Delaware corporation, which is a debtor-in-possession.
“Sorrento
Repurchase” shall mean the transactions contemplated by the Sorrento Stock Purchase Agreement.
“Sorrento
Stock Purchase Agreement” shall have the meaning ascribed to such term in Section 2.2(a)(xi).
“Specified
Licensors” means Oishi Koseido Co., LTD and Itochu Chemical Frontier Corporation.
“Subordination
Agreement” means a Subordination Agreement, to be entered into, between the Agent, Scilex Pharmaceuticals, Inc. and eCapital
Healthcare Corp., as lender under the AR Facility, acceptable to the Initial Purchaser in form and substance in its sole discretion.
“Subsequent
Warrants” means the warrants to purchase Common Stock delivered to the Initial Purchaser at the Closing in accordance with Section 2.2(a)(iv)(C),
which warrants shall have an exercise price of $0.01 per Warrant Share, and be exercisable for an aggregate number of 8,500,000 Warrant
Shares, in the form of Exhibit D attached hereto.
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Subsidiary
Guarantee” means the Subsidiary Guarantee, to be entered into, by the Subsidiaries of Company party thereto from time to time
in favor of the Note Holders, acceptable to the Initial Purchaser in form and substance in its sole discretion.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Note, the Warrants, the Registration Rights Agreement, the Security Agreement, the other
Security Documents, the Subsidiary Guarantee, the Management Sale Letters, the DIP Assignment Letter, the Oramed SPA Termination, all
exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated
hereunder.
“Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with an address of 1
State Street, 30th Floor, New York, New York 10004 and any successor transfer agent of the Company.
“Transferred
Warrants” means the outstanding warrants to purchase Common Stock owned by Sorrento and transferred and delivered to the Initial
Purchaser at the Closing in accordance with Section 2.2(a)(iv)(B) hereof, which warrants have an exercise price of $11.50
per Warrant Share, and are collectively exercisable for 4,000,000 Warrant Shares, in the form of Exhibit E attached hereto.
“Variable
Rate Transaction” has the meaning set forth in Section 4.13(b).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB Venture Market (“OTCQB”) or OTCQX Best Market
(“OTCQX”) is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if
prices for the Common Stock are then reported on the Pink Open Market (“Pink Market”) operated by OTC Markers, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Initial Purchaser of a majority in interest of the Warrant Shares subject to Warrants then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Warrants”
means, collectively, the Closing Warrant, the Subsequent Warrants, and the Transferred Warrants.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
Article II.
PURCHASE, SALE AND ISSUANCE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, in exchange for (i) the Initial Purchaser’s approval of and consent to the DIP Assumption,
and (ii) the agreement of the Initial Purchaser to the Oramed SPA Termination, the Company agrees to issue to the Initial Purchaser, and
the Initial Purchaser agrees to purchase, the Note in a principal amount equal to $101,875,000.00 and the Warrants. At the Closing, the
Company shall deliver to the Initial Purchaser the Note and deliver to the Initial Purchaser (or its designees identified in writing prior
to the Closing), the Warrants pursuant to Section 2.2(a), and the Company and the Initial Purchaser shall deliver the other
items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in
Sections 2.2 and 2.3, the Closing shall take place remotely by electronic transfer of the Closing documentation. This
Agreement and the Note, following the consummation of the DIP Assumption, amend and restate and replace in its entirety the Senior DIP
Facility, and the obligations set forth herein and in the other Transaction Documents amend and restate and replace in their entirety
the DIP Facility Obligations, and any additional documentation governing the Senior DIP Facility shall be deemed to be cancelled, terminated,
and extinguished, and replaced in their entirety with the Transaction Documents.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Initial Purchaser the following:
(i) this
Agreement, duly executed by the Company;
(ii) a
customary legal opinion of Company Counsel, dated as of the Closing Date, in the form reasonably acceptable to the Initial Purchaser;
(iii) the
Note, duly executed by the Company;
(iv) each
of (A) the Closing Warrant, (B) the Transferred Warrants, and (C) four (4) Subsequent Warrants, each for 2,125,000 Warrant Shares and
with one of each such Subsequent Warrant having a vesting date of 180 days following the Closing Date, 270 days following the Closing
Date, 360 days following the Closing Date, or 450 days following the Closing Date, as applicable, in each case, duly executed by the Company
and registered in the name of the Initial Purchaser (or its designees identified in writing prior to the Closing);
(v) the
Security Agreement along with all of the Security Documents, including the Subsidiary Guarantee and the Account Control Agreements and
2nd Lien Account Control Agreements (as defined in the Note) (to the extent such Account Control Agreements and 2nd Lien Account
Control Agreements are required to be delivered pursuant to the terms of the Note or the Security Documents, in each case, subject to
the time period(s) set forth therein), duly executed by the Company and the Subsidiaries thereto, the Pledged Securities (to the extent
such Pledged Securities are certificated) and corresponding stock powers;
(vi) the
Registration Rights Agreement, duly executed by the Company;
(vii) the
Company and each Subsidiary shall have delivered a certificate, executed on behalf of the Company or such Subsidiary, as applicable, by
its Secretary (or other comparable officer), dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors
(or similar governing body) of the Company or such Subsidiary, as applicable, approving the transactions contemplated by this Agreement
and the other Transaction Documents, certifying the current versions of the Company’s or such Subsidiary’s, as applicable,
certificate or articles of incorporation and bylaws and certifying as to the signatures and authority of Persons signing the Transaction
Documents and related documents on behalf of the Company or such Subsidiary, as applicable;
(viii) the
Company shall have delivered a certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Accounting Officer,
dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Section 2.3;
(ix) the
Company and each of Henry Ji and Jaisim Shah, as applicable, shall have duly executed and delivered to the Initial Purchaser each Management
Sale Letter;
(x) [reserved];
(xi) duly
executed Stock Purchase Agreement by and between the Company and Sorrento with respect to the Sorrento Repurchase (the “Sorrento
Stock Purchase Agreement”), the form of which is attached hereto as Exhibit F, which the Initial Purchaser hereby
acknowledges and agrees is in the form that is acceptable to the Initial Purchaser;
(xii) the
Subordination Agreement duly executed by Scilex Pharmaceuticals, Inc., the Agent and eCapital Healthcare Corp.;
(xiii) [reserved];
(xiv) [reserved];
(xv) the
payment of the portion of the Fees and Expenses Reimbursement to be delivered at the Closing (for the avoidance of doubt, the Initial
Rolled Expense Amount shall be added to the Note Principal at Closing);
(xvi) the
DIP Assignment Agreement, duly executed by the Company and Sorrento; and
(xvii) to
the extent entered into at or prior to the Closing, all documentation in respect of the B. Riley Indebtedness or the Yorkville Indebtedness
(each as defined in the Note).
(b) On
or prior to the Closing Date, the Initial Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following:
(i) this
Agreement duly executed by the Initial Purchaser;
(ii) the
Security Agreement duly executed by the Initial Purchaser and the Agent;
(iii) the
Registration Rights Agreement duly executed by the Initial Purchaser;
(iv) the
Subordination Agreement duly executed by the Agent;
(v) the
DIP Assignment Agreement, duly executed by the Initial Purchaser; and
(vi) a
duly completed and validly executed IRS Form W-9 indicating the Initial Purchaser is a “U.S. person” for U.S. federal income
tax purposes.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) on the
Closing Date of the representations and warranties of the Initial Purchaser contained herein (unless as of a specific date therein in
which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality,
in all respects) as of such date);
(ii) all
obligations, covenants and agreements of the Initial Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by the Initial Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
obligations of the Initial Purchaser hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date
therein in which case they shall be accurate in all material respects or, to the extent representations or warranties are qualified by
materiality or Material Adverse Effects, in all respects) as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company;
(v) no
Default (as defined in the Note) or Event of Default (as defined in the Note) shall have occurred and be continuing;
(vi) all
of the conditions precedent to the consummation of the Sorrento Stock Purchase Agreement shall have been satisfied (subject only to funding
of any portion of the purchase price for the Sorrento Repurchase to be funded in cash at the closing of the transactions contemplated
thereby) and substantially concurrently with the Closing, the Sorrento Repurchase shall have been consummated;
(vii) the
Company shall have delivered to the Initial Purchaser evidence reasonably satisfactory to the Initial Purchaser that all Liens (revealed
by the Lien, tax and judgment searches conducted on the Company and its Subsidiaries in connection with transactions contemplated hereby)
are Permitted Liens (as defined in the Note) or have been, or substantially contemporaneously with the Closing, will be, released;
(viii) [reserved];
(ix) there
shall exist no action, suit, investigation, litigation or proceeding affecting the Company or any of the Subsidiaries pending or, threatened
before any governmental authority that purports to affect the legality, validity or enforceability of any Transaction Document or the
consummation of the transactions contemplated by this Agreement;
(x) the
Initial Purchaser shall have received reasonably satisfactory evidence that the Company has obtained all governmental authorizations,
including bankruptcy court approvals, and third party consents and approvals necessary in connection with the transactions contemplated
by this Agreement and the Sorrento Stock Purchase Agreement;
(xi) all
financing statements, Account Control Agreements, 2nd Lien Account Control Agreements (to the extent such Account Control Agreements and/or
2nd Lien Account Control Agreements are required to be delivered pursuant to the terms of the Note or the Security Documents, in each
case, subject to the time period(s) set forth therein) and other Security Documents necessary to perfect the Agent’s first priority
security interest, for the benefit of the Note Holders, in substantially all of the assets of the Company and its Subsidiaries shall have
been duly executed, filed or recorded, as applicable;
(xii) [reserved]
(xiii) [reserved]
(xiv) the
Blocked Account (as defined in the Note) shall have been established;
(xv) the
Warrant Shares shall be approved for listing on the Principal Market (as defined in the Note);
(xvi) from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Initial
Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing; and
(xvii) the
Initial Purchaser shall have received from Sorrento the Oramed SPA Termination, in form and substance reasonably satisfactory to Initial
Purchaser and duly executed by Sorrento.
Article III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth (i) in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or otherwise made herein, to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules, or (ii) in the SEC Reports (as defined below) that are available on the SEC’s website
through the EDGAR system prior to the date of this Agreement, the Company hereby makes the following representations and warranties to
the Initial Purchaser, as of the date hereof (other than representations and warranties which address matters only as of a certain date,
which shall be true and correct as written as of such certain date):
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens (other than Permitted Liens
and restrictions contained in the organizational documents of the Company or its Subsidiaries and restrictions arising from applicable
securities Laws), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries,
all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its organization, with the requisite power and authority to own and use its properties and assets and
to carry on its business as currently conducted. Each of the Company and the Subsidiaries is duly qualified to conduct their respective
business and is in good standing (to the extent applicable) as a foreign corporation or other entity in each jurisdiction in which the
nature of their respective business conducted or property owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in:
(i) a
material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations
under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”).
(c) Authorization;
Enforcement.
(i) The
Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement
and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except (A) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting
enforcement of creditors’ rights generally, (B) as limited by Laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (C) insofar as indemnification and contribution provisions may be limited by applicable Law.
(ii) Each
Subsidiary party to the Subsidiary Guarantee has the requisite power and authority to enter into and to consummate the transactions contemplated
by such Subsidiary Guarantee and otherwise to carry out its obligations thereunder. The execution and delivery of the Subsidiary Guarantee
and the consummation by the applicable Subsidiary of the transactions contemplated thereby have been duly authorized by all necessary
corporate or other action on the part of the applicable Subsidiary, and no further corporate or other action is required by the respective
Subsidiary, its managers or its members in connection therewith. The Subsidiary Guarantee has been (or upon delivery will have been) duly
executed by the respective Subsidiaries and, when delivered in accordance with the terms thereof, will constitute the valid and binding
obligation of the respective Subsidiary enforceable against such Subsidiary in accordance with its terms, except (A) as listed by
general equitable principals and applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting
enforcement of creditors’ rights generally, (B) as limited by Laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (C) insofar as indemnification and contribution provisions may be limited by applicable Law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it
is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do
not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien (other than Permitted Liens) upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument evidencing
Company or Subsidiary Indebtedness, other than in relation to any agreement, credit facility, debt or other instrument that is expected
to be repaid or redeemed in full on or before the Closing Date (iii) subject to the Required Approvals, conflict with or result in
a violation of any Law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected, or (iv) conflict with, violate any provision of, or constitute a default
under a contract providing for any exclusivity obligations or similar restrictions that are binding on the Company; except in the case
of each of clause (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority in connection with the
execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to
Section 4.6 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights Agreement, (iii) the
notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Warrant
Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission and such filings as
are required to be made under applicable state or federal securities Laws, (v) filings to be made under the Security Documents and (vi) any
necessary approval from the Bankruptcy Court (collectively, the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock a
number of shares of Common Stock for issuance equal to the aggregate number of Warrant Shares on the date hereof.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g). No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction
Documents. Except as set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary,
or written contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities
will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Initial
Purchaser). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise,
conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary (it
being understood that this representation and warranty is not qualified by any reference to the SEC Documents). There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully
paid and nonassessable, have been issued in material compliance with all federal and state securities Laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities (other than
the Required Approvals). Except as set forth on Schedule 3.1(g), there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, as the case may be, including pursuant to Section 13(a) or 15(d)
thereof, since November 11, 2022 (the foregoing materials filed prior to the date of this Agreement, including the exhibits thereto
and documents incorporated by reference therein, 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. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act
and the Exchange Act, 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 the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material
liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice, (B) liabilities not required to be reflected in the Company’s financial statements pursuant
to GAAP or disclosed in filings made with the Commission, (C) the AR Facility and (D) liabilities that were disclosed or reserved
against in the Company’s financial statements (including the notes thereto), (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before
the Commission any request for confidential treatment of information. To the knowledge of the Company, except for the issuance of the
Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their
respective businesses, prospects, properties, operations, assets or financial condition, that would be required to be disclosed by the
Company under applicable securities Laws at the time this representation is made or deemed made that has not been publicly disclosed at
least one Trading Day prior to the date that this representation is made.
(j) Litigation.
Except as set forth on Schedule 3.1(j), there is no material action, suit, notice of violation, or legal proceeding pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). Except as set forth on Schedule 3.1(j), none of the Actions set forth on Schedule 3.1(j)
could, if determined adversely to the Company or its Subsidiaries, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities Laws. There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of
the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is threatened with respect to any of the employees of the
Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that
their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and
foreign Laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received any written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument governing Indebtedness to which it is a party or by which it or any of its properties
is bound that has not been waived, in each case other than in relation to any indenture, loan or credit agreement or any other agreement
or instrument that is expected to be repaid or redeemed in full on or before the Closing Date, (ii) is in violation of any judgment,
decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local Laws relating
to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(m) Environmental
Laws. To the knowledge of the Company and its Subsidiaries, the Company and its Subsidiaries (i) are in compliance with all federal,
state, local and foreign Laws relating to pollution or protection of human health or the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata), including Laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or
approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation
or modification of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title to all real property owned by them that is material to
the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Permitted Liens (as defined
in the Note), (ii) Liens as do not materially affect the value of such property and do not materially interfere with the use made
of such property by the Company and the Subsidiaries and (iii) Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties.
Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance in all material respects.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
so have would have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except as set forth
in Schedule 3.1(p), none of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest
audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably be expected to not have a Material
Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement
by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage. Neither the Company nor any Subsidiary 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 without a significant increase in cost.
(r) Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $500,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company, (iii) other
employee benefits, including stock option agreements under any stock option plan of the Company and (iv) loans and other extensions of
credit to directors and officers of the Company and/or any Subsidiaries for travel or business expenses or other employment-related purposes
in the ordinary course of business.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof. The Company and the Subsidiaries maintain a system
of internal accounting controls designed to provide reasonable assurance 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 asset accountability, (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information required to be disclosed by the Company 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’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of
the Company and the Subsidiaries as of the end of the period covered by the 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 internal control over financial reporting (as
such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Initial Purchaser 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 Section 3.1(f) that may be due in connection with
the transactions contemplated by the Transaction Documents.
(u) Private
Placement. Assuming the accuracy of the Initial Purchaser’s representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Initial Purchaser
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading
Market.
(v) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(w) Registration
Rights. Other than the Initial Purchaser, no Person has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.
(x) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such
registration. The Company has not, since November 11, 2022, received any written notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements
of such Trading Market. The Company is, and as of the date of this Agreement has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic
transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the
fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(y) Application
of Takeover Protections. 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 certificate of incorporation (or similar charter documents) or the Laws of its state
of incorporation that is or could become applicable to the Initial Purchaser as a result of the Initial Purchaser and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Initial Purchaser’s ownership of the Securities.
(z) Disclosure.
All of the disclosure furnished by or on behalf of the Company to the Initial Purchaser regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct
in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Company acknowledges
and agrees that the Initial Purchaser does not make or has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(aa) No Integrated
Offering. Assuming the accuracy of the Initial Purchaser’s representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration
of any such securities under the Securities Act, or (ii) any applicable stockholder approval provisions of any Trading Market on
which any of the securities of the Company are listed or designated.
(bb) Indebtedness.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the purchase of the Note hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business
as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of
the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the
current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization Laws
of any jurisdictions within one year from the Closing Date. Schedule 3.1(bb) sets forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the
purposes of this Agreement, “Indebtedness” has the meaning set forth in the Note.
(cc) Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income
and franchise tax returns, reports and declarations required to be made or filed by it by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges required to be paid by it that are material in amount, shown or determined
to be due on such returns, reports and declarations, except any such taxes or charges which are being diligently contested in good faith
by appropriate proceedings and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes
required to be paid by it for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.
(dd) No General
Solicitation. Neither the Company nor 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. The Company has offered the Securities for sale only to the Initial Purchaser and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(ee) Foreign
Corrupt Practices. In the prior five (5) years, neither the Company nor any Subsidiary, nor to the knowledge of the Company or any
Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any
funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of applicable Law or (iv) violated in any material respect
any provision of FCPA.
(ff) Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ff). To the knowledge and belief of the Company, such accounting
firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect
to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2023.
(gg) Seniority.
As of the Closing Date, except as set forth on Schedule 3.1(gg) the AR Facility (subject to the Subordination Agreement),
and the Acceptable Indebtedness (to the extent permitted under the Note), no Indebtedness or other claim against the Company is senior
to the Note in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness
secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations
(which is senior only as to the property covered thereby).
(hh) No Disagreements
with Accountants and Lawyers. To the knowledge of the Company, there are no material disagreements presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
(ii) Acknowledgment
Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Initial Purchaser is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that the Initial Purchaser is not 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 the Initial
Purchaser or any of its respective representatives or agents in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Initial Purchaser’s purchase of the Securities. The Company further represents to the Initial
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.
(jj) Acknowledgment
Regarding Initial Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) the Initial
Purchaser has not been asked by the Company to agree, nor has the Initial Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term, (ii) past or future open market or other transactions by the Initial Purchaser, specifically including,
without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) the Initial Purchaser,
and counter-parties in “derivative” transactions to which the Initial Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock and (iv) the Initial Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) the Initial Purchaser may engage in hedging activities at various times during the period that the Securities
are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities
are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests
in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the Transaction Documents.
(kk) Regulation
M Compliance. The Company has not, and to its knowledge no one 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
of the Securities in violation of Regulation M, or (iii) paid or agreed to pay to any Person any compensation for soliciting another
to purchase any other securities of the Company.
(ll) BRE.
The BRE was formed solely for the purpose of acquiring and/or holding the Purchased Securities (as defined in the Sorrento Stock Purchase
Agreement), and, except for the Sorrento Stock Purchase Agreement and any instruments of transfer entered into in connection therewith
in respect of the Purchased Securities, the BRE is not now and has never been party to any contract, agreement or arrangement and has
not conducted any activities other than its entrance into the Sorrento Stock Purchase Agreement and such instruments of transfer. BRE’s
sole obligations pursuant to the Sorrento Stock Purchase Agreement are to receive the Purchased Securities. BRE has no liabilities or
obligations pursuant to the Sorrento Stock Purchase Agreement that survive the closing of the transactions contemplated thereby, and upon
such closing the BRE shall hold the Purchased Securities free and clear of any Liens other than Liens arising pursuant to the Note.
(mm) Stock
Option Plans. Each stock option granted by the Company under one of the Company’s equity incentive plans was granted (i) in
accordance with the terms of the applicable equity incentive plan and (ii) with an exercise price at least equal to the fair market
value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable Law. Except as set forth
on Schedule 3.1(mm), no stock option granted under the Company’s stock option plan has been backdated. The Company has
not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise
knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company
or its Subsidiaries or their financial results or prospects.
(nn) Cybersecurity.
(i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers,
vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”)
and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably
be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries
are presently in compliance with all applicable Laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator
or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems
and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as
would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented
and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous
operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup
and disaster recovery technology consistent with industry standards and practices.
(oo) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).
(pp) Money
Laundering. In the last five (5) years, the operations of the Company and its Subsidiaries are and have been conducted in material
compliance with applicable financial record-keeping 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 or Proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.
(qq) No Disqualification
Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none
of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating
in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered
Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2)
or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Initial
Purchaser a copy of any disclosures provided thereunder.
(rr) Other
Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly
or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(ss) Notice
of Disqualification Events. The Company will notify the Initial Purchaser in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event
relating to any Issuer Covered Person.
(tt) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Code, and the Company shall so certify upon the Initial Purchaser’s written request.
(uu) Sorrento
Stock Purchase Agreement. A true and accurate copy of the Sorrento Stock Purchase Agreement is set forth on Schedule 3.1(uu).
The Sorrento Stock Purchase Agreement is in full force and effect and there has been no amendment or modification thereof and the Company
has not waived any provisions of the Sorrento Stock Purchase Agreement. Under the terms of the Sorrento Stock Purchase Agreement, Sorrento
has retained the benefits of ownership of, and voting power over, the securities subject to the Sorrento Repurchase at all times prior
to the consummation of the Sorrento Repurchase. The Company will not enter into any amendment, waiver or other modification of the Sorrento
Stock Purchase Agreement without the prior written consent of the Initial Purchaser.
(vv) Specified
Licensors. With respect to each of the Specified Licensors: (i) except any Anticipated/Known Breach (as defined in the
Note), there exists no event of default or breach and no event has occurred which would or would reasonably be expected to result in an
event of default or breach or prevent the Company or any Subsidiary from obtaining any benefit under any product development agreement,
licensing agreement, license or similar agreement (“Licenses”) with such Specified Licensor(s); (ii) such Specified
Licensor has not notified (orally or in writing) the Company or any of its Subsidiaries that such Specified Licensor intends to terminate,
suspend, cancel or otherwise modify, amend or alter any of its Licenses to, licensing agreements with or its business relationship with
the Company or any of its Subsidiaries in any manner that would be adverse to the Company and its Subsidiaries or the business conducted
thereby; (iii) none of the Company or any of its Subsidiaries has been engaged in any material dispute with such Specified Licensor; and
(iv) there has not occurred any change, event, circumstance or condition that has resulted in, or would reasonably be likely to result
in, a material change in the Company’s or any of its Subsidiaries’ business relationship with such Specified Licensor.
3.2 Representations
and Warranties of the Initial Purchaser. The Initial Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the date hereof to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such
date):
(a) Organization;
Authority. The Initial Purchaser is an entity duly incorporated, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and
to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of the Transaction Documents and performance by the Initial Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate action on the part of the Initial Purchaser. Each Transaction
Document to which it is a party has been duly executed by the Initial Purchaser, and when delivered by the Initial Purchaser in accordance
with the terms hereof, will constitute its valid and legally binding obligation, enforceable against it in accordance with its terms,
except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other
Laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable Law.
(b) Own
Account. The Initial Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities Law and is acquiring the Securities 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 Law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable
state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the
distribution of such Securities in violation of the Securities Act or any applicable state securities Law (this representation and warranty
not limiting the Initial Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities Laws). The Initial Purchaser is acquiring the Securities hereunder in the ordinary course
of its business.
(c) Purchaser
Status. At the time the Initial Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on
which it exercises any Warrants it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
(a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act.
(d) General
Solicitation. The Initial Purchaser is not, to its knowledge, purchasing the Securities as a result of any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television
or radio or presented at any seminar or, to its knowledge, any other general solicitation or general advertisement.
(e) Acknowledgement.
The Initial Purchaser acknowledges and agrees that neither the Company nor any Subsidiary makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.1 hereof. The Initial
Purchaser further represents to the Company that its 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 Initial Purchaser and its representatives.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Initial Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with the Initial Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Initial
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other than to other Persons
party to this Agreement or to the Initial Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, the Initial 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 the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions
with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the
Company in order for the Initial Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions
in the future.
The Company acknowledges and agrees that the representations
contained in this Section 3.2 shall not modify, amend or affect the Initial Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document
or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions
contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions
in the future.
Article IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with applicable state and federal securities Laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Initial
Purchaser or in connection with a 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; provided, however, that, at the election of the transferor, the transferor
may instead provide the Company with reasonable assurances in the form of a seller and broker representation letter that is customary
for the applicable exemption under the Securities Act or the rules and regulations of the SEC thereunder under which such Note (or applicable
portion thereof) is to be sold, assigned or transferred and which letter is reasonably acceptable to the Company that the Note can be
sold, assigned or transferred in compliance with such exemption; provided, that a representation letter that is in a form agreed to by
the Initial Purchaser and the Company shall automatically be deemed reasonably acceptable to the Company, subject to any modifications
as may be reasonably requested by the Company or required by applicable law. As a condition of transfer, any such transferee shall agree
in writing to be bound by the terms of this Agreement applicable to the Securities to be transferred thereto and the Registration Rights
Agreement and shall have the same rights and obligations as the Initial Purchaser under this Agreement and the Registration Rights Agreement,
except where modification of such rights or obligations as among the Initial Purchaser and a transferee of Securities is necessary as
determined by the Initial Purchaser in its good faith discretion to account for a transfer of less than all of the Securities held by
the Initial Purchaser or an Affiliate thereof. As soon as reasonably practicable following the Closing, the Company and Initial Purchaser
will cooperate in good faith to agree upon a form of a customary seller and broker representation letter for a transfer relying upon applicable
exemptions from registration under Rule 144 or such other applicable rules and regulations as the parties mutually determine.
(b) The
Initial Purchaser agrees, and each Note Holder will agree, to the imprinting, so long as is required by this Section 4.1,
of a legend on any of the Securities substantively in the following form:
NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE/ THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT] BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 SAID ACT OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE
COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR
ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID 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. THE NUMBER OF SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF THIS
WARRANT.
The Company acknowledges and agrees
that the Initial Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant
a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined
in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Initial Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the Initial 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, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of
any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.
(c) Certificates
evidencing the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while
a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), (iii) if
such Warrant Shares are eligible for sale without the requirement for the Company to be in compliance with the current public information
required under Rule 144 and without volume or manner-of-sale restrictions under Rule 144 (assuming cashless exercise of the
Warrants) or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). Provided one or more of the preceding conditions are met, the Company shall
cause its counsel to issue a legal opinion to the Transfer Agent or the Initial Purchaser promptly after the Effective Date if required
by the Transfer Agent to effect the removal of the legend hereunder, or if requested by the Initial Purchaser, respectively. If a Warrant
is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, or if such Warrant
Shares may be sold without the requirement for the Company to be in compliance with the current public information required under Rule 144
and without volume or manner-of-sale restrictions under Rule 144 or if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Warrant
Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no
longer required under this Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by the Initial Purchaser to
the Company or the Transfer Agent of a certificate representing Warrant Shares, as applicable, issued with a restrictive legend (such
date, the “Legend Removal Date”), deliver or cause to be delivered to the Initial Purchaser a certificate representing
such shares that is 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 Article IV. Certificates for Warrant Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Initial Purchaser by crediting the account of the
Initial Purchaser’s prime broker with the Depository Trust Company System as directed by the Initial Purchaser. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Warrant Shares,
as applicable, issued with a restrictive legend.
(d) In
addition to the Initial Purchaser’s other available remedies, the Company shall pay to the Initial Purchaser, in cash, (i) as
partial liquidated damages and not as a penalty, for each $1,000 of Warrant Shares (based on the VWAP of the Common Stock on the date
such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c),
$10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after the Legend Removal Date) for each Trading Day after
the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and
deliver (or cause to be delivered) to the Initial Purchaser by the Legend Removal Date a certificate representing the Securities so delivered
to the Company by the Initial Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date
the Initial Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Initial Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock
equal to all or any portion of the number of shares of Common Stock that the Initial Purchaser anticipated receiving from the Company
without any restrictive legend, then, an amount equal to the excess of the Initial Purchaser’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and
other out-of-pocket expenses, if any) over the product of (A) such number of Warrant Shares that the Company was required to deliver
to the Initial Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading
Day during the period commencing on the date of the delivery by the Initial Purchaser to the Company of the applicable Warrant Shares
(as the case may be) and ending on the date of such delivery and payment under this clause (ii).
(e) The
Initial Purchaser agrees with the Company that it will sell any Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to
a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal
of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the
Company’s reliance upon this understanding.
4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under
the Transaction Documents, including, without limitation, its obligation to issue the Warrant Shares pursuant to the Transaction Documents,
are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of
any such dilution or any claim the Company may have against the Initial Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.
4.3 Furnishing
of Information; Public Information.
(a) Until
the earlier of the time that (i) the Initial Purchaser does not own Securities or (ii) the Warrants have expired and the Note
has been repaid in full, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the
Exchange Act and 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 even if the Company is not then subject to the reporting
requirements of the Exchange Act.
(b) At
any time following the date that is six (6) months after the date hereof, if the Company (i) shall fail for any reason to satisfy
the current public information requirement under Rule 144(c) or (ii) becomes an issuer described in Rule 144 (i)(1)(i),
in the future and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to the Initial Purchaser’s other available remedies, the Company shall pay to the Initial Purchaser, in cash,
as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities,
an amount in cash equal to two percent (2.0%) of the aggregate subscription amount of the Initial Purchaser’s Securities on the
day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter
until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is
no longer required for the Initial Purchaser to transfer the Warrant Shares pursuant to Rule 144. The payments to which the Initial
Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during
which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving
rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in
a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months)
until paid in full. Nothing herein shall limit the Initial Purchaser’s right to pursue actual damages for the Public Information
Failure, and the Initial Purchaser shall have the right to pursue all remedies available to it at Law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.
4.4 Integration.
The Company shall not 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 would 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 or that would 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 shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.5 Warrant
Exercise Procedures. The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures required of
the Initial Purchaser in order to exercise the Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required
in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Initial Purchaser
to exercise its Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.
4.6 Securities
Laws Disclosure; Publicity. The Company and the Initial Purchaser shall (a) by the Disclosure Time, issue a press release disclosing
the transactions contemplated hereby, and (b) file a Current Report on Form 8-K with the Commission within the time required by the
Exchange Act. The Company and the Initial Purchaser shall consult with each other in issuing any other press releases with respect to
the transactions contemplated hereby, and neither the Company nor the Initial Purchaser shall issue any such press release nor otherwise
make any such public statement without the prior consent of the Company, with respect to any press release of the Initial Purchaser, or
without the prior consent of the Initial Purchaser, with respect to any press release of the Company, which consent shall not unreasonably
be withheld or delayed, except if such disclosure is required by Law (and, for the avoidance of doubt, nothing in this Agreement or the
other Transaction Documents shall restrict the Initial Purchaser’s ability to file any public filing that it deems reasonably necessary
to comply with applicable Laws), in which case the disclosing party shall promptly provide the other party with prior notice of such public
statement or communication; provided that such notice will not be required for information previously disclosed in the SEC Reports or
in any press release. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Initial Purchaser, or include
the name of the Initial Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written
consent of the Initial Purchaser, except (a) as required by federal securities Law in connection with (i) any registration statement
contemplated by the Registration Rights Agreement and (ii) the filing of final forms of Transaction Documents with the Commission
and (b) to the extent such disclosure is required by Law or Trading Market regulations, in which case the Company shall provide the
Initial Purchaser with prior notice of such disclosure permitted under this clause (b) and reasonably cooperate with the Initial
Purchaser regarding such disclosure.
4.7 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Initial
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 the Initial Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the Company and the Initial Purchaser.
4.8 [Reserved].
4.9 [Reserved].
4.10 Indemnification
of Initial Purchaser. Subject to the provisions of this Section 4.10, the Company will indemnify and hold the Initial
Purchaser and its directors, officers, shareholders, members, partners, employees, successors, assigns, 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 the Initial Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, an “Initial
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 (provided, that in the event the
Initial Purchaser assigns the Note or any portion thereof to any other Person, such attorneys’ fees shall be limited to a single
counsel for Agent, the Initial Purchaser and the holders of any Additional Notes (as defined in the Note), taken as a whole, and a single
local counsel for Agent, the Initial Purchaser and the holders of any Additional Notes (as defined in the Note), taken as a whole, in
each relevant jurisdiction and, solely in the case of an actual or potential conflict of interest, a single additional counsel in each
applicable jurisdiction to each affected similarly situated group of Agent, the Initial Purchaser and the holders of any Additional Notes
(as defined in the Note), taken as a whole) and costs of investigation that any such Initial Purchaser Party suffers or incurs, directly
or indirectly, 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 threatened or instituted against the Company,
Sorrento or any Initial Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company
or any other Person (including Hudson Bay or any other current or former financing source (or prospective or potential financing source))
who is not an Affiliate of such Initial Purchaser Party, with respect to (i) any claim arising from or relating to any financing, advisory
or similar engagement or agreement (written or oral) between the Company and any Person, including pursuant to or in connection with any
banking or placement fees, brokerage commissions, exclusivity rights (including any exclusive right to provide financing), rights of refusal,
“most favored nations” or similar agreements or arrangements, or (ii) any of the terms of or transactions contemplated by
the Transaction Documents, the Oramed SPA, or the Senior DIP Facility (in each case, unless such action is solely based upon a material
breach of such Initial Purchaser Party’s representations, warranties or covenants under the Transaction Documents, the Oramed SPA,
or the Senior DIP Facility or any agreements or understandings such Initial Purchaser Party may have with any such Person or any violations
by such Initial Purchaser Party of state or federal securities Laws or any conduct by such Initial Purchaser Party which is finally judicially
determined to constitute fraud, gross negligence or willful misconduct), or (iii) any claim arising from or relating to that certain Settlement
Agreement, dated September 15, 2023 (the “HB Settlement Agreement”), by and among Cove Lane Onshore Fund, LLC, HBC
Investments LLC, Hudson Bay Capital Management LP and the Company, or the Securities Purchase Agreement (as defined in the HB Settlement
Agreement). For the avoidance of doubt, the indemnification obligations set forth in this Section 4.10 shall not be (A) qualified
by, limited or reduced in any respect as a result of disclosures provided in the Disclosure Schedules or elsewhere in this Agreement or
in any other Transaction Document, or (B) affected by any knowledge acquired (or capable of being acquired) by any Initial Purchaser Party
at any time, whether before, on or after the Closing Date or the execution and delivery of this Agreement or the other Transaction Documents,
with respect to the accuracy or inaccuracy of any of the representations, warranties, covenants or agreements provided herein or therein
or of any other matter that is subject to the indemnification obligations provided in this Section 4.10 or in any other Transaction
Document. If any action shall be brought against any Initial Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Initial Purchaser Party shall promptly notify the Company in writing, and, the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to an Initial Purchaser Party. Any Initial Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Initial Purchaser Party except to the extent that (A) the employment thereof has been
specifically authorized by the Company in writing, (B) the Company has failed after a reasonable period of time to assume such defense
and to employ counsel or the Company lacks resources (including available funds) reasonably sufficient to conduct such defense (as determined
in good faith by an Initial Purchaser Party after consultation with the Company), or (C) in such action there is, in the reasonable
opinion of counsel a material conflict on any material issue between the position of the Company and the position of such Initial Purchaser
Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Initial Purchaser Party under this Agreement (y) for any settlement by an Initial Purchaser Party
effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent,
but only to the extent that a loss, claim, damage or liability is attributable to any Initial Purchaser Party’s breach of any of
the representations under the Transaction Documents, the Oramed SPA, or the Senior DIP Facility. The indemnification required by this
Section 4.10 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as
and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or
similar right of any Initial Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant
to Law.
4.11 Reservation
and Listing of Warrant Shares.
(a) The
Company shall maintain a reserve equal to the aggregate number of Warrant Shares from its duly authorized shares of Common Stock for issuance
pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction
Documents.
(b) If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the aggregate number
of Warrant Shares subject to outstanding Warrants on such date, then the Board of Directors shall use commercially reasonable efforts
to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common
Stock to at least the aggregate number of Warrant Shares subject to outstanding Warrants at such time, as soon as possible and in any
event not later than the 75th day after such date.
(c) The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering the Warrant Shares on the date of such application, (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter,
(iii) provide to the Initial Purchaser evidence of such listing or quotation and (iv) maintain the listing or quotation the
Warrant Shares on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common
Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic
transfer.
(d) [reserved].
(e) Notwithstanding
the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance or the Subsequent Financing set forth on
Schedule 4.13.
4.12 Sorrento
Lock-Up. The Company shall not permit or cause any modification, amendment, revocation or waiver of the Sorrento Lock-Up Extension;
provided, however, the Company and/or Sorrento may or may cause one or more amendments of the Sorrento Lock-Up Extension to extend
the restrictions on transfer of shares of Common Stock received as a dividend or distribution by stockholders of Sorrento to a date that
is later than March 31, 2024.
4.13 Variable
Rate Transactions.
(a) [Reserved].
(b) From
the date hereof until such time as the Initial Purchaser no longer holds any of the Warrants, the Company shall be prohibited from
effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common
Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading
prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or
(B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance
of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the
business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the
Company may issue securities at a future determined price regardless of whether shares pursuant to such agreement have actually been
issued and regardless of whether such agreement is subsequently canceled. The Initial Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect
damages.
(c) Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of (i) the issuance of any shares of Common Stock in the underwritten
offering the Company is currently contemplating with Cantor Fitzgerald & Co. under the Registration Statement on Form S-1, File No.
333-271401, which has not yet been declared effective by the Commission and (ii) an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance, other than any issuances of shares of Common Stock under clause (d) of the definition of “Exempt
Issuance”. For the avoidance of doubt, and notwithstanding anything contained herein to the contrary, this Section 4.13
shall not prohibit the Company from entering into and effecting sales under the ATM Program or the ELOCs.
4.14 Equal
Treatment of Initial Purchaser. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to such Transaction Documents.
4.15 Certain
Transactions and Confidentiality. The Initial Purchaser, covenants that neither it, nor any Affiliate acting on its behalf or pursuant
to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during
the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.6. The Initial Purchaser covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial
press release as described in Section 4.6, the Initial Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the Disclosure Schedules (other than as disclosed to its legal and other representatives).
Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges
and agrees that (i) the Initial Purchaser makes no representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.6, (ii) the Initial Purchaser shall not be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities Laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.6.
4.16 Form
D; Blue Sky Filings. 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 request of the Initial Purchaser. The Company 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 Initial Purchaser at the Closing
under applicable securities or “Blue Sky” Laws of the states of the United States, and shall provide evidence of such actions
promptly upon request of the Initial Purchaser.
4.17 Capital
Changes. Until the one year anniversary of the Effective Date, the Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the Note Holders holding a majority in principal amount outstanding
of the Note.
4.18 Treatment
of Common Stock and Warrants Purchased from Sorrento. Immediately following the consummation of the Sorrento Repurchase, the 29,057,097
shares of the Company’s preferred stock, the 60,068,585 shares of the Company’s Common Stock. the warrants for the purchase
of 4,490,617 shares of the Common Stock (other than the Transferred Warrants) acquired from Sorrento shall remain outstanding and shall
be owned of record and beneficially by the BRE (as defined in the Note).
4.19 Tax
Treatment. The Company, the Initial Purchaser and the Agent each agree (i) that the Note is debt for U.S. federal income tax purposes,
(ii) that the Note is issued with original issue discount (“OID”), (iii) that the Note is not governed by the rules
set out in Treasury Regulations Section 1.1275-4, and (iv) not to file any tax return, report or declaration inconsistent with the foregoing.
The inclusion of this Section 4.19 is not an admission by the Initial Purchaser that it is subject to United States taxation.
Article V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated solely by mutual written consent of the parties hereto; provided, however, that no such
termination will affect the right of any party to sue for any breach by any other party (or parties). Section 4.10 and Section 5.2
shall survive any termination of this Agreement.
5.2 Fees
and Expenses. The Company has agreed to reimburse the Initial Purchaser, at the Closing, for its reasonable and documented out-of-pocket
legal and other advisor costs, fees and expenses (“Oramed Costs”) incurred by the Initial Purchaser through and including
the Closing Date in connection with the Oramed SPA, the Senior DIP Facility, and the preparation, negotiation and review of this Agreement
and the other Transaction Documents of up to $2,910,000 in the aggregate. The first $1,910,000 of such Oramed Costs shall be paid in cash
at Closing by wire transfer of immediately available funds to such account(s) as are specified in writing by the Initial Purchaser and
any portion of the Oramed Costs in excess of $1,910,000 (up to a maximum amount in excess of $1,000,000 (such amount, the “Initial
Rolled Expense Amount”)) shall be reimbursed by adding such excess amount to the Principal Amount of the Note (collectively,
the “Fees and Expenses Reimbursement”). For the avoidance of doubt, all Oramed Costs of H.C. Wainwright & Co.,
Proskauer Rose LLP, Gray Reed LLP, and Richards, Layton & Finger P.A. shall be deemed reasonable for purposes of the Fees and Expenses
Reimbursement. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the reasonable and documented
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion
or exercise notice delivered by the Initial Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery
of any Securities to the Initial Purchaser.
5.3 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 thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder, under the Note or under any
Security Document (unless otherwise expressly set forth in such Security Document) shall be in writing and shall be deemed given and effective
on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email attachment at the email
address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service 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 set
forth on the signature pages attached hereto. The address and notice information set forth on the signature pages hereto for the Initial
Purchaser shall be deemed to be the address and notice information for the Initial Purchaser and any other Note Holder until such time
as the Company shall have received written notice from any Note Holder of a different address and notice information (which, for the avoidance
of doubt, shall include an email address) for such Note Holder. Each party hereto and each Note Holder may change the address at which
they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party.
5.5 Amendments;
Waivers. 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, Agent and the Initial Purchaser. 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 any party to exercise any right hereunder
in any manner impair the exercise of any such right. Any amendment effected in accordance with this Section 5.5 shall be binding
upon the Initial Purchaser and each holder of Securities and the Company and the Agent.
5.6 Headings.
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.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Initial Purchaser
(other than by merger). The Initial Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Initial
Purchaser assigns or transfers the Note or any Warrants, provided that such transferee agrees in writing to be bound, with respect to
the Note or Warrants, by the provisions of the Transaction Documents that apply to the “Initial Purchaser” and as further
required by the provisions of this Section 5.7. For the avoidance of doubt, (a) the Initial Purchaser may transfer its agreement
to purchase the Note to an Affiliate to the Closing Date, provided that such transferee executes this Purchase Agreement and the transferor
remains liable for the obligations of the Affiliate transferee, and (b) the Notes, Warrants, and other Securities shall be transferable
by the Initial Purchaser in accordance with the terms thereof and hereof and thereof and in accordance with any applicable securities
Laws. The parties to each assignment shall execute and deliver to the Company and the Agent an Assignment and Assumption in the form of
Exhibit G hereto acceptable to the Agent and any tax form required by the Agent, together with a processing and recordation fee
of $3,500; provided that the Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case
of any assignment. The assignee shall deliver to the Agent an administrative questionnaire as requested by the Agent. Beneficial ownership
of the Notes will only be shown on, and transfers thereof will be effected only through, the books and records of the Agent. The Agent
shall not record upon its books and records any transfer of any Notes except in accordance with the terms and conditions of this Agreement.
Any purported sale, transfer or assignment of Notes in express violation of such terms and conditions shall be void ab initio and
shall not be recognized by the Company or the Agent.
5.8 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 as otherwise set forth in
Section 4.10.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the federal courts located
in New York, New York. Each party hereby irrevocably submits to the exclusive jurisdiction of such 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 Action or Proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an
inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this 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 other manner permitted by Law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such Action or
Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 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 each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered 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 “.pdf” signature page were an original thereof.
5.12 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 commercially 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.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Note Holder exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Note Holder may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an
exercise of a Warrant, the Initial Purchaser shall be required to return any shares of Common Stock subject to any such rescinded conversion
or exercise notice concurrently with the return to the Initial Purchaser of the aggregate exercise price paid to the Company for such
shares and the restoration of the Initial Purchaser’s right to acquire such shares pursuant to the Initial Purchaser’s Warrant
(including, issuance of a replacement warrant certificate evidencing such restored right).
5.14 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 (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by Law, including recovery of damages, the Initial Purchaser
and the Company will be entitled to specific performance under the Transaction Documents. The Initial Purchaser and the Company agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to Note Holder pursuant to any Transaction Document or a Note
Holder 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.
5.17 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury Laws wherever enacted, now or at any time hereafter
in force, in connection with any Action or Proceeding that may be brought by any Note Holder in order to enforce any right or remedy under
any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable Law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by Law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by Law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable Law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Note Holder with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by such Note Holder to the unpaid principal balance of any such indebtedness
or be refunded to the Company, the manner of handling such excess to be at such Note Holder’s election.
5.18 Independent
Nature of Note Holders’ Obligations and Rights. The obligations of each Note Holder under any Transaction Document are several
and not joint with the obligations of any other Note Holder, and no Note Holder shall be responsible in any way for the performance or
non-performance of the obligations of any other Note Holder under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Note Holder pursuant hereto or thereto, shall be deemed to constitute the Note Holders as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Note Holders 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 Note Holder 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 Note Holder to be joined as an additional party in any
Proceeding for such purpose. The Company has elected to provide all Note Holders 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 of the Note Holders.
5.19 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.20 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.21 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.22 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
5.23 Correction
of Transaction Documents. The Initial Purchaser and the Agent (at the written direction of the Required Holders) may correct patent
errors and fill in any blanks in the Transaction Documents consistent with the agreement of the parties with five (5) days prior written
notice to the Company.
5.24 Amendment
and Restatement. This Agreement and the Note, following the consummation of the DIP Assumption, amend and restate and replace in its
entirety the Senior DIP Facility, and the obligations set forth herein and in the other Transaction Documents amend and restate and replace
in their entirety the DIP Facility Obligations, and any additional documentation governing the Senior DIP Facility shall be deemed to
be cancelled, terminated, and extinguished, and replaced in their entirety with the Transaction Documents.
Article VI.
THE AGENT
6.1 Appointment and
Authorization. Each Note Holder hereby irrevocably appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Note Document and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement or any other Transaction Document. Each Note Holder hereby acknowledges and agrees
that the Agent shall not have any duties or responsibilities except those expressly set forth herein and in the other Transaction Documents.
The Agent shall not have or be deemed to have any fiduciary relationship with any Note Holder or any other Person, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or
otherwise exist against the Agent in such capacity. Without limiting the generality of the foregoing, the use of the term “agent”
herein and in the other Transaction Documents with reference to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between independent contracting parties. The permissive authorizations,
entitlements, powers and rights (including the right to request that the Company take an action or deliver a document and the exercise
of remedies following an Event of Default as provided herein) granted to the Agent herein shall not be construed as duties. The Agent
shall not have any responsibility for interest or income on any funds held by it hereunder and any funds so held shall be held uninvested
pending distribution thereof. Whether or not explicitly set forth therein, the rights, powers, protections, immunities and indemnities
granted to the Agent herein shall apply to any document entered into by the Agent in connection with its role as Agent under the Transaction
Documents. Except to the extent expressly provided otherwise herein, the Required Holders shall have the right to direct the Agent in
all matters concerning the Transaction Documents.
6.2 Delegation
of Duties. The Agent may execute any and all of its duties and exercise its rights and powers under this Agreement or any other Transaction
Document by or through agents, sub-agents, employees or attorneys in fact and shall be entitled to advice of counsel and other consultants
or experts concerning all matters pertaining to such duties. The Agent shall not be responsible for the supervision, negligence or misconduct
of any agent or attorney in fact that it selects with due care. Any such delegation made shall not preclude the subsequent exercise of
those rights and powers by the Agent, any revocation of such delegation or any subsequent delegation of any such rights, powers, authorities
and discretions.
6.3 Default;
Collateral.
(a) Upon
the occurrence and during the continuance of a Default or an Event of Default, the Note Holders agree that Required Holders shall have
the sole right to determine a course of action for the enforcement of the rights of the Note Holders, and the Agent shall be entitled
to refrain from taking any action (without incurring any liability to any Person for so refraining) unless and until the Agent shall have
received written instructions from the Required Holders (email being sufficient). All rights of action under the Transaction Documents
and all rights to the Collateral, if any, hereunder and thereunder may be enforced by the Agent (at the written direction of the Required
Holders) and any suit or proceeding instituted by the Agent in furtherance of such enforcement shall be brought in its name as the Agent
without the necessity of joining as plaintiffs or defendants any Note Holder, and the recovery of any judgment shall be for the benefit
of the Note Holders subject to the reasonable and documented fees, expenses and other amounts payable to the Agent. In actions with respect
to any Collateral or other property or assets of the Company or any of its Subsidiaries, the Agent is acting for the benefit of each Note
Holder. Each Note Holder authorizes and directs the Agent to enter into the Transaction Documents to which it is a party on the date hereof
on behalf of and for the benefit of the Note Holders.
(b) Except
to the extent that the consent of such Note Holder is required under the terms of this Agreement, each Note Holder agrees that any action
taken by the Required Holders in accordance with the provisions of the Transaction Documents, and the exercise by the Required Holders
of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized by
and binding upon, all of the Note Holders.
(c) The
Agent is hereby authorized (but not obligated) on behalf of the Note Holders, without the necessity of any notice to or further consent
from any Note Holder, from time to time to take any action with respect to any property, Collateral or Transaction Documents which may
be necessary to create, perfect and maintain perfected Liens upon the Collateral and the properties granted pursuant to the Transaction
Documents.
(d) The
Agent shall not have any obligation whatsoever to any Note Holder or to any other Person to assure that the Collateral exists or is owned
(whether in fee or by leasehold) by the Person purporting to own it or is cared for, protected, or insured or has been encumbered or that
the Liens granted to the Agent pursuant to the Transaction Documents have been properly or sufficiently or lawfully created, perfected,
protected or enforced, or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty
of care, disclosure or fidelity, or to continue exercising, any of the rights granted or available to the Agent in any of the Transaction
Documents; IT BEING UNDERSTOOD AND AGREED THAT IN RESPECT OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT, OR ANY ACT, OMISSION OR EVENT
RELATED THERETO, THE AGENT SHALL NOT HAVE ANY LIABILITY WHATSOEVER WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTION DOCUMENTS TO ANY
PERSON IN THE ABSENCE OF ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL
AND NON-APPEALABLE JUDGMENT. Notwithstanding anything contained in the Transaction Documents or otherwise to the contrary, except as directed
by the Required Holders or as otherwise expressly set forth herein or in the other Transaction Documents, the Agent shall not have any
duty to (i) file or prepare any financing or continuation statements or record any documents or instruments in any public office for purposes
of creating, perfecting or maintaining any Lien or security interest created under the Transaction Documents; (ii) take any necessary
steps to preserve rights against any parties with respect to any Collateral; or (iii) take any action to protect against any diminution
in value of the Collateral.
(e) The
Note Holders hereby irrevocably authorize the Agent to release any Lien granted to or held by the Agent upon any Collateral: (i) when
the Notes have been paid in full in cash, (ii) solely with respect to the Liens on the subject Collateral, in connection with any disposition
expressly permitted under the Transaction Documents, or (iii) solely with respect to the Liens on the subject Collateral, in connection
with such Collateral becoming Excluded Collateral as expressly permitted under the Transaction Documents. In addition, the Note Holders
irrevocably authorize the Agent to release Liens upon the Collateral as otherwise contemplated herein and in the other Transaction Documents
if approved and authorized in writing by the Required Holders. Upon request by the Agent at any time, the Required Holders (or such other
number or percentage of Note Holders as is required hereunder) will confirm in writing the Agent’s authority to release particular
types or items of the Collateral pursuant to this Section 6.3(e) and the Agent shall be entitled to conclusively rely, and shall
be fully protected in so relying, upon the authorization of the Required Holders (or such other number or percentage of Note Holders as
is required hereunder). In the absence of such confirmation, the Agent shall be entitled to refrain from granting any release under this
Section 6.3(e).
(f) In
furtherance of the authorizations set forth in this Section 6.3, each Note Holder hereby irrevocably appoints the Agent as its
attorney-in-fact, with full power of substitution, for and on behalf of and in the name of each such Note Holder (i) to enter into the
Transaction Documents, (ii) to take action with respect to the Collateral and Transaction Documents to create, perfect, maintain and preserve
the Agent’s Liens therein, and (iii) to execute instruments of release or to take other action necessary to release Liens upon any
Loan or to release any Guarantor to the extent authorized herein or in the other Transaction Documents. This power of attorney shall be
liberally, not restrictively, construed so as to give the greatest latitude to the Agent’s power, as attorney, relative to the matters
described in this Section 6.3. The powers and authorities herein conferred on the Agent may be exercised by the Agent through any
Person who, at the time of the execution of a particular instrument, is an officer of the Agent (or any Person acting on behalf of the
Agent pursuant to a valid power of attorney). The power of attorney conferred by this Section 6.3(f) to the Agent is granted for
valuable consideration and is coupled with an interest and is irrevocable so long as the Note, or any part thereof, shall remain unpaid.
6.4 Liability
of Agent.
(a) Neither
the Agent nor any of its Related Parties shall:
(i) BE
LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY ANY OF THEM UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT IN CONNECTION WITH ITS DUTIES
EXPRESSLY SET FORTH HEREIN AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL AND NONAPPEALABLE JUDGMENT); PROVIDED THAT NO
ACTION TAKEN OR NOT TAKEN BY THE AGENT AT THE DIRECTION OF THE REQUIRED HOLDERS (OR SUCH OTHER NUMBER OR PERCENTAGE OF NOTE HOLDERS AS
IS REQUIRED HEREUNDER) SHALL BE CONSIDERED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT, or
(ii) be
responsible in any manner to any Note Holder or any other Person for any recital, statement, representation or warranty made by the Company
or any officer thereof, contained herein or in any other Transaction Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Transaction Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for
the priority of any liens purported to be created by any of the Transaction Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any Collateral, or to make any inquiry respecting the performance by the Company of its obligations hereunder
or under any other Transaction Document, or for any failure of the Company or any other party to any Transaction Document to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties,
books or records of the Company.
(b) The
Agent shall not be required to use, risk or advance its own funds or otherwise incur financial liability in the performance of any of
its duties or the exercise of any of its rights and powers hereunder. In no event shall the Agent be liable, directly or indirectly, for
any special, indirect, punitive or consequential damages, even if the Agent has been advised of the possibility of such damages and regardless
of the form of action.
(c) Notwithstanding
any other provision of this Agreement or the other Transaction Documents, the Agent shall not be liable for any action taken or not taken
by it with the consent or at the request or direction of the Required Holders (or such other number or percentage of Note Holders as is
required hereunder). The Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event
of Default has occurred and is continuing. The Agent shall not be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Agent to liability or that is contrary to any Transaction Document or applicable law.
(d) The
Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out
of or caused, directly or indirectly, by circumstances beyond its control, including any act or provision of any present or future law
or regulation or governmental authority; acts of God; earthquakes; fires; floods; wars; terrorism; civil or military disturbances; sabotage;
epidemics; pandemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service;
accidents; labor disputes; acts of civil or military authority or governmental actions; or the unavailability of the Federal Reserve Bank
wire or telex or other wire or communication facility.
(e) The
Agent shall have no obligation to file or record any financing statements, notices, instruments, documents, agreements, consents or other
papers as shall be necessary to (i) create, preserve, perfect or validate any security interest granted to the Agent pursuant to any Transaction
Document or (ii) enable the Agent to exercise and enforce its rights under any Transaction Document. In addition, the Agent shall
have no responsibility or liability (i) in connection with the acts or omissions of any Person in respect of the foregoing or (ii) for
or with respect to the legality, validity and enforceability of any security interest created in the Collateral or priority of such security
interest.
(f) Whenever
reference is made in this Agreement or any other Transaction Document to any discretionary action by, consent, designation, specification,
requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be
(or not to be) suffered or omitted by the Agent or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction
or other exercise of discretion, rights or remedies to be made (or not to be made) by the Agent (except in connection with the Agent’s
ability to enter into any amendment to the Agent Fee Letter or any other Transaction Document to which it is a party when such amendment
affects the rights and obligations of the Agent, each of which shall be made in the Agent’s sole discretion), it is understood that
in all cases that the Agent shall not have any duty to act, and shall be fully justified in failing or refusing to take any such action,
if it has not received written instruction, advice or concurrence (email being sufficient) from the Required Holders in respect of such
action.
6.5 Reliance
by Agent.
(a) The
Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation,
notice, consent, certificate, affidavit, letter, facsimile or email, statement or other document or conversation believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and shall be entitled to consult
and seek advice and statements of legal counsel (including counsel to the Company), independent accountants and other experts selected
by the Agent. Delivery of reports, documents and other information to the Agent is for informational purposes only and the Agent’s
receipt of the foregoing shall not constitute constructive knowledge of any event or circumstance or any information contained therein
or determinable from information contained therein. Information contained in notices, reports or other documents delivered to the Agent
and other publicly available information shall not constitute actual or constructive knowledge. Knowledge of or notices or other documents
delivered to the Agent in any capacity shall not constitute knowledge of or delivery to the Agent in any other capacity under the Transaction
Documents or to any affiliate or other division of the Agent.
(b) Notwithstanding
any provision of this Agreement or the other Transaction Documents to the contrary, before taking or omitting any action to be taken or
omitted by the Agent under the terms of this Agreement and the other Transaction Documents, the Agent may seek the written direction of
the Required Holders (or such other number or percentage of Note Holders as is required under this Agreement), which written direction
may be in the form of an email, and the Agent is entitled to rely (and is fully protected in so relying) upon such direction. If the Agent
requests such direction with respect to any action, the Agent shall be entitled to refrain from such action unless and until the Agent
has received such direction, and the Agent does not incur liability to any Person by reason of so refraining. In the absence of an express
statement in the Transaction Documents regarding which Note Holders shall direct in any circumstance, the direction of the Required Holders
shall apply and be sufficient for all purposes. If the Agent so requests, it must first be indemnified to its satisfaction by the Note
Holders against any and all reasonable and documented fees, losses, liabilities and expenses which may be incurred by the Agent by reason
of taking or continuing to take, or omitting, any action directed by the Required Holders (or such other number or percentage of Note
Holders as is required under this Agreement) prior to having any obligation to take or omit to take any such action. Any provision of
this Agreement or the other Transaction Documents authorizing the Agent to take any action does not obligate the Agent to take such action.
(c) The
Agent shall be entitled to rely upon advice of counsel concerning legal matters and such advice shall be full protection and authorization
for any action taken by the Agent in good faith thereon.
(d) If
at any time the Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative
process (including orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of any
Collateral), the Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate
in good faith, and if the Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial
or administrative process, the Agent shall not be liable to any of the parties hereto or to any other Person even though such order, judgment,
decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect.
(e) If
the Agent shall reasonably require any information to perform its duties under the Transaction Documents, the Company shall, to the extent
it has such information, provide such information promptly upon request.
(f) Whether
or not so expressly stated therein, in entering into, or taking (or forbearing from) any action under pursuant to, the Transaction Documents,
the Agent shall have all of the rights, immunities, indemnities and other protections granted to it under this Agreement (in addition
to those that may be granted to it under the terms of such other agreement or agreements).
(g) [reserved].
(h) [reserved]
(i) The
Note Holders and any transferees or assignees after the Closing Date will be required to provide to the Agent or its agents all information,
documentation or certifications reasonably requested by the Agent to permit the Agent to comply with its tax reporting obligations under
applicable laws, including any applicable cost basis reporting obligations.
6.6 Notice
of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless
a responsible officer of the Agent shall have received written notice from a Note Holder or the Company referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of default”. The Agent shall promptly notify the
Note Holders of its receipt of any such notice. The Agent shall take such action with respect to such Default or Event of Default as may
be directed by the Required Holders.
6.7 Successor
Agent. The Agent may (i) resign at any time upon 30 days’ notice to the Note Holders with a written copy of such notice to the
Company or (ii) be terminated by the Required Holders. If the Agent resigns or is terminated under this Agreement, the Required Holders
shall appoint a successor agent. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed
to all the rights (other than any rights of reimbursement for any costs, expenses, indemnities or other amounts due and owing to the Agent
prior to the resignation or removal thereof), powers and duties of the retiring Agent, the retiring Agent shall be discharged from all
of its duties and obligations hereunder and under the other Transaction Documents and the term “Agent” shall mean such successor
agent and the retiring Agent’s appointment, powers and duties as Agent shall be terminated. After any retiring Agent’s resignation
or termination hereunder, the provisions of this Article VI and Section 6.7 shall inure to the benefit of such retiring
Agent, its sub-agents or attorneys in fact and as to any actions taken or omitted to be taken by any of them while the retiring Agent
was the Agent under this Agreement. If no successor agent has accepted appointment as the Agent by the date which is 30 days following
the retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless become effective and the Initial
Purchaser shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Holders appoint a successor
agent as provided for herein; provided that in the case of any security held by the Agent on behalf of the Note Holders under the
Transaction Documents, the retiring Agent shall continue to hold such security in a custodial capacity only until such time as a successor
agent is appointed or deposit such security with a court of competent jurisdiction (at the reasonable expense of Note Holders). Any Person
into which the Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion
or consolidation to which the Agent shall be a party, or any Person succeeding to the business of the Agent shall be the successor of
the Agent without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto,
except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
6.8 Discretionary
Acts and Solicitation of Note Holder Consent. Notwithstanding anything else to the contrary herein or in the other Transaction Documents,
whenever reference is made in this Agreement or any other Transaction Document to any discretionary action by, consent, designation, specification,
requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be
(or not to be) suffered or omitted by the Agent or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction
or other exercise of discretion, rights or remedies to be made (or not to be made) by the Agent, it is understood that the Agent shall
be acting at the written direction of the Required Holders or that percentage of the Note Holders as required under the specific circumstance
otherwise provided for hereunder and shall be fully protected in acting pursuant to such directions.
6.9 Expenses;
Indemnity.
(a) The
Company agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Agent in connection with the preparation and
administration of this Agreement and the other Transaction Documents or in connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions hereby or thereby contemplated shall be consummated) or incurred by
the Agent in connection with the enforcement or protection of its or the Note Holders’ rights in connection with this Agreement
and the other Transaction Documents including the reasonable and documented out-of-pocket fees, charges and disbursements of counsel for
the Agent (limited to a single counsel for Agent and a single local counsel for Agent in each relevant jurisdiction). The Company agrees
to pay and reimburse the Agent for its reasonable and documented out-of-pocket legal costs and expenses paid or incurred by the Agent
through and including the Closing Date in connection with the preparation, negotiation and review of this Agreement and other Transaction
Documents.
(b) The
Company agrees to indemnify the Agent and its respective partners, controlling persons, legal counsel, directors, trustees, officers,
employees, members, agents, administrators, managers, representatives and advisors and affiliates (each, an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable
and documented counsel fees (limited to a single counsel for Agent and a single local counsel for Agent in each relevant jurisdiction),
charges and disbursements (collectively, “Losses”), incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of this Agreement or any other Transaction Document or any agreement
or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation
the transactions contemplated thereby, (ii) the enforcement of this Agreement (including the indemnification set forth in this Section
6.9(b)) and any other Transaction Document, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Company
or any of their respective Affiliates); provided that (x) any indemnity provided herein shall not, as to any Indemnitee, be available
to the extent that such Losses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee, (y) in each case, any reimbursement or indemnity, as the case may
be, was incurred by or asserted against the Indemnitee in its capacity as Agent, and (z) with respect to the Agent and the other Indemnitees
(as defined in this paragraph) only, the foregoing indemnification provisions shall be in lieu of and not in addition to the indemnification
provisions set forth in Section 4.10 of this Agreement.
(c) Each
Note Holder shall indemnify, reimburse and hold harmless the Indemnitees, in each case, to the extent that the Company for any reason
fails to pay any amount required to be paid by it to any such Indemnitee under clause (a) or (b) of this Section 6.9
within 60 days of written notice to the Company of such Loss, and without limiting the obligation of the Company to so indemnify, based
on and to the extent of such Note Holder’s pro rata share of the aggregate outstanding Principal Amount of the Notes (determined
as of the time that the applicable unreimbursed expense or indemnity payment is sought, on a several basis), from and against (i) all
unreimbursed expenses of such Indemnitee due and owing under clause (a) of this Section 6.9 and (ii) any and all Losses,
incurred by or asserted against such Indemnitee arising out of, in connection with, or as a result of (A) the execution or delivery of
this Agreement or any other Transaction Document or any agreement or instrument contemplated thereby, the performance by the parties thereto
of their respective obligations thereunder or the consummation of the transactions contemplated thereby, (B) the enforcement of this Agreement
(including the indemnification set forth in this Section 6.9(c)) and any other Transaction Document, or (C) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not such Indemnitee is a party thereto (and regardless of whether
such matter is initiated by a third party or by the Company); provided that (x) any indemnity provided herein shall not, as to
any Indemnitee, be available to the extent that such Losses are determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, and (y) in each case, any reimbursement
or indemnity, as the case may be, was incurred by or asserted against the Indemnitee in its capacity as Agent. For purposes of determining
each Note Holder’s “pro rata share,” if such unreimbursed expense or indemnity payment is sought after the date on which
the Notes have been paid in full, such determination of each Note Holder’s “pro rata share” shall be made based on the
aggregate outstanding Principal Amount immediately prior to the Note being paid in full.
(d) To
the extent permitted by applicable law, the Company shall not assert, and hereby waives, any claim against any Indemnitee, and each Indemnitee
shall not assert, and hereby waives, any claim against the Company, in each case, on any theory of liability, for special, indirect, incidental,
consequential (including lost profits) or punitive damages arising out of, in connection with, or as a result of, this Agreement, any
agreement or instrument contemplated hereby, or the other Transaction Documents, regardless of the form of action and whether or not any
such damages were foreseeable or contemplated.
(e) The
provisions of this Section 6.9 shall survive, remain operative and in full force and effect regardless of the expiration of the
term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Notes, the invalidity or
unenforceability of any term or provision of this Agreement or any other Transaction Document, any investigation made by or on behalf
of the Agent or any Note Holder, or the resignation or replacement of the Agent. Subject to Section 6.9(c), all amounts due under
this Section 6.9 shall be payable on written demand therefor
(Signature Pages Follow)
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.
SCILEX HOLDING COMPANY |
Address for Notice:
960 San Antonio Rd.,
Palo Alto, CA 94303
Attention: Stephen Ma
Telephone: (408) 891-8341 |
|
Email: sma@scilexholding.com |
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer and President |
|
With a copy to (which shall not constitute notice):
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304
Attention: Elizabeth Razzano
Telephone: (650) 320-1895
E-mail: elizabethrazzano@paulhastings.com
AGENT:
ACQUIOM AGENCY SERVICES LLC
By: |
/s/ Beth Cesari |
|
|
Name: Beth Cesari |
|
|
Title: Senior Director |
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR THE INITIAL PURCHASER FOLLOWS]
INITIAL PURCHASER:
ORAMED PHARMACEUTICALS, INC.
By: |
/s/ Nadav Kidron |
|
|
Name: Nadav Kidron |
|
|
Title: Chief Executive Officer |
|
With a copy to (which shall not constitute notice):
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attention: Ehud Barak; James P. Gerkis
E-mail: ebarak@proskauer.com;
jgerkis@proskauer.com
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Initial Purchaser: Oramed Pharmaceuticals, Inc.
Signature of Authorized Signatory of Initial Purchaser: /s/
Nadav Kidron
Name of Authorized Signatory: Nadav Kidron
Title of Authorized Signatory: Chief Executive Officer
Email Address of Authorized Signatory: nadav@oramed.com
Address for Notice to Initial Purchaser:
1185 Avenue of the Americas,
Third Floor
New York, NY 10036
Attn: Josh Hexter
Principal Amount: $ 101,875,000.00 (including
the Initial Rolled Expense Amount)
Exhibit 10.2
EXECUTION VERSION
THIS SENIOR SECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 SAID ACT OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID 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.
THIS SENIOR SECURED PROMISSORY NOTE WAS ISSUED
WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THE HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THIS SENIOR SECURED PROMISSORY
NOTE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: SCILEX HOLDING COMPANY, 960 SAN ANTONIO ROAD, PALO ALTO CA 94303, ATTENTION:
STEPHEN MA.
Original Issue Date: September 21, 2023
$101,875,000.00
SENIOR SECURED PROMISSORY NOTE
This SENIOR SECURED PROMISSORY
NOTE (as amended, restated, supplemented, modified or replaced from time to time, this “Note”) is duly authorized and
validly issued pursuant to the Securities Purchase Agreement (as from time to time amended, the “Securities Purchase Agreement”),
dated as of September 21, 2023, between Scilex Holding Company, a Delaware corporation (the “Company”), having
its principal place of business at 960 SAN ANTONIO ROAD, PALO ALTO CA 94303, and Oramed Pharmaceuticals Inc., a Delaware corporation (together
with its successors and registered assigns, the “Holder”).
FOR VALUE RECEIVED, the Company promises to pay
to the Holder the principal sum of $101,875,000.00 (the “Original Principal Amount”) on March 21, 2025 (the
“Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and
to pay interest to the Holder on the outstanding principal amount of this Note (“Outstanding Principal Amount”) in
accordance with the provisions hereof.
This Note, together with the
other senior secured promissory notes issued by the Company after the Closing Date in full or partial substitution of this Note (if any)
(each as amended, restated, supplemented or otherwise modified from time to time in accordance with this Note, an “Additional
Note”, and collectively, the “Additional Notes”) shall be in an aggregate original principal amount not to
exceed One Hundred One Million Eight Hundred Seventy Five Thousand Dollars ($101,875,000.00).
The Securities Purchase Agreement
and the Note, following the consummation of the DIP Assumption, amend and restate and replace in its entirety the Senior DIP Facility,
and the obligations set forth herein and in the other Transaction Documents amend and restate and replace in their entirety the DIP Facility
Obligations, and any additional documentation governing the Senior DIP Facility shall be deemed to be cancelled, terminated, and extinguished,
and replaced in their entirety with the Transaction Documents.
This Note is subject to the following additional
provisions:
Section 1. Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Securities Purchase Agreement and (b) the following terms shall have the following meanings:
“2nd
Lien Account Control Agreements” means any agreement entered into by and among the Agent, Scilex Pharmaceuticals, Inc. and Bank
of America with respect to the accounts which are collateral for the AR Facility, which grants Agent (for the benefit of the Secured Parties)
a perfected security interest in the subject account or accounts, which is in second in priority to the lender under the AR Facility.
“Acceptable
Indebtedness” means (a) B. Riley Indebtedness, (b) Yorkville Indebtedness or (c) any Indebtedness incurred by the Company owing
to a third-party financing provider reasonably acceptable to the Required Holders, in each case, which may be secured by proceeds from
any of the ELOCs or ATM Program or unsecured; provided, that the Acceptable Indebtedness (i) shall not exceed the Acceptable Indebtedness
Cap at any time and (ii) shall only be comprised of term loans (and shall not, for the avoidance of doubt, be structured as or comprised
of any Indebtedness that is revolving in nature or is otherwise permitted to be repaid and reborrowed from time to time); provided
further, that the Company shall provide the Holder a reasonable opportunity (not to exceed three (3) Business Days) to review and
provide reasonable comments to the definitive documentation of any such Acceptable Indebtedness prior to the incurrence or guarantee thereof.
“Account
Control Agreement(s)” means any agreement entered into by and among the Agent, Company or any Qualified Subsidiary, and the
applicable bank or other institution (including a securities intermediary) in which Company or any Subsidiary maintains a deposit account
or an account holding investment property and which grants Agent (for the benefit of the Secured Parties) a perfected first priority security
interest in the subject account or accounts.
“Additional
Note” has the meaning set forth in the preamble.
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act. “Affiliated” has
a meaning correlative thereto.
“Agent”
has the meaning set forth in the Securities Purchase Agreement.
“Anticipated/Known
Breach” means each breach or default under any Material License Agreement or Material License that has occurred and is continuing
or is anticipated to occur that is listed on the written schedule delivered by the Company to the Holder on the day immediately prior
to the Closing Date.
“Applicable
Rate” means, for any Interest Period, a fluctuating per annum interest rate equal to the sum of (1) greater of (x) the
Floor and (y) Term SOFR and (2) eight and one half percent (8.5%); provided that the “Applicable Rate”
with respect to any Benchmark other than Term SOFR, shall mean the sum of (1) the greater of (x) the Floor and (y) the
Benchmark Replacement and (2) eight and one half percent (8.5%). Any change in Term SOFR or the Benchmark Replacement shall be effective
from and including the effective date of such change in Term SOFR or the Benchmark Replacement.
“AR Credit
Agreement” has the meaning set forth in the definition of “AR Facility”.
“AR Facility”
means all Indebtedness and other obligations of the Company and its Subsidiaries pursuant to that certain Credit and Security Agreement,
dated June 27, 2023 (the “AR Credit Agreement”), by and between Scilex Pharmaceuticals, Inc., as borrower, and eCapital
Healthcare Corp., as lender, and the related Guaranty Agreement, dated June 27, 2023, by and between eCapital Healthcare Corp.
and the Company, as guarantor, in each case, as in effect on the date of the Securities Purchase Agreement.
“ATM Program”
has the meaning set forth in Section 7(b)(ix).
“ATM Sales
Agreement” has the has the meaning set forth in Section 7(b)(ix).
“ATM Shelf”
has the meaning set forth in Section 7(b)(ix).
“Available
Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable (a) if the
then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period
or (b) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement
as of such date; not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest
Period” pursuant to Section 2(c).
“Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary
thereof any such case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Company or any Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the
Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property
that is not discharged or stayed within sixty (60) calendar days after such appointment, (e) the Company or any Subsidiary thereof
makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof calls a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Subsidiary thereof admits
in writing that it is generally unable to pay its debts as they become due, or (h) the Company or any Subsidiary thereof, by any act or
failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other
action for the purpose of effecting any of the foregoing.
“Benchmark”
means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR
Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that
such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2(c).
“Benchmark
Replacement” means the first alternative set forth in the order below that can be determined by the Required Holders (and that
is acceptable to the Required Holders) for the applicable Benchmark Replacement Date: (a) Daily Simple SOFR; or (b) the sum
of: (i) the alternate benchmark rate that has been selected by the Required Holders in consultation with the Company giving due consideration
to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant
Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the
then-current Benchmark for Dollar-denominated syndicated credit facilities and (ii) the related Benchmark Replacement Adjustment.
“Benchmark
Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement,
the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or
zero) that has been selected by the Required Holders in consultation with the Company giving due consideration to (a) any selection
or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such
Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing
market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement
of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time.
“Benchmark
Replacement Date” means a date and time determined by the Required Holders, which date shall be no later than the earliest to
occur of the following events with respect to the then-current Benchmark: (a) in the case of clause (a) or (b) of the definition
of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced
therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof)
permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or (b) in the case
of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published
component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such
Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference
to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such
component thereof) continues to be provided on such date. For the avoidance of doubt, the “Benchmark Replacement Date” will
be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event
or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the
calculation thereof).
“Benchmark
Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: (a) a
public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used
in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark
(or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor
administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (b) a public statement
or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in
the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over
the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark
(or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark
(or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all
Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement
or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component
thereof); or (c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark
(or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component
thereof) are not, or as of a specified future date will not be, representative. For the avoidance of doubt, a “Benchmark Transition
Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth
above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation
thereof).
“Blocked
Account” has the meaning set forth in Section 7(c).
“Board
Observer” has the meaning set forth in Section 5(a).
“Board
Observer Expense Cap” has the meaning set forth in Section 5(d).
“Board
Observer Fee Cap” has the meaning set forth in Section 5(d).
“BRE”
has the meaning set forth in Section 7(d).
“BRE Organizational
Documents” has the meaning set forth in Section 7(d).
“B. Riley
ELOC” has the meaning set forth in clause (b) of the definition of ELOCs.
“B. Riley
Indebtedness” means any Indebtedness incurred by the Company owing to B. Riley Securities, and which may be secured by proceeds
from any of the ELOCs or ATM Program or unsecured.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.
“Capital
Stock” means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after the Closing Date, including
common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership,
interests in a trust, interests in other unincorporated organizations or any other equivalent of such ownership interest.
“Cash Management
Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing
house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline
system) and other cash management arrangements.
“Cash Sweep
Financing” means any Equity Issuance and any issuance or incurrence of Indebtedness or debt financing excluding (a) any
outstanding Indebtedness under the AR Facility, (b) any Equity Issuance undertaken by means of either of the ELOCs, (c) the
Subordinated Debt and (d) Acceptable Indebtedness (if any) (provided, that such exclusion shall apply only to the extent of such
Indebtedness that is not in excess of the thresholds applicable thereto as set forth in the definition of “Permitted Indebtedness”
including, for the avoidance of doubt, the AR Facility Cap, the Acceptable Indebtedness Cap and the Subordinated Debt Cap).
“Cash Sweep
Financing Source” has the meaning set forth in Section 2(g)(i).
“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50%
of the voting securities of the Company (other than by means of exercise of the Securities issued under the Securities Purchase Agreement),
(b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and,
after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the
aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries,
taken as a whole) sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a
replacement at one time or within a three year period of more than one-half of the members of the Board of Directors that is not approved
by a majority of those individuals who are members of the Board of Directors on the date of the Securities Purchase Agreement (or by those
individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by
a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an
agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d)
above.
“Code”
means the United States Internal Revenue Code of 1986, as amended.
“Collateral”
has the meaning set forth in the Security Agreement.
“Company
Boards” has the meaning set forth in Section 5(a).
“Competitor”
means any Person that is (i) identified in a written schedule of all such entities delivered by the Company to Oramed on the day immediately
prior to the Closing Date, or (ii) otherwise directly engaged in the manufacture or sale of pharmaceutical products targeting pain management
(provided, for the avoidance of doubt, that any Person which merely has an economic interest in any such direct competitor, and is not
itself such a direct competitor of the Company or its Subsidiaries, shall not be deemed to be a Competitor for purposes of this definition).
“Conforming
Changes” means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation
of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business
Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or
any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining
rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability
and length of lookback periods and other technical, administrative or operational matters) that the Required Holders decide may be appropriate
to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Required Holders in
a manner substantially consistent with market practice.
“Daily
Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for
the day (such day, a “SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to (i) if
such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government
Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR
is published by the SOFR Administrator on the SOFR Administrator’s Website, and (b) four percent (4%). If by 5:00 p.m. (New
York City time) on the second (2nd) U.S. Government Securities Business Day immediately following any SOFR Determination Day, SOFR in
respect of such SOFR Determination Day has not been published on the SOFR Administrator’s Website and a Benchmark Replacement Date
with respect to the Daily Simple SOFR has not occurred, then SOFR for such SOFR Determination Day will be SOFR as published in respect
of the first preceding U.S. Government Securities Business Day for which such SOFR was published on the SOFR Administrator’s Website;
provided that, any SOFR determined pursuant to this sentence shall be utilized for purposes of calculation of Daily Simple SOFR for no
more than three (3) consecutive SOFR Rate Days; provided further, Daily Simple SOFR shall be rounded upwards to the next 1/100% (if necessary).
Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR
without notice to the Company.
“Default”
means any breach of or default under any term, provision, condition, covenant or agreement contained in this Note or any other Transaction
Document or any other event, in each case that, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“Default
Rate” has the meaning set forth in Section 2(d).
“DIP Facility
Obligations” has the meaning set forth in the Securities Purchase Agreement.
“Disqualified
Stock” means, with respect to any person, any Capital Stock of such person that, by its terms (or by the terms of any security
or other equity interests into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition
(a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option
of the holder thereof, in whole or in part, (c) provides for the scheduled or mandatory payments of dividends in cash, or (d) is
or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Stock.
“Dollars”,
“dollars” and “$” each means lawful money of the United States of America.
“eCapital
Subordination Agreement” means the Subordination Agreement, dated September 21, 2023, by and among the Agent and eCapital
Healthcare Corp. with respect to the AR Facility or, if applicable, any successor lender to eCapital Healthcare Corp. in connection with
any Refinancing Indebtedness in respect of the AR Facility.
“Effectiveness
Period” has the meaning set forth in the Registration Rights Agreement.
“Eligible
Assignee” means (a) any Affiliate of the Holder and (b) any commercial bank, insurance company, investment or mutual
fund or other Person that is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended);
provided, that neither the Company nor any of its Affiliates shall be an Eligible Assignee; provided further, that no person
who is a Competitor shall be an Eligible Assignee.
“ELOCs”
means (a) any advance subject to the standby equity purchase agreement entered into between the Company and YA II PN, Ltd., dated
November 17, 2022, as amended by an amended and restated standby equity purchase agreement on February 8, 2023, as
such agreement may be further amended, restated, supplemented or otherwise modified from time to time following the Closing Date (the
“YA ELOC”) and (b) any advance or additional advance subject to the standby equity purchase agreement entered
into between the Company and B. Riley Principal Capital II, LLC, dated as of January 8, 2023 as such agreement may be amended,
restated, supplemented or otherwise modified from time to time following the Closing Date (the “B. Riley ELOC”).
“Event
of Default” has the meaning set forth in Section 8(a).
“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all (1) all Exercise Notices
(as defined in the Warrants) of the Holder in accordance with the terms of the Warrants, (b) the Company shall have paid all liquidated
damages and other amounts owing to the Holder in respect of this Note, (c)(i) there is an effective Registration Statement pursuant
to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Warrant Shares issuable pursuant to the Warrants
(and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all
of the Warrant Shares issuable pursuant to the Warrants (and shares issuable in lieu of cash payments of interest) may be resold pursuant
to Rule 144 without volume or manner-of-sale restrictions or current public information requirements as determined by the counsel to the
Company and set forth in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) the
Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted
for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will
continue uninterrupted for the foreseeable future) and (e) there is a sufficient number of authorized but unissued and otherwise
unreserved shares of Common Stock for the issuance of all of the Warrant Shares then issuable pursuant to the Warrants.
“Equity
Issuance” means (a) any issuance or sale by the Company or any of its Subsidiaries of any Capital Stock (including any
Capital Stock issued upon exercise or conversion of any Equity Rights) or any Equity Rights and other than any issuance contemplated by
clauses (a) or (b) of the definition of “Exempt Issuance” set forth in the Securities Purchase Agreement or (b) the receipt
by the Company or any of its Subsidiaries of any capital contribution (whether or not evidenced by any Capital Stock issued by the recipient
of such contribution), in each case for bona fide capital-raising purposes.
“Equity
Rights” means, with respect to any Person, any then-outstanding subscriptions, options, warrants, commitments, preemptive rights,
convertible debt, or other equity-linked securities or agreements of any kind for the issuance or sale, of any additional Capital Stock
of any class, or partnership or other ownership interests of any type in, such Person.
“Excluded
Accounts” means (i) payroll, healthcare and other employee wage and benefit accounts, provided that the balance of all
such accounts does not exceed $1,500,000 in the aggregate at any time, (ii) cash collateral accounts subject to Permitted Liens,
in each case with a balance which does not exceed $500,000 individually or $1,000,000 for all such accounts in the aggregate at any one
time, (iii) deposit accounts used for disbursements, accounts payable, and clearinghouse purposes not otherwise being provided by
the bank at which such deposit accounts are held, in each case with a balance which does not exceed $1,000,000 individually or $2,000,000
for all such accounts in the aggregate at any one time (iv) accounts with a balance which does not exceed $100,000 individually or
$500,000 for all such accounts in the aggregate at any one time, and (v) the funds or other property held in or maintained for such
purposes in any such account described in clauses (i) through (iv).
“Exit Fee”
has the meaning set forth in Section 4.
“Exit Fee
Triggering Event” has the meaning set forth in Section 4.
“Floor”
means four percent (4%).
“Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more
Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its
Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the
holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making
or party to, such purchase, tender or exchange offer were not outstanding, or (z) such number of shares of Common Stock such that
all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer,
become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually
or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated
with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such
number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more
related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin- off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held
by all such Subject Entities as of the date of the Securities Purchase Agreement calculated as if any shares of Common Stock held by all
such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other shareholders of the Company to surrender their shares of Common Stock without approval
of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent,
or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this
definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
“Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
“Holder
Cash Sweep Amount” means, with respect to any Cash Sweep Financing, seventy percent (70.0%) of the cash proceeds (net of underwriting
discounts, accounting, investment banking or broker fees and sales commissions and other reasonable and documented out-of-pocket costs
and expenses of the Company associated therewith, in each case, paid to non-Affiliates) received by the Company or any of its Subsidiaries
from such financing.
“Holder
ELOC Sweep Amount” means, with respect to any advance under the ELOCs, seventy percent (70.0%) of the cash proceeds (net of
reasonable and documented out-of-pocket costs and expenses associated therewith, in each case, paid to non-Affiliates) received by the
Company or any of its Subsidiaries from such advance.
“Indebtedness”
of a Person shall include (a) all obligations for borrowed money or the deferred purchase price of property or services (excluding
trade credit and trade accounts payable incurred in the ordinary course of business), (b) all obligations evidenced by bonds, debentures,
notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, surety bonds, bankers
acceptances, current swap agreements, interest rate hedging agreements, interest rate swaps or other financial products, (c) all
capital lease obligations (as determined in accordance with GAAP), (d) all obligations or liabilities secured by a Lien on any asset
of such Person, irrespective of whether such obligation or liability is assumed by such Person, (e) any obligation arising with respect
to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets
of such Person (excluding trade credit and trade accounts payable incurred in the ordinary course of business), (f) Disqualified
Stock, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse) any of the foregoing obligations of any other Person. The foregoing to the contrary notwithstanding,
“Indebtedness” shall not include: (i) contingent obligations incurred in the ordinary course of business consistent with
past practice in connection with trade credit and trade payables and, for the avoidance of debt, not in respect of borrowed money; (ii) deferred
or prepaid revenues, (iii) any milestone or bonus payments (whether performance or time-based), and royalty, licensing, revenue or
profit sharing arrangements, in each case, characterized as such and arising expressly out of Permitted Licenses; or (iv) asset retirement
obligations and obligations in respect of workers’ compensation (including pensions and retiree medical care) that are not overdue
by more than sixty (60) days, and in no event in excess of $250,000 in the aggregate at any time outstanding.
“Interest
Payment Date” has the meaning set forth in Section 2(a).
“Interest
Period” means, (a) initially, the period beginning on (and including) the Original Issue Date and ending on (and including)
the last day of the calendar month in which the Original Issue Date occurs, and (b) thereafter, the period beginning on (and including)
the first day of each succeeding calendar month and ending on the earlier of (and including) (i) the last day of such calendar month
and (ii) the Maturity Date.
“Investments”
means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or
other acquisition (including by merger) of Capital Stock of another Person, (b) a loan, advance or capital contribution to, guarantee
or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase
or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all
or a substantial part of the business of, such Person.
“License
Agreement” means any license or sublicense agreement pursuant to which the Company or any of its Subsidiaries is the licensee
or grantee of any Intellectual Property Rights, as such agreements may be amended, restated, amended and restated, supplemented or otherwise
modified not in contravention of this Note.
“Licensor”
means the licensor or grantor of any Intellectual Property Rights under a License Agreement.
“Liquidity”
means the sum of (a) all unrestricted cash and cash equivalents of the Company and its Qualified Subsidiaries (without duplication),
which cash, for the avoidance of doubt, shall not be subject to any liens or encumbrances except for those of the Holder and (b) availability
within the Borrowing Base (as defined in the AR Facility) under the AR Facility.
“Make-Whole
Amount” means, in connection with any Voluntary Prepayment of this Note, an amount equal to fifty percent (50.0%) of the amount
of additional interest that would accrue on the principal amount so prepaid at the Applicable Rate from the Prepayment Date through and
including the Maturity Date.
“Mandatory
Default Amount” means the sum of (a) 125% of the Outstanding Principal Amount, plus 100% of accrued and unpaid interest
hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.
“Mandatory
Prepayment Trigger Date” means the earlier of (x) April 1, 2024 and (y) the date upon which all of the Acceptable
Indebtedness (excluding for the avoidance of doubt, any Refinancing Indebtedness in respect thereof; provided, that any Acceptable
Indebtedness incurred in order to refinance the Yorkville Debentures shall not constitute Refinancing Indebtedness for purposes of this
parenthetical) is repaid in full.
“Material
License” means any license of Intellectual Property Rights under a Material License Agreement.
“Material
License Agreement” means (a) those License Agreements set forth on Schedule 4 hereto on the Closing Date, (b) all
License Agreements disclosed as material in SEC Filings of the Company from time to time, and (c) all other License Agreements, whether
now in existence or entered into following the Closing Date, that are or become material to the Company or the results of operations,
assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, from time to time.
“Monthly
Reports” means (i) a profit and loss statement with detail by product for (a) net sales, (b) cost of sales (c) royalty/milestone
obligations for the applicable period, (ii) operating expenses on a line-item basis, (iii) a Gross-to-Net report (“GtN”),
including a breakdown by product between wholesale acquisition cost and net revenue (including, but not limited to, contract price discounts,
cash discounts, rebates (patient co-pay cards, managed care and commercial), distribution fees, wholesaler service fees (DSAs), PBM admin
fees, commercial and managed care fees, federal government chargebacks (e.g., 340b), vouchers, return reserves, and wholesaler prompt
pay discount), and (iv) new and total scripts by product (provided, for the avoidance of doubt, that the Company shall provide
the most recent information available to it or its Subsidiaries with respect to such new and total scripts by product as of the end of
the relevant month, it being understood and acknowledged that such information becomes available to the Company or its Subsidiaries up
to three months following the relevant changes, and as a result the information provided under such Monthly Reports with respect thereto
will not be current with respect to the most recently ended month when provided).
“Non-Material
License Agreement” means any License Agreement that is not a Material License Agreement.
“Note Holder”
means the Holder and the holders of the Additional Notes.
“Note Holder
Designee” has the meaning set forth in Section 10(c).
“Note Register”
has the meaning set forth in Section 3(c).
“Notes”
means collectively, this Note and all Additional Notes outstanding at any date of determination.
“NY Courts”
has the meaning set forth in Section 9(d).
“Obligations”
has the meaning set forth in the Security Agreement.
“Oramed”
means Oramed Pharmaceuticals Inc., in its capacity as initial Holder of this Note.
“Original
Issue Date” means the date of the issuance of this Note.
“Outstanding
Principal Amount” has the meaning set forth in the preamble.
“Periodic
Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR.”
“Permitted
Indebtedness” means (a) the Indebtedness evidenced by the Notes, (b) Indebtedness under the AR Facility not exceeding
$30,000,000 in aggregate principal amount outstanding at any time (the “AR Facility Cap”), subject always to the eCapital
Subordination Agreement, and any Refinancing Indebtedness in respect thereof, (c) the Acceptable Indebtedness (for the avoidance
of doubt, inclusive of Indebtedness incurred and outstanding under the Yorkville Debentures as of the Closing Date) not exceeding $30,000,000
in aggregate principal amount outstanding at any time (the “Acceptable Indebtedness Cap”) and any Refinancing Indebtedness
in respect thereof; provided that, for the avoidance of doubt, Acceptable Indebtedness may be incurred prior to, concurrently with,
or after the Closing Date, (d) lease obligations and purchase money indebtedness of up to $500,000, in the aggregate, incurred in
connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets, (e) unsecured
Indebtedness not exceeding $30,000,000 in aggregate principal amount outstanding (the “Subordinated Debt Cap”), which
(1) is expressly subordinate to the Note pursuant to a written subordination agreement with the Holder that is acceptable to the
Holder in its sole and absolute discretion, (2) matures at a date later than the 91st day following the Maturity Date,
and (3) shall not have any scheduled amortization payments, mandatory redemptions or sinking fund obligations or mandatory prepayments
(including cash flow sweeps) prior to the date that is ninety-one (91) days after the Maturity Date (the Indebtedness incurred pursuant
to this clause (e), the “Subordinated Debt”), (f) intercompany Indebtedness among the Company and Qualified
Subsidiaries, provided that Agent (for the benefit of the Secured Parties) has a first priority perfected security interest in such intercompany
Indebtedness and, unless expressly waived in writing by the Required Holders, such intercompany Indebtedness is made expressly subordinate
to the Note pursuant to a subordination agreement acceptable to Agent in form and substance, (g) Indebtedness incurred in the ordinary
course of business to finance insurance premiums or otherwise owed to any Person providing property, casualty, liability or other insurance
to the Company or any of its Subsidiaries, but in no event in excess of $500,000 in the aggregate outstanding at any time, (h) contingent
liabilities of the Company and/or its Subsidiaries in respect of intercompany indebtedness permitted under the foregoing clause (f),
(i) Indebtedness arising in connection with the endorsement of instruments or other payment items for deposit in the ordinary course
of business consistent with past practice, (j) Indebtedness incurred in the ordinary course of business in respect of credit cards
or Cash Management Services, but in no event in excess of $100,000 in the aggregate outstanding at any time; (k) Indebtedness comprising
Investments permitted under Section 7(a)(viii), (l) unsecured Indebtedness incurred in respect of netting services, overdraft
protection and other like services, in each case, incurred in the ordinary course of business, but in no event in excess of $100,000 in
the aggregate outstanding at any time, (m) Indebtedness consisting of ELOCs, if any, (n) other Indebtedness existing on the
date of the Securities Purchase Agreement and listed on Schedule 3 hereto, and (o) additional Indebtedness in an aggregate
amount outstanding at any one time not to exceed $500,000.
“Permitted
Licenses” means: (a) intercompany licenses, sublicenses or grants of rights for development, manufacture, production, commercialization
(including commercial sales to end users), marketing, promotion, co-promotion, sales or distribution, in each case, solely among the Company
and its Qualified Subsidiaries, (b) licenses, sublicenses and grants of rights in effect on the date of the Securities Purchase Agreement
and described on Schedule 2 hereto, (c) licenses, sublicenses, or grants of rights entered into in the ordinary course
of business consistent with past practice or which would not be reasonably likely to have a Material Adverse Effect on the use or value
of the Intellectual Property Rights; provided, that with respect to any exclusive license it shall not be exclusive with respect to any
territory in North America without the prior written consent of the Required Holders and cannot result in a transfer of title to the underlying
intellectual property, and (d) other licenses, sublicenses, or grants of rights to which the Required Holders shall have consented
to in writing in their sole discretion.
“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and
by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established
in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such
as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising
in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract
from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its
consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect
of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) (i) Liens
incurred in connection with Permitted Indebtedness under clause (a) of the definition thereof, (ii) Liens incurred in connection with
Permitted Indebtedness under clause (b) of the definition thereof, provided that such Liens are only secured by the “Collateral”
as defined in the AR Credit Agreement as set forth therein on the Closing Date (for the avoidance of doubt, irrespective of any amendments
or modifications thereto following the Closing Date) and (iii) Liens incurred in connection with Permitted Indebtedness under clause (c) of
the definition thereof, provided that such Liens are only secured by the proceeds of advances under the ELOCs or the ATM Sales Agreement;
(d) Liens incurred in connection with Permitted Indebtedness under clause (d) of the definition thereof, provided that such
Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased, (e) easements, rights
of way, restrictions, minor defects or irregularities in title, in each case, not interfering in any material respect with the ordinary
conduct of the Company’s business and which do not materially detract from the value from the asset or property in question, (f) any
interest or title of a licensor, sublicensor, lessor or sublessor under any license or lease agreement, (g) licenses, sublicenses,
leases or subleases of real property or intellectual property granted by the Company (as lessor or licensor) to third persons in the ordinary
course of business and, in the case of intellectual property, that are otherwise permitted by this Note and the other Transaction Documents,
(h) banker’s Liens and rights of set-off of financial institutions arising in connection with items deposited in accounts maintained
at such financial institution and subsequently unpaid and fees and expenses that are charged to the Company by such financial institutions
in the normal course of business of the maintenance and operation of such accounts, (i) Liens on insurance policies and the proceeds
thereof incurred in connection with Permitted Indebtedness under clause (g) thereof, (j) Liens existing on the date hereof and
Liens securing Refinancing Indebtedness in respect thereof, (k) Liens in the form of deposits or pledges incurred in connection with
worker’s compensation, unemployment compensation and other types of social security (excluding Liens arising under ERISA) for sums
not overdue or being contested in good faith by appropriate proceedings and not involving any advances or borrowed money or the deferred
purchase price of property or services and, in each case, for which it maintains adequate reserves and which in the aggregate do not exceed
$100,000 in the aggregate outstanding at any time, (l) Liens constituting Permitted Licenses, (m) rights of lessors under leases
(including financing statements regarding property subject to lease) not in violation of the requirements of this Note and filed as a
precautionary filing, provided that such Liens are only in respect of the property subject to, and secure only, the respective
lease, (n) Liens on amounts deposited to secure the Company’s and its Subsidiaries’ obligations in connection with worker’s
compensation or other unemployment insurance, (o) Liens granted in the ordinary course of business on the unearned portion of insurance
premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,
(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection
with the importation of goods, and (q) additional Liens the aggregate amount of obligations and/or contingent obligations secured
thereby does not exceed $500,000.
“PIK Interest”
has the meaning set forth in Section 2(a).
“Prepayment
Amount” has the meaning set forth in Section 2(f)(i).
“Prepayment
Date” has the meaning set forth in Section 2(f)(i).
“Prepayment
Notice” has the meaning set forth in Section 2(f)(i).
“Prepayment
Notice Date” has the meaning set forth in Section 2(f)(i).
“Prepayment
Period” has the meaning set forth in Section 2(f)(i).
“Principal
Market” means the Nasdaq Capital Market or such other Trading Market which may be the principal Trading Market for the Common
Stock from time to time.
“Qualified
Subsidiary” means any Subsidiary that has executed and delivered the Subsidiary Guaranty to the Holder and in which the Agent
(for the benefit of the Secured Parties) has a perfected, first priority Lien (other than with respect to assets subject to Permitted
Liens under clause (c)(ii) and (c)(iii) thereof, in which, in each case, Agent (for the benefit of the Secured Parties) shall have a perfected,
second priority Lien) in substantially all of the assets and property of such Subsidiary.
“Refinancing
Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as: (a) such refinancings, renewals,
or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, (b) such
refinancings, renewals, or extensions do not result in a shortening of the final stated maturity or the average weighted maturity (measured
as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions
that, taken as a whole, are or would reasonably be expected to be materially adverse to the interests of the Holder, (c) if the Indebtedness
that is refinanced, renewed, or extended was subordinated in right of payment to this Note, then the terms and conditions of the refinancing,
renewal, or extension must include subordination terms and conditions that are at least as favorable to the Holder as those that were
applicable to the refinanced, renewed, or extended Indebtedness, (d) the Indebtedness that is refinanced, renewed, or extended is
not recourse to any Person that is liable on account of this Note other than those Persons which were obligated with respect to the Indebtedness
that was refinanced, renewed, or extended, (e) if the Indebtedness that is refinanced, renewed or extended was unsecured, such refinancing,
renewal or extension shall be unsecured, and (f) if the Indebtedness that is refinanced, renewed, or extended was secured (i) such
refinancing, renewal, or extension shall be secured by substantially the same or less collateral as secured such refinanced, renewed or
extended Indebtedness on terms no less favorable to the Holder and (ii) the Liens securing such refinancing, renewal or extension
shall not have a priority more senior than the Liens securing such Indebtedness that is refinanced, renewed or extended.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Securities Purchase Agreement, among
the Company and the original Holder, in the form of Exhibit B attached to the Securities Purchase Agreement.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale of the Warrant Shares by the Holder as provided for in the Registration Rights Agreement.
“Relevant
Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially
endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Required
Holders” means the holders of this Note and the Additional Notes then holding more than fifty percent (50%) of the sum of the
aggregate unpaid principal amount of this Note and the Additional Notes then outstanding on any date of determination; provided,
that to the extent any amendment or other modification to this Note and the Additional Notes would (a) extend the date of maturity of
such notes or of any payment thereunder, (b) decrease the interest rate (it being acknowledged and agreed that any application or failure
to apply the Default Rate shall be excluded from this clause (b)), (c) release or subordinate (other than as permitted by this Note and
the Additional Notes) the security interests granted on any material portion of the Collateral securing the Obligations or (d) release
the Company or any Subsidiary from its Obligations under this Note and/or the Additional Notes or any other Transaction Document, then
such amendment, consent, waiver or other modification shall, in addition to the Required Holders without giving effect to this proviso,
also require the consent or approval of the applicable holder of the Note or the Additional Notes directly affected thereby.
“Rolled
Expense Amount” means a portion of the Outstanding Principal Amount that is equal to (i) the Initial Rolled Expense Amount (as
defined in the Securities Purchase Agreement, which, for the avoidance of doubt is $1,000,000) minus the aggregate amount of fees,
costs and expenses paid to or on behalf of the Board Observer pursuant to the second sentence of Section 5(d). For the avoidance of doubt,
the Original Principal Amount as defined and set forth above is inclusive of the Rolled Expense Amount.
“Secured
Parties” has the meaning set forth in the Security Agreement.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Securities
Purchase Agreement” means the Securities Purchase Agreement, dated as of September 21, 2023, among, inter alios,
the Company and the original Holder, as amended, modified or supplemented from time to time in accordance with its terms.
“Security
Agreement” has the meaning set forth in Section 9(j).
“Senior
DIP Facility” has the meaning set forth in the Securities Purchase Agreement.
“SOFR”
means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator”
means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
“Subordinated
Debt” has the meaning set forth in clause (e) of the definition of Permitted Indebtedness.
“Term SOFR”
means Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term
SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period,
as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic
Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator
and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference
Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which
such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government
Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination
Day.
“Term SOFR
Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference
Rate selected by the Required Holders in its reasonable discretion).
“Term SOFR
Reference Rate” means the forward-looking term rate based on SOFR.
“Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market, provided that “Trading Day” shall not include any day
on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in
advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such
day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price
or trading volume determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto)
is open for trading of securities.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York
Stock Exchange (or any successors to any of the foregoing).
“U.S. Government
Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities
Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for
purposes of trading in United States government securities.
“Unadjusted
Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Voluntary
Prepayment” has the meaning set forth in Section 2(f)(i).
“Warrant
Shares” mean the shares of Common Stock issuable upon exercise of the Warrants.
“YA ELOC”
has the meaning set forth in clause (a) of the definition of ELOCs.
“Yorkville
Debentures” means the Convertible Debentures issued to YA II PN, Ltd. or its affiliates (collectively, “Yorkville”)
pursuant to that certain Securities Purchase Agreement, dated March 21, 2023, between the Company and the investors listed on Schedule
I thereto.
“Yorkville
Indebtedness” means the aggregate Indebtedness incurred by the Company owing to Yorkville pursuant to (i) the Yorkville Debentures
outstanding on the Closing Date and (ii) any Indebtedness incurred by the Company owing to Yorkville and which may be secured by the proceeds
of the YA ELOCs or ATM Program or unsecured.
Section 2. Payments.
(a) Payment
of Interest. The Company shall pay interest to the Holder on the aggregate then Outstanding Principal Amount at the Applicable Rate,
which such interest shall be payable monthly (i) in kind in arrears on the last Business Day of each calendar month, beginning on
the first such date after the Original Issue Date (each such date, an “Interest Payment Date”), by capitalizing such
interest and adding it to the Outstanding Principal Amount on such Interest Payment Date (such amount of interest capitalized and paid-in-kind,
“PIK Interest”) and (ii) in cash on the Maturity Date. On each Interest Payment Date, the Outstanding Principal
Amount shall without further action by any party hereto be deemed to be increased by the aggregate amount of PIK Interest due on such
Interest Payment Date and added to the Note in accordance with the immediately preceding sentence, whereupon such amount of PIK Interest
shall be treated as outstanding principal for all purposes of this Note and shall accrue interest in accordance with the preceding sentence.
(b) Interest
Calculations. Interest shall be calculated on the basis of a 360-day year and the actual number of days elapsed and shall accrue daily
commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest,
liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose
name this Note is registered in the Note Register.
(c) Conforming
Changes; Benchmark Replacement.
(i) In
connection with the use or administration of Term SOFR, the Required Holders will have the right to make Conforming Changes from time
to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Conforming
Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document.
The Required Holders will promptly notify the Company of the effectiveness of any Conforming Changes in connection with the use or administration
of Term SOFR.
(ii) Notwithstanding
anything to the contrary herein or in any other Transaction Document, if a Benchmark Transition Event and its related Benchmark Replacement
Date have occurred prior to any setting of the then-current Benchmark, then if a Benchmark Replacement is determined in accordance with
clause (a) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement
will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of such Benchmark setting and subsequent
Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction
Document and (y) if a Benchmark Replacement is determined in accordance with clause (b) of the definition of “Benchmark
Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder
and under any Transaction Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business
Day after the date notice of such Benchmark Replacement is provided to the Company without any amendment to, or further action or consent
of any other party to, this Agreement or any other Transaction Document.
(iii) In
connection with the implementation of a Benchmark Replacement, the Required Holders will have the right to make Benchmark Replacement
Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments
implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of the Company.
(iv) The
Required Holders will promptly notify the Company and all Note Holders of (x) the implementation of any Benchmark Replacement and
(y) the effectiveness of any Benchmark Replacement Conforming Changes in connection with the use, administration, adoption or implementation
of a Benchmark Replacement. Any determination, decision or election that may be made by the Required Holders pursuant to this Section 2(c)(iv)
including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance
or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made
in its sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2(c).
(v) Notwithstanding
anything to the contrary herein or in any other Transaction Document, at any time (including in connection with the implementation of
a Benchmark Replacement), (x) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any
tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected
by the Required Holders in their permitted discretion or (B) the regulatory supervisor for the administrator of such Benchmark has
provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative,
then the Required Holders may modify the definition of “Interest Period” (or any similar or analogous definition) for any
Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (y) if a tenor that was removed
pursuant to clause (x) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including
a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative
for a Benchmark (including a Benchmark Replacement), then the Required Holders may modify the definition of “Interest Period”
(or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
The Required Holders will promptly notify the Company and the other Note Holders of the effectiveness of any modifications pursuant to
this clause (v).
(d) Default
Rate. Upon the occurrence and during the continuance of an Event of Default, at the election of the Required Holders, the Outstanding
Principal Amount and all other amounts outstanding (whether or not past due) shall accrue at an interest rate equal to the lesser of (x) the
Benchmark plus fifteen percent (15%) or (y) the maximum rate permitted under applicable law (the “Default Rate”),
which interest shall be payable on each Interest Payment Date and on the Maturity Date in accordance with Section 2(a). Upon the
election of the Required Holders pursuant to the preceding sentence, the Company shall pay the Default Rate on the Obligations hereunder
retroactive to the date that such Event of Default occurred.
(e) Principal
Payments. The principal amount of the Note shall be paid in installments on the dates and in the respective amounts shown below (as
such amounts shall be reduced from time to time as a result of mandatory prepayments or Voluntary Prepayments required or permitted hereunder
in accordance with Section 2(h)):
Date of Payment (if not a Business Day, to
be the first Business Day following the date listed below): |
|
Amount of Loan Payment |
December 21, 2023 |
|
$5,000,000 |
March 21, 2024 |
|
$15,000,000 |
June 21, 2024 |
|
$20,000,000 |
September 21, 2024 |
|
$20,000,000 |
December 21, 2024 |
|
$20,000,000 |
Maturity Date |
|
the entire remaining principal balance of the Note |
The final scheduled principal installment
of the Note shall, in any event, be in an amount equal to the entire remaining Outstanding Principal Amount including, for the avoidance
of doubt, all PIK Interest that has been capitalized pursuant to and in accordance with Section 2(a) prior to the Maturity Date.
(f) Voluntarily
Prepayments.
(i) Voluntary
Prepayments. Subject to the provisions of this Section 2(f), upon two (2) Business Days’ prior written notice (a “Prepayment
Notice” and the date such notice is deemed delivered hereunder, the “Prepayment Notice Date”) to the Holder
(which notice may be conditioned upon a transaction (including a refinancing) to be closed or consummated in connection with such repayment),
the Company may, at any time and from time to time, voluntarily prepay the Note in whole or in part (such prepayment pursuant to this
Section 2(f), a “Voluntary Prepayment”); provided, that (i) any such Voluntary Prepayment of the Note shall
be in a principal amount of not less than $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if less, the entire principal
amount of the Note then outstanding), (ii) any Voluntary Prepayment of the Note shall be accompanied by the applicable premium required
by Section 2(f)(ii) and (iii) in connection with any Voluntary Prepayment, the Equity Conditions are satisfied during the period
between the Prepayment Notice Date and the Prepayment Date (such two (2) Trading Day period, “Prepayment Period”) (unless
waived by the Required Holders in writing in their sole discretion). Each Prepayment Notice shall specify the subsection of this Note
pursuant to which such prepayment is being made and the date (such date, the “Prepayment Date”) and amount of such
Voluntary Prepayment. Any Voluntary Prepayment of the Note shall be accompanied by any additional amounts required pursuant to Section 2(f)(ii)
(collectively, the “Prepayment Amount”). If a Prepayment Notice is given (and not revoked in accordance with this Section
2(f)(i)), the Company shall make such prepayment and the Prepayment Amount shall be due and payable in cash on the Prepayment Date specified
therein. The Company will, concurrently with the delivery of a Prepayment Notice to the Holder which contemplates prepayment in full,
publicly announce its intention to prepay this Note in full by means of a press release and filing of a Current Report on Form 8-K with
the Commission. Notwithstanding anything herein contained to the contrary, if (1) any portion of the Prepayment Amount remains unpaid
after the Prepayment Date or (2) the Equity Conditions are not satisfied during the Prepayment Period, then, in each case, the Holder
may elect, by written notice to the Company given at any time thereafter, to invalidate such prepayment, ab initio.
(ii) Prepayment
Premium. In the event the Note is voluntarily prepaid on or prior to the one year anniversary of the Original Issue Date, the Company
shall pay to the Holder a prepayment premium equal to the Make-Whole Amount. For the avoidance of doubt, any prepayments of this Note
other than a mandatory prepayment pursuant to Section 2(g) shall be a Voluntary Prepayment and subject to the requirement and prepayment
premium set forth in this Section 2(f)(ii).
(g) Mandatory
Prepayments.
(i) Cash
Sweep Financing. Commencing on the Mandatory Prepayment Trigger Date, on the date of receipt by the Company (or any of its Affiliates)
of proceeds of any Cash Sweep Financing, the Company shall prepay the Note in an aggregate amount equal to the Holder Cash Sweep Amount;
provided that, concurrently with the completion of any Cash Sweep Financing, the Company shall certify to the Holder in writing
(1) the amount of the applicable Cash Sweep Financing and (2) the calculation of the potential Holder Cash Sweep Amount with
respect to such Cash Sweep Financing (including a certification that such Holder Cash Sweep Amount was calculated in accordance with the
terms hereof) (such certification a “Cash Sweep Certification”); provided further, that, unless consented to
by the Required Holders in writing, in the event that the extent of such Cash Sweep Financing and Holder Cash Sweep Amount is such that
the information required in the Cash Sweep Certification would constitute material non-public information regarding the Company, then
the Company shall also concurrently publicly disclose such material non-public information on a Current Report on Form 8-K or otherwise.
The Company shall use commercially reasonable efforts to cause the underwriter or placement agent (if any) for such Cash Sweep Financing
to cause the payment set forth in the preceding sentence to be expressly set forth as a separate line item in the funds flow memorandum
for such Cash Sweep Financing. The Holder Cash Sweep Amount shall be paid directly to an account of the Holder by the applicable third
party lender or investor of such Cash Sweep Financing (such person, the “Cash Sweep Financing Source”); provided
that, if such Cash Sweep Financing Source cannot or will not pay the Holder directly, the Holder Cash Sweep Amount shall instead be deposited
by the Cash Sweep Financing Source into the Blocked Account.
(ii) ELOC
Financing. Commencing on the Mandatory Prepayment Trigger Date, on the date of any advance made to the Company (or any of its Affiliates)
under the YA ELOC or the B. Riley ELOC, the Company shall prepay the Note in an aggregate amount equal to the Holder ELOC Sweep Amount;
provided, that concurrently with the completion of any advance under the YA ELOC or the B. Riley ELOC, the Company shall certify to the
Holder in writing (1) the amount of the applicable advance and (2) the calculation of the potential Holder ELOC Sweep Amount with respect
to such advance (including certification that such advance amount was calculated in accordance with the terms hereof) . The Holder ELOC
Sweep Amount shall be paid directly to an account of the Holder by the applicable ELOC facility counterparty; provided that, if
such ELOC facility counterparty cannot or will not pay the Holder directly, the Holder ELOC Sweep Amount shall instead be deposited by
the ELOC facility counterparty into the Blocked Account.
(h) Application
of Prepayments. So long as no Event of Default has occurred and is continuing, any Voluntary Prepayment of the Note pursuant to Section 2(f)
or mandatory prepayment of the Note pursuant to Section 2(g) shall be applied to the Outstanding Principal Amount of the Note until
paid in full in cash, in each case, to be applied to the remaining scheduled principal payments under Section 2(e) on a dollar-for-dollar
basis, in direct order of maturity. At any time that an Event of Default has occurred and is continuing, all payments shall be applied
pursuant to Section 2(i)(iv). Nothing contained herein shall modify the provisions of Section 2(f)(ii) or Section 2(i)(ii)
regarding the requirement that all prepayments be accompanied by accrued fees on the principal amount being prepaid to the date of such
prepayment and the Make-Whole Amount, if any, or any requirement otherwise contained herein to pay all other amounts as the same become
due and payable.
(i) General
Provisions Regarding Payments.
(i) All
payments by Company of principal, cash interest, fees and other Obligations hereunder shall be made in Dollars in immediately available
funds, without defense, recoupment, setoff or counterclaim, free of any restriction or condition, and delivered to the Holder, not later
than 2:00 p.m. (New York City time) to an account designated in writing by the Holder; funds received by the Holder after that time on
such due date may, in the Holder’s discretion, be deemed to have been paid by the Company on the next Business Day.
(ii) All
payments in respect of the principal amount of the Note shall be accompanied by any Make-Whole Amount in the case of any Voluntary Prepayment,
and all fees (if any) and other amounts payable with respect to the principal amount being repaid or prepaid.
(iii) Whenever
any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder.
(iv) At
any time an Event of Default has occurred and is continuing, or this Note shall have been accelerated pursuant to Section 8(b), all
payments or proceeds received by the Holder hereunder or under any Transaction Document in respect of any of the Obligations, including,
but not limited to all proceeds received by the Holder in respect of any sale, any collection from, or other realization upon all or any
part of the Collateral, shall be applied in full or in part, subject to the provisions of this Agreement and the eCapital Subordination
Agreement, as follows:
first, to pay
any fees, costs, expenses of the Agent then due and payable by the Company until paid in full;
second, to
pay any fees (other than any Make-Whole Amount) and indemnities then due and payable to the Holder until paid in full;
third, to
pay interest then due and payable to the Holder until paid in full;
fourth, to
pay principal then due and payable to the Holder until paid in full;
fifth, to pay
any Make-Whole Amount then due and payable to the Holder until paid in full;
sixth, to the
ratable payment of all other Obligations then due and payable until paid in full; and
last, the balance,
if any, after all of the Obligations have been paid in full, to the Company or as otherwise required by Law as directed by a court of
competent jurisdiction.
(v) In
the event of a direct conflict between the priority provisions of clause (iv) above and other provisions contained in this Note or
any Transaction Document, it is the intention of the parties hereto that both such priority provisions in such documents shall be read
together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, the terms and provisions of clause (iv) above shall control and govern.
(vi) The
records of the Holder shall be prima facie evidence of the debt evidenced hereby, any accrued interest hereon and all principal and interest
payments made in respect hereof; provided, that no failure of the Holder to record, or to timely record, any transaction shall
in any way affect or impair any liability or other obligation of the Company to the Holder.
(j) Withholding.
For the avoidance of doubt and without limitation and anything to the contrary contained in this Note or any other Transaction Document
nothwithstanding, the Company may withhold from any amounts payable hereunder amounts with respect to taxes (if, in the Company’s
judgment, any such amounts are required to be withheld) with respect to any such payments made hereunder and the Company will not be required
to gross up or otherwise indemnify any Holder with respect to any such taxes (or any other taxes, including, without limitation, any stamp,
registration taxes or any income taxes) and Holder shall indemnify the Company with respect to any such taxes to the extent not so withheld.
Section 3. Registration
of Transfers and Exchanges.
(a) Assignment.
The Note may be transferred, exchanged or assigned, in whole or in part, without the prior written consent of the Company to one or more
Eligible Assignees subject to the following requirements: (i) any transfers in part shall be made in minimum denominations of $500,000
and higher integral multiples of $100,000 thereof, (ii) the Holder shall provide the Company with a copy of a duly executed and completed
assignment agreement, (iii) such Eligible Assignee shall deliver either (A) a duly completed and validly executed IRS Form W-9 or (B)
a duly completed and validly executed applicable IRS Form W-8, (iv) upon its receipt of a duly executed and completed assignment
agreement, the Company shall record the information contained in such assignment agreement in the Note Register, and (v) prior to the
consummation of any such assignment, the Holder shall provide the Company with not less than two (2) Business Days prior written notice
of such assignment, which such notice shall set forth the proposed date of such assignment, the amount to be assigned, and the identity
of the proposed assignee; provided that neither the Company, its Subsidiaries nor any of their respective directors, officers,
employees, agents or representatives shall contact any such proposed assignee (except in connection with a preexisting business relationship,
in the ordinary course of business and unrelated to the proposed assignment) without the prior written consent of Oramed prior to the
closing of the proposed assignment. The Note Register shall be maintained in accordance with Section 5f.103-1(c) and Proposed Section
1.163-5(b) of the United States Treasury Regulations (or, in each case, any amended, successor or final version) such that the Note is
in “registered form” including for purposes of Section 163(f), Section 871 and Section 881 of the Code. In the event that
less than all of the Note is transferred, exchanged or assigned in accordance with the preceding sentence, the Company shall enter into,
issue and deliver, at the direction of the Holder, an Additional Note to the assignee representing the right to receive the pro-rata portion
of the Outstanding Principal Amount (and interest thereon) so transferred and assigned. Such Additional Note shall be of like and tenor
with this Note, and shall have the same terms, rights and conditions as this Note; provided, the determination of whether the Exit
Fee shall be paid pro rata among the Holder and each assignee shall be at the Holder’s discretion. The assignee shall deliver to
the Company, any information reasonably requested by the Company in connection with the payment obligations under this Note. No such assignment
hereunder shall be made to the Company or any of its Subsidiaries, any of the Company’s Affiliates or Subsidiaries or to a natural
Person.
(b) Pari
Passu Note; Pro Rata Sharing. This Note ranks equally and ratably without priority over any Additional Note. Subject to the antepenultimate
sentence of Section 3(a) above, the Holder acknowledges and agrees that the payment of all or any portion of the outstanding principal
amount of this Note and all interest hereon shall be pari passu in right of payment and in all respects to the Additional Notes. No payment,
including any prepayment, shall be made hereunder unless payment, including any prepayment, is made with respect to any Additional Note
in an amount which bears the same ratio to the then Outstanding Principal Amount on the Additional Notes as the payment made hereon bears
to the then Outstanding Principal Amount under this Note. In the event that the Holder receives payments in excess of its pro rata share
of the Company’s payments to the holders of this Note and the Additional Notes, then the Holder shall hold in trust all such excess
payments for the benefit of the holders of the Additional Notes and shall pay such amounts held in trust to the holder of the Additional
Notes upon demand by such holder. Nothing contained herein shall be interpreted or construed to limit the obligation of the Company, which
is absolute, to make payment in full of all amounts due under each of this Note and the Additional Notes.
(c) Reliance
on Note Register. The Company shall maintain a record of the names and addresses of the Holder(s), and principal amounts owing to,
each Holder pursuant to the terms hereof from time to time (the “Note Register”). The Note Register shall be available
for inspection by the Company, the Agent and the Holder, at any reasonable time and from time to time upon reasonable prior notice. The
Company hereby agrees, that upon any assignment of any of the Obligations owing by it, and in accordance with the terms hereunder, to
issue an Additional Note to the assignee of such interests, and the assigning Holder shall return or provide for exchange, as applicable,
its then existing Note. Prior to due presentment for transfer to the Company of this Note, the Company may treat the Person in whose name
this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Note is overdue, and the Company shall not be affected by notice to the contrary.
(d) This
Note has not been registered under the Securities Act or any state securities laws and may not be offered for sale, sold, assigned or
transferred unless (i) subsequently registered thereunder, (ii) the relevant buyer shall have delivered to the Company an opinion of counsel,
in a generally acceptable form, to the effect that such Note to be sold, assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration requirements, or (iii) the relevant buyer provides the Company with reasonable assurances
in the form of a seller and broker representation letter that is customary for the applicable exemption under the Securities Act or the
rules and regulations of the SEC thereunder under which such Note (or applicable portion thereof) is to be sold, assigned or transferred
and which letter is reasonably acceptable to the Company that the Note can be sold, assigned or transferred in compliance with such exemption;
provided, that a representation letter that is in a form agreed to by the Initial Purchaser and the Company pursuant to Section
4.1(a) of the Securities Purchase Agreement shall automatically be deemed reasonably acceptable to the Company.
Section 4. Exit Fee.
If the Outstanding Principal Amount of the Note has not been repaid in full on or prior to March 21, 2024 (the “Exit
Fee Trigger Event”), the Company hereby agrees to pay to the Holder an exit fee in an amount equal to $3,056,250.00 (the “Exit
Fee”). The Exit Fee shall be fully earned upon the occurrence of the Exit Fee Trigger Event and shall be due and payable on
the date on which the Outstanding Principal Amount of the Note is paid in full.
Section 5. Board Observer
Rights.
(a) Until
all Obligations arising under the Notes have been paid in full in cash, the Company shall, and shall cause each of its Subsidiaries to,
(i) allow one (1) representative designated by the Required Holders (who shall initially be Oramed) (the “Board Observer”)
to attend and participate (but, for the avoidance of doubt, not vote or constitute a member of the board of directors or of any other
Company Board), either telephonically, virtually or in-person (at the Board Observer’s option), in all meetings of the board of
directors (or other equivalent governing body) of the Company and any committees and sub-committees thereof and the board of directors
(or similar governing body) of each Subsidiary and any committees and sub-committees thereof (collectively, the “Company Boards”),
and (ii) give the Board Observer notice of all such meetings, at the same time as furnished to the members of the Company Boards;
provided that, for the avoidance of doubt, the Required Holders shall be permitted in their discretion, at any time, (i) to remove
and replace a Board Observer, (ii) determine not to exercise their rights to designate a Board Observer pursuant to this Section 5 on
a temporary or permanent basis or (iii) direct the Board Observer to refrain from attending all or any meetings of the Company Boards.
The initial Board Observer shall be David Silberman.
(b) All
documentation, information and other materials delivered or provided to the members of any of the Company Boards (whether at or in advance
of a meeting) shall be contemporaneously provided to the Board Observer, including any actions to be taken by written consent of such
Company Board or copies of any minutes of any Company Board meetings. With respect to any Subsidiary that is manager-managed, general-partner-managed
(i.e., limited liability companies or limited partnerships) or otherwise not governed by a Company Board, all written consents
thereof shall be promptly (but in any event within 5 Business Days) provided to the Board Observer following execution. The Board Observer
shall be subject to customary confidentiality terms and agreements which shall be set forth in a customary board observer confidentiality
agreement, it being understood and agreed that all materials provided to the Board Observer in such capacity shall be received on a confidential
basis. Without limiting the foregoing, the Board Observer shall have the right to receive such additional information regarding the Company
or its Subsidiaries as the Board Observer shall reasonably request, which information shall be provided to the Board Observer as soon
as reasonably practicable following such request (but in any event no later than 45 days after such request). The Board Observer shall
be entitled to share all of the information it receives pursuant to this Section 5 with the executive officers of the Holder on a confidential
basis. The Holder acknowledges and agrees (and the Board Observer shall acknowledge and agree prior to the receipt of any information
pursuant to this Section 5) that (i) any information so provided or received through the Board Observer pursuant to this Section 5 may
be material non-public information (as defined in and pursuant to applicable law) regarding the Company and (ii) such recipient shall
not engage in unlawful trading of the Company’s or Sorrento’s securities when in possession of such material non-public information
for so long as it continues to constitute material non-public information in accordance with applicable law.
(c) Notwithstanding
the foregoing, the Board Observer may be excluded from attending any portion of a Company Board meeting, and certain materials that would
otherwise be required to be furnished to the Board Observer under this Section 5, may be withheld from distribution or redacted solely
to the extent: (i) such attendance or distribution would directly jeopardize the Company’s or any of its Subsidiaries’
ability to assert attorney-client privilege with its counsel with respect to the specific matters discussed or disclosed or (ii) the
matters discussed or disclosed relate to a matter involving a direct conflict of interest with the Board Observer, the Holder or their
respective Affiliates (including matters directly relating to the Note and the other Transaction Documents, the Holder or their respective
affiliates), in each case, as reasonably determined in good faith by the applicable Company Board; provided that, prior to such
exclusion or withholding, the Company Board shall inform the Board Observer of the basis for such exclusion or withholding and if the
Board Observer objects to any proposed exclusion under clause (i) or (ii) above, the Company or its Subsidiary, as applicable, shall
at the Board Observer’s written direction be required to obtain a recommendation in writing by outside counsel to the Company that
such exclusion or withholding from the Board Observer is necessary to preserve attorney-client privilege or avoid a direct conflict of
interest.
(d) For
so long as the Holder is entitled to the Board Observer under Section 5(a), the Company shall (i) reimburse the reasonable and
documented out-of-pocket expenses incurred by the Board Observer prior to the Maturity Date to the extent that such expenses would be
reimbursed for any director (independent or otherwise) of the Company, with such reimbursement obligation capped at $10,000 per year (and
such $10,000/year cap being pro-rated for any partial year) (the “Board Observer Expense Cap”), and (ii) pay to
the Board Observer a fee equivalent to the fees paid to independent directors of the Company for a period ending on the Maturity Date;
provided that such fees shall be capped at $80,000 per year (the “Board Observer Fee Cap”), with such Board
Observer Fee Cap being pro-rated for any partial year. For purposes of the Board Observer Expense Cap and the Board Observer Fee Cap,
a “year” shall mean the 12-month period commencing on the Original Issue Date (and not, for the avoidance of doubt, a calendar
year). Notwithstanding the foregoing, if any time, any independent director of the Company Board receives expense reimbursement that is
greater than the Board Observer Expense Cap and/or an annual fee is paid to any independent director of the Company that is greater than
the Board Observer Fee Cap as set forth in the first sentence of this Section 5(d), then the Company shall provide written notice to the
Holder and the Board Observer of such increase and the Board Observer Expense Cap and Board Observer Fee Cap shall, upon request of the
Board Observer or the Holder, be increased to be equal to such greater amounts; provided that, any amounts paid by the Company
to or on behalf of the Board Observer during the period commencing on the Original Issue Date and ending on the Maturity Date in respect
of any expenses or fees that exceed $135,000 in the aggregate shall be offset against and reduce (but not less than $0) on a dollar-for-dollar
basis the Rolled Expense Amount (and therefore, reduce the Outstanding Principal Amount as if payments were made directly in respect thereof,
without the requirement of the application of the Make-Whole Amount); provided further that, the Company shall not pay and shall not be
obligated to pay any amounts pursuant to this sentence that are in excess of the then-remaining Rolled Expense Amount (or, if less, the
Outstanding Principal Amount).
Section 6. Information
Rights. The Company shall furnish to the Holder at all times any portion of this Note remains outstanding: (a) the Company’s
annual financial statements within 120 calendar days following the end of the fiscal year to which such financial statement relates, (b)
quarterly financial statements within 45 calendar days following the end of the quarter to which such financial statements relates, (c)
annual budgets within 60 calendar days after the beginning of the fiscal year for which such annual budget is to apply, and (d) Monthly
Reports upon the earlier of (i) 45 days following the end of the month to which such Monthly Report relates and (ii) the date that
such Monthly Reports become available to the applicable Company Board or the management of the Company or its Subsidiaries; provided,
that the obligations under the foregoing clauses (a) and (b) may be satisfied by furnishing a copy of the Company’s Annual Report
on form 10-K or Quarterly Report on Form 10-Q within the applicable timeframe; provided, further, that the Company shall not be required
to furnish any document to the extent such document is available on EDGAR. The Holder acknowledges and agrees that (x) any information
so provided or received pursuant to this Section 6 may be material non-public information (as defined in and pursuant to applicable law)
regarding the Company and (y) the Holder shall not engage in unlawful trading of the Company’s or Sorrento’s securities when
in possession of such material non-public information for so long as it continues to constitute material non-public information in accordance
with applicable law. Notwithstanding anything to the contrary herein, the Holder shall be permitted at any time to deliver written notice
to the Company waiving on a temporary or permanent basis all or any portion of its rights pursuant to this Section 6 (and the Company
shall refrain from delivering to the Holder any information so waived for so long as such waiver remains in effect).
Section 7. Covenants.
(a) Negative
Covenants. As long as any portion of this Note remains outstanding, the Company shall not, and shall not permit any of the Subsidiaries,
without prior written consent of the Required Holders, to, directly or indirectly:
(i) other
than Permitted Indebtedness enter into, create, incur, assume, guarantee or suffer to exist any Indebtedness of any kind, including, but
not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;
(ii) other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;
(iii) amend
its charter or other governance documents, including, without limitation, its certificate of incorporation and bylaws (or equivalent
organizational documents) in any manner that adversely affects any rights of the Holder, whether under this Note, the Warrants or any
other Transaction Documents; provided, that any amendments to the charter or other governance documents of the Company to increase
the number of authorized shares of the Company shall be deemed not to adversely affect any rights of the Holder;
(iv) repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common
Stock Equivalents other than as to (1) the Warrant Shares as permitted or required under the Warrants, (2) repurchases of Common
Stock or Common Stock Equivalents of departing officers and directors of the Company, provided that such repurchases shall not exceed
an aggregate of $100,000 for all officers and directors during the term of this Note, (3) the Sorrento Repurchase, (4) the cashless
exercise of options and warrants, or (5) to the extent constituting transactions restricted under this clause (iv), upon the
vesting of Capital Stock pursuant to the terms of any agreement with employees, consultants or directors or pursuant to the terms of the
Company’s equity compensation plans or agreements, the Company may (x) repurchase a portion of such Capital Stock (through
any “net” settling of any Capital Stock or through a tax withholding feature of any Capital Stock) to the extent such repurchased
Capital Stock represent the exercise price of options or warrants or the amount of withholding taxes due upon such exercise or vesting
and (y) make tax withholding payments on behalf of such employees, consultants or directors in connection therewith;
(v) repay,
repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than (1) this Note, (2) the AR Facility,
(3) the Acceptable Indebtedness and (4) regularly scheduled principal and interest payments of Permitted Indebtedness (except that
with respect to Subordinated Debt only interest payments shall be permitted); provided that, in any case, such payments of Subordinated
Debt shall not be permitted if, at such time, or after giving effect to such payment, any Default or Event of Default exists or would
occur;
(vi) pay
or declare cash dividends or distributions on any Capital Stock of the Company;
(vii) assign,
sell, transfer, license, lease or otherwise dispose of any its assets (including, without limitation, any disposition to any Subsidiary
that is not a Qualified Subsidiary) other than (1) sales of inventory in the ordinary course of business, (2) other dispositions
not to exceed $500,000 in the aggregate during any twelve (12) month period, (3) mergers, consolidations, sales, transfers, conveyances,
leases or assignments of or by any wholly-owned Subsidiary into the Company or into any domestic wholly-owned Qualified Subsidiary of
the Company, (4) any purchase or other acquisition by the Company or any domestic wholly-owned Qualified Subsidiary of the assets
or Capital Stock of any wholly-owned Subsidiary, (5) dispositions of excess equipment, and obsolete or worn-out equipment or equipment
that is no longer used or useful to the business, in the ordinary course of business, (6) Permitted Licenses, and (7) any Subsidiary
of the Company may issue Capital Stock to the Company or any direct or indirect Qualified Subsidiary;
(viii) make
or hold any Investments other than: (1) Investments existing on the date of the Securities Purchase Agreement and that are disclosed
in the Perfection Certificate (provided, for clarity, that neither the Company nor any Subsidiary shall increase the size of its Investment
in any such Investment existing on the date of the Securities Purchase Agreement other than in accordance with this Note and the other
Transaction Documents) and, for the avoidance of doubt, Investments arising as a result of the consummation of the Sorrento Repurchase,
(2) Investments in cash and cash equivalents, (3) Investments in Qualified Subsidiaries, (4) other Investments that do
not exceed $500,000 in the aggregate during any 12-month period, (5) Investments in negotiable instruments deposited or to be deposited
for collection in the ordinary course of business consistent with past practice, (6) advances made in connection with purchases of
goods or services in the ordinary course of business, (7) intercompany loans that are Permitted Indebtedness, (8) equity interests
or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to the Company
or any of its Subsidiaries (in bankruptcy of customers or suppliers) or as security for any such Indebtedness or claims, (9) Investments
in the form of capital contributions and the acquisition of equity interests made by the Company or any Qualified Subsidiary in the Company
or any Qualified Subsidiary, (10) Investments consisting of non-cash consideration received in connection with dispositions permitted
hereunder, so long as the non-cash consideration received in connection with any such disposition does not exceed 5% of the total consideration
received in connection with such disposition, (11) Permitted Licenses, and (12) deposits of cash made in the ordinary course
of business to secure performance or operating leases, which deposits are existing on the date of the Securities Purchase Agreement, provided
the amount of such deposits are not increased;
(ix) enter
into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of
the Company (even if less than a quorum otherwise required for board approval), other than the Sorrento Repurchase; or
(x) settle
or otherwise compromise any actions, suits, litigations or proceedings or demands, which are pending or threatened by or against the Company
or any of its Subsidiaries, officers or directors involving more than, individually or in the aggregate for all related proceedings, one
hundred thousand dollars ($100,000) or in which any adverse decision has had or could reasonably be expected to have any Material Adverse
Effect.
(b) Affirmative
Covenants. As long as any portion of this Note remains outstanding, the Company shall, and shall cause each of its Subsidiaries to
(and, for such purpose, the references to “the Company” in each of the following clauses, other than (viii), (ix) and (x),
shall be deemed instead to refer mutatis mutandis to the applicable Subsidiary of the Company), unless the Required Holders shall
have otherwise previously waived in writing the application thereof:
(i) preserve
and maintain its legal existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified
as a foreign business entity in each jurisdiction in which qualification is necessary in view of its business and operations or the ownership
of its properties and where failure to so preserve, maintain or qualify could reasonably be expected to have a Material Adverse Effect;
(ii) provide
to the Agent and the Holder, promptly upon becoming aware thereof (and in any event within three (3) days after the occurrence thereof),
a notice of each Event of Default known to an executive officer of the Company, together with a statement of such executive officer setting
forth the details of such Event of Default and the actions which the Company has taken and proposes to take with respect thereto;
(iii) (1) pay
and discharge as the same shall become due and payable: (x) all material tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted
(which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien) and adequate
reserves in accordance with GAAP are being maintained by the Company or such Subsidiary, as applicable; (y) all material lawful claims
which, if unpaid, would by law become a Lien upon its property, unless the same are being contested in good faith by appropriate proceedings
diligently conducted (which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any
such Lien) and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary, as applicable; and (z)
all material Indebtedness, as and when due and payable, but subject to the terms of this Note; and (2) timely file all material tax
returns required to be filed (subject to any valid extension);
(iv) (1) maintain,
preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; and (2) make all necessary repairs thereto and renewals and replacements thereof;
(v) comply
in all respects with the requirements of all applicable laws and all orders, writs, injunctions and decrees applicable to it or to its
business or property, in each case except where the failure to do so would not reasonably be expected to have a Material Adverse Effect;
(vi) as
soon as practicable and in any event no later than 30 days following the Original Issue Date, enter into Account Control Agreements and
2nd Lien Account Control Agreements, in each case in form and substance reasonably acceptable to Holder, for each depositary,
operating and securities account in the name of the Company or any Subsidiary, as applicable, other than Excluded Accounts; provided
that, to the extent new deposit accounts must be established to allow for the implementation of any such Account Control Agreement in
respect of any such accounts that are not Excluded Accounts, the Company shall, as soon as reasonably practicable and in any event no
later than fourteen (14) days following the Original Issue Date, establish or cause its Subsidiaries to establish such new accounts at
each applicable bank or financial institution;
(vii) maintain
(1) insurance with financially sound and reputable insurance companies in at least the amounts (and with only those deductibles)
customarily maintained, and against such risks as are typically insured against, by persons of comparable size engaged in the same or
similar business as the Company and its Subsidiaries; and (2) all worker’s compensation, employer’s liability insurance
or similar insurance as may be required under the laws of any state or jurisdiction in which it may be engaged in business;
(viii) after
such time as the Company becomes eligible to use Form S-3, the Company shall use best efforts to cause the Company to remain eligible
to use Form S-3 for a delayed or continuous offering pursuant to Rule 415(a)(1)(x) promulgated under the Securities Act;
(ix) on
or about November 12, 2023 (and in any event not later than November 21, 2023), the Company may (but shall not be
required to) file a shelf registration statement for a delayed or continuous offering pursuant to Rule 415(a)(1)(x) promulgated under
the Securities Act (the “ATM Shelf”) and simultaneously enter an at-the-market sales agreement (the “ATM Sales
Agreement”) with a placement agent acceptable to the Holder, in its sole and absolute discretion (provided that, the
Holder hereby acknowledges and agrees that B. Riley Securities shall be an acceptable placement agent), for the issuance and sale of at
least $172,500,000 of Common Stock, from time to time, at prevailing market prices (the “ATM Program”). Following the
date that the ATM Shelf is declared effective by the Commission, and so long as the ATM Program is effective and the Company is able to
make sales thereunder, the Company may (but shall not be required to) terminate the B. Riley ELOC. The Company shall ensure that it is
eligible to make sales and issuances under the ATM Program immediately upon termination of the B. Riley ELOC and at all times thereafter.
In addition, the Company will not take any action, or fail to take any action, that would result in the B. Riley ELOC, or at the ATM Program
following the termination of the B. Riley ELOC, being terminated or otherwise result in the Company being suspended from using or limit
the use of the same;
(x) the
Company and its Subsidiaries on a consolidated basis shall have, at all times (i) from the Original Issue Date until and through
the 60th day thereafter, $1,000,000 of Liquidity, (ii) from the 61st day after the Original Issue Date until
the 180th day thereafter, $3,000,000 of Liquidity and (iii) following the 180th day from the Original Issue Date and at
all times thereafter, $5,000,000 of Liquidity;
(xi) within
two (2) Business Days of receipt thereof, the Company shall provide a copy of any written notice received by the Company and/or any applicable
Subsidiary from a Licensor under any Material License Agreement of any breach or default of any covenant, obligation or agreement set
forth in such Material License Agreement by the Company and/or any applicable Subsidiary; and
(xii) within
four (4) Business Days of receipt thereof, the Company shall provide a copy of any written notice received by the Company and/or any applicable
Subsidiary from a Licensor under any Non-Material License Agreement of any breach or default of any covenant, obligation or agreement
set forth in such Non-Material License Agreement by the Company and/or any applicable Subsidiary.
(c) Blocked
Account. Subject to Section 7(b)(vi), the Company shall at all times while this Note is outstanding maintain a segregate deposit account
for the purposes of receiving deposits of amounts required to be prepaid pursuant to Section 2(g), subject to an Account Control Agreement
in form and substance reasonably acceptable to the Agent, which shall (i) provide that the Company shall have no access to such account,
(ii) grant the Agent control within the meaning of Section 9-104 of the UCC as of the date of execution thereof, (iii) have
an authorized signatory who is designated by Agent (to the extent permitted by the depositary institution maintaining such account) and
(iv) authorize the Agent to instruct the third-party bank to immediately transfer all funds that are available on deposit in such
account into a deposit account designated by the Agent (at the direction of the Required Holders) from time to time(the “Blocked
Account”); provided that, the Agent (at the direction of the Required Holders) shall instruct such third-party bank to
transfer all funds on deposit in such account on a daily basis (on each Business Day), which amounts shall be used to satisfy the mandatory
prepayment obligations set forth in Section 2(g), and be applied to reduce the Outstanding Principal Amount in accordance with the terms
thereof; provided further, that during the period from the Closing Date until the date that an Account Control Agreement with respect
to the Blocked Account is executed, the Company shall manually sweep all funds available (if any) in such account to a deposit account
designated by the Agent (at the direction of the Required Holders) on each Business Day.
(d) Bankruptcy
Remote Entity. Prior to the Closing Date, the Company shall have formed a single purpose bankruptcy-remote entity (the “BRE”)
that is a direct wholly-owned subsidiary of the SPV (as defined below), such BRE having bylaws or an operating agreement, as applicable,
and other organizational documents (the “BRE Organizational Documents”) in form and substance reasonably acceptable
to the Required Holders, which BRE Organizational Documents shall contain separateness representations and covenants (it being acknowledged
and agreed that SCLX Stock Acquisition JV LLC shall be the BRE, that such entity has been formed as of the Closing Date, and that the
BRE Organizational Documents thereof in effect as of the Closing Date, which have been delivered to Oramed, are acceptable to the Required
Holders). The BRE shall not, nor shall the Manager of the BRE, the Company or any of its Subsidiaries permit the BRE to, violate at any
time any of the separateness representations and covenants in the BRE Organizational Documents or any express consent right of Oramed
or the Required Holders set forth in the BRE Organizational Documents.
(e) Passive
Holding Company. Prior to the Closing Date, the Company shall have formed a subsidiary (the “SPV”) that is a direct,
wholly-owned, single-member, manager managed subsidiary of the Company (as defined below), such SPV having an operating agreement and
other organizational documents (the “SPV Organizational Documents”) in form and substance reasonably acceptable to
the Required Holders, (it being acknowledged and agreed that SCLX DRE Holdings LLC shall be the SPV, that such entity has been formed
as of the Closing Date, and that the SPV Organizational Documents thereof in effect as of the Closing Date, which have been delivered
to Oramed, are acceptable to the Required Holders). The SPV shall not conduct any business, operations, or activities other than: (i) holding
and owning 100% of the equity interests of the BRE, (ii) maintaining its organizational existence (including the ability to incur fees,
costs and expenses relating to such maintenance), (iii) entering into and performing its obligations under this Note and the other
Transaction Documents, (iv) the initial issuance of equity interests of its own (other than Disqualified Stock), (v) participating
in tax, accounting and other administrative matters as a member of the consolidated, combined, unitary or similar group that includes
the Company, (vi) providing customary indemnification for managers and officers, (vii) filing tax reports and paying taxes and other customary
obligations in the ordinary course of business, (viii) preparing annual franchise filing reports to the governmental authority in its
jurisdiction of formation or incorporation or such other filings to governmental authorities as may be necessary, (ix) holding manager
and/or member meetings, preparing organizational records and other organizational activities required to maintain its separate organizational
structure or to comply with applicable requirements of law, and (x) performing any activities directly incidental to the activities described
in the foregoing clauses (i) through (ix).
Section 8. Events of
Default.
(a) “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):
(i) any
default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages, fees and other amounts owing
to the Holder on any Note, as and when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise)
which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three (3) Business
Days;
(ii) the
Company or any Subsidiary party hereto or thereto shall fail to observe or perform any other covenant or agreement contained in this Note
or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Business
Days after notice of such failure sent by the Agent or by any Holder to the Company and (B) ten (10) Business Days after the Company
or such Subsidiary has become or should have become aware of such failure; provided, however, that any failure to comply with Section 2(g)(i),
Section 2(g)(ii), Section 5, Section 7(b)(vi), Section 7(b)(x), Section 7(c), Section 7(d) or Section 7(e) shall
be an immediate Event of Default;
(iii) an
event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument or if a grace or cure
period is not prescribed, within five (5) Business Days) shall occur under any of the Transaction Documents;
(iv) any
representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any
other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any
material respect (or in all respects to the extent that such representation or warranty is qualified as to materiality or Material Adverse
Effect) as of the date when made;
(v) the
Company or any Subsidiary shall be subject to a Bankruptcy Event;
(vi) the
Company or any Subsidiary shall default on any of its obligations under: (x) the AR Facility, (y) the Acceptable Indebtedness or
(z) any other Indebtedness that involves an obligation greater than $1,000,000, whether such Indebtedness now exists or shall hereafter
be created and results in the holder of such Indebtedness being entitled to declare such Indebtedness due and payable prior to the date
on which it would otherwise become due and payable;
(vii) the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing
or quotation for trading thereon within three (3) Trading Days;
(viii) the
Company (and all of its Subsidiaries, taken as a whole) shall be a party to any Change of Control Transaction or Fundamental Transaction
or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether
or not such sale would constitute a Change of Control Transaction);
(ix) the
Initial Registration Statement (as defined in the Registration Rights Agreement) shall not have been (A) filed with the Commission
by the Filing Date (as defined in the Registration Rights Agreement) or (B) declared effective by the Commission on or prior to the
sixtieth (60th) calendar day after the Closing Date or if the Company is notified by the Securities and Exchange Commission
that the Initial Registration Statement will be reviewed, then, instead of the sixtieth (60th) calendar day after the Closing Date, the
date that is ninety (90) days following the Closing Date or (C) the Company does not meet the current public information requirements
under Rule 144 in respect of the Registrable Securities (as defined in the Registration Rights Agreement);
(x) if,
during the Effectiveness Period (as defined in the Registration Rights Agreement), either (a) the effectiveness of the Registration
Statement lapses for any reason or (b) the Holder shall not be permitted to resell Registrable Securities (as defined in the Registration
Rights Agreement) under the Registration Statement for a period of more than twenty (20) consecutive Trading Days or thirty (30) non-consecutive
Trading Days during any twelve (12) month period; provided, however, that in no event shall Holder’s inability to
resell Registrable Securities under the immediately preceding clause (b) be an Event of Default if the reason for such inability to resell
is primarily the result of such Holder’s possession of material non-public information; provided, further, that the immediately
preceding proviso shall not apply if the Holder, together with the other Note Holders, has delivered the MNPI Waiver Notice (as defined
in the Securities Purchase Agreement) (or is deemed to have delivered the MNPI Waiver Notice by virtue of such Note Holder’s status
as a transferee, successor or assignee of a Note Holder that has executed the MNPI Waiver Notice) and the Company thereafter provides
the Holder with material non-public information without the Holder’s written consent and the Holder shall not be permitted to resell
Registrable Securities under the Registration Statement for the applicable period under clause (b); provided, that for purposes
of the foregoing, the Company providing any material non-public information to any Note Holder Designee in accordance with Section 4.8(d)
of the Securities Purchase Agreement shall not be considered providing the Holder with material non-public information;
(xi) the
Company shall fail for any reason to deliver Warrant Shares to the Holder prior to the third (3rd) Trading Day after the Share
Delivery Date (as defined in the Warrant) or the Company shall provide at any notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for exercise of any Warrants in accordance with the terms thereof;
(xii) any
Person shall breach any agreement delivered to the Initial Purchaser pursuant to Section 2.2 of the Securities Purchase Agreement
(subject to any grace or cure period provided in the Securities Purchase Agreement or if a grace or cure period is not prescribed, within
five (5) Business Days);
(xiii) the
electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing corporation
is no longer available or is subject to a “chill”;
(xiv) any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective
property or other assets for more than $500,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or
unstayed for a period of 45 calendar days;
(xv) any
Security Document shall for any reason fail or cease to create a valid Lien on the collateral described therein in favor of the Agent
(for the benefit of the Secured Parties), or any material provision of any Security Document shall at any time for any reason cease to
be valid and binding on or enforceable against the Company or the applicable Subsidiary, the validity or enforceability thereof shall
be contested by any party thereto, or a proceeding shall be commenced by the Company, any Subsidiary or any governmental authority having
jurisdiction over the Company or any such Subsidiary, seeking to establish the invalidity or unenforceability thereof;
(xvi) the
occurrence of a Material Adverse Effect which would require the Company to make a public disclosure under applicable securities laws or
the rules and regulations of the Nasdaq Stock Market (whether or not the Company is then listed on the Nasdaq Stock Market) within five
(5) Business Days after the occurrence thereof;
(xvii) the
occurrence of a breach or default by the Company under any Material License Agreement or Material License other than any Anticipated/Known
Breach, which results in the applicable Licensor threatening in writing to (a) terminate such Material License Agreement or Material
License and such termination would have a Material Adverse Effect or (B) otherwise take an action (including, without limitation,
any modification, suspension or revocation of such Material License Agreement or Material License) that would have a Material Adverse
Effect, and, in each case, such breach or default (solely to the extent curable under the terms of the Material License Agreement) is
not cured within the applicable cure period permitted thereunder (or, if none is specified, within seven (7) Business Days of the date
of occurrence of such breach or default) or otherwise waived by such Licensor;
(xviii) the
Licensor under any Material License Agreement has (A) terminated such Material License Agreement or Material License for cause on
the basis of a breach or default by the Company or Subsidiary party thereto other than any Anticipated/Known Breach and such termination
would have a Material Adverse Effect or (B) otherwise taken any action (including, without limitation, any modification, suspension
or revocation of such Material License Agreement or Material License) that has resulted in the occurrence of a Material Adverse Effect;
or
(xix) the
incurrence of an Authorized Share Failure (as defined in the Warrant), which remains uncured for more than 30 consecutive Trading Days.
(b) Remedies
Upon Event of Default. If any Event of Default occurs which is not cured or remedied within the time prescribed, the outstanding principal
amount of this Note, plus accrued but unpaid interest and liquidated damages owed in respect thereof through the date of acceleration,
shall become, at the Holder’s written election, immediately due and payable in cash at the Mandatory Default Amount. During the
continuance of any Event of Default (whether or not the Holder accelerates this Note), at the election of the Holder, the interest rate
on this Note shall accrue at an interest rate equal to the Default Rate. Upon the payment in full of the Mandatory Default Amount, the
Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such acceleration may be rescinded and annulled by the Holder at any time prior to payment hereunder
and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to
this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
Section 9. Miscellaneous.
(a) Notices.
Any and all notices or other communications or deliveries to be provided by the hereunder shall be provided at such addresses and in the
manner set forth in the Securities Purchase Agreement.
(b) Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, liquidated damages, fees and accrued interest, as applicable, on this Note at
the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.
(c) Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note,
a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss,
theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
(d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note 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 conflict of laws thereof.
Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by
any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in any state and federal court of competent jurisdiction located in New York, New York (the “NY
Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the NY 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 suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of such NY Courts, or such NY Courts are improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by applicable 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 Note or the transactions contemplated hereby.
If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation
and prosecution of such action or proceeding.
(e) Waiver.
The Agent and the Holder shall not by any act (except by a written instrument executed and delivered in accordance with Section 9(f) below),
delay, indulgence, omission or otherwise be deemed to have waived any right, remedy or other power hereunder or under any other Transaction
Document or to have acquiesced in any Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Agent
or the Holder, any right, remedy or other power shall preclude any other or further exercise thereof or the exercise of any other right,
remedy or other power. No single or partial exercise of any right, remedy, or power hereunder or under any other Transaction Document
shall preclude any other or further exercise thereof or the exercise of any other right, remedy or power. Any waiver by the Company or
the Holder (or Required Holders) of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this Note on any future occasion. The failure of the Company
or the Holder (or Required Holders) to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on
any other occasion. Any waiver by the Company or the Holder (or Required Holders) must be in writing.
(f) Amendments,
Waivers and Modifications. Other than (i) the rights set forth in Section 5 and, unless otherwise approved by Oramed, the right to
receive the Exit Fee, which rights may only be waived or amended exclusively by Oramed in writing or (ii) as otherwise expressly set forth
in the Transaction Documents to the contrary, this Note shall not be amended or modified, and no provisions hereof or thereof may be waived,
without the prior written consent of the Company and the Required Holders; provided that, only the written consent of the Company
and, for so long as it holds all or any portion of this Note, Oramed shall be required to approve any amendments or modifications as are
required for administrative or clarification purposes in connection with the transfer and assignment of less than all of this Note.
(g) Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision
is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall
be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate
of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.
(h) Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and
consequential damages for any failure by the Company to comply with the terms of this Note. The Agent and the Holder may exercise any
or all such rights, remedies and powers at any time(s) in any order which the Agent and the Holder chooses in its sole discretion. The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any
such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder
to confirm the Company’s compliance with the terms and conditions of this Note.
(i) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect
any of the provisions hereof.
(j) Secured
Obligation. The Obligations of the Company under this Note are secured by all assets of the Company and each Subsidiary pursuant to
the Security Agreement, dated as of September 21, 2023, by and among the Company, all Subsidiaries of the Company and the Secured
Parties (the “Security Agreement”).
(k) Binding
Nature; Successors and Assigns. This Note shall bind the Company, its Subsidiaries and their successors and assigns and shall inure
to the benefit of the Agent, the Holder and their successors and permitted assigns. The Company may not assign any of its rights, or delegate
any of its obligations, under this Note or any other Transaction Document without the prior written consent of the Agent, the Holder and
the holders of all Additional Notes, and any such purported assignment by the Company without the written consent of the Agent, the Holder
and the holders of the Additional Notes shall be void and of no effect.
Section 10. Non-Public
Information.
(a) The
Holder acknowledges and agrees that the rights and obligations of the parties under this Note may result in the Company providing material
non-public information to the Board Observer and/or the Note Holders.
(b) At
any time following the Closing Date, the Required Holders may, collectively (but not individually) (collectively, the “NPI Waiving
Persons”), deliver a written notice to the Company stating that each such NPI Waiving Person (on behalf of itself and any future
transferees, successors or assigns) waives all rights pursuant to this Note and the other Transaction Documents that would, or would reasonably
be expected to, result in the NPI Waiving Persons receiving material non-public information from the Company (such notice, the “MNPI
Waiver Notice”), which notice shall identify the Note Holder Designee(s) and the contact information therefor. For the avoidance
of doubt, any MNPI Waiver Notice shall apply to all Note Holders. Notwithstanding
the foregoing, each Note Holder may at any time, by delivering written notice to the Company, permanently waive as to itself the right
to receive any of the materials delivered under Section 6 of this Note, and following receipt of such notice, the Company shall
refrain from delivering such materials to such Note Holder.
(c) Prior
to delivery of the MNPI Waiver Notice, the NPI Waiving Persons shall have established a “tree” system by designating one or
more representatives, who shall be named in the MNPI Waiver Notice (each a “Note Holder Designee” and together the
“Note Holder Designees”), whereby a separate working group or “tree” with an ethical wall will be formed
and dedicated to the NPI Waiving Persons in connection with receiving, reviewing and considering material non-public information that
would otherwise be delivered by the Company to the NPI Waiving Persons in connection with the Company’s compliance with its obligations
under the Transaction Documents and such Note Holder Designee shall have full power and authority to act on behalf of NPI Waiving Persons
with respect to the rights that are waived in the MNPI Waiver Notice.
(d) From
and after the delivery of the MNPI Waiver Notice by the NPI Waiving Persons, (i) the NPI Waiving Persons acknowledge and agree that the
Company may provide material non public information to the Note Holder Designee(s) in connection with the Company’s compliance with
its obligations under the Transaction Documents and (ii) the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any information that constitutes, or the Company reasonably believes constitutes, material non public information,
directly to any NPI Waiving Person unless prior thereto such recipient NPI Waiving Person shall have consented in writing to the receipt
of such information and agreed in writing with the Company to keep such information confidential.
(e) For
the avoidance of doubt, the Company, the Holder and each other Note Holder hereby acknowledges and agrees that, with respect to each of
the Holder and each other Note Holder, such Person (i) shall only be deemed to have received material non-public information from the
Board Observer if the Board Observer actually provides such information to such Person or any of its representatives (who are serving
in their capacities as representatives of such Person), and (ii) shall not be constructively deemed to have received any information (whether
material non-public information or otherwise) that is received by the Board Observer but not otherwise actually provided to such Person.
(f) The
Company understands and confirms that the Holder and each other Note Holder who is an NPI Waiving Person shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.
(g) To
the extent that the Company, any of its Subsidiaries, or any of their respective officers, director, agents, employees or Affiliates delivers
any material, non-public information to the Note Holders, any transferee thereof, or any of their respective agents or counsel without
such recipient’s consent, the Company hereby covenants and agrees that such recipient shall not have any duty of confidentiality
to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates, or agents, or a duty to
the Company, any of its Subsidiaries or any of their respective officers, directors, employees, Affiliates or agents, not to trade on
the basis of, such material, non-public information, provided that such recipient shall remain subject to applicable law. For avoidance
of doubt, this Section 10.8(g) shall not apply to the delivery of any material non-public information to any Note Holder Designee in accordance
with Section 10.8(d).
Section 11. 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 thereof and supersede all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
*********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
|
SCILEX HOLDING COMPANY, a Delaware corporation |
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and President |
[Schedules provided under separate cover]
Exhibit
10.3
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT; OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF
THIS WARRANT.
Scilex Holding Company
Warrant To Purchase Common Stock
Warrant No.: ORMP CS-1
Date of Issuance: September 21, 2023 (“Issuance
Date”)
Scilex Holding Company, a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ORAMED PHARMACEUTICALS, INC., the registered holder hereof
or its assigns (“Oramed” or the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the date that is the earliest of: (A) March 14, 2025, (B) the date on which the Note (as defined below)
is repaid in full, and (C) the Management Sale Trigger Date (as defined below) (such date that is the later of (i) and (ii), the “Exercise
Eligibility Date”), but in any case not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 4,500,000
(subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (such shares of Common
Stock, the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the
respective meanings set forth in Section 18. This Warrant is one of the Warrants to Purchase Common Stock (the “Note
Warrants”) issued pursuant to Section 2.2(a)(iv)(A) or 2.2(a)(iv)(C) of that certain Securities Purchase Agreement, dated
as of the Issuance Date, by and between the Company and the Holder, as amended from time to time (the “Securities Purchase Agreement”).
For avoidance of doubt, this Warrant, to the extent not fully exercised by such time, shall be deemed terminated and be of no further
force or effect as of 11:59 p.m., New York time, on the Expiration Date.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after the Exercise Eligibility Date (an “Exercise Date”),
as to all or any portion of the Warrant Shares, by delivery (whether via electronic mail or otherwise) of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to (i) the Exercise Price in effect on the date of such exercise multiplied by (ii) the number of Warrant Shares
as to which this Warrant was so exercised (the “Aggregate Exercise Price”), which amount shall be delivered in cash
or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant (for the avoidance
of doubt, containing the same terms, rights and conditions, as would be contained in a Warrant issued in compliance with Section 7(d))
evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance
with the terms hereof.
On or before the first (1st)
Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the
Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the Exchange
Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program (“FAST”) and the Company is not otherwise prohibited from delivering the
Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon advice of counsel, upon the request
of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer
Agent is not participating in FAST and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive
legend pursuant to applicable securities laws upon the advice of counsel, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a certificate (which may be an electronic book entry statement),
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant
to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates (or electronic book entry statements) evidencing
such Warrant Shares (as the case may be).
Notwithstanding that the Holder
shall not be required to deliver or submit this Warrant in order effectuate an exercise, if the original of this Warrant is submitted
in connection with an exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant
is greater than the number of Warrant Shares being acquired upon such exercise and submission of this Warrant to the Company by the Holder,
then, the Company shall as soon as practicable and in no event later than two (2) Business Days after such exercise and submission and
at the Company’s own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase a number of Warrant Shares equal to (i) the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such exercise under this Warrant, less (ii) the number of Warrant Shares with respect to which this Warrant is so
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date
as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares
initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price
(or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall be a breach of this Warrant.
From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01 per share, subject to adjustment as provided
herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company, for any reason or for no reason, on or prior to the Share Delivery Date, either
| (I) | (a)(i) if the Transfer Agent is not participating in FAST or (ii) the Company is not then required to
have a Registration Statement (as defined below) available for the resale of Warrant Shares pursuant to the terms of the Registration
Rights Agreement and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive legend pursuant
to applicable securities laws upon the advice of counsel, shall fail to issue and deliver to the Holder (or its designee) a certificate
(which may be an electronic book entry statement) for the number of Warrant Shares to which the Holder is entitled and register such Warrant
Shares on the Company’s share register, or (b) if the Transfer Agent is participating in FAST and the Company is not otherwise prohibited
from delivering the Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon the advice
of counsel, shall fail to credit (or to cause the Transfer Agent to credit) the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case
may be), or |
| (II) | if a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale (as provided for in the Registration Rights Agreement) of the Warrant Shares by the Holder (a “Registration
Statement”) that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available
for the resale of such Unavailable Warrant Shares and a Registration Statement is then required to be available pursuant to the terms
of the Registration Rights Agreement, shall fail to promptly, but in no event later than as required pursuant to the Registration Rights
Agreement, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in this clause (II) is herein referred
as a “Notice Failure”; and each of the events described in the foregoing clause (I) and this clause (II) is herein
referred to as a “Delivery Failure”), |
then, in addition to all other
remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and for so
long as such Delivery Failure is continuing an amount equal to 2.0% of the product of (A) the sum of the number of shares of Common Stock
not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice
with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice (including, for the avoidance of doubt, as to the Warrant Shares that were the subject of such voided Exercise Notice);
provided, however, that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice of voiding pursuant to this Section 1(c) or otherwise.
In addition to the foregoing,
if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in FAST or the Company is not then required
to have a Registration Statement available for the resale of Warrant Shares pursuant to the terms of the Registration Rights Agreement,
the Company shall fail to issue and deliver to the Holder (or its designee) a certificate (or electronic book entry statement) and register
such shares of Common Stock on the Company’s share register, or, if the Transfer Agent is participating in FAST, the Company shall
fail (or shall fail to cause to the Transfer Agent) to credit the balance account of the Holder or the Holder’s designee with DTC
for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date
the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such exercise (i.e., equivalent to the Warrant Shares in respect of which
an exercise has been made) that the Holder is entitled to receive from the Company and has not received from the Company in connection
with such Delivery Failure or Notice Failure, as applicable, then, in addition to all other remedies available to the Holder, the Company
shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either
(i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and
other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in
respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue
and deliver such certificate (which may be an electronic book entry statement) (and to issue such shares of Common Stock) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate,
or
(ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates (which may be an electronic book entry statement
or statements) representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant
Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).
Nothing 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
to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this
Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (I) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share
Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares
that were the subject of such rescinded exercise); provided, however that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and (II) if a Registration Statement covering the resale of the Warrant Shares that are subject to an Exercise Notice is
not available, but is then required to be available pursuant to the Registration Rights Agreement, for the resale of such Warrant Shares
and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such Registration Statement and the
Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery
of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any
portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares that were the subject
of such rescinded exercise); provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some
or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(e) below), the Holder may, in
its sole discretion, exercise this Warrant, as to all or any portion of the Warrant Shares, and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For purposes of the foregoing
formula:
A= the total number of shares with respect
to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the
VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares
of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a),
or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice
is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) after the close of “regular
trading hours” on such Trading Day.
C = the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the Securities Act,
as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally
issued pursuant to the Securities Purchase Agreement.
(e) Beneficial
Ownership. The Company shall not effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion
of this Warrant, to the extent that after giving effect to the exercise set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties,
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Note Warrants) beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this
Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 1(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant may be exercised (in relation to other securities
owned by the Holder together with any Affiliates or Attribution Parties) and which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 1(e) in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C)
a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership
Limitation” shall be 9.9% of the number of shares of the Common Stock outstanding (as defined under Section 13(d) of the Securities
Act) immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(e). Any increase
in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered
to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
If the exercise of the Warrant into Common Stock would otherwise result in the Holder exceeding the Beneficial Ownership Limitation, the
Company will only exercise up to that number of shares that would amount to the Holder reaching the Beneficial Ownership Limitation and
the balance will be held in abeyance by the Company until such shares can be delivered to the Holder without exceeding the Beneficial
Ownership Limitation.
(f) Reservation
of Shares.
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock that is not less than 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under all of the Note Warrants (including all Subsequent Warrants)
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided,
however, that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(f) be reduced other
than proportionally to the number of Warrant Shares delivered in connection with any exercise of Note Warrants or such other event covered
by Section 2(a). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Note Warrants based on number of shares of Common Stock issuable upon the
exercise of Note Warrants held by each holder on the Issuance Date (without regard to any limitations on exercise) or increase in the
number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Note Warrants, each transferee shall be allocated a pro rata portion of such
holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Note
Warrants shall be allocated to the remaining holders of Note Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Note Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(f)(i), and not in limitation thereof, at any time while any of the Note Warrants
remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for all the Note Warrants then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its
issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company
may satisfy this obligation by obtaining such consent and submitting for filing with the Commission an Information Statement on Schedule
14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure
Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such
Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y)
the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the
applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and
payment under this Section 1(f)(ii); plus (ii) to the extent 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 Authorization Failure Shares, any Buy-In Price payment amount,
brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(f)(ii) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement. An Authorized
Share Failure which remains uncured for more than thirty (30) consecutive Trading Days shall be an “Event of Default” under
the Note.
2. WARRANT 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 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on
or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock or (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator 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) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such event. For the avoidance of doubt, and notwithstanding anything to contrary
contained herein or the other Transaction Documents, in no event shall there be any adjustment to the Exercise Price if the Company combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number
of shares.
(b) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, 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 adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the
avoidance of doubt, and notwithstanding anything to the contrary contained herein or the other Transaction Documents, in no event shall
there be any adjustment to the Exercise Price if the Company combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares.
(d) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF ASSETS.
In addition to any adjustments pursuant to Section 2 or Section 4,
if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other
securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), then, in each such case, the
Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the
Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided,
however, that to the extent that the Holder’s right to participate in any such
Distribution would result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Distribution at that time to the extent of the Beneficial Ownership Limitation (and shall
not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to
the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such
time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Beneficial
Ownership Limitation, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on
such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such
limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this
Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, that to
the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to
the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such shares of Common Stock as
a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall
be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder shall be granted such
right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly
in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which
is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments
to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common stock is quoted on or listed for trading on a Trading Market.
Upon the consummation of each
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall expressly assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this
Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without
limiting Section 1(e) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this
Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution
for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common
Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon
an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under
Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant
prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory
to the Holder.
(c) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Beneficial Ownership Limitation,
applied however with respect to shares of capital stock registered under the Exchange Act and thereafter receivable upon exercise of this
Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company hereby covenants and
agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality
of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant. Notwithstanding
anything herein to the contrary, if after the Exercise Eligibility Date, the Holder is not permitted to exercise this Warrant in full
or in part for any reason (other than pursuant to restrictions expressly set forth in this Warrant), the Company shall use its best efforts
to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit such exercise
into shares of Common Stock.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise specifically provided herein, the Holder, solely in its 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 its capacity as the Holder of this Warrant, any of the rights of a stockholder
of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights (except
as provided herein as a contractual right of the Holder in its capacity as a holder of this Warrant), or otherwise, prior to the issuance
to the Holder of the Warrant Shares which it 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. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders; provided, however,
that the Company shall not be obligated to provide such notice or information if it is filed with the Securities and Exchange Commission
through EDGAR and available to the public through the EDGAR system.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered to the
transferee of the Holder (or, if there are multiple transferees, new Warrants to each such transferee) or as the Holder otherwise directs,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this
Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number
of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant
Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock
shall be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant (whether to the Holder
or a transferee thereof), such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number
of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date and Exercise Eligibility Date, and (iv) shall have the same terms, rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required
to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 5.4 of the
Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this
Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth
in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. 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 pursuant to a Current Report
on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously
filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the
basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified by the Holder
in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms
of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material,
non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York time on
the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Current
Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating
to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately
upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification
from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained
in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise
provided herein, the provisions of this Warrant (other than Section 1(e)) may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
12. SEVERABILITY. If any provision of
this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the
remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable provision(s).
13. GOVERNING LAW. This Warrant shall
be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of New York. The Company 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 to
the Company at the address set forth in the Securities Purchase Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, and any appellate court therefrom, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to
realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the
Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
14. CONSTRUCTION; HEADINGS. This
Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the
drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings
ascribed to such terms on the Issuance Date in such other Transaction Documents unless otherwise consented to in writing by the
Holder.
15. REMEDIES, CHARACTERIZATION, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and
consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder
that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or
provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be
received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to specific
performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The
Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to
confirm the Company’s compliance with the terms and conditions of this Warrant. The issuance of shares and certificates for
shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any
issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax (other than income
tax) which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than
the Holder or its agent on its behalf.
16. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
17. TRANSFER. This Warrant may be
offered for sale, sold, transferred or assigned by the Holder without the consent of the Company.
18. CERTAIN DEFINITIONS. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement. In addition, the
following terms used in this Warrant shall have the following meanings:
(a) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such
time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of
the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(b) “Bloomberg”
means Bloomberg, L.P.
(c) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
(d) “Closing
Date” means September 21, 2023.
(e) “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market for
such security, as reported by Bloomberg, or, if the Principal Market for such security begins to operate on an extended hours basis and
does not designate the closing trade price then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market for such security is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the
average of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). 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 (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
(f) “Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class or series of capital stock or
equity interests into which such common stock shall have been changed, converted, exchanged or reclassified following the date hereof.
(g) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(h) “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a day other
than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday.
(i) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate,
acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the
Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of the Securities Purchase Agreement calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent
with the intended treatment of such instrument or transaction.
(j) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(k) “Management
Sale Letters” means, collectively, (i) that certain Management Sale Letter Agreement, dated as of the September 21, 2023 (the
“HJ MSL”), by and among the Company, Oramed and Henry Ji, and (ii) that certain Management Sale Letter Agreement, dated
as of the September 21, 2023 (the “JS MSL”), by and among the Company, Oramed and Jaisim Shah, in each case as may
be amended or restated from time to time.
(l) “Management
Sale Trigger Date” means the first Management Sale Date (as defined in each of the HJ MSL and the JS MSL) to occur following
the Issuance Date. (By way of example, if a Management Sale Date occurs under the HJ MSL prior to the occurrence of a Management Sale
Date under the JS MSL, the Management Sale Date under the HJ MSL shall be the Management Sale Trigger Date for purposes of all Note Warrants).
(m) “Note”
means that certain Senior Secured Promissory Note issued by the Company to the Holder pursuant to the Securities Purchase Agreement, as
may be amended or restated from time to time.
(n) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(o) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on a Trading Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(p) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(q) “Principal
Market” means the Nasdaq Capital Market.
(r) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s) “Subsequent
Warrant” means any Note Warrant issued on the Issuance Date and which contains a Vesting Date (as defined therein).
(t) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(u) “Trading
Day” means any day on which Principal Market is open for trading.
(v) “Transaction
Documents” means this Warrant, the other Warrants (as defined in the Securities Purchase Agreement), the Securities Purchase
Agreement, the Note, the Oramed SPA Termination and any other agreements, documents or instruments entered into in connection with the
transactions contemplated by such agreements.
(w) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[signature page follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SCILEX
HOLDING COMPANY
The undersigned holder hereby
elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Scilex Holding Company,
a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares. |
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii)
if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2. Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock
in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate to the
following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
|
DTC Participant: |
|
|
DTC Number: |
|
|
Account Number: |
|
Date: ________________ __,
|
|
Name of Registered Holder |
|
Tax ID:____________________________
E-mail Address:_____________________
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
Exhibit 10.4
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT; OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF
THIS WARRANT.
Scilex Holding Company
Warrant To Purchase Common Stock
Warrant No.: ORMP CS-2
Date of Issuance: September 21, 2023 (“Issuance
Date”)
Scilex Holding Company, a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ORAMED PHARMACEUTICALS, INC., the registered holder hereof
or its assigns (“Oramed” or the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the date that is the later of (i) March 19, 2024 (the “Vesting Date”) and (ii) the
date that is the earliest of: (A) March 14, 2025, (B) the date on which the Note (as defined below) is repaid in full, and (C) the Management
Sale Trigger Date (as defined below) (such date that is the later of (i) and (ii), the “Exercise Eligibility Date”),
but in any case not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 2,125,000 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below) (such shares of Common Stock, the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have the respective meanings set forth in Section 18.
This Warrant is one of the Warrants to Purchase Common Stock (the “Note Warrants”) issued pursuant to Section 2.2(a)(iv)(A)
or 2.2(a)(iv)(C) of that certain Securities Purchase Agreement, dated as of the Issuance Date, by and between the Company and the Holder,
as amended from time to time (the “Securities Purchase Agreement”). For avoidance of doubt, this Warrant, to the extent
not fully exercised by such time, shall be deemed terminated and be of no further force or effect as of 11:59 p.m., New York time, on
the Expiration Date.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after the Exercise Eligibility Date (an “Exercise Date”),
as to all or any portion of the Warrant Shares, by delivery (whether via electronic mail or otherwise) of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to (i) the Exercise Price in effect on the date of such exercise multiplied by (ii) the number of Warrant Shares
as to which this Warrant was so exercised (the “Aggregate Exercise Price”), which amount shall be delivered in cash
or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant (for the avoidance
of doubt, containing the same terms, rights and conditions, as would be contained in a Warrant issued in compliance with Section 7(d))
evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance
with the terms hereof.
On or before the first (1st)
Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the
Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the Exchange
Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program (“FAST”) and the Company is not otherwise prohibited from delivering the
Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon advice of counsel, upon the request
of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer
Agent is not participating in FAST and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive
legend pursuant to applicable securities laws upon the advice of counsel, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a certificate (which may be an electronic book entry statement),
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant
to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates (or electronic book entry statements) evidencing
such Warrant Shares (as the case may be).
Notwithstanding that the Holder
shall not be required to deliver or submit this Warrant in order effectuate an exercise, if the original of this Warrant is submitted
in connection with an exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant
is greater than the number of Warrant Shares being acquired upon such exercise and submission of this Warrant to the Company by the Holder,
then, the Company shall as soon as practicable and in no event later than two (2) Business Days after such exercise and submission and
at the Company’s own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase a number of Warrant Shares equal to (i) the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such exercise under this Warrant, less (ii) the number of Warrant Shares with respect to which this Warrant is so
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date
as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares
initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price
(or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall be a breach of this Warrant.
From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01 per share, subject to adjustment as provided
herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company, for any reason or for no reason, on or prior to the Share Delivery Date, either
| (I) | (a)(i) if the Transfer Agent is not participating in FAST or (ii) the Company is not then required to
have a Registration Statement (as defined below) available for the resale of Warrant Shares pursuant to the terms of the Registration
Rights Agreement and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive legend pursuant
to applicable securities laws upon the advice of counsel, shall fail to issue and deliver to the Holder (or its designee) a certificate
(which may be an electronic book entry statement) for the number of Warrant Shares to which the Holder is entitled and register such Warrant
Shares on the Company’s share register, or (b) if the Transfer Agent is participating in FAST and the Company is not otherwise prohibited
from delivering the Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon the advice
of counsel, shall fail to credit (or to cause the Transfer Agent to credit) the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case
may be), or |
| (II) | if a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale (as provided for in the Registration Rights Agreement) of the Warrant Shares by the Holder (a “Registration
Statement”) that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available
for the resale of such Unavailable Warrant Shares and a Registration Statement is then required to be available pursuant to the terms
of the Registration Rights Agreement, shall fail to promptly, but in no event later than as required pursuant to the Registration Rights
Agreement, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in this clause (II) is herein referred
as a “Notice Failure”; and each of the events described in the foregoing clause (I) and this clause (II) is herein
referred to as a “Delivery Failure”), |
then, in addition to all other
remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and for so
long as such Delivery Failure is continuing an amount equal to 2.0% of the product of (A) the sum of the number of shares of Common Stock
not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice
with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice (including, for the avoidance of doubt, as to the Warrant Shares that were the subject of such voided Exercise Notice);
provided, however, that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice of voiding pursuant to this Section 1(c) or otherwise.
In addition to the foregoing,
if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in FAST or the Company is not then required
to have a Registration Statement available for the resale of Warrant Shares pursuant to the terms of the Registration Rights Agreement,
the Company shall fail to issue and deliver to the Holder (or its designee) a certificate (or electronic book entry statement) and register
such shares of Common Stock on the Company’s share register, or, if the Transfer Agent is participating in FAST, the Company shall
fail (or shall fail to cause to the Transfer Agent) to credit the balance account of the Holder or the Holder’s designee with DTC
for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date
the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such exercise (i.e., equivalent to the Warrant Shares in respect of which
an exercise has been made) that the Holder is entitled to receive from the Company and has not received from the Company in connection
with such Delivery Failure or Notice Failure, as applicable, then, in addition to all other remedies available to the Holder, the Company
shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either
(i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and
other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in
respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue
and deliver such certificate (which may be an electronic book entry statement) (and to issue such shares of Common Stock) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate,
or
(ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates (which may be an electronic book entry statement
or statements) representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant
Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).
Nothing 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
to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this
Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (I) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share
Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares
that were the subject of such rescinded exercise); provided, however that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and (II) if a Registration Statement covering the resale of the Warrant Shares that are subject to an Exercise Notice is
not available, but is then required to be available pursuant to the Registration Rights Agreement, for the resale of such Warrant Shares
and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such Registration Statement and the
Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery
of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any
portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares that were the subject
of such rescinded exercise); provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some
or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(e) below), the Holder may, in
its sole discretion, exercise this Warrant, as to all or any portion of the Warrant Shares, and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For purposes of the foregoing
formula:
A= the total number of shares with respect
to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the
VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares
of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a),
or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice
is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) after the close of “regular
trading hours” on such Trading Day.
C = the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the Securities Act,
as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally
issued pursuant to the Securities Purchase Agreement.
(e) Beneficial
Ownership. The Company shall not effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion
of this Warrant, to the extent that after giving effect to the exercise set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties,
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Note Warrants) beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this
Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 1(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant may be exercised (in relation to other securities
owned by the Holder together with any Affiliates or Attribution Parties) and which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 1(e) in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C)
a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership
Limitation” shall be 9.9% of the number of shares of the Common Stock outstanding (as defined under Section 13(d) of the Securities
Act) immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(e). Any increase
in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered
to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
If the exercise of the Warrant into Common Stock would otherwise result in the Holder exceeding the Beneficial Ownership Limitation, the
Company will only exercise up to that number of shares that would amount to the Holder reaching the Beneficial Ownership Limitation and
the balance will be held in abeyance by the Company until such shares can be delivered to the Holder without exceeding the Beneficial
Ownership Limitation.
(f) Reservation
of Shares.
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock that is not less than 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under all of the Note Warrants (including all Subsequent Warrants)
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided,
however, that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(f) be reduced other
than proportionally to the number of Warrant Shares delivered in connection with any exercise of Note Warrants or such other event covered
by Section 2(a). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Note Warrants based on number of shares of Common Stock issuable upon the
exercise of Note Warrants held by each holder on the Issuance Date (without regard to any limitations on exercise) or increase in the
number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Note Warrants, each transferee shall be allocated a pro rata portion of such
holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Note
Warrants shall be allocated to the remaining holders of Note Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Note Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(f)(i), and not in limitation thereof, at any time while any of the Note Warrants
remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for all the Note Warrants then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its
issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company
may satisfy this obligation by obtaining such consent and submitting for filing with the Commission an Information Statement on Schedule
14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure
Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such
Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y)
the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the
applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and
payment under this Section 1(f)(ii); plus (ii) to the extent 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 Authorization Failure Shares, any Buy-In Price payment amount,
brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(f)(ii) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement. An Authorized
Share Failure which remains uncured for more than thirty (30) consecutive Trading Days shall be an “Event of Default” under
the Note.
2. WARRANT 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 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on
or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock or (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator 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) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such event. For the avoidance of doubt, and notwithstanding anything to contrary
contained herein or the other Transaction Documents, in no event shall there be any adjustment to the Exercise Price if the Company combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number
of shares.
(b) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, 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 adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the
avoidance of doubt, and notwithstanding anything to the contrary contained herein or the other Transaction Documents, in no event shall
there be any adjustment to the Exercise Price if the Company combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares.
(d) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF
ASSETS. In addition to any adjustments pursuant to Section 2 or Section 4, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property,
options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time on or after the Vesting Date,
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would
have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that to the extent that the Holder’s right to participate in any such Distribution would
result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution at that time to the extent of the Beneficial Ownership Limitation (and shall not be
entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the
extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such
time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Beneficial Ownership Limitation, at which time or times the Holder shall be granted such Distribution (and any Distributions
declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if
there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if, at any time on or after the Vesting
Date, the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such
shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which
is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant other than the limitation on exercise
prior to the Vesting Date) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on a Trading Market.
Upon the consummation of each
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall expressly assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this
Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date), as adjusted in accordance with the provisions
of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(e) hereof, the Holder may elect, at its sole option,
by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the
assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or
in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure
that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant other than the limitation on
exercise prior to the Vesting Date). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory
to the Holder.
(c) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date (provided that the Holder shall continue
to be entitled to the benefit of the Beneficial Ownership Limitation, applied however with respect to shares of capital stock registered
under the Exchange Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company
hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any
reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at
all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of
the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such
actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the Exercise
Eligibility Date, the Holder is not permitted to exercise this Warrant in full or in part for any reason (other than pursuant to
restrictions expressly set forth in this Warrant), the Company shall use its best efforts to promptly remedy such failure,
including, without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common
Stock.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER
. Except as otherwise specifically provided herein, the Holder, solely in its 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 its capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights (except as provided herein as a contractual right of the Holder in its capacity as a holder of this Warrant), or
otherwise, prior to the issuance to the Holder of the Warrant Shares which it 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. Notwithstanding this Section 6, the Company shall provide the Holder with copies
of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders; provided, however, that the Company shall not be obligated to provide such notice or information if it is filed
with the Securities and Exchange Commission through EDGAR and available to the public through the EDGAR system.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered to the
transferee of the Holder (or, if there are multiple transferees, new Warrants to each such transferee) or as the Holder otherwise directs,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this
Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number
of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant
Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock
shall be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant (whether to the Holder
or a transferee thereof), such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number
of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date and Exercise Eligibility Date, and (iv) shall have the same terms, rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required
to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 5.4 of the
Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this
Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth
in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. 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 pursuant to a Current Report
on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously
filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the
basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified by the Holder
in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. DISCLOSURE. Upon delivery by the Company
to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to
the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York time on the Business Day immediately following
such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the
event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries,
the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder,
as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt
of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material,
non-public information relating to the Company or any of its Subsidiaries.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise
provided herein, the provisions of this Warrant (other than Section 1(e)) may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
12. SEVERABILITY. If any provision of
this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the
remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable provision(s).
13. GOVERNING LAW. This Warrant shall be
governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. The Company 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 to the Company at the address set
forth in the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, and any appellate court therefrom, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce
a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
14. CONSTRUCTION; HEADINGS. This
Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the
drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings
ascribed to such terms on the Issuance Date in such other Transaction Documents unless otherwise consented to in writing by the
Holder.
15. REMEDIES, CHARACTERIZATION, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and
consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder
that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or
provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be
received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to specific
performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The
Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to
confirm the Company’s compliance with the terms and conditions of this Warrant. The issuance of shares and certificates for
shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any
issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax (other than income
tax) which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than
the Holder or its agent on its behalf.
16. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
17. TRANSFER. This Warrant may be offered
for sale, sold, transferred or assigned by the Holder without the consent of the Company.
18. CERTAIN DEFINITIONS. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement. In addition, the
following terms used in this Warrant shall have the following meanings:
(a) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such
time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of
the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(b) “Bloomberg”
means Bloomberg, L.P.
(c) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
(d) “Closing
Date” means September 21, 2023.
(e) “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market for
such security, as reported by Bloomberg, or, if the Principal Market for such security begins to operate on an extended hours basis and
does not designate the closing trade price then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market for such security is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the
average of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). 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 (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
(f) “Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class or series of capital stock or
equity interests into which such common stock shall have been changed, converted, exchanged or reclassified following the date hereof.
(g) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(h) “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a day other
than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday; provided that if the Note is repaid in full prior to the Vesting Date, then the Expiration Date shall be the date that
the Note is repaid in full.
(i) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate,
acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the
Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of the Securities Purchase Agreement calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent
with the intended treatment of such instrument or transaction.
(j) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(k) “Management
Sale Letters” means, collectively, (i) that certain Management Sale Letter Agreement, dated as of the September 21, 2023 (the
“HJ MSL”), by and among the Company, Oramed and Henry Ji, and (ii) that certain Management Sale Letter Agreement, dated
as of the September 21, 2023 (the “JS MSL”), by and among the Company, Oramed and Jaisim Shah, in each case as may
be amended or restated from time to time.
(l) “Management
Sale Trigger Date” means the first Management Sale Date (as defined in each of the HJ MSL and the JS MSL) to occur following
the Issuance Date. (By way of example, if a Management Sale Date occurs under the HJ MSL prior to the occurrence of a Management Sale
Date under the JS MSL, the Management Sale Date under the HJ MSL shall be the Management Sale Trigger Date for purposes of all Note Warrants).
(m) “Note”
means that certain Senior Secured Promissory Note issued by the Company to the Holder pursuant to the Securities Purchase Agreement, as
may be amended or restated from time to time.
(n) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(o) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on a Trading Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(p) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(q) “Principal
Market” means the Nasdaq Capital Market.
(r) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s) “Subsequent
Warrant” means any Note Warrant issued on the Issuance Date and which contains a Vesting Date (as defined therein).
(t) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(u) “Trading
Day” means any day on which Principal Market is open for trading.
(v) “Transaction
Documents” means this Warrant, the other Warrants (as defined in the Securities Purchase Agreement), the Securities Purchase
Agreement, the Note, the Oramed SPA Termination and any other agreements, documents or instruments entered into in connection with the
transactions contemplated by such agreements.
(w) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[signature page follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SCILEX
HOLDING COMPANY
The undersigned holder hereby
elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Scilex Holding Company,
a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares. |
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii)
if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2. Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock
in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate to the
following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
DTC Participant: |
|
DTC Number: |
|
Account Number: |
|
Date: _______________ __,
|
|
Name of Registered Holder |
|
Tax ID:____________________________
E-mail Address:_____________________
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
Exhibit 10.5
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT; OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF
THIS WARRANT.
Scilex Holding Company
Warrant To Purchase Common Stock
Warrant No.: ORMP CS-3
Date of Issuance: September 21, 2023 (“Issuance
Date”)
Scilex Holding Company, a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ORAMED PHARMACEUTICALS, INC., the registered holder hereof
or its assigns (“Oramed” or the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the date that is the later of (i) June 17, 2024 (the “Vesting Date”) and (ii) the
date that is the earliest of: (A) March 14, 2025, (B) the date on which the Note (as defined below) is repaid in full, and (C) the Management
Sale Trigger Date (as defined below) (such date that is the later of (i) and (ii), the “Exercise Eligibility Date”),
but in any case not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 2,125,000 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below) (such shares of Common Stock, the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have the respective meanings set forth in Section 18.
This Warrant is one of the Warrants to Purchase Common Stock (the “Note Warrants”) issued pursuant to Section 2.2(a)(iv)(A)
or 2.2(a)(iv)(C) of that certain Securities Purchase Agreement, dated as of the Issuance Date, by and between the Company and the Holder,
as amended from time to time (the “Securities Purchase Agreement”). For avoidance of doubt, this Warrant, to the extent
not fully exercised by such time, shall be deemed terminated and be of no further force or effect as of 11:59 p.m., New York time, on
the Expiration Date.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after the Exercise Eligibility Date (an “Exercise Date”),
as to all or any portion of the Warrant Shares, by delivery (whether via electronic mail or otherwise) of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to (i) the Exercise Price in effect on the date of such exercise multiplied by (ii) the number of Warrant Shares
as to which this Warrant was so exercised (the “Aggregate Exercise Price”), which amount shall be delivered in cash
or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant (for the avoidance
of doubt, containing the same terms, rights and conditions, as would be contained in a Warrant issued in compliance with Section 7(d))
evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance
with the terms hereof.
On or before the first (1st)
Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the
Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the Exchange
Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program (“FAST”) and the Company is not otherwise prohibited from delivering the
Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon advice of counsel, upon the request
of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer
Agent is not participating in FAST and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive
legend pursuant to applicable securities laws upon the advice of counsel, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a certificate (which may be an electronic book entry statement),
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant
to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates (or electronic book entry statements) evidencing
such Warrant Shares (as the case may be).
Notwithstanding that the Holder
shall not be required to deliver or submit this Warrant in order effectuate an exercise, if the original of this Warrant is submitted
in connection with an exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant
is greater than the number of Warrant Shares being acquired upon such exercise and submission of this Warrant to the Company by the Holder,
then, the Company shall as soon as practicable and in no event later than two (2) Business Days after such exercise and submission and
at the Company’s own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase a number of Warrant Shares equal to (i) the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such exercise under this Warrant, less (ii) the number of Warrant Shares with respect to which this Warrant is so
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date
as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares
initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price
(or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall be a breach of this Warrant.
From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01 per share, subject to adjustment as provided
herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company, for any reason or for no reason, on or prior to the Share Delivery Date, either
| (I) | (a)(i) if the Transfer Agent is not participating in FAST or (ii) the Company is not then required to
have a Registration Statement (as defined below) available for the resale of Warrant Shares pursuant to the terms of the Registration
Rights Agreement and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive legend pursuant
to applicable securities laws upon the advice of counsel, shall fail to issue and deliver to the Holder (or its designee) a certificate
(which may be an electronic book entry statement) for the number of Warrant Shares to which the Holder is entitled and register such Warrant
Shares on the Company’s share register, or (b) if the Transfer Agent is participating in FAST and the Company is not otherwise prohibited
from delivering the Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon the advice
of counsel, shall fail to credit (or to cause the Transfer Agent to credit) the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case
may be), or |
| (II) | if a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale (as provided for in the Registration Rights Agreement) of the Warrant Shares by the Holder (a “Registration
Statement”) that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available
for the resale of such Unavailable Warrant Shares and a Registration Statement is then required to be available pursuant to the terms
of the Registration Rights Agreement, shall fail to promptly, but in no event later than as required pursuant to the Registration Rights
Agreement, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in this clause (II) is herein referred
as a “Notice Failure”; and each of the events described in the foregoing clause (I) and this clause (II) is herein
referred to as a “Delivery Failure”), |
then, in addition to all other
remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and for so
long as such Delivery Failure is continuing an amount equal to 2.0% of the product of (A) the sum of the number of shares of Common Stock
not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice
with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice (including, for the avoidance of doubt, as to the Warrant Shares that were the subject of such voided Exercise Notice);
provided, however, that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice of voiding pursuant to this Section 1(c) or otherwise.
In addition to the foregoing,
if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in FAST or the Company is not then required
to have a Registration Statement available for the resale of Warrant Shares pursuant to the terms of the Registration Rights Agreement,
the Company shall fail to issue and deliver to the Holder (or its designee) a certificate (or electronic book entry statement) and register
such shares of Common Stock on the Company’s share register, or, if the Transfer Agent is participating in FAST, the Company shall
fail (or shall fail to cause to the Transfer Agent) to credit the balance account of the Holder or the Holder’s designee with DTC
for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date
the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such exercise (i.e., equivalent to the Warrant Shares in respect of which
an exercise has been made) that the Holder is entitled to receive from the Company and has not received from the Company in connection
with such Delivery Failure or Notice Failure, as applicable, then, in addition to all other remedies available to the Holder, the Company
shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either
(i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and
other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in
respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue
and deliver such certificate (which may be an electronic book entry statement) (and to issue such shares of Common Stock) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate,
or
(ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates (which may be an electronic book entry statement
or statements) representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant
Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).
Nothing 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
to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this
Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (I) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share
Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares
that were the subject of such rescinded exercise); provided, however that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and (II) if a Registration Statement covering the resale of the Warrant Shares that are subject to an Exercise Notice is
not available, but is then required to be available pursuant to the Registration Rights Agreement, for the resale of such Warrant Shares
and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such Registration Statement and the
Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery
of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any
portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares that were the subject
of such rescinded exercise); provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some
or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(e) below), the Holder may, in
its sole discretion, exercise this Warrant, as to all or any portion of the Warrant Shares, and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For purposes of the foregoing
formula:
A= the total number of shares with respect
to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the
VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares
of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a),
or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice
is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) after the close of “regular
trading hours” on such Trading Day.
C = the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the Securities Act,
as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally
issued pursuant to the Securities Purchase Agreement.
(e) Beneficial
Ownership. The Company shall not effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion
of this Warrant, to the extent that after giving effect to the exercise set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties,
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Note Warrants) beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this
Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 1(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant may be exercised (in relation to other securities
owned by the Holder together with any Affiliates or Attribution Parties) and which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 1(e) in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C)
a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership
Limitation” shall be 9.9% of the number of shares of the Common Stock outstanding (as defined under Section 13(d) of the Securities
Act) immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(e). Any increase
in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered
to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
If the exercise of the Warrant into Common Stock would otherwise result in the Holder exceeding the Beneficial Ownership Limitation, the
Company will only exercise up to that number of shares that would amount to the Holder reaching the Beneficial Ownership Limitation and
the balance will be held in abeyance by the Company until such shares can be delivered to the Holder without exceeding the Beneficial
Ownership Limitation.
(f) Reservation
of Shares.
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock that is not less than 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under all of the Note Warrants (including all Subsequent Warrants)
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided,
however, that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(f) be reduced other
than proportionally to the number of Warrant Shares delivered in connection with any exercise of Note Warrants or such other event covered
by Section 2(a). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Note Warrants based on number of shares of Common Stock issuable upon the
exercise of Note Warrants held by each holder on the Issuance Date (without regard to any limitations on exercise) or increase in the
number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Note Warrants, each transferee shall be allocated a pro rata portion of such
holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Note
Warrants shall be allocated to the remaining holders of Note Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Note Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(f)(i), and not in limitation thereof, at any time while any of the Note Warrants
remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for all the Note Warrants then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its
issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company
may satisfy this obligation by obtaining such consent and submitting for filing with the Commission an Information Statement on Schedule
14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure
Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such
Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y)
the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the
applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and
payment under this Section 1(f)(ii); plus (ii) to the extent 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 Authorization Failure Shares, any Buy-In Price payment amount,
brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(f)(ii) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement. An Authorized
Share Failure which remains uncured for more than thirty (30) consecutive Trading Days shall be an “Event of Default” under
the Note.
2. WARRANT 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 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on
or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock or (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator 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) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such event. For the avoidance of doubt, and notwithstanding anything to contrary
contained herein or the other Transaction Documents, in no event shall there be any adjustment to the Exercise Price if the Company combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number
of shares.
(b) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, 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 adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the
avoidance of doubt, and notwithstanding anything to the contrary contained herein or the other Transaction Documents, in no event shall
there be any adjustment to the Exercise Price if the Company combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares.
(d) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF ASSETS.
In addition to any adjustments pursuant to Section 2 or Section 4, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness
or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution”), at any time on or after the Vesting Date, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s
right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Distribution at that time to the extent of the Beneficial Ownership
Limitation (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial
ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder
until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Beneficial Ownership Limitation, at which time or times the Holder shall be granted such Distribution (and any Distributions declared
or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had
been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if, at any time on or after the Vesting
Date, the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such
shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which
is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant other than the limitation on exercise
prior to the Vesting Date) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on a Trading Market.
Upon the consummation of each
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall expressly assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this
Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date), as adjusted in accordance with the provisions
of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(e) hereof, the Holder may elect, at its sole option,
by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the
assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or
in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure
that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant other than the limitation on
exercise prior to the Vesting Date). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory
to the Holder.
(c) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date (provided that the Holder shall continue
to be entitled to the benefit of the Beneficial Ownership Limitation, applied however with respect to shares of capital stock registered
under the Exchange Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company
hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any
reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at
all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of
the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such
actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the Exercise
Eligibility Date, the Holder is not permitted to exercise this Warrant in full or in part for any reason (other than pursuant to
restrictions expressly set forth in this Warrant), the Company shall use its best efforts to promptly remedy such failure,
including, without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common
Stock.
6. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its 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 its capacity as the Holder of this
Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action
(whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive
notice of meetings, receive dividends or subscription rights (except as provided herein as a contractual right of the Holder in its
capacity as a holder of this Warrant), or otherwise, prior to the issuance to the Holder of the Warrant Shares which it 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. Notwithstanding this Section 6,
the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the stockholders; provided, however, that the Company shall not be obligated
to provide such notice or information if it is filed with the Securities and Exchange Commission through EDGAR and available to the
public through the EDGAR system.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered to the
transferee of the Holder (or, if there are multiple transferees, new Warrants to each such transferee) or as the Holder otherwise directs,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this
Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number
of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant
Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock
shall be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant (whether to the Holder
or a transferee thereof), such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number
of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date and Exercise Eligibility Date, and (iv) shall have the same terms, rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required
to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 5.4 of the
Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this
Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth
in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. 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 pursuant to a Current Report
on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously
filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the
basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified by the Holder
in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. DISCLOSURE. Upon delivery by the Company
to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to
the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York time on the Business Day immediately following
such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the
event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries,
the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder,
as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt
of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material,
non-public information relating to the Company or any of its Subsidiaries.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
11. AMENDMENT AND WAIVER. Except as
otherwise provided herein, the provisions of this Warrant (other than Section 1(e)) may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.
12. SEVERABILITY. If any provision of
this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the
remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable provision(s).
13. GOVERNING LAW. This Warrant shall
be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of New York. The Company 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 to
the Company at the address set forth in the Securities Purchase Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, and any appellate court therefrom, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to
realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the
Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
14. CONSTRUCTION; HEADINGS. This Warrant
shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof.
The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Issuance
Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
15. REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure
by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without
posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested by the
Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant. The issuance of
shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder
or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax
(other than income tax) which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a
name other than the Holder or its agent on its behalf.
16. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
17. TRANSFER. This Warrant may be offered
for sale, sold, transferred or assigned by the Holder without the consent of the Company.
18. CERTAIN DEFINITIONS. Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement. In addition, the following
terms used in this Warrant shall have the following meanings:
(a) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such
time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of
the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(b) “Bloomberg”
means Bloomberg, L.P.
(c) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
(d) “Closing
Date” means September 21, 2023.
(e) “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market for
such security, as reported by Bloomberg, or, if the Principal Market for such security begins to operate on an extended hours basis and
does not designate the closing trade price then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market for such security is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the
average of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). 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 (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
(f) “Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class or series of capital stock or
equity interests into which such common stock shall have been changed, converted, exchanged or reclassified following the date hereof.
(g) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(h) “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a day other
than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday; provided that if the Note is repaid in full prior to the Vesting Date, then the Expiration Date shall be the date that
the Note is repaid in full.
(i) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate,
acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the
Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of the Securities Purchase Agreement calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent
with the intended treatment of such instrument or transaction.
(j) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(k) “Management
Sale Letters” means, collectively, (i) that certain Management Sale Letter Agreement, dated as of the September 21, 2023 (the
“HJ MSL”), by and among the Company, Oramed and Henry Ji, and (ii) that certain Management Sale Letter Agreement, dated
as of the September 21, 2023 (the “JS MSL”), by and among the Company, Oramed and Jaisim Shah, in each case as may
be amended or restated from time to time.
(l) “Management
Sale Trigger Date” means the first Management Sale Date (as defined in each of the HJ MSL and the JS MSL) to occur following
the Issuance Date. (By way of example, if a Management Sale Date occurs under the HJ MSL prior to the occurrence of a Management Sale
Date under the JS MSL, the Management Sale Date under the HJ MSL shall be the Management Sale Trigger Date for purposes of all Note Warrants).
(m) “Note”
means that certain Senior Secured Promissory Note issued by the Company to the Holder pursuant to the Securities Purchase Agreement, as
may be amended or restated from time to time.
(n) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(o) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on a Trading Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(p) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(q) “Principal
Market” means the Nasdaq Capital Market.
(r) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s) “Subsequent
Warrant” means any Note Warrant issued on the Issuance Date and which contains a Vesting Date (as defined therein).
(t) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(u) “Trading
Day” means any day on which Principal Market is open for trading.
(v) “Transaction
Documents” means this Warrant, the other Warrants (as defined in the Securities Purchase Agreement), the Securities Purchase
Agreement, the Note, the Oramed SPA Termination and any other agreements, documents or instruments entered into in connection with the
transactions contemplated by such agreements.
(w) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[signature page follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SCILEX
HOLDING COMPANY
The undersigned holder hereby
elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Scilex Holding Company,
a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares. |
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii)
if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2. Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock
in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate to the
following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
DTC Participant: |
|
DTC Number: |
|
Account Number: |
|
Date: _____________ __,
|
|
Name of Registered Holder |
|
Tax ID:____________________________
E-mail Address:_____________________
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
Exhibit 10.6
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT; OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF
THIS WARRANT.
Scilex Holding Company
Warrant To Purchase Common Stock
Warrant No.: ORMP CS-4
Date of Issuance: September 21, 2023 (“Issuance
Date”)
Scilex Holding Company, a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ORAMED PHARMACEUTICALS, INC., the registered holder hereof
or its assigns (“Oramed” or the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the date that is the later of (i) September 15, 2024 (the “Vesting Date”) and (ii)
the date that is the earliest of: (A) March 14, 2025, (B) the date on which the Note (as defined below) is repaid in full, and (C) the
Management Sale Trigger Date (as defined below) (such date that is the later of (i) and (ii), the “Exercise Eligibility Date”),
but in any case not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 2,125,000 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below) (such shares of Common Stock, the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have the respective meanings set forth in Section 18.
This Warrant is one of the Warrants to Purchase Common Stock (the “Note Warrants”) issued pursuant to Section 2.2(a)(iv)(A)
or 2.2(a)(iv)(C) of that certain Securities Purchase Agreement, dated as of the Issuance Date, by and between the Company and the Holder,
as amended from time to time (the “Securities Purchase Agreement”). For avoidance of doubt, this Warrant, to the extent
not fully exercised by such time, shall be deemed terminated and be of no further force or effect as of 11:59 p.m., New York time, on
the Expiration Date.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after the Exercise Eligibility Date (an “Exercise Date”),
as to all or any portion of the Warrant Shares, by delivery (whether via electronic mail or otherwise) of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to (i) the Exercise Price in effect on the date of such exercise multiplied by (ii) the number of Warrant Shares
as to which this Warrant was so exercised (the “Aggregate Exercise Price”), which amount shall be delivered in cash
or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant (for the avoidance
of doubt, containing the same terms, rights and conditions, as would be contained in a Warrant issued in compliance with Section 7(d))
evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance
with the terms hereof.
On or before the first (1st)
Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the
Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the Exchange
Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program (“FAST”) and the Company is not otherwise prohibited from delivering the
Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon advice of counsel, upon the request
of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer
Agent is not participating in FAST and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive
legend pursuant to applicable securities laws upon the advice of counsel, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a certificate (which may be an electronic book entry statement),
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant
to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates (or electronic book entry statements) evidencing
such Warrant Shares (as the case may be).
Notwithstanding that the Holder
shall not be required to deliver or submit this Warrant in order effectuate an exercise, if the original of this Warrant is submitted
in connection with an exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant
is greater than the number of Warrant Shares being acquired upon such exercise and submission of this Warrant to the Company by the Holder,
then, the Company shall as soon as practicable and in no event later than two (2) Business Days after such exercise and submission and
at the Company’s own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase a number of Warrant Shares equal to (i) the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such exercise under this Warrant, less (ii) the number of Warrant Shares with respect to which this Warrant is so
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date
as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares
initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price
(or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall be a breach of this Warrant.
From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01 per share, subject to adjustment as provided
herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company, for any reason or for no reason, on or prior to the Share Delivery Date, either
| (I) | (a)(i) if the Transfer Agent is not participating in FAST or (ii) the Company is not then required to
have a Registration Statement (as defined below) available for the resale of Warrant Shares pursuant to the terms of the Registration
Rights Agreement and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive legend pursuant
to applicable securities laws upon the advice of counsel, shall fail to issue and deliver to the Holder (or its designee) a certificate
(which may be an electronic book entry statement) for the number of Warrant Shares to which the Holder is entitled and register such Warrant
Shares on the Company’s share register, or (b) if the Transfer Agent is participating in FAST and the Company is not otherwise prohibited
from delivering the Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon the advice
of counsel, shall fail to credit (or to cause the Transfer Agent to credit) the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case
may be), or |
| (II) | if a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale (as provided for in the Registration Rights Agreement) of the Warrant Shares by the Holder (a “Registration
Statement”) that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available
for the resale of such Unavailable Warrant Shares and a Registration Statement is then required to be available pursuant to the terms
of the Registration Rights Agreement, shall fail to promptly, but in no event later than as required pursuant to the Registration Rights
Agreement, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in this clause (II) is herein referred
as a “Notice Failure”; and each of the events described in the foregoing clause (I) and this clause (II) is herein
referred to as a “Delivery Failure”), |
then, in addition to all other
remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and for so
long as such Delivery Failure is continuing an amount equal to 2.0% of the product of (A) the sum of the number of shares of Common Stock
not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice
with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice (including, for the avoidance of doubt, as to the Warrant Shares that were the subject of such voided Exercise Notice);
provided, however, that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice of voiding pursuant to this Section 1(c) or otherwise.
In addition to the foregoing,
if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in FAST or the Company is not then required
to have a Registration Statement available for the resale of Warrant Shares pursuant to the terms of the Registration Rights Agreement,
the Company shall fail to issue and deliver to the Holder (or its designee) a certificate (or electronic book entry statement) and register
such shares of Common Stock on the Company’s share register, or, if the Transfer Agent is participating in FAST, the Company shall
fail (or shall fail to cause to the Transfer Agent) to credit the balance account of the Holder or the Holder’s designee with DTC
for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date
the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such exercise (i.e., equivalent to the Warrant Shares in respect of which
an exercise has been made) that the Holder is entitled to receive from the Company and has not received from the Company in connection
with such Delivery Failure or Notice Failure, as applicable, then, in addition to all other remedies available to the Holder, the Company
shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either
(i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and
other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in
respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue
and deliver such certificate (which may be an electronic book entry statement) (and to issue such shares of Common Stock) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate,
or
(ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates (which may be an electronic book entry statement
or statements) representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant
Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).
Nothing 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
to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this
Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (I) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share
Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares
that were the subject of such rescinded exercise); provided, however that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and (II) if a Registration Statement covering the resale of the Warrant Shares that are subject to an Exercise Notice is
not available, but is then required to be available pursuant to the Registration Rights Agreement, for the resale of such Warrant Shares
and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such Registration Statement and the
Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery
of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any
portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares that were the subject
of such rescinded exercise); provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some
or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(e) below), the Holder may, in
its sole discretion, exercise this Warrant, as to all or any portion of the Warrant Shares, and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For purposes of the foregoing
formula:
A= the total number of shares with respect
to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the
VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares
of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a),
or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice
is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) after the close of “regular
trading hours” on such Trading Day.
C = the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the Securities Act,
as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally
issued pursuant to the Securities Purchase Agreement.
(e) Beneficial
Ownership. The Company shall not effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion
of this Warrant, to the extent that after giving effect to the exercise set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties,
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Note Warrants) beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this
Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 1(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant may be exercised (in relation to other securities
owned by the Holder together with any Affiliates or Attribution Parties) and which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 1(e) in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C)
a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership
Limitation” shall be 9.9% of the number of shares of the Common Stock outstanding (as defined under Section 13(d) of the Securities
Act) immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(e). Any increase
in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered
to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
If the exercise of the Warrant into Common Stock would otherwise result in the Holder exceeding the Beneficial Ownership Limitation, the
Company will only exercise up to that number of shares that would amount to the Holder reaching the Beneficial Ownership Limitation and
the balance will be held in abeyance by the Company until such shares can be delivered to the Holder without exceeding the Beneficial
Ownership Limitation.
(f) Reservation
of Shares.
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock that is not less than 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under all of the Note Warrants (including all Subsequent Warrants)
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided,
however, that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(f) be reduced other
than proportionally to the number of Warrant Shares delivered in connection with any exercise of Note Warrants or such other event covered
by Section 2(a). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Note Warrants based on number of shares of Common Stock issuable upon the
exercise of Note Warrants held by each holder on the Issuance Date (without regard to any limitations on exercise) or increase in the
number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Note Warrants, each transferee shall be allocated a pro rata portion of such
holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Note
Warrants shall be allocated to the remaining holders of Note Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Note Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(f)(i), and not in limitation thereof, at any time while any of the Note Warrants
remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for all the Note Warrants then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its
issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company
may satisfy this obligation by obtaining such consent and submitting for filing with the Commission an Information Statement on Schedule
14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure
Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such
Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y)
the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the
applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and
payment under this Section 1(f)(ii); plus (ii) to the extent 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 Authorization Failure Shares, any Buy-In Price payment amount,
brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(f)(ii) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement. An Authorized
Share Failure which remains uncured for more than thirty (30) consecutive Trading Days shall be an “Event of Default” under
the Note.
2. WARRANT
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 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on
or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock or (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator 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) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such event. For the avoidance of doubt, and notwithstanding anything to contrary
contained herein or the other Transaction Documents, in no event shall there be any adjustment to the Exercise Price if the Company combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number
of shares.
(b) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, 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 adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the
avoidance of doubt, and notwithstanding anything to the contrary contained herein or the other Transaction Documents, in no event shall
there be any adjustment to the Exercise Price if the Company combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares.
(d) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF ASSETS.
In addition to any adjustments pursuant to Section 2 or Section 4, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness
or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution”), at any time on or after the Vesting Date, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s
right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Distribution at that time to the extent of the Beneficial Ownership
Limitation (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial
ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder
until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Beneficial Ownership Limitation, at which time or times the Holder shall be granted such Distribution (and any Distributions declared
or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had
been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if, at any time on or after the Vesting
Date, the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such
shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which
is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant other than the limitation on exercise
prior to the Vesting Date) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on a Trading Market.
Upon the consummation of each
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall expressly assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this
Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date), as adjusted in accordance with the provisions
of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(e) hereof, the Holder may elect, at its sole option,
by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the
assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or
in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure
that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant other than the limitation on
exercise prior to the Vesting Date). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory
to the Holder.
(c) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date (provided that the Holder shall continue
to be entitled to the benefit of the Beneficial Ownership Limitation, applied however with respect to shares of capital stock registered
under the Exchange Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company hereby
covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith
carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise
of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant.
Notwithstanding anything herein to the contrary, if after the Exercise Eligibility Date, the Holder is not permitted to exercise this
Warrant in full or in part for any reason (other than pursuant to restrictions expressly set forth in this Warrant), the Company shall
use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary
to permit such exercise into shares of Common Stock.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise specifically provided herein, the Holder, solely in its 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 its capacity as the Holder of this Warrant, any of the rights of a stockholder
of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights (except
as provided herein as a contractual right of the Holder in its capacity as a holder of this Warrant), or otherwise, prior to the issuance
to the Holder of the Warrant Shares which it 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. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders; provided, however,
that the Company shall not be obligated to provide such notice or information if it is filed with the Securities and Exchange Commission
through EDGAR and available to the public through the EDGAR system.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered to the
transferee of the Holder (or, if there are multiple transferees, new Warrants to each such transferee) or as the Holder otherwise directs,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this
Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number
of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant
Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock
shall be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant (whether to the Holder
or a transferee thereof), such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number
of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date and Exercise Eligibility Date, and (iv) shall have the same terms, rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required
to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 5.4 of the
Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this
Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth
in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. 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 pursuant to a Current Report
on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously
filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the
basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified by the Holder
in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. DISCLOSURE. Upon delivery by the Company
to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to
the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York time on the Business Day immediately following
such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the
event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries,
the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder,
as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt
of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material,
non-public information relating to the Company or any of its Subsidiaries.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise
provided herein, the provisions of this Warrant (other than Section 1(e)) may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
12. SEVERABILITY. If any provision of
this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be
valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions
of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does
not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits
that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid
or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid
or unenforceable provision(s).
13. GOVERNING LAW. This Warrant shall
be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation
and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. The Company 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 to the Company at the address set
forth in the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, and any appellate court therefrom, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce
a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
14. CONSTRUCTION; HEADINGS. This Warrant
shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof.
The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Issuance
Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
15. REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure
by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without
posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested by the
Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant. The issuance of
shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder
or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax
(other than income tax) which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a
name other than the Holder or its agent on its behalf.
16. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
17. TRANSFER. This Warrant may be offered
for sale, sold, transferred or assigned by the Holder without the consent of the Company.
18. CERTAIN DEFINITIONS. Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement. In addition, the following
terms used in this Warrant shall have the following meanings:
(a) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such
time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of
the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(b) “Bloomberg”
means Bloomberg, L.P.
(c) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
(d) “Closing
Date” means September 21, 2023.
(e) “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market for
such security, as reported by Bloomberg, or, if the Principal Market for such security begins to operate on an extended hours basis and
does not designate the closing trade price then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market for such security is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the
average of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). 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 (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
(f) “Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class or series of capital stock or
equity interests into which such common stock shall have been changed, converted, exchanged or reclassified following the date hereof.
(g) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(h) “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a day other
than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday; provided that if the Note is repaid in full prior to the Vesting Date, then the Expiration Date shall be the date that
the Note is repaid in full.
(i) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate,
acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the
Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of the Securities Purchase Agreement calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent
with the intended treatment of such instrument or transaction.
(j) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(k) “Management
Sale Letters” means, collectively, (i) that certain Management Sale Letter Agreement, dated as of the September 21, 2023 (the
“HJ MSL”), by and among the Company, Oramed and Henry Ji, and (ii) that certain Management Sale Letter Agreement, dated
as of the September 21, 2023 (the “JS MSL”), by and among the Company, Oramed and Jaisim Shah, in each case as may
be amended or restated from time to time.
(l) “Management
Sale Trigger Date” means the first Management Sale Date (as defined in each of the HJ MSL and the JS MSL) to occur following
the Issuance Date. (By way of example, if a Management Sale Date occurs under the HJ MSL prior to the occurrence of a Management Sale
Date under the JS MSL, the Management Sale Date under the HJ MSL shall be the Management Sale Trigger Date for purposes of all Note Warrants).
(m) “Note”
means that certain Senior Secured Promissory Note issued by the Company to the Holder pursuant to the Securities Purchase Agreement, as
may be amended or restated from time to time.
(n) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(o) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on a Trading Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(p) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(q) “Principal
Market” means the Nasdaq Capital Market.
(r) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s) “Subsequent
Warrant” means any Note Warrant issued on the Issuance Date and which contains a Vesting Date (as defined therein).
(t) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(u) “Trading
Day” means any day on which Principal Market is open for trading.
(v) “Transaction
Documents” means this Warrant, the other Warrants (as defined in the Securities Purchase Agreement), the Securities Purchase
Agreement, the Note, the Oramed SPA Termination and any other agreements, documents or instruments entered into in connection with the
transactions contemplated by such agreements.
(w) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[signature page follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SCILEX
HOLDING COMPANY
The undersigned holder hereby
elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Scilex Holding Company,
a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares. |
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii)
if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2. Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock
in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate to the
following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
|
DTC
Participant: |
|
|
DTC
Number: |
|
|
Account
Number: |
|
Date: _____________ __,
|
|
Name of Registered Holder |
|
Tax ID:____________________________
E-mail Address:_____________________
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
Exhibit 10.7
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT; OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF
THIS WARRANT.
Scilex Holding Company
Warrant To Purchase Common Stock
Warrant No.: ORMP CS-5
Date of Issuance: September 21, 2023 (“Issuance
Date”)
Scilex Holding Company, a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ORAMED PHARMACEUTICALS, INC., the registered holder hereof
or its assigns (“Oramed” or the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the date that is the later of (i) December 14, 2024 (the “Vesting Date”) and (ii)
the date that is the earliest of: (A) March 14, 2025, (B) the date on which the Note (as defined below) is repaid in full, and (C) the
Management Sale Trigger Date (as defined below) (such date that is the later of (i) and (ii), the “Exercise Eligibility Date”),
but in any case not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 2,125,000 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below) (such shares of Common Stock, the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have the respective meanings set forth in Section 18.
This Warrant is one of the Warrants to Purchase Common Stock (the “Note Warrants”) issued pursuant to Section 2.2(a)(iv)(A)
or 2.2(a)(iv)(C) of that certain Securities Purchase Agreement, dated as of the Issuance Date, by and between the Company and the Holder,
as amended from time to time (the “Securities Purchase Agreement”). For avoidance of doubt, this Warrant, to the extent
not fully exercised by such time, shall be deemed terminated and be of no further force or effect as of 11:59 p.m., New York time, on
the Expiration Date.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after the Exercise Eligibility Date (an “Exercise Date”),
as to all or any portion of the Warrant Shares, by delivery (whether via electronic mail or otherwise) of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to (i) the Exercise Price in effect on the date of such exercise multiplied by (ii) the number of Warrant Shares
as to which this Warrant was so exercised (the “Aggregate Exercise Price”), which amount shall be delivered in cash
or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise
was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant (for the avoidance
of doubt, containing the same terms, rights and conditions, as would be contained in a Warrant issued in compliance with Section 7(d))
evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance
with the terms hereof.
On or before the first (1st)
Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the
Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the Exchange
Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program (“FAST”) and the Company is not otherwise prohibited from delivering the
Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon advice of counsel, upon the request
of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer
Agent is not participating in FAST and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive
legend pursuant to applicable securities laws upon the advice of counsel, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a certificate (which may be an electronic book entry statement),
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant
to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates (or electronic book entry statements) evidencing
such Warrant Shares (as the case may be).
Notwithstanding that the Holder
shall not be required to deliver or submit this Warrant in order effectuate an exercise, if the original of this Warrant is submitted
in connection with an exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant
is greater than the number of Warrant Shares being acquired upon such exercise and submission of this Warrant to the Company by the Holder,
then, the Company shall as soon as practicable and in no event later than two (2) Business Days after such exercise and submission and
at the Company’s own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase a number of Warrant Shares equal to (i) the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such exercise under this Warrant, less (ii) the number of Warrant Shares with respect to which this Warrant is so
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date
as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares
initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price
(or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall be a breach of this Warrant.
From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01 per share, subject to adjustment as provided
herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company, for any reason or for no reason, on or prior to the Share Delivery Date, either
| (I) | (a)(i) if the Transfer Agent is not participating in FAST or (ii) the Company is not then required to
have a Registration Statement (as defined below) available for the resale of Warrant Shares pursuant to the terms of the Registration
Rights Agreement and the Company is otherwise unable to deliver the Warrant Shares electronically without any restrictive legend pursuant
to applicable securities laws upon the advice of counsel, shall fail to issue and deliver to the Holder (or its designee) a certificate
(which may be an electronic book entry statement) for the number of Warrant Shares to which the Holder is entitled and register such Warrant
Shares on the Company’s share register, or (b) if the Transfer Agent is participating in FAST and the Company is not otherwise prohibited
from delivering the Warrant Shares electronically without any restrictive legend pursuant to applicable securities laws upon the advice
of counsel, shall fail to credit (or to cause the Transfer Agent to credit) the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case
may be), or |
| (II) | if a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale (as provided for in the Registration Rights Agreement) of the Warrant Shares by the Holder (a “Registration
Statement”) that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available
for the resale of such Unavailable Warrant Shares and a Registration Statement is then required to be available pursuant to the terms
of the Registration Rights Agreement, shall fail to promptly, but in no event later than as required pursuant to the Registration Rights
Agreement, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in this clause (II) is herein referred
as a “Notice Failure”; and each of the events described in the foregoing clause (I) and this clause (II) is herein
referred to as a “Delivery Failure”), |
then, in addition to all other
remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and for so
long as such Delivery Failure is continuing an amount equal to 2.0% of the product of (A) the sum of the number of shares of Common Stock
not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice
with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice (including, for the avoidance of doubt, as to the Warrant Shares that were the subject of such voided Exercise Notice);
provided, however, that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice of voiding pursuant to this Section 1(c) or otherwise.
In addition to the foregoing,
if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in FAST or the Company is not then required
to have a Registration Statement available for the resale of Warrant Shares pursuant to the terms of the Registration Rights Agreement,
the Company shall fail to issue and deliver to the Holder (or its designee) a certificate (or electronic book entry statement) and register
such shares of Common Stock on the Company’s share register, or, if the Transfer Agent is participating in FAST, the Company shall
fail (or shall fail to cause to the Transfer Agent) to credit the balance account of the Holder or the Holder’s designee with DTC
for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date
the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such exercise (i.e., equivalent to the Warrant Shares in respect of which
an exercise has been made) that the Holder is entitled to receive from the Company and has not received from the Company in connection
with such Delivery Failure or Notice Failure, as applicable, then, in addition to all other remedies available to the Holder, the Company
shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either
(i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and
other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in
respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue
and deliver such certificate (which may be an electronic book entry statement) (and to issue such shares of Common Stock) or credit the
balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate,
or
(ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates (which may be an electronic book entry statement
or statements) representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant
Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).
Nothing 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
to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this
Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (I) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share
Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares
that were the subject of such rescinded exercise); provided, however that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and (II) if a Registration Statement covering the resale of the Warrant Shares that are subject to an Exercise Notice is
not available, but is then required to be available pursuant to the Registration Rights Agreement, for the resale of such Warrant Shares
and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such Registration Statement and the
Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery
of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any
portion of this Warrant that has not been exercised pursuant to such Exercise Notice (including the Warrant Shares that were the subject
of such rescinded exercise); provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some
or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(e) below), the Holder may, in
its sole discretion, exercise this Warrant, as to all or any portion of the Warrant Shares, and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For purposes of the foregoing
formula:
A= the total number of shares with respect
to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the
VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares
of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a),
or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice
is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) after the close of “regular
trading hours” on such Trading Day.
C = the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the Securities Act,
as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally
issued pursuant to the Securities Purchase Agreement.
(e) Beneficial
Ownership. The Company shall not effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion
of this Warrant, to the extent that after giving effect to the exercise set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties,
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Note Warrants) beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this
Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 1(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant may be exercised (in relation to other securities
owned by the Holder together with any Affiliates or Attribution Parties) and which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 1(e) in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C)
a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership
Limitation” shall be 9.9% of the number of shares of the Common Stock outstanding (as defined under Section 13(d) of the Securities
Act) immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(e). Any increase
in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered
to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
If the exercise of the Warrant into Common Stock would otherwise result in the Holder exceeding the Beneficial Ownership Limitation, the
Company will only exercise up to that number of shares that would amount to the Holder reaching the Beneficial Ownership Limitation and
the balance will be held in abeyance by the Company until such shares can be delivered to the Holder without exceeding the Beneficial
Ownership Limitation.
(f) Reservation
of Shares.
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock that is not less than 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under all of the Note Warrants (including all Subsequent Warrants)
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided,
however, that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(f) be reduced other
than proportionally to the number of Warrant Shares delivered in connection with any exercise of Note Warrants or such other event covered
by Section 2(a). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Note Warrants based on number of shares of Common Stock issuable upon the
exercise of Note Warrants held by each holder on the Issuance Date (without regard to any limitations on exercise) or increase in the
number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Note Warrants, each transferee shall be allocated a pro rata portion of such
holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Note
Warrants shall be allocated to the remaining holders of Note Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Note Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(f)(i), and not in limitation thereof, at any time while any of the Note Warrants
remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for all the Note Warrants then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its
issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company
may satisfy this obligation by obtaining such consent and submitting for filing with the Commission an Information Statement on Schedule
14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure
Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such
Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y)
the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the
applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and
payment under this Section 1(f)(ii); plus (ii) to the extent 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 Authorization Failure Shares, any Buy-In Price payment amount,
brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(f)(ii) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement. An Authorized
Share Failure which remains uncured for more than thirty (30) consecutive Trading Days shall be an “Event of Default” under
the Note.
2. WARRANT
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 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on
or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock or (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator 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) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such
Exercise Price shall be adjusted appropriately to reflect such event. For the avoidance of doubt, and notwithstanding anything to contrary
contained herein or the other Transaction Documents, in no event shall there be any adjustment to the Exercise Price if the Company combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number
of shares.
(b) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, 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 adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the
avoidance of doubt, and notwithstanding anything to the contrary contained herein or the other Transaction Documents, in no event shall
there be any adjustment to the Exercise Price if the Company combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares.
(d) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF ASSETS.
In addition to any adjustments pursuant to Section 2 or Section 4, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness
or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution”), at any time on or after the Vesting Date, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s
right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Distribution at that time to the extent of the Beneficial Ownership
Limitation (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial
ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder
until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Beneficial Ownership Limitation, at which time or times the Holder shall be granted such Distribution (and any Distributions declared
or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had
been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if, at any time on or after the Vesting
Date, the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such
shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which
is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant other than the limitation on exercise
prior to the Vesting Date) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on a Trading Market.
Upon the consummation of each
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall expressly assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this
Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date), as adjusted in accordance with the provisions
of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(e) hereof, the Holder may elect, at its sole option,
by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the
assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or
in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure
that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant other than the limitation on
exercise prior to the Vesting Date). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory
to the Holder.
(c) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant other than the limitation on exercise prior to the Vesting Date (provided that the Holder shall continue
to be entitled to the benefit of the Beneficial Ownership Limitation, applied however with respect to shares of capital stock registered
under the Exchange Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company hereby
covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith
carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise
of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant.
Notwithstanding anything herein to the contrary, if after the Exercise Eligibility Date, the Holder is not permitted to exercise this
Warrant in full or in part for any reason (other than pursuant to restrictions expressly set forth in this Warrant), the Company shall
use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary
to permit such exercise into shares of Common Stock.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise specifically provided herein, the Holder, solely in its 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 its capacity as the Holder of this Warrant, any of the rights of a stockholder
of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights (except
as provided herein as a contractual right of the Holder in its capacity as a holder of this Warrant), or otherwise, prior to the issuance
to the Holder of the Warrant Shares which it 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. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders; provided, however,
that the Company shall not be obligated to provide such notice or information if it is filed with the Securities and Exchange Commission
through EDGAR and available to the public through the EDGAR system.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered to the
transferee of the Holder (or, if there are multiple transferees, new Warrants to each such transferee) or as the Holder otherwise directs,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this
Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number
of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant
Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock
shall be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant (whether to the Holder
or a transferee thereof), such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number
of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date and Exercise Eligibility Date, and (iv) shall have the same terms, rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required
to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 5.4 of the
Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this
Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth
in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental
Transaction. 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 pursuant to a Current Report
on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously
filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their
respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the
basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified by the Holder
in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. DISCLOSURE. Upon delivery by the Company
to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to
the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York time on the Business Day immediately following
such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the
event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries,
the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder,
as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt
of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material,
non-public information relating to the Company or any of its Subsidiaries.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may
possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
11. AMENDMENT AND WAIVER. Except as otherwise
provided herein, the provisions of this Warrant (other than Section 1(e)) may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
12. SEVERABILITY. If any provision of
this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be
valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions
of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does
not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits
that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid
or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid
or unenforceable provision(s).
13. GOVERNING LAW. This Warrant shall
be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation
and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. The Company 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 to the Company at the address set
forth in the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, and any appellate court therefrom, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce
a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
14. CONSTRUCTION; HEADINGS. This Warrant
shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof.
The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Issuance
Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
15. REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure
by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without
posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested by the
Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant. The issuance of
shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder
or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax
(other than income tax) which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a
name other than the Holder or its agent on its behalf.
16. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
17. TRANSFER. This Warrant may be offered
for sale, sold, transferred or assigned by the Holder without the consent of the Company.
18. CERTAIN DEFINITIONS. Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement. In addition, the following
terms used in this Warrant shall have the following meanings:
(a) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such
time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of
the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(b) “Bloomberg”
means Bloomberg, L.P.
(c) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
(d) “Closing
Date” means September 21, 2023.
(e) “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market for
such security, as reported by Bloomberg, or, if the Principal Market for such security begins to operate on an extended hours basis and
does not designate the closing trade price then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market for such security is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the
average of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). 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 (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
(f) “Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class or series of capital stock or
equity interests into which such common stock shall have been changed, converted, exchanged or reclassified following the date hereof.
(g) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(h) “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a day other
than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday; provided that if the Note is repaid in full prior to the Vesting Date, then the Expiration Date shall be the date that
the Note is repaid in full.
(i) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate,
acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the
Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of the Securities Purchase Agreement calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent
with the intended treatment of such instrument or transaction.
(j) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(k) “Management
Sale Letters” means, collectively, (i) that certain Management Sale Letter Agreement, dated as of the September 21, 2023 (the
“HJ MSL”), by and among the Company, Oramed and Henry Ji, and (ii) that certain Management Sale Letter Agreement, dated
as of the September 21, 2023 (the “JS MSL”), by and among the Company, Oramed and Jaisim Shah, in each case as may
be amended or restated from time to time.
(l) “Management
Sale Trigger Date” means the first Management Sale Date (as defined in each of the HJ MSL and the JS MSL) to occur following
the Issuance Date. (By way of example, if a Management Sale Date occurs under the HJ MSL prior to the occurrence of a Management Sale
Date under the JS MSL, the Management Sale Date under the HJ MSL shall be the Management Sale Trigger Date for purposes of all Note Warrants).
(m) “Note”
means that certain Senior Secured Promissory Note issued by the Company to the Holder pursuant to the Securities Purchase Agreement, as
may be amended or restated from time to time.
(n) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(o) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on a Trading Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(p) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(q) “Principal
Market” means the Nasdaq Capital Market.
(r) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s) “Subsequent
Warrant” means any Note Warrant issued on the Issuance Date and which contains a Vesting Date (as defined therein).
(t) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(u) “Trading
Day” means any day on which Principal Market is open for trading.
(v) “Transaction
Documents” means this Warrant, the other Warrants (as defined in the Securities Purchase Agreement), the Securities Purchase
Agreement, the Note, the Oramed SPA Termination and any other agreements, documents or instruments entered into in connection with the
transactions contemplated by such agreements.
(w) “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[signature page follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
|
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SCILEX
HOLDING COMPANY
The undersigned holder hereby
elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Scilex Holding Company,
a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| ☐ | a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a “Cashless Exercise” with respect to _______________ Warrant Shares. |
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii)
if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2. Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock
in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
| ☐ | Check here if requesting delivery as a certificate to the
following name and to the following address: |
| ☐ | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
|
DTC Participant: |
|
|
DTC Number: |
|
|
Account Number: |
|
Date: _____________ __,
|
|
Name of Registered Holder |
|
Tax ID:____________________________
E-mail Address:_____________________
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
Exhibit 10.8
NUMBER
________- |
|
(SEE REVERSE SIDE FOR LEGEND)
THIS WARRANT WILL BE VOID IF NOT EXERCISED
PRIOR TO THE EXPIRATION DATE (DEFINED BELOW)
|
|
WARRANTS |
VICKERS VANTAGE CORP. I
CUSIP
G9440B 115
WARRANT
THIS CERTIFIES THAT, for value received
is the registered holder of a warrant or warrants (the
“Warrant”) of Vickers Vantage Corp. I, a Cayman Islands exempted company (the “Company”),
expiring at 5:00 p.m., New York City time, on the five year anniversary of the Company’s completion of an initial business
combination, capital share exchange, asset acquisition, or other similar business combination with one or more businesses or entities
(a “Business Combination”), or earlier upon redemption or liquidation, to purchase one fully paid and non-assessable
ordinary share, par value $0.0001 per share (“Shares”), of the Company for each Warrant evidenced by this Warrant
Certificate. The Warrant entitles the holder thereof to purchase from the Company, commencing on the later of (a) the Company’s
completion of an initial Business Combination and (b) 12 months from the closing of the Company’s initial public offering
(“IPO”), such number of Shares of the Company at the Warrant Price (as defined below), upon surrender of this
Warrant Certificate and payment of the Warrant Price at the office or agency of Continental Stock Transfer & Trust Company
(the “Warrant Agent”), but only subject to the conditions set forth herein and in the Warrant Agreement between
the Company and Continental Stock Transfer & Trust Company. In no event will the Company be required to net cash settle any
warrant exercise. The Warrant Agreement provides that upon the occurrence of certain events the Warrant Price and the number of
Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. The term “Warrant
Price” as used in this Warrant Certificate refers to the price per Share at which Shares may be purchased at the time
the Warrant is exercised. The initial Warrant Price per Ordinary Share for any Warrant is equal to $11.50 per share.
No fraction of a Share will be
issued upon any exercise of a Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon any exercise
of a Warrant, the Company shall, upon such exercise, round down to the nearest whole number the number of Shares to be issued to
such holder.
Upon any exercise of the Warrant
for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof or the
registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.
Warrant Certificates, when surrendered
at the office or agency of the Warrant Agent by the registered holder in person or by attorney duly authorized in writing, may
be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service
charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of
Warrants.
Upon due presentment for registration
of transfer of the Warrant Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant Certificates
of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax
or other governmental charge.
The Company and the Warrant Agent
may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership
or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the registered holder,
and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
This Warrant does not entitle the
registered holder to any of the rights of a shareholder of the Company.
The Company reserves the right
to call the Warrant at any time prior to its exercise with a notice of call in writing to the holders of record of the Warrant,
giving at least 30 days’ notice of such call, at any time while the Warrant is exercisable, if the last sale price of the
Shares has been at least $18.00 per share (the “Redemption Trigger Price”) on each of 20 trading days within any 30
trading day period (the “30-day trading period”) ending on the third business day prior to the date on which
notice of such call is given and if, and only if, there is a current registration statement in effect with respect to the Shares
underlying the Warrants for the entire 30-day trading period and continuing each day thereafter until the date of redemption. The
call price of the Warrants is to be $0.01 per Warrant. Any Warrant either not exercised or tendered back to the Company by the
end of the date specified in the notice of call shall be canceled on the books of the Company and have no further value except
for the $0.01 call price.
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder irrevocably
elects to exercise ______________ Warrants represented by this Warrant Certificate, and to purchase the Ordinary Shares issuable
upon the exercise of such Warrants, and requests that Certificates for such shares shall be issued in the name of
|
(PLEASE TYPE OR PRINT NAME AND ADDRESS) |
|
|
|
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
and, if such number of Warrants shall not
be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered
in the name of, and delivered to, the Registered Holder at the address stated below:
Dated: |
|
|
|
|
(SIGNATURE) |
|
|
|
(ADDRESS) |
|
|
|
|
|
|
|
(TAX IDENTIFICATION NUMBER) |
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
For Value Received, _______________________ hereby sell, assign,
and transfer unto
|
(PLEASE TYPE OR PRINT NAME AND ADDRESS) |
|
|
|
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
______________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitute and appoint _________________________________ Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the premises.
The
signature to the assignment of the Subscription Form must correspond to the name written upon the face of this Warrant Certificate
in every particular, without alteration or enlargement or any change whatsoever, and must be guaranteed by a commercial bank or
trust company or a member firm of the NYSE American, Nasdaq, New York Stock Exchange, Pacific Stock Exchange, or Chicago Stock
Exchange.
Exhibit 10.9
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement
(this “Agreement”) is made and entered into as of September 21, 2023, between Scilex Holding Company, a Delaware corporation
(the “Company”), and Oramed Pharmaceuticals, Inc. (“Purchaser”).
This Agreement is made pursuant
to the Securities Purchase Agreement, dated as of the date hereof, between the Company and Purchaser (the “Purchase Agreement”).
The Company and Purchaser
hereby agrees 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”
shall have the meaning set forth in Section 7(c).
“Blackout
Period” means such day or days, not to exceed five (5) consecutive Trading Days or fifteen (15) Trading Days in the aggregate
in any consecutive twelve (12) month period, with respect to which the Board of Directors of the Company determines in good faith (a)
that an amendment or supplement to a Registration Statement or prospectus contained therein is necessary, in light of subsequent events,
in order to correct a material misstatement made therein or to include information the absence of which would render such Registration
Statement or such prospectus materially misleading and (b) that the filing of such amendment or supplement would result in the disclosure
of information which the Company has a bona fide business purpose for preserving as confidential; provided that in no event shall
a Blackout Period occur more than once in any twelve (12) month period.
“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the date that is 60 days following
the Closing Date, or if the Company is notified by the Commission that the Initial Registration Statement will be reviewed, the date that
is 90 days following the Closing Date, and with respect to any additional Registration Statements which may be required pursuant to Section
2(c) or Section 3(c), the 30th calendar day following the date on which an additional Registration Statement is required to be filed hereunder;
provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will
not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall
be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above,
provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next
succeeding Trading Day.
“Effectiveness
Period” shall have the meaning set forth in Section 2(a).
“Event”
shall have the meaning set forth in Section 2(d).
“Event
Date” shall have the meaning set forth in Section 2(d).
“Existing
Registration Statement” means that certain Registration Statement on Form S-1 previously filed by the Company with the SEC (File
No. 333-268603), as amended and supplemented.
“Filing
Date” means, (a) with respect to the prospectus supplement to the Existing Registration Statement required pursuant to Section
2(a)(i) regarding the Transferred Warrants, the date that is 15 days following the Closing Date, (b) with respect to the Initial Registration
Statement required hereunder, the date that is 30 days following the Closing Date and, (c) with respect to any additional Registration
Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted
by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified
Party” shall have the meaning set forth in Section 6(c).
“Indemnifying
Party” shall have the meaning set forth in Section 7(c).
“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses”
shall have the meaning set forth in Section 7(a).
“Plan of
Distribution” shall have the meaning set forth in Section 2(a).
“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 by the Commission
pursuant to 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.
“Registrable
Securities” means, as of any date of determination, (a) the Warrant Shares1 then issued and issuable upon exercise
of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein) and (b)
any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect
to the foregoing.
“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration
statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such
registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in any such registration statement.
“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).
“SEC Guidance”
means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.
| 1 | Note to Draft: To include the Closing Warrant, the Subsequent
Warrants, if any, and the Transferred Warrants (each as defined in the term sheet). |
2. Shelf
Registration.
(a) On
or prior to each Filing Date (i) with respect to the Transferred Warrants, the Company shall prepare and file with the Commission a prospectus
supplement to the Existing Registration Statement to update information to reflect the transfer of the Transferred Warrants to Purchaser
and update the “Selling Stockholder” section of such registration statement to add Purchaser as a “Selling Stockholder”
thereunder and (ii) with respect to all other Registrable Securities, the Company shall prepare and file with the Commission a Registration
Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement
for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3
(except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise
directed by the Holders of at least 85% interest the Registrable Securities) the “Plan of Distribution” in substantially
the form attached hereto as Annex A and the “Selling Stockholder” section in substantially the form attached
hereto as Annex B; provided, however, that (A) with respect to the prospectus supplement required by Section 2(a)(i),
such Plan of Distribution and Selling Stockholder section may be in substantially the form set forth in the Existing Registration Statement
and (B) no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent.
Subject to the terms of this Agreement, the Company shall use its reasonable best efforts to cause a Registration Statement filed under
this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its reasonable best efforts
to keep such Registration Statement and the Existing Registration Statement continuously effective under the Securities Act until the
date that all Registrable Securities covered by such Registration Statement and the Existing Registration Statement (i) have been sold,
thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without
the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected
Holders (the “Effectiveness Period”). The Company shall request effectiveness of a Registration Statement as of 5:00
p.m. (New York City time) on a Trading Day. The Company shall immediately notify the Holders via e-mail of the effectiveness of a Registration
Statement on the same Trading Day that the Commission confirms effectiveness with the Company, which shall be the date requested for effectiveness
of such Registration Statement. The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after the effective date of such
Registration Statement, file a final Prospectus with the Commission as required by Rule 424.
(b)
Notwithstanding the registration obligations set forth in Section 2(a), if 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 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, covering the maximum number of Registrable Securities permitted to
be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary
offering, subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form, and subject to the
provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however, that prior to filing such
amendment, the Company shall be obligated to use its reasonable best efforts to advocate with the Commission for the registration of all
of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation
612.09.
(c) Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission or
any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration
Statement as a secondary offering (and notwithstanding that the Company used its reasonable best efforts to advocate with the Commission
for the registration of all or a greater portion 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 be reduced as follows:
| a. | First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities;
and |
| b. | Second, the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the
case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant
Shares held by such Holders). |
In the event of a cutback hereunder,
the Company shall give the Holder at least three (3) Trading Days prior written notice along with the calculations as to such Holder’s
allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its
best 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 Form S-3 or such other form available to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration Statement, as amended.
| (d) | If: (i) the Initial Registration Statement or the prospectus supplement to the Existing Registration Statement
is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement or prospectus supplement without
affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein or the Company subsequently
withdraws the filing of any such Registration Statement, the Company shall be deemed to have not satisfied this clause (d)(i) as of the
Filing Date (i); provided, that if the filing of a Registration Statement or prospectus supplement is delayed (x) to respond to inquiries
raised by a Holder or counsel to a Holder pursuant to Section 3(a) herein, (y) in response to a notice of objection by the Holders of
a majority of the Registrable Securities pursuant to Section 3(a) herein, or (z) because a Holder fails to timely deliver a Selling Stockholder
Questionnaire pursuant to Section 3(a) herein, then in each case the Company shall be deemed to have satisfied this clause (d)(i) as of
the Filing Date), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or
will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective
amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within ten (10)
calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration
Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared
effective by the Commission by the Effectiveness Date of the Initial Registration Statement (provided if the Registration Statement does
not allow for the resale of Registrable Securities at prevailing market prices (i.e., only allows for fixed price sales), the Company
shall have been deemed to have not satisfied this clause) or (v) after the effective date of a Registration Statement or of the Existing
Registration Statement, such Registration Statement or Existing Registration Statement ceases for any reason to remain continuously effective
as to all Registrable Securities included in such Registration Statement or Existing Registration Statement, as applicable, or the Holders
are otherwise not permitted to utilize the Prospectus or prospectus supplement therein to resell such Registrable Securities, for more
than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar
days) during any 12-month period (any such failure or breach being referred to as an “Event”, and for purposes of clauses
(i) and (iv), the date on which such Event occurs, and for purposes of clause (ii) the date on which such five (5) Trading Day period
is exceeded, and for purposes of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purposes of clause
(v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event
Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date
and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to the product
of 2.0% multiplied by the sum of (x) the aggregate principal amount outstanding under the Note issued to such Holder, and (y) the aggregate
Exercise Price (as defined in the Closing Warrant) of the Closing Warrants (excluding, for the avoidance of doubt, the aggregate Exercise
Price of the Transferred Warrants, as applicable) issued to such Holder for which the underlying Warrant Shares are included in such Registration
Statement. The parties agree that the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be 12.0% of
the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If the Company fails to pay any partial liquidated
damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of
18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date
such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages
pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event. |
(e) If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale
of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon
as reasonably practicable following the date on which such form is available, provided that the Company shall maintain the effectiveness
of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities
has been declared effective by the Commission.
(f) Notwithstanding
anything to the contrary contained herein, in no event shall the Company be (i) permitted to name any Holder or affiliate of a Holder
as any “underwriter” without the prior written consent of such Holder or (ii) required pursuant to this Agreement to file
more than two Registration Statements on Form S-1 with respect to the Registrable Securities in any twelve month period.
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 the prospectus supplement that includes the Transferred
Warrants and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including
any document that would be incorporated or deemed to be incorporated therein by reference) (except for any amendments, post-effective
amendments or supplements caused by the filing of any Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and any similar or successor reports or Prospectus supplements), the Company shall (i) furnish to
each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated
by reference) will be subject to the review of such Holders, and (ii) 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 a Registration Statement, the
prospectus supplement that includes the Transferred Warrants or any such Prospectus or any amendments or supplements thereto to which
the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified
of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement
or the prospectus supplement that includes the Transferred Warrants or one (1) Trading Day after the Holders have been so furnished copies
of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire
in the form attached to this Agreement as Annex C (a “Selling Stockholder Questionnaire”) on a date that is
not less than three (3) Trading Days prior to the filing of the Registration Statement.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement, the Existing Registration
Statement and the Prospectuses used in connection therewith as may be necessary to keep a Registration Statement continuously effective
as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the Registrable Securities, (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 possible to any comments received from the Commission
with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and
complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall
excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries),
and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement and Existing Registration Statement during the applicable
period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth
in such Registration Statement as so amended or in such Prospectus as so supplemented.
(c) If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock
then registered in a Registration Statement and the Existing Registration Statement, then the Company shall file as soon as reasonably
practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders
of not less than the number of such Registrable Securities.
(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (v) hereof, be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (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 or the Existing 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 such Registration Statement, and (C) with respect to a 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, (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 or the Existing 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, and (v) of the occurrence of any event
or passage of time that makes the financial statements included in a Registration Statement or the Existing Registration Statement ineligible
for inclusion therein or any statement made in a Registration Statement, the Existing 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 a Registration
Statement, the Existing Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement, the Existing
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 light of the circumstances under which
they were made, not misleading.
(e) Use
its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement and the Effective Registration Statement, or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(f) Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement, Existing Registration Statement and each
amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference
to the extent requested by such Person, and all exhibits to the extent requested by such Person (solely to the extent not previously furnished
or incorporated by reference) promptly after the filing of such documents with the Commission, provided that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished.
(g) Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h)
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 and Existing 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.
(i) 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 a Registration Statement or the Existing Registration
Statement, which certificates or book-entry statements shall be free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.
(j) Upon
the occurrence of any event contemplated by Section 3(d) and except during a Blackout Period, as promptly as reasonably possible under
the circumstances 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 a Registration
Statement, the Existing Registration Statement 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, neither a Registration Statement
, the Existing Registration Statement nor such 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 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(d) 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 reasonable best 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(j) to suspend the
availability of a Registration Statement, the Existing Registration Statement and Prospectus, subject to the payment of partial liquidated
damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need not be consecutive days)
in any 12-month period.
(k) Otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and
the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at
any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof,
the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions
as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
(l) Following
such time as the Company is eligible to use Form S-3, the Company shall use its best efforts to maintain eligibility for use of Form S-3
(or any successor form thereto) for the registration of the resale of Registrable Securities.
(m) The
Company shall notify each Holder in writing of the information the Company reasonably requires from the Holder in connection with the
registration of Registrable Securities hereunder. The Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required
to effect the registration of such Registrable Securities. Notwithstanding the foregoing, the Registration Statement shall contain the
“Plan of Distribution” section in substantially the form attached hereto as Exhibit A.
4. Holder
Obligations.
In connection with the registration
of the Registrable Securities, each Holder shall:
(a) not
less than three (3) Trading Days prior to the filing of the Registration Statement, furnish to the Company the Selling Stockholder Questionnaire;
(b) reasonably
cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement
hereunder;
(c) comply
with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales
of Registrable Securities pursuant to the Registration Statement; and
(d) notify
the Company when it has sold all of the Registrable Securities theretofore held by it.
5. Registration
Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by
the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement or the Existing 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 of the Company’s counsel and independent registered public accountants) (A) with respect to
filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is
then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or
exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for
Registrable Securities), (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. 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 broker or similar commissions of any Holder
or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.
6. Indemnification.
| (a) | Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement,
indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and
sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment
advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack
of such title or any other title) of 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, members, stockholders, partners, agents and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title)
of 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, actual, reasonable and documented attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact
contained in a Registration Statement, the Existing 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 supplement thereto, in
light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the 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 (i) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, such
Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose)
or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(v), the use by such Holder of an outdated,
defective or otherwise unavailable Prospectus during any Blackout Period or after the Company has notified such Holder in writing that
the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice
contemplated in Section 7(c). 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 such indemnified person and shall survive the
transfer of any Registrable Securities by any of the Holders in accordance with Section 7(f). |
(b) Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents
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, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, any 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 supplement thereto, in light of the circumstances under which they were
made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in the Holder Information
or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling
Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly 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 in any amendment or supplement thereto. In no event shall the liability of a selling Holder be greater
in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this
Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission)
received by such Holder upon the sale of the Registrable Securities included in the Registration Statement or Existing Registration Statement
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 actual, reasonable and documented 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 material conflict of interest is likely to exist 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 the actual, reasonable and documented fees and expenses of no more than one separate counsel shall be at the expense of the
Indemnifying Party). 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 or delayed. 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 actual, reasonable and documented fees and expenses of the Indemnified Party (including actual, reasonable
and documented 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) shall be paid to the Indemnified Party, as incurred, within ten 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 determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.
(d) Contribution.
If the indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying 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 actual, reasonable and documented attorneys’ or other actual, reasonable and documented 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 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 6(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. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount
of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 6 and the amount of any
damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission)
received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The indemnity and
contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
7. Miscellaneous.
(a) Remedies.
In the event of a breach by the Company or by a Holder of any of their respective 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, shall be entitled to seek specific performance of its rights under this Agreement. Each of the Company and each Holder agrees
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
not assert or shall waive the defense that a remedy at law would be adequate.
(b) No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Except as set forth on Schedule 6(b) attached
hereto, none of the Company’s security holders (other than the Holders in such capacity pursuant hereto) may include securities
of the Company in any Registration Statements other than the Registrable Securities.
(c) 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(d)(iii) through (v), 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 reasonable
best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. 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(d).
(d) Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the
Company and the Holders of 67% or more of the then outstanding Registrable Securities (for purposes of clarification, this includes any
Registrable Securities issuable upon exercise or conversion of any Security), provided that, if any amendment, modification or waiver
disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group
of Holders) shall be required. If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or
amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall
be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted
from such Registration Statement. 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 a Holder or some Holders and that does not directly or indirectly affect the rights
of other Holders may be given only by such Holder or 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 first sentence of this Section 7(d). No consideration shall be offered or paid to any Person to amend or consent
to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to
this Agreement.
(e) 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.
(f) 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. The Company may not assign (except by or in connection with a merger) its rights
or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each
Holder may assign its registration rights hereunder in connection with a transfer of Registrable Securities by such Holder, provided that
such transferee execute and deliver a joinder agreement, in form and substance reasonably acceptable to the Company, agreeing to be bound
by the terms and conditions of this Agreement as if such transferee were a Holder party hereto; whereupon such transferee will be treated
for all purposes of this Agreement, with the same rights, benefits and obligations under this Agreement as were initially granted to the
Holder with respect to the transferred securities.
(g) 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 of this Agreement, 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. Neither
the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any
of its securities to any Person that have not been satisfied in full.
(h) Execution
and Counterparts. 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 e-mail delivery
of a “.pdf” format data file or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com),
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 “.pdf” signature page were an original thereof.
(i) 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.
(j) Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(k) 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 commercially 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.
(l) Headings.
The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
(m) Independent
Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations
of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder
hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder
pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind
of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to
such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders
are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions.
Each Holder 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 Holder to be joined as an additional party in any proceeding for such purpose. The use of
a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or
decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by
any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder,
solely, and not between the Company and the Holders collectively and not between and among Holders.
********************
(Signature
Pages Follow)
IN WITNESS WHEREOF, the parties
have executed this Registration Rights Agreement as of the date first written above.
|
By: |
/s/ Jaisim Shah |
|
|
Name: Jaisim Shah |
|
|
Title: Chief Executive Officer |
|
ORAMED PHARMACEUTICALS, INC. |
|
By: |
/s/ Nadav Kidron |
|
|
Name: Nadav Kidron |
|
|
Title: Chief Executive Officer |
|
By: |
/s/ Josh Hexter |
|
|
Name: Josh Hexter |
|
|
Title: Chief Business and Operating Officer |
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
Annex A
Plan of Distribution
Each Selling Stockholder (the
“Selling Stockholders”) of the securities and any of their pledgees, donees, transferees, distributees, assignees and
successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any
other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at
fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:
| ● | ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block
trades in which the broker-dealer will attempt to sell the securities 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; |
| ● | in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified
number of such securities at a stipulated price per security; |
| ● | through
the writing or settlement of options or other hedging transactions, whether through an options
exchange or otherwise; |
| ● | a
combination of any such methods of sale; or |
| ● | any
other method permitted pursuant to applicable law. |
The Selling Stockholders may
also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities
Act”), if available, rather than under this prospectus.
Broker-dealers engaged by
the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts
to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a
customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in
compliance with FINRA Rule 2121. It is possible that the Selling Stockholders will attempt to sell shares of our common stock in block
transactions to market makers or other purchasers at a price per share which may be below the then existing market price. We cannot assure
that all or any of the shares offered in this prospectus will be issued to, or sold by, the Selling Stockholders.
In connection with the sale
of the securities or interests therein, 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 securities in the course of hedging the positions they assume. The Selling
Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and
any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. To our knowledge, there are currently no plans, arrangements or understandings between the Selling Stockholders and any broker-dealer
or agent regarding the sale of the securities by the Selling Stockholders. Upon our notification by a Selling Stockholder that any material
arrangement has been entered into with an underwriter or broker-dealer for the sale of securities through a block trade, special offering,
exchange distribution, secondary distribution or a purchase by an underwriter or broker-dealer, we will file, if required by applicable
law or regulation, a supplement to this prospectus pursuant to Rule 424(b) under the Securities Act disclosing certain material information
relating to such underwriter or broker-dealer and such offering.
The Company is required to
pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities
have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities
will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in
certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and
regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement
of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling
Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them
of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule
172 under the Securities Act).
Annex B
SELLING STOCKHOLDERS
The common stock being offered
by the selling stockholders are those issuable to the selling stockholders, upon the exercise of the Warrants. For additional information
regarding the issuances of Warrants, see “Private Placement of Warrants” above. We are registering the shares of common stock
in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the Warrants,
the selling stockholders have not had any material relationship with us within the past three years.
The table below lists the
selling stockholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling stockholders.
The second column lists the number of shares of common stock beneficially owned by each selling stockholder, based on its ownership of
the Warrants, as of ________, 2023, that are currently exercisable or that will become exercisable by the selling stockholders within
60 days of [ ], without regard to any limitations on exercises.
The third column lists the
shares of common stock being offered by this prospectus by the selling stockholders.
In accordance with the terms
of a registration rights agreement with the selling stockholders, this prospectus generally covers the resale of the sum of the maximum
number of shares of common stock issuable upon the exercise of the Warrants, determined as if the outstanding Warrants were exercised,
as applicable, in full as of the trading day immediately preceding the date this registration statement was initially filed with the SEC,
each as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the
registration rights agreement, without regard to any limitations on the exercise of the warrants. The fourth column assumes the sale of
all of the shares offered by the selling stockholders pursuant to this prospectus.
The terms of the Warrants
provide for certain limitations on the exercise of such Warrants, including that a selling stockholder may not exercise such Warrants,
as applicable, to the extent such conversion or exercise would cause such selling stockholder, together with its affiliates, to beneficially
own a number of shares of common stock which would exceed 9.9% of our then outstanding common stock following such conversion or such
exercise, excluding for purposes of such determination shares of common stock issuable upon exercise of such Warrants which have not been
exercised. The number of shares in the second and fourth columns do not reflect any such limitations. The selling stockholders may sell
all, some or none of their shares in this offering. See “Plan of Distribution.”
Name of Selling Stockholder |
|
Number of shares of
Common Stock Owned
Prior to Offering |
|
Maximum Number of
shares of Common Stock
to be Sold Pursuant to this
Prospectus |
|
Number of shares of
Common Stock Owned
After Offering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annex C
SCILEX
HOLDING COMPANY
Selling Stockholder Notice and Questionnaire
The undersigned beneficial
owner of common stock (the “Registrable Securities”) of Scilex Holding Company a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities
Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed. A copy of the
Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial
owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or
not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial
owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned
by it in the Registration Statement.
The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate:
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
are held: |
| | |
| | |
| (c) | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone
or with others has power to vote or dispose of the securities covered by this Questionnaire): |
| | |
| | |
2. Address for Notices to Selling Stockholder:
|
|
|
|
|
Telephone: |
|
E-Mail: |
|
Contact Person: |
|
3. Broker-Dealer Status:
| (a) | Are you a broker-dealer? |
Yes ☐ No ☐
| (b) | If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for
investment banking services to the Company? |
Yes ☐ No ☐
| Note: | If “no” to Section 3(b), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement. |
| (c) | Are you an affiliate of a broker-dealer? |
Yes ☐ No ☐
| (d) | If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities
in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the Registrable Securities? |
Yes ☐ No ☐
| Note: | If “no” to Section 3(d), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement. |
| 4. | Beneficial Ownership of Securities of the Company Owned
by the Selling Stockholder. |
Except as set forth below in this
Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.
| (a) | Type and Amount of securities beneficially owned by the Selling Stockholder: |
| | |
| | |
| | |
| | |
| 5. | Relationships with the Company: |
Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities
of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
| | State any exceptions here: |
| | |
| | |
| | |
| | |
The undersigned agrees to
promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify
the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and
the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.
The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of
the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned,
by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized
agent.
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND
EXECUTED NOTICE AND QUESTIONNAIRE TO:
C-4
Exhibit 10.10
EXECUTION VERSION
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated
as of September 21, 2023 (this “Guarantee”), made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the “Guarantors”) in favor of the holders of that certain Senior
Secured Promissory Note dated as of the date hereof due March 21, 2025 in the original aggregate principal amount of $101,875,000.00 (the
“Note”) and any Additional Notes (as defined below) issued by Scilex Holding Company, a Delaware corporation (the “Company”).
W I T N E S S E T H:
WHEREAS, pursuant to the Securities
Purchase Agreement dated as of the date hereof, among Oramed Pharmaceuticals Inc. (the “Initial Note Holder”), Acquiom
Agency Services LLC, as the collateral agent (the “Agent”) and the Company (the “Securities Purchase Agreement”),
the Company has agreed to sell and issue to the Inital Note Holder, and the Initial Note Holder has agreed to purchase from the Company
the Note, subject to the terms and conditions set forth therein; and
WHEREAS, each Guarantor will directly benefit from the extension of credit to the Company represented
by the issuance of the Notes (as defined below); and
NOW, THEREFORE, in consideration
of the premises and to induce the Initial Note Holder to enter into the Securities Purchase Agreement and to carry out the transactions
contemplated thereby, each Guarantor hereby agrees with the Note Holders as follows:
1. Definitions.
Unless otherwise defined herein, terms defined in the Securities Purchase Agreement and used herein shall have the meanings given to them
in the Securities Purchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder”
and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of
this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such terms. The following terms shall have the following meanings:
“Additional
Notes” means any other senior secured promissory notes issued by the Company after the Closing Date in full or partial substitution
of the Note.
“Collateral”
has the meaning set forth in the Security Agreement.
“eCapital
Subordination Agreement” has the meaning set forth in the Note.
“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise modified from time to time.
“Note Documents”
means the Securities Purchase Agreement, the Notes, this Guarantee, the other Security Documents and all exhibits and schedules thereto
and hereto. For the avoidance of doubt, Note Documents shall not include the Registration Rights Agreement, any Warrants or related documents.
“Note Holders”
means, collectively, the holders of the Notes, including the Initial Note Holder and any transferee, successor or assign thereof that
is a holder of the Note.
“Notes”
means, collectively, the Note and the Additional Notes (each as amended, restated, supplemented or otherwise modified from time to time
in accordance with the Note).
“Obligations”
has the meaning set forth in the Security Agreement.
“Required
Holders” has the meaning set forth in the Note.
“Security
Agreement” means that certain Security Agreement entered into on the date hereof, among the Company, the Company’s Subsidiaries
and the Agent, as amended, restated, supplemented or otherwise modified from time to time in accordance therewith.
2. Guarantee.
(a) Guarantee.
(i) The
Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Note Holders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration
or otherwise) of the Obligations.
(ii) Anything
herein or in any other Note Documents to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Note Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state
laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting the rights of creditors
generally (after giving effect to the right of contribution established in Section 2(b)).
(iii) Each
Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Note Holders hereunder.
(iv) The
guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each Guarantor
under the guarantee contained in this Section 2 shall have been paid in full (excluding inchoate reimbursement obligations for which no
demand has been made).
(v) No
payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the Note Holders
from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off
or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of
the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations are
paid in full (excluding inchoate reimbursement obligations for which no demand has been made).
(vi) Notwithstanding
anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific performance of which by
the Guarantors is not reasonably possible (e.g. the issuance of the Company’s Common Stock), the Guarantors shall only be liable for making
the Note Holders whole on a monetary basis for the Company’s failure to perform such Obligations in accordance with the Note Documents.
(b) Right
of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than
its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall
be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect limit the obligations
and liabilities of any Guarantor to the Note Holders and each Guarantor shall remain liable to the Note Holders for the full amount guaranteed
by such Guarantor hereunder.
(c) No
Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Note Holders, no Guarantor shall be entitled to be subrogated to any of the rights of the Note Holders against the Company or any
other Guarantor or any collateral security or guarantee or right of offset held by the Note Holders for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in respect
of payments made by such Guarantor hereunder, in each case, until all amounts owing to the Note Holders by the Company on account of the
Obligations are paid in full (excluding inchoate reimbursement obligations for which no demand has been made). If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full,
such amount shall be held by such Guarantor in trust for the Note Holders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Note Holders in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Note Holders, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the
Required Holders may determine.
(d) Amendments,
Etc. With Respect to the Obligations. To the extent permitted by applicable law, each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by the Note Holders may be rescinded by the Note Holders and any of the Obligations continued,
and the Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Note Holders, and the Securities Purchase Agreement and the other Note Documents and
any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Required Holders may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time
held by the Agent for the benefit of the Note Holders for the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. The Agent shall have no obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for the guarantee contained in this Section 2 or any property subject thereto.
(e) Guarantee
Absolute and Unconditional. To the extent permitted by applicable law, each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of reliance by the Note Holders upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed
to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Company and any of the Guarantors, on the one hand, and the Note Holders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon
the Company or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to
(i) the validity or enforceability of the Securities Purchase Agreement, the Note or any other Note Documents, any of the Obligations
or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by
the Agent or the Note Holders, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance or fraud by the
Note Holders) which may at any time be available to or be asserted by the Company or any other Person against the Note Holders, or (iii)
any other circumstance whatsoever (with or without notice to or knowledge of the Company or such Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Company for the Obligations, or of such Guarantor under the guarantee
contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights
and remedies hereunder against any Guarantor, the Note Holders may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as they may have against the Company, any other Guarantor or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Note Holders to make any
such demand, to pursue such other rights or remedies or to collect any payments from the Company, any other Guarantor or any other Person
or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Company, any
other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of
any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as
a matter of law, of the Note Holders against any Guarantor. For the purposes hereof, “demand” shall include the commencement
and continuance of any legal proceedings.
(f) Reinstatement.
The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Note Holders upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the Company or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
(g) Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to the Note Holders without set-off or counterclaim in U.S. dollars
in accordance with Section 2(i) of the Note.
3. Representations
and Warranties. Each Guarantor hereby makes the following representations and warranties to the Note Holders as of the date hereof:
(a) Organization
and Qualification. The Guarantor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization set forth on Schedule 1, with the requisite power and authority to own and use its properties and assets and to carry
on its business as currently conducted. The Guarantor is duly qualified to conduct their respective business and is in good standing (to
the extent applicable) as a foreign corporation or other entity in each jurisdiction in which the nature of their respective business
conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing,
as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability
of this Guarantee, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise)
of the Guarantor, or (iii) a material adverse effect on the Guarantor’s ability to perform in any material respect on a timely
basis its obligations under this Guarantee (any of (i), (ii) or (iii), a “Material Adverse Effect”). As of the date
hereof, the Company (as defined in the Securities Purchase Agreement) has no subsidiaries other than those identified as such on the Disclosure
Schedules to the Securities Purchase Agreement.
(b) Authorization;
Enforcement. The Guarantor has the requisite power and authority to enter into and to consummate the transactions contemplated by
this Guarantee, and otherwise to carry out its obligations hereunder. The execution and delivery of this Guarantee by the Guarantor and
the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Guarantor.
This Guarantee has been duly executed and delivered by the Guarantor and constitutes the valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms, except as such enforceability may be limited by general equitable principles
and 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 and other laws of general application.
(c) No
Conflicts. The execution, delivery and performance of this Guarantee by the Guarantor and the consummation by the Guarantor of the
transactions contemplated thereby do not and will not (i) conflict with or violate any provision of its certificate or articles of incorporation,
bylaws or other organizational or charter documents or (ii) conflict with, 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 (with
or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument evidencing the Guarantor’s
Indebtedness, other than in relation to any agreement, credit facility, debt or other instrument that is expected to be repaid or redeemed
in full on or before the Closing Date, or (iii) subject to the Required Approvals, result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Guarantor is subject (including
Federal and State securities laws and regulations), or by which any property or asset of the Guarantor is bound or affected. The business
of the Guarantor is not being conducted in violation of any law, ordinance or regulation of any governmental authority, except for violations
which, individually or in the aggregate, do not have a Material Adverse Effect.
(d) Consents
and Approvals. Except as already obtained and/or being made in connection herewith, the Guarantor is not required to obtain any consent,
waiver, authorization or order of, or make any filing or registration with, any court or other federal, state, local, foreign or other
governmental authority or other person in connection with the execution, delivery and performance by the Guarantor of this Guarantee,
other than (i) filings to be made under the Security Documents and (ii) any necessary approval from the Bankruptcy Court.
(e) Purchase
Agreement. The representations and warranties made by the Company in the Purchase Agreement as they relate to such Guarantor, each
of which is hereby incorporated herein by reference, are true and correct in all material respects as of the date hereof as of the date
hereof (other than representations and warranties which address matters only as of a certain date, which
shall be true and correct as written as of such certain date), and the Note Holders shall be entitled to rely on each of them as
if they were fully set forth herein, provided that each reference in each such representation and warranty to the Company’s knowledge
shall, for the purposes of this Section 3, be deemed to be a reference to such Guarantor’s knowledge.
4. Covenants.
Each Guarantor covenants and agrees with the Note Holders that, from and after the date of this Guarantee until the Obligations shall
have been paid in full (excluding inchoate reimbursement obligations for which no demand has been made), such Guarantor shall take, and/or
shall refrain from taking, as the case may be, each commercially reasonable action that is necessary to be taken or not taken, as the
case may be, so that no Event of Default (as defined in the Note) under Sections 8(a)(ii), (a)(iii), (a)(v), (a)(vi), (a)(xiv), (a)(xv),
(a)(xvii) or (a)(xviii) under the Note is caused by the failure to take such action or to refrain from taking such action by such Guarantor.
5. Miscellaneous.
(a) Amendments
in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except in
writing by the Required Holders.
(b) Notices.
All notices, requests and demands to or upon the Note Holders or any Guarantor hereunder shall be effected in the manner provided for
in the Securities Purchase Agreement, provided that any such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
(c) No
Waiver By Course Of Conduct; Cumulative Remedies. The Note Holders shall not by any act (except by a written instrument pursuant to
Section 5(a)), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in
any default under the Note Documents or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Note
Holder, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver
by the Note Holders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which
the Note Holders would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies provided by law.
(d) Enforcement
Expenses; Indemnification.
(i) Each
Guarantor agrees to pay, or reimburse the Note Holders for, all their reasonable and documented costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee
and the other Note Documents to which such Guarantor is a party, including, without limitation, the reasonable out-of-pocket fees and
disbursements of counsel to the Note Holders (limited to a single counsel for the Note Holders, taken as a whole, and, a single local
counsel for Note Holders, taken as a whole, in each relevant jurisdiction).
(ii) The
Guarantors may withhold from any amounts payable hereunder amounts with respect to taxes (if, in the Guarantor’s judgment, any such
amounts are required to be withheld) with respect to any such payments made hereunder and no Guarantor will not be required to gross up
or otherwise indemnify any Note Holder with respect to any such taxes (or any other taxes, including, without limitation, any stamp, registration
taxes or any income taxes) and each Note Holder shall indemnify the Company with respect to any such taxes to the extent not so withheld.
(iii) The
indemnification provisions set forth in Section 4.10 of the Securities Purchase Agreement is incorporated herein by reference and shall
apply to each Guarantor.
(iv) The
agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Securities Purchase Agreement
and the other Note Documents.
(e) Successor
and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of the
Note Holders and their respective successors and assigns; provided that no Guarantor may assign, transfer or delegate any of its rights
or obligations under this Guarantee without the prior written consent of the Required Holders.
(f) Set-Off.
Each Guarantor hereby irrevocably authorizes the Note Holders at any time and from time to time while an Event of Default under any of
the Note Documents shall have occurred and be continuing, without notice to such Guarantor or any other Guarantor, any such notice being
expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits, credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Note
Holders to or for the credit or the account of such Guarantor, or any part thereof in such amounts as the Note Holders may elect, against
and on account of the obligations and liabilities of such Guarantor to the Note Holders hereunder and claims of every nature and description
of the Note Holders against such Guarantor, in any currency, whether arising hereunder, under the Securities Purchase Agreement, the Note,
any other Note Document or otherwise, as the Note Holders may elect, whether or not the Note Holders have made any demand for payment
and although such obligations, liabilities and claims may be contingent or unmatured. The Note Holders shall notify such Guarantor promptly
of any such set-off and the application made by the Note Holders of the proceeds thereof, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the Note Holders under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off) which the Note Holders may have.
(g) Counterparts.
This Guarantee may be executed by one or more of the parties to this Guarantee on any number of separate counterparts (including by telecopy),
and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
(h) Severability.
Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
(i) Section
Headings. The Section headings used in this Guarantee are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
(j) Integration.
This Guarantee and the other Note Documents represent the agreement of the Guarantors and the Note Holders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Note Holders relative to subject
matter hereof and thereof not expressly set forth or referred to herein or in the other Note Documents.
(k) Governing
Laws. All questions concerning the construction, validity, enforcement and interpretation of this Guarantee 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 which would result in the application of the law of another jurisdiction. Each of the Company and the Guarantors agree that
all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Guarantee (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall
be commenced exclusively in the Supreme Court of the State of New York and the United States District Court for the Southern District
of New York. Each of the Company and the Guarantors hereby irrevocably submits to the exclusive jurisdiction of the Supreme Court of the
State of New York and the United States District Court for the Southern District of New York for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such proceeding is
improper. 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 Guarantee 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 Guarantee or the transactions contemplated hereby.
(l) Acknowledgements.
Each Guarantor hereby acknowledges that:
(i) it
has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Note Documents to which it is a
party;
(ii) the
Note Holders have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee or any of
the other Note Documents, and the relationship between the Guarantors, on the one hand, and the Note Holders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(iii) no
joint venture is created hereby or by the other Note Documents or otherwise exists by virtue of the transactions contemplated hereby among
the Guarantors and the Note Holders.
(m) Additional
Guarantors. The Company shall cause each of its domestic subsidiaries formed or acquired on or subsequent to the date hereof to become
a Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of Annex 1 hereto.
(n) Release
of Guarantors. Each Guarantor will be released from all liability hereunder (i) concurrently with the repayment in full in cash of
all amounts owed under the Note, the Securities Purchase Agreement and the other Note Documents (excluding inchoate reimbursement obligations
for which no demand has been made) and (ii) if such Guarantor ceases to be a wholly-owned subsidiary of the Company pursuant to a transaction
expressly permitted by the Note Documents and performed for bona fide business purposes and not in contemplation of adversely impacting
the Note Holders’ interest in this Guarantee or the Collateral generally.
(o) Seniority.
Other than the AR Facility (subject to the eCapital Subordination Agreement), and all Acceptable Indebtedness, Obligations of each of
the Guarantors hereunder rank senior in priority of payment to any other Indebtedness (as defined in the Note) of such Guarantor.
(p) WAIVER
OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE NOTE HOLDERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
*********************
(Signature
Pages Follow)
IN WITNESS WHEREOF, each of
the undersigned has caused this Subsidiary Guarantee to be duly executed and delivered as of the date first above written.
|
SCILEX HOLDING COMPANY, a Delaware corporation, as the Company |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and President |
|
|
|
SCILEX, INC., a Delaware corporation, as a Guarantor |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer, President, Treasurer, and Secretary |
|
|
|
SEMNUR PHARMACEUTICALS, INC., a Delaware corporation, as a Guarantor |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and President |
|
|
|
|
|
SCILEX PHARMACEUTICALS INC., a Delaware corporation, as a Guarantor |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and Secretary |
|
SCLX STOCK ACQUISITION JV LLC, a Texas limited liability company, as a Guarantor |
|
|
|
By: |
/s/ Jack Wu |
|
Name: |
Jack Wu |
|
Title: |
Sole Manager |
|
|
|
SCLX DRE Holdings LLC, a Delaware limited liability company, as a Guarantor |
|
|
|
By: |
/s/ Jack Wu |
|
Name: |
Jack Wu |
|
Title: |
Sole Manager |
ACCEPTED AND AGREED |
|
|
|
AGENT: |
|
|
|
ACQUIOM AGENCY SERVICES LLC, as Agent |
|
|
|
By: |
/s/ Beth Cesari |
|
Name: |
Beth Cesari |
|
Title: |
Senior Director |
|
|
|
INITIAL NOTE HOLDER: |
|
|
|
ORAMED PHARMACEUTICALS, INC. |
|
|
|
By: |
/s/ Nadav Kidron |
|
Name: |
Nadav Kidron |
|
Title: |
President and Chief Executive Officer |
|
By: |
/s/ Josh Hexter |
|
Name: |
Josh Hexter |
|
Title: |
Chief Business and Operating Officer |
|
SCHEDULE 1
GUARANTORS
The following are the names, notice addresses
and jurisdiction of organization of each Guarantor.
GUARANTOR |
JURISDICTION OF
INCORPORATION |
NOTICE ADDRESS |
Scilex, Inc. |
Delaware |
960 San Antonio Road
Palo Alto, CA 94303
Attention: Stephen Ma
Telephone: (408)891-8341
Email: sma@scilexholding.com
With copy to (which shall not constitute notice):
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304
Attention: Elizabeth Razzano
Telephone: (650) 320-1895
Email: elizabethrazzano@paulhastings.com
|
Semnur Pharmaceuticals, Inc. |
Delaware |
960 San Antonio Road
Palo Alto, CA 94303
Attention: Stephen Ma
Telephone: (408)891-8341
Email: sma@scilexholding.com
With copy to (which shall not constitute notice):
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304
Attention: Elizabeth Razzano
Telephone: (650) 320-1895
Email: elizabethrazzano@paulhastings.com
|
Scilex Pharmaceuticals Inc. |
Delaware |
960 San Antonio Road
Palo Alto, CA 94303
Attention: Stephen Ma
Telephone: (408)891-8341
Email: sma@scilexholding.com
With copy to (which shall not constitute notice):
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304
Attention: Elizabeth Razzano
Telephone: (650) 320-1895
Email: elizabethrazzano@paulhastings.com
|
SCLX DRE Holdings LLC |
Delaware |
960 San Antonio Road
Palo Alto, CA 94303
Attention: Stephen Ma
Telephone: (408)891-8341
Email: sma@scilexholding.com
With copy to (which shall not constitute notice):
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304
Attention: Elizabeth Razzano
Telephone: (650) 320-1895
Email: elizabethrazzano@paulhastings.com
|
SCLX Stock Acquisition JV LLC |
Texas |
960 San Antonio Road
Palo Alto, CA 94303
Attention: Stephen Ma
Telephone: (408)891-8341
Email: sma@scilexholding.com
With copy to (which shall not constitute notice):
Paul Hastings LLP
1117 S. California Avenue
Palo Alto, CA 94304
Attention: Elizabeth Razzano
Telephone: (650) 320-1895
Email: elizabethrazzano@paulhastings.com
|
Annex 1 to
SUBSIDIARY GUARANTEE
ASSUMPTION AGREEMENT, dated as of ____ __, ______
made by ______________________________, a ______________ corporation (the “Additional Guarantor”), in favor of the
Note Holders pursuant to the Securities Purchase Agreement referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Securities Purchase Agreement.
W I T N E S S E T H :
WHEREAS, Scilex Holding Company, a Delaware corporation (the “Company”) and
Oramed Pharmaceuticals, Inc. (the “Initial Note Holder”) have entered into a Securities Purchase Agreement, dated as
of September 21, 2023 (as amended, supplemented or otherwise modified from time to time, the “Securities Purchase Agreement”);
WHEREAS, in connection with the Securities Purchase Agreement, the Subsidiaries of the Company
(other than the Additional Guarantor) have entered into the Subsidiary Guarantee, dated as of September 21, 2023 (as amended, supplemented
or otherwise modified from time to time, the “Guarantee”) in favor of the Note Holders;
WHEREAS, the Securities Purchase Agreement requires the Additional Guarantor to become a party
to the Guarantee; and
WHEREAS, the Additional
Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee.
By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 5(m) of the Guarantee, hereby
becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor
and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder.
The Additional Guarantor hereby, jointly and severally with each other Guarantor, unconditionally and irrevocably, guarantees to the Note
Holders and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the Obligations. The information set forth in Annex 1 hereto is hereby
added to the information set forth in Schedule 1 to the Guarantee. The Additional Guarantor hereby represents and warrants that each of
the representations and warranties contained in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional
Guarantor (after giving effect to this Assumption Agreement) as if made on and as of such date.
2. Governing
Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
*********************
(Signature Page Follows)
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
|
[ADDITIONAL GUARANTOR] |
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
Exhibit 10.11
EXECUTION VERSION
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated
as of September 21, 2023 (this “Agreement”), is among Scilex Holding Company, a Delaware corporation (the “Company”),
the Subsidiaries of the Company party hereto (such subsidiaries, the “Guarantors” and together with the Company, the
“Debtors”) and Acquiom Agency Services LLC, a Colorado limited liability company, as the collateral agent (the “Agent”)
for the holders of the Company’s Senior Secured Note Due March 21, 2025, in the original aggregate principal amount of $101,875,000.00
(the “Note”) and all Additional Notes (as defined in the Note), their endorsees, transferees and assigns (collectively
with the Agent, the “Secured Parties”).
W I T N E S S E T H:
WHEREAS, pursuant to the Securities
Purchase Agreement (as defined below), Oramed Pharmaceuticals Inc. has agreed to extend the loan to the Company evidenced by the Note;
WHEREAS, pursuant to a certain
Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors have jointly and severally agreed
to guarantee and act as surety for payment of such Note and any Additional Notes (collectively, the “Notes”); and
WHEREAS, in order to induce
the Secured Parties to extend or hold the loan evidenced by the Notes, each Debtor has agreed to execute and deliver to the Secured Parties
this Agreement and to grant the Agent (on behalf and for the benefit of the Secured Parties), pari passu with each other Secured
Party and through the Agent, a security interest in all or substantially all of the property of such Debtor to secure the prompt payment,
performance and discharge in full of all of the Company’s obligations under the Notes and the Guarantors’ obligations under
the Guarantee.
NOW, THEREFORE, in consideration
of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. Certain
Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used
but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel paper”,
“commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”,
“general intangibles”, “goods”, “instruments”, “inventory”, “investment property”,
“letter-of-credit rights”, “payment intangibles”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the UCC. Unless otherwise defined herein, terms defined in the Note
and used herein shall have the meanings given to them in the Note.
“Additional
Debtor” has the meaning set forth in Section 4(ii).
“Closing
Date” has the meaning given to such term in the Securities Purchase Agreement.
“Collateral”
means the following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products
and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other
property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all
of the Pledged Securities (as defined below):
(i) All goods,
including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in
connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;
(ii) All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests, stock or
other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, rights under licenses
(including, but not limited to, Copyright Licenses, Patent Licenses, Trademark Licenses, Trade Secret Licenses, and any and all rights
in or to Material Licenses), distribution and other agreements, Computer Software (whether “off-the-shelf”, licensed from
any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists, quality control
procedures, grants and rights, goodwill, Intellectual Property and income tax refunds;
(iii) All
accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods,
equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to
each account, including any right of stoppage in transit;
(iv) All
documents, letter-of-credit rights, instruments and chattel paper;
(v) All
commercial tort claims (including, without limitation, the commercial tort claims set forth on Schedule 10 to the Perfection Certificate
as of the Closing Date);
(vi) All
deposit accounts and all cash and cash equivalents (whether or not deposited in such deposit accounts);
(vii)
All investment property;
(viii) All
supporting obligations;
(ix) All
insurance policies of any kind maintained by any Debtor;
(x) All
files, records, books of account, business papers, and computer programs; and
(xi) To
the extent not otherwise included, all Proceeds, Payment Intangibles, Supporting Obligations and products of any and all of the foregoing
and all collateral security and guaranties given by any Debtor with respect to any of the foregoing.
Without limiting the
generality of the foregoing, the “Collateral” shall include all investment property and general intangibles respecting
ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of Capital Stock and the other equity
interests presently owned as listed in the Perfection Certificate (as the same may be modified from time to time pursuant to the terms
hereof), and any other shares of Capital Stock and/or other equity interests of any other direct or indirect subsidiary of any Debtor
obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights,
options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect
of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged Securities, including, but not
limited to, all dividends, interest and cash.
Notwithstanding anything
to the contrary contained herein, the “Collateral” shall not include (each of the following, “Excluded Collateral”)
(a) any property that is the subject of a lien securing purchase money indebtedness or leases permitted under the Note where the applicable
purchase agreement or lease prohibits any Debtor from granting any other liens in such property provided, that (i) any such limitation
described in this clause (a) on the security interests granted hereunder shall apply only to the extent that any such prohibition
could not be rendered ineffective pursuant to the UCC or any other applicable law (including pursuant to a Bankruptcy Event) or principles
of equity and (ii) in the event of the termination or elimination of any such prohibition, or upon the granting of any such consent, or
waiving or terminating any requirement for such consent, a security interest in such property, lease, license or contract shall be automatically
and simultaneously granted hereunder and shall be included as Collateral hereunder, (b) more than sixty-five percent (65%) of the equity
interests of any entity organized under the laws of any jurisdiction outside of the United States, (c) any intent-to-use trademark application
prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent,
if any, that, and solely during the period, if any, in which the grant of a security interest therein would impair the validity or enforceability
of such intent-to-use trademark application under applicable federal law, (d) any lease, license or other contract or any governmental
authorization, certificate, charter, franchise, approval and consent of any Debtor (other than any proceeds and receivables thereof unless
such proceeds and receivables would otherwise be excluded from Collateral pursuant to the terms of this paragraph) if the grant of a security
interest in such lease, license, contract, governmental authorization, certificate, charter, franchise, approval or consent in the manner
contemplated by this Agreement is prohibited by the terms of such lease, license, contract governmental authorization, certificate, charter,
franchise, approval or consent (provided that such requirement existed on the Closing Date or at the time of the acquisition of such asset
and was not incurred in contemplation thereof (other than in the case of capital leases and purchase money financings)) or by applicable
law and would result in the termination of such lease, license or contract in favor of any other party thereto (other than a Debtor) or
give the other parties thereto (other than a Debtor) the right to terminate, accelerate or otherwise adversely alter any Debtor’s
rights, titles and interests thereunder (including upon the giving of notice or the lapse of time or both) or requires any consent from
the counterparty thereto or a governmental authority not obtained (without any requirement to obtain such consent or authorization), after
giving effect to the applicable anti-assignment provisions of the UCC, (e) any fee-owned real property (other than Material Real Property)
and any leasehold interest in real property (it being understood that there shall be no requirement to obtain any landlord waivers, estoppels
or collateral access letters), (f) motor vehicles and other assets subject to certificates of title, except to the extent a security interest
therein can be perfected by the filing of a UCC financing statement, (g) all commercial tort claims that are not reasonably expected as
determined by the Company in good faith to result in a judgment or settlement payment with a value in excess of $500,000 individually,
(h) assets to the extent the pledge thereof or grant of security interests therein (x) is prohibited by any applicable law, rule or regulation
(other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such
prohibition), or (y) requires any consent, approval, license or other authorization of any third party (other than the Company or
its Subsidiaries) pursuant to a contract binding on such asset (provided that such requirement existed on the Closing Date or at the time
of the acquisition of such asset and was not incurred in contemplation thereof (other than in the case of capital leases and purchase
money financings permitted under the Note)) or governmental authority not obtained, other than to the extent such prohibition or restriction
would be rendered ineffective under the UCC (other than proceeds and receivables thereof, the assignment of which is expressly deemed
effective under the UCC); provided that, in the event of the termination or elimination of any such prohibition or the requirement
for any consent for the pledge or grant of security interest in such asset to the extent sufficient to permit any such item to become
Collateral hereunder, or upon the granting of any such consent, or waiving or terminating any requirement for such consent, a security
interest in such asset shall be automatically and simultaneously granted hereunder and shall be included as Collateral hereunder, (i)
margin stock, (j) letter of credit rights with a value of less than $250,000 individually, except to the extent perfection of the security
interest therein is accomplished by the filing of a UCC financing statement (it being understood that no actions shall be required to
perfect a security interest in letter of credit rights, other than the filing of a UCC financing statement), (k) assets where the burden
or cost (including any adverse tax consequences to the Company or any Subsidiary) of obtaining a security interest therein or perfection
thereof exceeds the practical benefit to the Secured Parties afforded thereby as reasonably determined between the Company and the Agent
and (l) any assets to the extent a security interest in such assets or perfection thereof would result in material adverse tax consequences
to the Company or any Subsidiary as reasonably determined by the Company in good faith, in consultation with the Agent.
Notwithstanding anything
to the contrary set forth herein, no actions in any non-U.S. jurisdiction shall be required in order to create or perfect any security
interest in any assets unless the Company’s and its Subsidiaries’ EBITDA on a consolidated basis generated from such non-U.S.
jurisdiction is at any time greater than 5% of the total EBITDA of the Company and its Subsidiaries on a consolidated basis (an “Applicable
EBITDA Producing Foreign Jurisdiction”), in which case the Debtors shall be required to take such action as may be necessary
for the Agent to register the Agent’s security interest (to the extent legally permitted in such non-U.S. jurisdiction) in all Intellectual
Property registered in such Applicable EBITDA Producing Foreign Jurisdiction. As of the Closing Date, the Debtors shall only be required
to take such action as may necessary for the Agent to register the security interests of the Agent in Intellectual Property in the United
States (this paragraph, the “Foreign Perfection Requirement”).
“Computer
Software” shall mean all Software (as defined in the UCC), computer software, applications, programs and databases (including
Source Code, object code and all related applications and data files), firmware and documentation and materials relating thereto.
“Copyright
Licenses” shall mean any and all agreements, now or hereafter in effect, providing for the granting of any license or similar
right in or to Copyrights owned by any Debtor or that any Debtor otherwise has the right to license, or granting to any Debtor any right
to use any Copyright owned by any other Person or that any other Person otherwise has the right to license, and all rights of any Debtor
under any such agreement.
“Copyrights”
shall mean all United States and foreign copyrights (including community designs), including copyrights in Computer Software and databases,
whether registered or unregistered or published or unpublished, and, with respect to any and all of the foregoing: (i) all registrations,
recordings and applications therefor, (ii) all rights corresponding thereto throughout the world, (iii) all rights to sue for past, present
and future infringements thereof, and (iv) all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages
and proceeds of suit.
“EBITDA”
shall mean earnings before interest, taxes, depreciation and amortization.
“Excluded
Collateral” has the meaning set forth in the definition of Collateral.
“Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property owned by
the Debtors, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all Copyrights,
(ii) all Patents, (iii) all Trademarks, trade names, corporate names, company names, business names, fictitious business names, trade
dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing
or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country
or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all Trade Secrets arising under the
laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or
extensions of the foregoing, (vi) all rights, title and interests arising under any law, in or relating to Internet domain names, and
(vii) all permits, registrations, franchises, corporate or other business records, compositions, drawings, specifications, systems, designs,
plans, proposals and technical data and manuals, computer software (including object code, source code and associated data and related
documentation), goodwill, indicia, business identifiers, inventions, formulas, processes and techniques, production methods, research
and development information, proprietary information, know-how, and trade-secrets and, in each case, all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.
“Issuers”
means, collectively, each issuer of any investment property.
“Material
Real Property” means any fee-owned real property located in the United States and owned by any Debtor with a fair market value
in excess of $1,000,000 on the Closing Date (if owned by a Debtor on the Closing Date) or at the time of acquisition (if acquired by a
Debtor after the Closing Date).
“Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and such other
instruments or documents as the Agent (at the written direction of the Required Holders) may reasonably request.
“Note Documents”
means the Securities Purchase Agreement, the Notes, this Agreement, the other Security Documents, the Guarantee, and all exhibits and
schedules thereto and hereto. Note Documents shall not include the Warrants, the Management Sale Letters, the Registration Rights Agreement,
the DIP Assumption Letter, the Oramed SPA Termination (as each of the foregoing terms is defined in the Securities Purchase Agreement)
or any related documents to any of the foregoing.
“Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or
that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties, in each case arising under
this Agreement, the Notes and the other Note Documents (as defined herein), whether now or hereafter existing, voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities
that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties
as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from
time to time. Without limiting the generality of the foregoing, the term “Obligations” shall include, without limitation:
(i) principal of, and interest on the Notes and the loan extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations
and liabilities of the Debtors from time to time under or in connection with this Agreement and the other Note Documents (as defined herein);
and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for
the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving any Debtor.
“Organizational
Documents” means with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate of incorporation,
certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for
preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor (such as bylaws, a partnership
agreement or an operating, limited liability or members agreement).
“Patent
Licenses” shall mean any written agreement, now or hereafter in effect, granting to any Person any right to make, use or sell
any invention on which a Patent has been granted to any Debtor or that any Debtor otherwise has the right to license, or granting to any
Debtor any right to make, use or sell any invention on which a Patent has been granted to any other Person or that any other Person otherwise
has the right to license, and all rights of any Debtor under any such agreement.
“Patents”
shall mean all United States and foreign patents and certificates of invention, or similar industrial property rights, and applications
for any of the foregoing, including: (i) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations
thereof, (ii) all rights corresponding thereto throughout the world, (iii) all inventions and improvements described therein, (iv) all
rights to sue for past, present and future infringements thereof, (v) all claims, damages, and proceeds of suit arising therefrom, and
(vi) all proceeds of the foregoing, including royalties, income, payments, claims, damages, and proceeds of suit.
“Perfection
Certificate” shall mean the completed certificate entitled “Perfection Certificate” duly executed and delivered
to the Agent on the date hereof.
“Pledged
Collateral” shall have the meaning ascribed to such term in Section 8(a)(ii).
“Pledged
Interests” shall have the meaning ascribed to such term in Section 4(j).
“Pledged
Securities” shall mean, with respect to any Debtor, the shares of Capital Stock held by such Debtor; including the Capital Stock
set forth in Schedule 3 of the Perfection Certificate as held by such Debtor, along with any other shares of Capital Stock as are hereafter
acquired by such Debtor, in each case together with all rights, privileges, authority and powers of such Debtor relating to such Capital
Stock in each such issuer or under any Organizational Document of each such issuer, and the certificates, instruments and agreements representing
such Capital Stock and any and all interest of such Debtor in the entries on the books of any financial intermediary pertaining to such
Capital Stock, but, in any case, excluding any items constituting Excluded Collateral.
“Securities
Purchase Agreement” shall mean that certain Securities Purchase Agreement dated as of the date hereof among the Company, the
Agent and Oramed Pharmaceuticals Inc. as the initial purchaser thereunder.
“Source
Code” shall mean, collectively, any human readable software source code, any material portion or aspect of the software source
code, or any material proprietary information or algorithm contained in, embedded in or combined with, in any manner, any software source
code.
“Subsidiary”
has the meaning given to such term in the Securities Purchase Agreement.
“Trade
Secret Licenses” shall mean any and all agreements providing for the granting of any license or similar right in or to Trade
Secrets (whether such Debtor is licensee or licensor thereunder).
“Trade
Secrets” shall mean all trade secrets and all other confidential or proprietary information and know-how constituting trade
secrets, whether or not such trade secret has been reduced to a writing or other tangible form, including all documents and things embodying,
incorporating, or referring in any way to such Trade Secret, including: (i) the right to sue for past, present and future misappropriation
or other violation of any Trade Secret, and (ii) all proceeds of the foregoing, including royalties, income, payments, claims, damages,
and proceeds of suit.
“Trademark
Licenses” shall mean any written agreement, now or hereafter in effect, granting to any Person any right to use any Trademark
owned by any Debtor or that any Debtor otherwise has the right to license, or granting to any Debtor any right to use any Trademark owned
by any other Person or that any other Person otherwise has the right to license, and all rights of any Debtor under any such agreement.
“Trademarks”
shall mean all United States, state, territorial and provincial and foreign trademarks (including, to the extent constituting a trademark
or service mark, trade names, corporate names, company names, business names and fictitious business names), service marks, certification
marks, collective marks, logos, other source or business identifiers, trade dress and general intangibles of a like nature, all registrations
and applications for any of the foregoing including: (i) all extensions or renewals of any of the foregoing, (ii) all of the goodwill
of the business connected with the use of and symbolized by the foregoing, (iii) the right to sue for past, present and future infringement
or dilution of any of the foregoing or for any injury to goodwill, and (v) all proceeds of the foregoing, including royalties, income,
payments, claims, damages, and proceeds of suit.
“UCC”
means the Uniform Commercial Code of the State of New York and or any other applicable law of any state or states which has jurisdiction
with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined
terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed in its broadest
sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated
herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.
2. Grant
of Security Interest in Collateral. As an inducement for the Note Holders to extend and hold the loan as evidenced by the Notes and
to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Debtor
hereby unconditionally and irrevocably pledges, grants and hypothecates to the Agent (on behalf and for the benefit of the Secured Parties)
a security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever
kind and nature in and to, the Collateral (a “Security Interest” and, collectively, the “Security Interests”).
3. Delivery
of Certain Collateral. Each Debtor shall deliver or cause to be delivered to the Agent (a) any and all certificates and other instruments
representing or evidencing the Pledged Securities, if any, and (b) any and all certificates and other instruments or documents representing
any of the other Collateral, in each case, together with all Necessary Endorsements, in each case (i) with respect to such items in existence
on the Closing Date, contemporaneously or prior to the execution of this Agreement, and (ii) with respect to any such items acquired by
such Debtor following the Closing Date, within ten (10) days of such acquisition (or such later date as may be agreed to by the Required
Holders in their sole discretion). The Debtors are, contemporaneously with the execution hereof, delivering to the Agent a true and correct
copy of each Organizational Document governing any of the Pledged Securities.
4. Representations,
Warranties, Covenants and Agreements of the Debtors. Except as set forth in the Perfection Certificate, which Perfection Certificate
shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties as follows:
(a) Each Debtor
has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and otherwise
to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the filings contemplated
therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required by such Debtor.
This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and binding obligation of each Debtor,
enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles
of equity.
(b) The
Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily at the
offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth in the Perfection Certificate.
Except as specifically set forth in the Perfection Certificate, each Debtor is the lessee or record owner of the real property where such
Collateral is located, and there exists no mortgage or other liens on any such real property except for Permitted Liens. Except as disclosed
on in the Perfection Certificate, none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.
(c)
(i) Except for
Permitted Liens and except as set forth in Schedule 4(c) attached hereto, the Debtors are the sole owner of the Collateral (except
for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized through all corporate or limited liability company power, as applicable, to grant
the Security Interests.
(ii) Except
as set forth in Schedule 4(c) attached hereto, there is not on file in any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those
that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting any of the Collateral.
(iii) Except as
set forth in Schedule 4(c) attached hereto, as long as this Agreement shall be in effect, the Debtors shall not execute and shall
not knowingly permit to be on file in any such office or agency any other financing statement or other document or instrument (except
to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement or in connection with any Permitted
Lien).
(d) To
the Debtors’ knowledge, no written claim has been received that any Collateral or any Debtor’s use of any Collateral violates
the rights of any third party. To the Debtors’ knowledge, there has been no adverse decision to any Debtor’s claim of ownership
rights in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor’s right to keep and maintain such Collateral
in full force and effect, and, except as set forth in Schedule 4(d) attached hereto, there is no proceeding involving said rights
pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator
or other governmental authority.
(e) Each
Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and
its Collateral at the locations set forth in the Perfection Certificate attached hereto (to the extent such locations of Collateral would
be required to be disclosed on the Perfection Certificate pursuant to the thresholds and requirements set forth in the Perfection Certificate)
and may not relocate such books of account and records or tangible Collateral unless it delivers to the Secured Parties at least 30 days
prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States)
and (ii) evidence that appropriate financing statements under the UCC and other necessary documents, if any, have been filed and recorded
and other steps have been taken to perfect the Security Interests to create in favor of the Secured Parties a valid, perfected and continuing
perfected first priority (other than with respect to liens securing the AR Facility, and liens securing the Acceptable Indebtedness, to
the extent permitted under the Note) lien in the Collateral, subject to Permitted Liens.
(f) This
Agreement creates in favor of the Secured Parties a valid security interest in the Collateral, subject only to Permitted Liens, securing
the payment and performance of the Obligations. Upon making the filings described in the immediately following paragraph, all security
interests created hereunder in any Collateral which may be perfected by filing Uniform Commercial Code financing statements shall have
been duly perfected. Except for the filing of the Uniform Commercial Code financing statements referred to in the immediately following
paragraph, the recordation of each Intellectual Property Security Agreement (as defined in Section 4(p) hereof) with respect to
registered copyrights and copyright applications in the United States Copyright Office and/or Patents and registered or applied for Trademarks
in the United States Patent and Trademark Office, as applicable, the execution and delivery of deposit account control agreements satisfying
the requirements of Section 9-104(a)(2) of the UCC with respect to each deposit account of the Debtors, and the delivery of the certificates
and other instruments provided in Section 3 hereof, no action is necessary to create, perfect or protect the security interests
created hereunder (subject to the Foreign Perfection Requirement). Without limiting the generality of the foregoing, except for the filing
of said financing statements, the recordation of said Intellectual Property Security Agreements, the execution and delivery of said deposit
account control agreements and, subject to the Foreign Perfection Requirement, the recordation of the Agent’s security interest
in any intellectual property located in a non-U.S. jurisdiction, no consent of any third parties and no authorization, approval or other
action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the execution, delivery
and performance of this Agreement, (ii) the creation or perfection of the Security Interests created hereunder in the Collateral or (iii)
the enforcement of the rights of the Agent and the Secured Parties hereunder. Notwithstanding anything to the contrary set forth herein,
subject to the Foreign Perfection Requirement, no actions in any non-U.S. jurisdiction shall be required in order to create or perfect
any security interest in any assets.
(g) Each
Debtor hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests, with
the proper filing and recording agencies in any jurisdiction deemed proper by the Required Holders.
(h) The execution,
delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational Documents of
any Debtor, (ii) conflict with, or constitute a default (or an event that 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 (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor’s debt or otherwise) to which any Debtor
is a party, (iii) subject to any Required Approvals (as defined in the Securities Purchase Agreement), conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which
a Debtor is subject (including federal and state securities laws and regulations), or by which any property or asset of any Debtor is
bound or affected in any material respect. All required consents (including, without limitation, from stockholders or creditors of any
Debtor), if any, necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.
(i) The
Pledged Securities listed in Schedule 3 of the Perfection Certificate represent all of the Capital Stock and other equity interests of
the Guarantors, and represent all Capital Stock and other equity interests owned, directly or indirectly, by the Company. All of the Pledged
Securities are validly issued, fully paid and nonassessable, and the Company is the legal and beneficial owner of the Pledged Securities,
free and clear of any lien, security interest or other encumbrance except for the security interests created by this Agreement and Permitted
Liens.
(j) The
ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (“Pledged
Interests”) by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held
in a securities account or by any financial intermediary.
(k) Except
for Permitted Liens and subject to the terms of the eCapital Subordination Agreement, each Debtor shall at all times maintain the liens
and Security Interests provided for hereunder as valid and perfected first priority liens and security interests in the Collateral in
favor of the Secured Parties until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 14
hereof. Each Debtor hereby agrees to defend the same against the claims of any and all persons and entities. Each Debtor shall safeguard
and protect all Collateral for the account of the Secured Parties. At the request of the Agent (at the written direction of the Required
Holders), each Debtor will sign and deliver to the Agent on behalf of the Secured Parties at any time or from time to time one or more
financing statements pursuant to the UCC in form reasonably satisfactory to the Required Holders and will pay the cost of filing the same
in all public offices wherever filing is, or is deemed by the Required Holders to be, necessary or desirable to effect the rights and
obligations provided for herein. Without limiting the generality of the foregoing, each Debtor shall pay all fees, taxes and other amounts
necessary to maintain the Collateral and the Security Interests hereunder, and each Debtor shall obtain and furnish to the Agent from
time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the
Security Interests hereunder.
(l) No Debtor
will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except as permitted under the
Notes) without the prior written consent of the Required Holders.
(m) Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order (ordinary war
and tear excluded), and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from
insurance coverage.
(n) Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral hereafter
acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established reputation having
similar properties similarly situated and in such amounts as are customarily carried under similar circumstances by other such entities
and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover the full replacement cost
thereof (for the avoidance of doubt, it is acknowledged and agreed that the Debtor’s insurance as of the Closing Date is deemed
to satisfy the foregoing requirements). Each Debtor shall cause each insurance policy issued in connection herewith to provide, and the
insurer issuing such policy to certify to the Agent, that (a) the Agent will be named as lender loss payee and additional insured under
each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer
will promptly notify the Agent and such cancellation or change shall not be effective as to the Agent for at least thirty (30) days after
receipt by the Agent of such notice, unless the effect of such change is to extend or increase coverage under the policy; and (c) the
Agent will have the right (but no obligation) at its election to remedy any default in the payment of premiums within thirty (30) days
of notice from the insurer of such default (for the avoidance of doubt, it is acknowledged and agreed that the certificates of insurance
provided by Debtors to the Agent as of the Closing Date is deemed to satisfy the foregoing requirements). If no Event of Default exists
and if the proceeds arising out of any claim or series of related claims do not exceed $250,000, loss payments in each instance will be
applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent
reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the applicable
Debtor. Copies of such policies or the related certificates, in each case, naming the Agent as lender loss payee and additional insured
shall be delivered to the Agent at least annually and at the time any new policy of insurance is issued.
(o) Each
Debtor shall, within seven (7) days of obtaining knowledge thereof, advise the Secured Parties through the Agent promptly, in sufficient
detail, of any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect
on the value of the Collateral or on the Secured Parties’ security interest therein.
(p) Each
Debtor shall promptly execute and deliver to the Agent such further deeds, mortgages, assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and take such further action as the Agent (at the written direction of the
Required Holders) may from time to time reasonably request and the Required Holders may in their sole discretion deem necessary to perfect,
protect or enforce the Secured Parties’ security interest in the Collateral including, without limitation, the execution and delivery
of (i) a separate security agreement with respect to each Debtor’s Intellectual Property (an “Intellectual Property Security
Agreement”) on the Closing Date (for the avoidance of doubt, such Intellectual Property Security Agreement required on the Closing
Date shall only be required with respect to the Debtors’ U.S. Intellectual Property) and (ii) supplemental Intellectual Property
Security Agreements on a quarterly basis, commencing with the first full calendar quarter following the Closing Date, within 45 days following
the last day of each applicable calendar quarter, covering any newly acquired or registered Intellectual Property (subject to the Foreign
Perfection Requirement, limited to U.S. Intellectual Property), if any, which Intellectual Property Security Agreements shall be substantially
in a form reasonably acceptable to the Agent and the Required Holders and, in each case, other than as stated therein, shall be subject
to all of the terms and conditions hereof.
(q) Each
Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during normal business hours and upon reasonable
prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by the Agent (at the written direction
of the Required Holders) from time to time; provided, that unless an Event of Default has occurred and is continuing, Debtors shall not
be obligated to reimburse the Agent for more than one such inspection in any calendar year.
(r) Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes
of action and accounts receivable in respect of the Collateral.
(s) Each
Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution or
other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect the
value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.
(t) All
information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of any Debtor with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.
(u) The
Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights
and franchises material to its business.
(v) No
Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one),
legal or corporate structure, or identity, or add any new fictitious name unless it provides at least 30 days prior written notice to
the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture
filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.
(w) Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold, sale or
return, sale on approval, or other conditional terms of sale without the consent of the Agent (consenting at the written direction of
the Required Holders) which shall not be unreasonably withheld.
(x) No
Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof to the Secured
Parties and so long as, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary
to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.
(y) Each
Debtor was organized and remains organized solely under the laws of the state set forth in the Perfection Certificate.
(z)
(i) The actual name of each Debtor is the name set forth in the Perfection Certificate; (ii) no Debtor has any trade names except as set
forth in the Perfection Certificate; (iii) no Debtor has used any name other than that stated in the preamble hereto or as set forth in
the Perfection Certificate; and (iv) no entity has merged into any Debtor or been acquired by any Debtor within the past five years except
as set forth in the Perfection Certificate.
(aa) At
any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require or permit
possession by the secured party to perfect the security interest created hereby, the applicable Debtor shall deliver such Collateral to
the Agent.
(bb) Each
Debtor, in its capacity as issuer, hereby agrees, to comply with any and all orders and instructions of Agent (at the written direction
of the Required Holders) regarding the Pledged Interests or the Pledged Securities consistent with the terms of this Agreement without
the further consent of any Debtor as contemplated by Section 8-106 (or any successor section) of the UCC. Further, each Debtor agrees
that it shall not enter into a similar agreement (or one that would confer “control” within the meaning of Article 8 of the
UCC) with any other person or entity.
(cc) Each
Debtor shall cause all tangible chattel paper with an aggregate value in excess of $250,000 constituting Collateral to be delivered to
the Agent, or, if such delivery is not possible, then to cause such tangible chattel paper to contain a legend noting that it is subject
to the security interest created by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable
Debtor shall cause the underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor
section thereto).
(dd) Other
than with respect to Excluded Accounts, if there is any investment property or deposit account included as Collateral that can be perfected
by “control” through an account control agreement, the applicable Debtor shall cause such an account control agreement, in
form and substance in each case satisfactory to the Agent and Required Holders, to be entered into and delivered to the Agent for the
benefit of the Secured Parties, in each case, subject to the time period set forth in Section 7(b)(vi) of the Note.
(ee) If
any Debtor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Debtor with a face amount greater
than $500,000, such Debtor shall promptly, and in any event within 10 Business Days, notify the Agent thereof and shall, at the written
request and option of the Agent, pursuant to an agreement in form and substance reasonably satisfactory to the Agent, either (i) use commercially
reasonable efforts to, within 15 days of such request, arrange for the issuer and any confirmer of such letter of credit to consent to
an assignment to the Agent of the proceeds of any drawing under the letter of credit or (ii) during the occurrence and continuation of
an Event of Default, arrange for the Agent to become the transferee beneficiary of the letter of credit, with the Agent agreeing, in each
case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Debtor unless an Event of Default has
occurred and is continuing.
(ff) To
the extent that any Collateral is in the possession of any third party, the applicable Debtor shall promptly upon Agent’s written
request (and in no event later than five (5) Business Days after receiving written request from the Agent or such longer time period as
the Required Holders may agree), join with the Agent in notifying such third party of the Secured Parties’ security interest in
such Collateral and, to the extent necessary to protect and preserve Secured Parties’ security interest in such Collateral, shall
use its best efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance
reasonably satisfactory to the Agent and Required Holders.
(gg) If any Debtor
shall at any time hold or acquire any Commercial Tort Claim with an aggregate value (as determined by the Company in good faith) in excess
of $500,000, such Debtor shall promptly (and in any event within 10 Business Days of obtaining knowledge or receipt thereof) notify the
Secured Parties in a writing signed by such Debtor of the particulars thereof (provided, for the avoidance of doubt, that the foregoing
requirement, to the extent applicable, shall be deemed to be satisfied as of the Closing Date with respect to the Commercial Tort Claims
set forth on Schedule 10 to the Perfection Certificate) and hereby authorizes the filing of additional financing statements or amendments
to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things reasonably deemed
necessary or desirable by the Required Holders to give the Agent a perfected security interest in any such Commercial Tort Claim.
(hh) Reserved.
(ii) Each
Debtor shall cause each subsidiary of such Debtor to become a party hereto (an “Additional Debtor”), by executing and
delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply with the provisions hereof
applicable to the Debtors promptly following the formation or acquisition of such Additional Debtor (in any event within thirty (30) days
of such formation or acquisition). Concurrent therewith, the Additional Debtor shall deliver a supplement to the Perfection Certificate.
The Additional Debtor shall also deliver such opinions of counsel, authorizing resolutions, good standing certificates, incumbency certificates,
organizational documents, financing statements and other information and documentation as the Agent may reasonably request. Upon delivery
of the foregoing to the Agent, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations
as the Debtors, for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed
to have made the representations, warranties and covenants set forth herein as of the date of execution and delivery of such Additional
Debtor Joinder, and all references herein to the “Debtors” shall be deemed to include each Additional Debtor.
(jj) Each Debtor
shall vote the Pledged Securities to the extent necessary to comply with the covenants and agreements set forth herein and in the Note.
(kk) Each
Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each
issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on the
books of such issuer. Further, except with respect to certificated securities delivered to the Agent, upon written request by the
Agent (at the written direction of the Required Holders), the applicable Debtor shall deliver to the Agent an acknowledgement of
pledge (which, where appropriate, shall comply with the requirements of the relevant UCC with respect to perfection by registration)
signed by the issuer of the applicable Pledged Securities, which acknowledgement shall confirm that: (a) it has registered the
pledge on its books and records; and (b) at any time directed by the Agent (at the written direction of the Required Holders) during
the continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of
any designee of Agent, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without notice to or the further consent of the applicable Debtor.
(ll) In the
event that, upon an occurrence of an Event of Default, if the Agent shall sell all or any of the Pledged Securities to another party or
parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged Securities, each Debtor
shall, to the extent applicable: (i) deliver to the Agent or the Transferee, as the case may be, the articles of incorporation, bylaws,
minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books of account,
financial records and all other Organizational Documents and records of the Debtors and their direct and indirect subsidiaries; (ii) use
its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors and their direct and indirect
subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by any governmental or regulatory
body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged Securities by
the Agent and allow the Transferee or Agent to continue the business of the Debtors and their direct and indirect subsidiaries.
(mm) In the
event any Debtor, either itself or through any agent, employee, licensee, or designee, files an application for the registration of
any Copyright with the United States Copyright Office, or acquires or otherwise obtains any ownership of Collateral consisting of
Copyrights after the date hereof, such Debtor shall, in no event more than twenty five (25) days thereafter, execute and deliver an
Intellectual Property Security Agreement in accordance with Section 4(p) above.
(nn) Each
Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments
and documents, and take all such further action as may be necessary, or as the Agent (at the written direction of the Required Holders)
may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the
Secured Parties to exercise and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out
the purposes of this Agreement.
(oo) The
Perfection Certificate attached hereto lists all of the registered patents, patent applications, registered trademarks, trademark applications
and registered copyrights, and domain names owned by any of the Debtors as of the date hereof. The Perfection Certificate lists all licenses
in favor of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof.
(pp) Until the
Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct or indirect subsidiary
of the Company and formed or acquired after the date hereof to enter into an assumption agreement in the form of Annex 1 to the Guarantee.
5. Reserved.
6. Defaults.
The occurrence of an Event of Default under the Notes shall be an Events of Default hereunder.
7. Duty
To Hold In Trust.
(a) Upon
the occurrence of any Event of Default and at any time thereafter, each Debtor shall, upon receipt of any revenue, income, dividend, interest
or other sums subject to the Security Interests, whether payable pursuant to the Notes or other Obligation, or of any check, draft, note,
trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Parties and
shall forthwith endorse and transfer any such sums or instruments, or both, first to the payment or reimbursement of any fees and expenses
then owed to the Agent and then to the Secured Parties pro-rata in proportion to their respective then-currently outstanding principal
amount of the Notes for application to the satisfaction of the Obligations.
(b) If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares of
Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants, rights or
other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification
or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of its direct or indirect subsidiaries)
in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities or otherwise),
such Debtor agrees to (i) accept the same as the agent of the Secured Parties; (ii) hold the same in trust on behalf of and for the benefit
of the Secured Parties; and (iii) to deliver any and all certificates or instruments evidencing the same to the Agent on or before
the close of business on the fifth Business Day following the receipt thereof by such Debtor, in the exact form received together with
the Necessary Endorsements, to be held by the Agent subject to the terms of this Agreement as Collateral.
8. Rights
and Remedies Upon Default.
(a) Upon
the occurrence and during the continuance of an Event of Default, in addition to all other rights and remedies available to the Agent
under any other agreement, at law, in equity, or otherwise, and in all cases the Secured Parties, acting through the Agent, shall have
the right to exercise all of the remedies conferred hereunder and under the Notes, and the Secured Parties shall have all the rights and
remedies of a secured party under the UCC. Without limitation, the Agent, for the benefit of the Secured Parties, shall have the following
rights and powers in each case solely upon the occurrence and during the continuance of an Event of Default:
(i) The
Agent shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person,
any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall assemble the Collateral
and make it available to the Agent at places which the Agent shall reasonably select, whether at such Debtor's premises or elsewhere,
and make available to the Agent, without rent, all of such Debtor’s respective premises and facilities for the purpose of the Agent
taking possession of, removing or putting the Collateral in saleable or disposable form.
(ii) Subject
in each case to the requirement that concurrent notice thereof be delivered by the Agent to the applicable Debtor, (A) the Agent shall
have the sole and exclusive right to receive any and all dividends, payments or other proceeds paid in respect of the Pledged Securities
and other investment property pledged hereunder (to the extent not constituting Excluded Collateral) (collectively, the “Pledged
Collateral”) and make application thereof to the Obligations in the manner set forth in Section 9 hereof, (B) the Agent
shall have the sole and exclusive right (but shall be under no obligation) to register any or all of the Pledged Collateral in the name
of the Agent or its nominee, (C) all rights of each Debtor to exercise or refrain from exercising the voting, corporate, consensual and
other rights and privileges pertaining to the Pledged Collateral to which such Debtor would otherwise be entitled shall automatically
cease and become vested in the Agent, and (D) the Agent or its nominee shall have (except to the extent, if any, specifically waived in
each instance by the Agent in writing in its sole discretion) the sole and exclusive right to exercise or refrain from exercising, but
under no circumstances is the Agent obligated by the terms of this Agreement or otherwise to exercise, (x) all voting, corporate, consensual
and other rights and privileges pertaining to the Pledged Collateral, whether at any meeting of shareholders of the relevant Issuer or
Issuers, by written consent in lieu of a meeting or otherwise, and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange, at its discretion, any and all of the Pledged Collateral upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Debtor or the Agent of any right, privilege
or option pertaining to the Pledged Collateral, and in connection therewith, the right to deposit and deliver any and all of the Pledged
Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the
Agent may determine in its sole discretion), all without liability except to account for property actually received by the Agent, but
the Agent shall have no duty to any Debtor or any other Person to exercise any such right, privilege or option and shall not be responsible
for any failure to do so or delay in so doing. In furtherance of the rights exercised by the Agent upon concurrent notice to the applicable
Debtor in accordance with the preceding sentence, each Debtor hereby appoints the Agent as such Debtor’s true and lawful attorney-in-fact,
with full power of substitution, and grants to the Agent this IRREVOCABLE PROXY, to vote all or any part of the Pledged Collateral from
time to time following the occurrence and during the continuance of an Event of Default, in each case in any manner as the Agent is directed
in writing by the Required Holders for or against any or all matters submitted, or which may be submitted, to a vote of shareholders (including
holders of any Capital Stock of any Issuer), partners or members, as the case may be, and to exercise all other rights, powers, privileges
and remedies to which any such shareholders (including holders of any Capital Stock of any Issuer), partners or members would be entitled
(including, without limitation, giving or withholding written consents of holders of Capital Stock of any Issuer, calling special meetings
of the holders of the Capital Stock of any Issuer and voting at such meetings). The power-of-attorney and irrevocable proxy granted hereby
are effective automatically upon the occurrence and during the continuance of an Event of Default without the necessity that any action
(including, without limitation, that any transfer of any of the Pledged Collateral be recorded on the books and records of the relevant
Issuer or that any of the Pledged Collateral be registered in the name of the Agent or any other Person) be taken by any Person (including
the Issuer of the relevant Pledged Collateral or any officer or agent thereof), are coupled with an interest and shall be irrevocable,
shall survive the bankruptcy, dissolution or winding up of each relevant Debtor, and shall terminate only upon payment in cash of the
Obligations in full.
(iii) Each
Debtor hereby authorizes and instructs each Issuer of any Pledged Collateral pledged by such Debtor hereunder to comply with any instruction
received by such Issuer from the Agent in writing that states that an Event of Default has occurred and is continuing, without any other
or further instructions from such Debtor, and each Debtor agrees that each Issuer shall be fully protected in so complying and shall have
no duty or right to inquire as to the Agent’s authority to give such instruction, including the payment of any dividends or other
payments with respect to any Pledged Collateral directly to the Agent. Each party hereto that is an Issuer acknowledges the rights, remedies
and privileges of the Agent set forth in Section 8(a)(ii) above and agrees to abide and comply with any action taken by the Agent
thereunder or pursuant thereto.
(iv) In
furtherance of, and without in any way limiting, any of the foregoing, promptly (and in any event within two (2) Business Days or such
later date as the Agent may agree at the written direction of the Required Holders) following a request from the Agent, each Debtor shall
execute and deliver (or cause to be executed and delivered) to the Agent any and all such further proxies, dividend payment orders and
other instruments as the Agent may from time to time reasonably request (at the written direction of the Required Holders) to facilitate
the exercise of, or otherwise in connection with, any of the rights or remedies granted to the Agent in or pursuant to Section 8(a)(ii)
above.
(v) Reserved.
(vi) The
Agent shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in
such parcel or parcels and at such time or times and at such place or places, and upon commercially reasonable terms and conditions, all
without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any Debtor
or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral,
the Agent, for the benefit of the Secured Parties, may, to the extent permitted by applicable law, purchase all or any part of the Collateral
being sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived and
released.
(vii) The
Agent shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts to make
payments directly to the Agent, on behalf of the Secured Parties, and to enforce the Debtors’ rights against such account debtors
and obligors.
(viii) The
Agent, for the benefit of the Secured Parties, may (but is not obligated to) direct any financial intermediary or any other person
or entity holding any investment property to transfer the same to the Agent, on behalf of the Secured Parties, or its designee.
(ix) To
the extent permitted by applicable law, the Agent may (but is not obligated to) transfer any or all Intellectual Property registered in
the name of any Debtor at the United States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or
any designee or any purchaser of any Collateral.
(b) Each
Debtor covenants and agrees that, on the date that is thirty (30) days prior to the date of expiration (by operation of applicable law)
(other than, for the avoidance of doubt, any expiration arising as a result of all of the Obligations being repaid in full) of the irrevocable
proxy granted herein, including pursuant to Section 8(a)(ii) hereof, such Debtor shall automatically be deemed to have granted
to the Agent a new irrevocable proxy on the same terms as the terms of the irrevocable proxy previously granted herein, including pursuant
to Section 8(a)(ii) hereof. Promptly upon any request by the Agent (at the written request of the Required Holders), each Debtor
agrees to deliver to the Agent any further written evidence of such new irrevocable proxy to enable the Agent to exercise all of the rights
relating to the Pledged Securities set forth in Section 8(a)(ii) hereof on the same terms as set forth therein.
(c) The
Agent may sell the Collateral during the continuance of an Event of Default without giving any warranties and may specifically disclaim
such warranties. In addition, to the fullest extent permitted by applicable law, each Debtor waives any and all rights that it may have
to a judicial hearing in advance of the enforcement of any of the Agent’s rights and remedies hereunder, including, without limitation,
its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect
thereto.
(c) For
the purpose of enabling the Agent to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement
or applicable law, each Debtor hereby grants to the Agent, for the benefit of the Agent and the Secured Parties, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense following an Event
of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including
in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs
used for the compilation or printout thereof.
9. Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on account
of any insurance policy insuring any portion of the Collateral shall be applied (i) first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection
therewith) of the Collateral, (ii) then to the reasonable and documented out-of-pocket attorneys’ fees and expenses incurred by
the Agent in enforcing the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing of the Collateral
and any other fees and expenses including reasonable and documented out-of-pocket attorneys’ fees and expenses of the Agent due
and payable at such time, and (iii) then to satisfaction of the Obligations pro rata among the Secured Parties (based on then-outstanding
principal amounts of the Notes at the time of any such determination) in accordance with clause (iv) of Section 2(i) of the Notes, and
to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the applicable Debtor any
surplus proceeds. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands against the Secured Parties
arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence or willful misconduct
of the Secured Parties as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.
10. Securities
Law Provision. Each Debtor recognizes that Agent may be limited in its ability to effect a sale to the public of all or part of the
Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state securities laws
(collectively, the “Securities Laws”), and may be compelled to resort to one or more sales to a restricted group of
purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorable than if the Pledged
Securities were sold to the public, and that Agent has no obligation to delay the sale of any Pledged Securities for the period of time
necessary to register the Pledged Securities for sale to the public under the Securities Laws. Each Debtor shall cooperate with Agent
in its attempt to satisfy any requirements under the Securities Laws (including, without limitation, registration thereunder if requested
by the Agent) applicable to the sale of the Pledged Securities by the Agent.
11. Costs
and Expenses. Each Debtor agrees to pay all reasonable and documented out-of-pocket fees, costs and expenses incurred in connection
with any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements,
partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Agent (at the
direction of the Required Holders). The Debtors shall also pay all other claims and charges which in the reasonable opinion of the Required
Holders is reasonably likely to prejudice, imperil or otherwise affect the Collateral or the Security Interests therein. The Debtors will
also, upon demand, pay to the Note Holders the amount of any and all reasonable and documented out-of-pocket expenses, including the reasonable
and documented fees and expenses of its counsel and of any experts and agents, which the Note Holders may incur in connection with the
creation, perfection, protection, satisfaction, foreclosure, collection or enforcement of the Security Interest and the preparation, administration,
continuance, amendment or enforcement of this Agreement and pay to the Note Holders the amount of any and all reasonable and documented
out-of-pocket expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Note Holders
may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the exercise or enforcement (including with respect to any workout, restructuring
or bankruptcy proceeding) of any of the rights of the Note Holders under the Notes. Until so paid, any fees payable to the Note Holders
hereunder shall be added to the principal amount of the Notes and shall bear interest at the Default Rate and any fees and expenses payable
to the Agent shall bear interest at the Default Rate.
12. Responsibility
for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall
in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability
for any reason. Without limiting the generality of the foregoing, (a) neither the Agent nor any Secured Party (i) has any duty (either
before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral,
or (ii) has any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain obligated and liable
under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder. Neither the Agent nor
any Secured Party shall have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement
or the receipt by the Agent or any Secured Party of any payment relating to any of the Collateral, nor shall the Agent or any Secured
Party be obligated in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement,
to make inquiry as to the nature or sufficiency of any payment received by the Agent or any Secured Party in respect of the Collateral
or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Agent or to which the Agent
or any Secured Party may be entitled at any time or times.
13. Security
Interests Absolute. All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement, the Notes or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Notes or any other
agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral, or any release
or amendment or waiver of or consent to departure from any other collateral for, or any guarantee, or any other security, for all or any
of the Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims
or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal
or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interests granted hereby. Until the Obligations
shall have been paid in full in cash (other than contingent indemnification and reimbursement obligations for which no demand has been
made), the rights of the Secured Parties shall continue even if the Obligations are barred for any reason, including, without limitation,
the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of protest, demand,
notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received
by the Secured Parties hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference
or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Parties, then, in any such event, each Debtor’s obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain
a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Each Debtor waives all right to require
the Secured Parties to proceed against any other person or entity or to apply any Collateral which the Secured Parties may hold at any
time, or to marshal assets, or to pursue any other remedy. Each Debtor waives any defense arising by reason of the application of the
statute of limitations to any obligation secured hereby.
14. Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Notes and all
other Obligations (other than contingent indemnification and reimbursement obligations for which no demand has been made) have been paid
in full in cash; provided, however, that all indemnities of the Debtors contained in this Agreement (including, without limitation, Annex
B hereto) shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.
15. Power
of Attorney; Further Assurances.
(a) Each
Debtor authorizes the Agent, and does hereby make, constitute and appoint the Agent and its officers, agents, successors or assigns with
full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the Agent or such Debtor,
to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts, money orders or other
instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may
come into possession of the Agent; (ii) to sign and endorse any financing statement pursuant to the UCC or any invoice, freight or express
bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with
accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests or other encumbrances
at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue
for monies due in respect of the Collateral; (v) to transfer any Intellectual Property or provide licenses respecting any Intellectual
Property; and (vi) generally, at the option of the Agent (at the written direction of the Required Holders), and at the expense of the
Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts and things
which the Agent (at the written direction of the Required Holders) deems necessary to protect, preserve and realize upon the Collateral
and the Security Interests granted therein in order to effect the intent of this Agreement and the Notes all as fully and effectually
as the Debtors might or could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long
as any of the Obligations (other than contingent indemnification and reimbursement obligations for which no demand has been made) shall
be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational
Documents or other documents or agreements to which any Debtor is subject or to which any Debtor is a party. Without limiting the generality
of the foregoing, after the occurrence and during the continuance of an Event of Default, each Secured Party is specifically authorized
to execute and file any applications for or instruments of transfer and assignment of any Patents, Trademarks, Copyrights or other Intellectual
Property with the United States Patent and Trademark Office and the United States Copyright Office.
(b) On
a continuing basis, at the request of the Agent (at the written direction of the Required Holders), each Debtor will make, execute, acknowledge,
deliver, file and record, as the case may be, with the proper filing and recording agencies in any jurisdiction, including, without limitation,
the jurisdictions indicated in the Perfection Certificate, all such instruments, and take all such action as may reasonably be deemed
necessary or advisable to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Agent the grant or perfection of a perfected security interest in all the Collateral
under the UCC.
(c) Each
Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact, with full authority in the place and instead of
such Debtor and in the name of such Debtor, from time to time in the Agent’s discretion, at such time as an Event of Default has
occurred and is continuing, to take any action and to execute any instrument which the Agent (at the written direction of the Required
Holders) may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing, at the written direction
of the Required Holders, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral
without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral as
“all assets” or “all personal property” or words of like import, and ratifies all such actions taken by the Agent.
This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any
of the Obligations (other than contingent indemnification and reimbursement obligations for which no demand has been made) shall be outstanding.
16. Notices.
All notices, requests, demands and other communications hereunder shall be given in the form and manner and delivered to the Collateral
Agent and/or applicable Note Holder at its address specified in the Notes, and to any of the Grantors at their respective addresses specified
in the Note or the Guarantee, as applicable, or, as to any party, at such other address as shall be designated by such party in a written
notice to the other parties.
17. Other
Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity, then the Agent shall have the right, at the written direction
of the Required Holders, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way
modifying or affecting any of the Secured Parties’ rights and remedies hereunder.
18. Appointment
of Agent. Pursuant to Section 5.23 of the Securities Purchase Agreement, the Secured Parties have appointed Acquiom Agency Services
LLC to act as their agent (“Agent”) for purposes of exercising any and all rights and remedies of the Secured Parties
hereunder.
19. Miscellaneous.
(a) No
course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Parties, any right, power or privilege hereunder or under the Notes shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
(b) All
of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.
(c) This
Agreement, together with the schedules hereto and the Perfection Certificate, contains the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into this Agreement. 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 Debtors and the Agent (acting at the direction of the
Required Holders), or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.
(d) 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 commercially 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.
(e) 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 any party to exercise any right hereunder in any manner impair the exercise of any such right.
(f) This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company and the
Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Secured Party.
Any Secured Party may assign any or all of its rights under this Agreement to any Person (as defined in the Securities Purchase Agreement)
to whom such Secured Party assigns or transfers any Obligations, provided such transferee agrees in writing to be bound, with respect
to the transferred Obligations, by the provisions of this Agreement that apply to the “Secured Parties.”
(g) Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry
out the provisions and purposes of this Agreement.
(h) Except to the
extent mandatorily governed by the jurisdiction or situs where the Collateral is located, 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 to the extent mandatorily governed by the
jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and the Notes (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and
federal courts located in New York, New York. Each Debtor hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts located in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such proceeding is improper. 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.
(i) This
Agreement may be executed in any number of 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. In the event that any signature is delivered by .pdf via email transmission,
such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such .pdf via email signature were the original thereof.
(j) All
Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.
(k) The
provisions of Section 6.9 of the Securities Purchase Agreement are incorporated herein by reference, mutatis mutandis.
(l) Nothing
in this Agreement shall be construed to subject Agent or any Secured Party to liability as a partner in any Debtor or any if its direct
or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries that is a limited
liability company, nor shall Agent or any Secured Party be deemed to have assumed any obligations under any partnership agreement or limited
liability company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries or otherwise, unless and
until any such Secured Party exercises its right to be substituted for such Debtor as a partner or member, as applicable, pursuant hereto.
(m) To
the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent, approval
or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or compliance with
any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and waive any such noncompliance
with the terms of said documents.
(n) The Agent
shall enjoy all the same rights, protections, immunities and indemnities granted to it under the Securities Purchase Agreement as though
fully set forth herein. In performing its functions and duties under this Agreement, the Agent shall act solely as a non-fiduciary agent
of the Secured Parties and does not assume, nor shall be deemed to have assumed, any obligation or relationship of trust with or for the
Secured Parties. Nothing in this Agreement or any other Transaction Document shall be interpreted as giving the Agent responsibility for
or any duty concerning the validity, perfection, priority or enforceability of the liens granted hereunder or as giving the Agent any
obligation to take any action to procure or maintain such validity, perfection, priority or enforceability.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties
hereto have caused this Security Agreement to be duly executed on the day and year first above written.
DEBTORS: |
|
|
|
SCILEX HOLDING
COMPANY |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and President |
|
|
|
SCILEX, inc. |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer, President, Treasurer, and Secretary |
|
|
|
SCILEX PHARMACEUTICALS
inC. |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and Secretary |
|
|
|
SEMNUR PHARMACEUTICALS,
inC. |
|
|
|
By: |
/s/ Jaisim Shah |
|
Name: |
Jaisim Shah |
|
Title: |
Chief Executive Officer and President |
|
|
|
SCLX Stock
Acquisition JV LLC |
|
|
|
By: |
/s/ Jack Wu |
|
Name: |
Jack Wu |
|
Title: |
Sole Manager |
|
|
|
SCLX DRE
HOLDINGS LLC |
|
|
|
By: |
/s/ Jack Wu |
|
Name: |
Jack Wu |
|
Title: |
Sole Manager |
|
AGENT: |
|
|
|
ACQUIOM AGENCY SERVICES LLC, as Agent |
|
|
|
By: |
/s/ Beth Cesari |
|
Name: |
Beth Cesari |
|
Title: |
Senior Director |
|
|
|
HOLDER: |
|
|
|
ORAMED PHARMACEUTICALS INC. |
|
|
|
By: |
/s/ Nadav Kidron |
|
Name: |
Nadav Kidron |
|
Title: |
President and Chief Executive Officer |
|
ORAMED PHARMACEUTICALS INC. |
|
|
|
By: |
/s/ Josh Hexter |
|
Name: |
Josh Hexter |
|
Title: |
Chief Business and Operating Officer |
|
ANNEX A
to
Security
Agreement
FORM OF ADDITIONAL
DEBTOR JOINDER
Security Agreement dated as of September 21, 2023
made by Scilex Holding Company and its subsidiaries party thereto from time to time, as Debtors, to and in favor of the Secured Parties
identified therein (the “Security Agreement”).
Reference is made to the Security
Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms
in, or by reference in, the Security Agreement.
The undersigned hereby agrees
that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above, the undersigned shall (a) be an Additional
Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the Security Agreement as fully and
to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made the representations and warranties
set forth therein as of the date of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY
AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.
Attached hereto is a supplement
to the Perfection Certificate reflecting the information requested thereby with respect to the Additional Debtor [and a supplement to
Schedules 4(c) and 4(d) to the Security Agreement].
An executed copy of this Joinder
shall be delivered to the Secured Parties, and the Secured Parties may rely on the matters set forth herein on or after the date hereof.
This Joinder shall not be modified, amended or terminated without the prior written consent of the Secured Parties.
IN WITNESS WHEREOF, the undersigned
has caused this Joinder to be executed in the name and on behalf of the undersigned.
|
[Name of Additional Debtor] |
|
|
|
By: |
|
|
|
Name: |
|
Title: |
|
|
|
Address: |
|
|
Dated: |
|
A-2
Exhibit 10.12
Execution Version
MUTUAL TERMINATION AND RELEASE AGREEMENT
This Mutual Termination and
Release Agreement (this “Agreement”) is entered into as of September 21, 2023, by and between Sorrento Therapeutics,
Inc., a Delaware corporation, (“Sorrento”), and Oramed Pharmaceuticals, Inc., a Delaware corporation (“Oramed”,
and together with Sorrento, the “Parties”).
WHEREAS, on February
13, 2023, Sorrento, together with its wholly-owned subsidiary, Scintilla Pharmaceuticals, Inc., commenced voluntary proceedings under
Chapter 11 of the United States Bankruptcy in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy
Court”), which case has been administered under Case No. 23-90085 (DRJ) (the “Chapter 11 Case”);
WHEREAS, on August
7, 2023, Sorrento and Oramed entered into that certain Stock Purchase Agreement (as amended, the “Oramed Stock Purchase Agreement”);
WHEREAS, on September
11, 2023, in connection with the Chapter 11 Case and upon further negotiation between Sorrento, Scilex Holding Company, a Delaware corporation
(“Scilex”) and Oramed in connection with the proposed sale
by Sorrento and acquisition by Scilex of the Purchased Securities (as
defined in Scilex Stock Purchase Agreement (as defined below)), entered into that certain Non-Binding Term Sheet (the “Term
Sheet”), which includes as Exhibit A thereto that certain Term Sheet for Senior Secured Note and Warrants and Related Matters
(the “Senior Debt Term Sheet” and, together with the Short Form Term Sheet, the “Term Sheets”, and
the transactions contemplated thereby, collectively, the “Transactions”);
WHEREAS, the Bankruptcy
Court has, by order dated September 12, 2023 [Docket No. 1316] (the “Approval Order”), approved the Term Sheets, and
in connection therewith, (i) conditionally vacated the Oramed Stock Purchase Agreement and the order dated August 30, 2023 [Docket No.
1267], effective upon closing of the Transactions, and (ii) extended the restrictions on certain transfers of Scilex common stock set
forth in the Court’s Order Extending the Application of the Automatic Stay to Continue the Restricted Trading Period for Shares
of Scilex Stock Distributed to the Debtors’ Shareholders from September 1, 2023 to March 31, 2024;
WHEREAS, on September
[21], 2023, Sorrento and Scilex entered into that certain Stock Purchase Agreement (the “Scilex Stock Purchase Agreement”),
pursuant to which Sorrento agreed to sell and transfer to Scilex and Scilex agreed to purchase and acquire the Purchased Securities (as
defined therein); and
WHEREAS, in connection
with the closing of the Scilex Stock Purchase Agreement and in furtherance of the Transactions, Sorrento and Oramed desire to terminate
in all respects the Oramed Stock Purchase Agreement effective upon the closing of the Transactions, and to deliver mutual full, irrevocable
and unconditional releases of any and all claims and causes of action, including, without limitation, claims and causes of action relating
to or arising from or in connection with the Stock Purchase Agreement (and related documents) effective upon the closing of the Transactions.
NOW, THEREFORE, in
consideration of the mutual agreements contained herein, and good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
Section 1.
Termination of the Oramed Stock Purchase Agreement. Pursuant to Section 7(a) of the Oramed Stock Purchase Agreement,
effective upon the closing of the Transactions, each of Sorrento and Oramed hereby consents to the termination of the Oramed Stock Purchase
Agreement, all of the other Transaction Documents (as defined in the Oramed Stock Purchase Agreement) and the transactions contemplated
by the Oramed Stock Purchase Agreement and such other Transactions Documents, and acknowledges and agrees that the Oramed Stock Purchase
Agreement and all of the other Transaction Documents are of no further force and effect and each of the Oramed Stock Purchase Agreement,
the other Transaction Documents and the transactions contemplated by the Oramed Stock Purchase Agreement and such other Transactions Documents
are hereby terminated in all respects.
Section 2.
Mutual Releases.
(a) Effective upon the closing of the Transactions, each of Sorrento and Oramed, on behalf of itself and its predecessors, successors,
affiliates, heirs, administrators, executors, assigns and each of their respective officers, directors, partners, managers, members, financial
advisors, accountants, actuaries, shareholders, agents, attorneys, representatives, employees, direct and indirect parent entities, subsidiaries,
heirs, administrators, and executors and with respect to Sorrento, its estate and any trustee or other estate representative appointed
in the Chapter 11 Case or any successor case (collectively, and whether current or former, in each case in his, her, or its capacity as
such, the “Releasing Parties”), do hereby irrevocably and unconditionally release and discharge the other Party hereto
and such other Party’s predecessors, successors, affiliates, heirs, administrators, executors, assigns and each of their respective
officers, directors, partners, managers, members, financial advisors, accountants, actuaries, shareholders, agents, attorneys, representatives,
employees, direct and indirect parent entities, subsidiaries, heirs, administrators, and executors (collectively, and whether current
or former, in each case in his, her, or its capacity as such, the “Released Parties”), and each of them, of and from
any and all actions, suits, causes of action, contracts, debts, sums of money, controversies, claims, demands, liabilities, losses, judgments,
costs, attorney’s fees, damages and expenses, in each case of any kind whatsoever, whether in law, equity or otherwise, known or
unknown, actual or contingent, mature or unmatured, disputed or undisputed, accrued or not accrued, foreseen or unforeseen, then existing
or thereafter arising, in law, at equity or otherwise, whether individual, class, direct or derivative in nature, whether for tort, contract,
negligence, gross negligence, strict liability, contribution, subrogation, respondiat superior, breach of fiduciary duty, recharacterization,
subordination, violations of federal or state securities laws, rules or regulations, or otherwise, based, in whole or in part, on any
act, omission, transaction, event or other occurrence or circumstances (each, a “Claim” and collectively, “Claims”)
taking place on or before the date hereof which any of the Releasing Parties may now have or ever has had, prior to and including the
date hereof through, including, without limitation, any Claims relating to or arising in connection with the Oramed Stock Purchase Agreement
and the other Transaction Documents (as defined in the Oramed Stock Purchase Agreement), and the Breakup Fee and Expense Reimbursement
(each as defined in the Oramed Stock Purchase Agreement).
(b) Each Party, on its own
behalf and on behalf of its respective Releasing Parties, covenants not to directly or indirectly sue, participate in any suit (unless
lawfully compelled to do so by service with a subpoena or other legal process, demand, or order), or threaten to sue, or otherwise assert
any Claim or initiate any other action, arbitration, or proceeding, or in any other way assist others in any action, arbitration, or
proceeding (unless lawfully compelled to do so by service with a subpoena or other legal process, demand, or order), of any kind (including,
without limitation, lawsuits, arbitrations, administrative proceedings, proceedings before any government body, complaints, or appeals),
against any Released Party concerning, relating to, or arising from any of the Claims.
(c) Each Party (on behalf of itself and its respective Releasing Parties) hereby: (i) acknowledges a familiarity with Section 1542
of the Civil Code of the State of California, which provides as set forth below this Section 2(c); (ii) recognizes that it may
have some claim, demand, or cause of action against the other Party or any of such other Party’s respective Released Parties of
which it (or its respective Releasing Parties) is unaware and unsuspecting, and which it is (or its respective Releasing Parties are)
giving up by signing this Agreement; and (iii) hereby expressly waives and relinquishes every right or benefit which he, she, or it has
under Section 1542 of the Civil Code of the State of California, and any similar statute under any other state or federal law, principle
of common law, or international or foreign law, to the fullest extent that such right or benefit may lawfully be waived, regardless
of whether such Party (or any its respective Releasing Parties) is aware of or suspects such Claims at the time such Party executes this
Agreement or whether it later discovers Claims that may be different than, or in addition to, those that such Party (or any of its respective
Releasing Parties) now knows or believes to exist regarding the subject matter of the release provided in Section 2(a).
“A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
(d) Notwithstanding anything in this Agreement to the contrary, (i) Sorrento’s obligations under that certain Senior Secured,
Super-Priority Debtor-in-Possession Loan and Security Agreement, by and among Oramed on the one hand, and Sorrento and Scilex on the other
hand, dated as of August 8, 2023 (the “Senior DIP”), any other definitive agreements entered into in connection therewith
and ancillary thereto and the Order (I) Authorizing the Debtors to (A) Obtain Replacement Senior Secured Superpriority Postpetition
Financing and (B) Use Cash Collateral, (II) Granting Liens and Providing Claims with Superpriority Administrative Expense Status, (III)
Modifying the Automatic Stay, (IV) Granting Stalking Horse Protections and (V) Granting Related Relief [Docket No. 1184] shall not
be released or discharged pursuant to this Agreement, and (ii) the terms of this Agreement shall not, and shall not be construed to, limit
(I) the terms and scope of the releases provided in Paragraphs 14, 17, and 20 of the Approval Order or (II) the terms of the that certain
Assignment, Assumption and Release Agreement entered into on the date hereof by Scilex, Oramed and Sorrento, including any release by
either of the Parties provided therein.
Section 3.
Miscellaneous.
(a) Representations of the Parties. Each Party represents and warrants to the other that: (i) it has duly executed and delivered
this Agreement and it has all requisite corporate power and authority to execute this Agreement; (ii) its entrance into this Agreement
has been duly authorized by all necessary corporate action on the part of such Party; and (iii) this
Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms.
(i) Public Announcements. Each of the Parties may make any filings or public announcement it reasonably deems necessary in order
to comply with the requirements of any applicable Law, including, without limitation, the filing by any of the Parties of any Form 8-K,
Schedule 13G or Schedule 13G/A, Schedule 13D or Schedule 13D/A, Form 3, Form 4 or other appropriate filings with the SEC. Except as a
Party reasonably deems necessary to comply with the requirements of any applicable Law, no Party may issue any press release or make any
other public announcement relating to the subject matter of this Agreement or the Transactions contemplated hereby without the prior written
consent of the other Party, which shall not be unreasonably withheld, conditioned or delayed.
(b) Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York applicable
to contracts made and to be performed entirely within such State. All actions and proceedings arising out of or relating to this Agreement
shall be heard and determined exclusively in the United States Bankruptcy Court for the Southern District of Texas, and the Parties hereby
irrevocably submit to the exclusive jurisdiction of such court in any such action or proceeding and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or proceeding; provided, however, that, if the Bankruptcy Case is closed,
any action, claim, suit or proceeding arising out of, based upon, or relating to this Agreement or the transactions contemplated herby
shall be heard and determined exclusively in any state or federal court located in New York County, New York. Each Party agrees that a
final, non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. Each Party hereto irrevocably waives any objection, including any objection to
the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any
action or proceeding in such jurisdiction in respect of this Agreement or any other document related hereto. EACH PARTY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(c) Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.
Upon a determination that any term or other provision of this Agreement is invalid, illegal or incapable of being enforced, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible.
(d) Mutual
Drafting. The Parties participated jointly in the negotiation and drafting of this Agreement and the language used in this Agreement
shall be deemed to be the language chosen by the Parties to express their mutual intent. If an ambiguity or question of intent or interpretation
arises, then this Agreement will accordingly be construed as drafted jointly by the Parties, and no presumption or burden of proof will
arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
(e)
Headings. The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each
of the Parties including, without limitation, with respect to Sorrento, any trustee or other estate representative appointed in the Chapter
11 Case or any successor case.
(g)
Counterparts. This Agreement may be executed with counterpart signature pages or in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterpart signature pages or counterparts
of this Agreement may be executed and delivered by electronic means (including in .pdf format sent by electronic mail) and other electronic
signatures, and the receiving party may rely on the receipt of such document so executed and delivered by electronic means as if the
original had been received.
[Signature Pages Follow]
IN WITNESS WHEREOF,
each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.
|
SORRENTO THERAPEUTICS, INC. |
|
|
|
By: |
/s/ Moshin Y. Meghji |
|
|
Name: |
Moshin Y. Meghji |
|
|
Title: |
Chief Restructuring Officer |
|
ORAMED PHARMACEUTICALS, INC. |
|
|
|
By: |
/s/ Nadav Kidron |
|
|
Name: |
Nadav Kidron |
|
|
Title: |
President and Chief Executive Officer |
|
ORAMED PHARMACEUTICALS, INC. |
|
|
|
By: |
/s/ Josh Hexter |
|
|
Name: |
Josh Hexter |
|
|
Title: |
Chief Business and Operating Officer |
[Signature Page to Mutual Termination and Release
Agreement]
Exhibit 99.1
Oramed Announces $101,875,000 Short-Term Senior Secured Note Transaction
with Scilex Holding Company
| ● | 18-month loan with interest rate of SOFR plus 8.5% |
| ● | Oramed receives warrants to purchase up to 17 million shares of Scilex common stock |
| ● | The Senior Secured Note with Scilex replaces Oramed’s previously announced Stock Purchase Agreement and DIP Term Loan
with Sorrento Therapeutics |
NEW YORK, September 21, 2023 – Oramed
Pharmaceuticals Inc. (Nasdaq/TASE: ORMP), today announced that on September 21, 2023, Oramed and Scilex Holding Company (Nasdaq: SCLX)
(“Scilex”) entered into a Securities Purchase Agreement pursuant to which Scilex issued a Senior Secured Promissory Note (the
“Note”) to Oramed. The Note is the culmination of Scilex’s assumption of Sorrento Therapeutics Inc.’s (“Sorrento”)
approximately $100 million senior secured Debtor In Possession (“DIP”) term loan facility with Oramed. Oramed previously announced
the execution of term sheets relating to the Note on September 13, 2023.
The issuance of the Note is part of a series of
mutually beneficial transactions agreed upon by Oramed, Scilex and Sorrento, whereby (i) Sorrento and Oramed mutually terminated a previously
announced Stock Purchase Agreement (the “Sorrento SPA”) between Oramed and Sorrento for the sale of Sorrento’s equity
interests in Scilex to Oramed, which termination includes a release of claims by each of the parties relating to the Sorrento SPA, (ii)
Scilex was declared the winning bidder for the purchase of all of the Scilex common stock, preferred stock and warrants owned by Sorrento
for an aggregate purchase price of $110 million (which includes assumption of the DIP term loan facility); and Scilex and Sorrento entered
into a definitive purchase agreement with respect to such purchase, and (iii) Scilex assumed all of Sorrento’s obligations as borrower
under the DIP term loan facility, upon which assumption the DIP term loan facility was amended, restated and replaced with the Note. The
U.S. Bankruptcy Court entered a final order approving the transactions following a hearing before the court on September 12, 2023.
In tandem with the Note, Scilex has issued to
Oramed new warrants to purchase an aggregate of up to 13 million shares of Scilex common stock at an exercise price of $0.01 per share
and each with restrictions on exercisability, of which, warrants to purchase up to 8.5 million shares are subject to certain vesting restrictions.
In addition, Scilex transferred to Oramed warrants to purchase 4 million shares of Scilex common stock at an exercise price of $11.50
per share that Scilex purchased from Sorrento. Oramed has received customary registration rights with respect to the shares of Scilex
common stock underlying these warrants.
The primary terms of the Note include, among others:
| ● | An
initial principal balance of $101,875,000.00; |
| ● | A
senior lien for Oramed on substantially all assets of Scilex and its subsidiaries, subject
to certain exclusions; |
| ● | Certain
mandatory prepayment obligations tied to future equity or debt financings of Scilex (subject
to certain limitations specified in the Note); |
| ● | Interest
rate per annum is equal to the SOFR plus 8.5% (and subject to a SOFR floor of 4.0%); |
| ● | Repayment
of principal in installments will commence on December 21, 2023, with a fixed portion of
the principal balance required to be repaid in three month increments thereafter. If the
Note is not repaid in full on or prior to March 21, 2024, an exit fee equal to $3,056,250.00
becomes payable upon repayment of the Note in full; |
| ● | $2.91
million of expense reimbursement for Oramed; and |
| ● | The
right for Oramed to designate an observer to Scilex’s Board of Directors (and the boards
or similar governing bodies of its subsidiaries). The right of Oramed to receive certain
customary information relating to Scilex. |
“In our opinion, Scilex has great intrinsic
value that is not currently realized, based on the company’s growth trajectory, commercial portfolio and infrastructure, and its
robust clinical stage pipeline,” stated Oramed CEO Nadav Kidron. “We believe that this Senior Secured Note, along with the
warrant package, is a favorable outcome to Oramed while also supporting Scilex in executing on its growth opportunities.”
Proskauer Rose LLP served as legal advisor and
H.C. Wainwright & Co. served as financial advisor to Oramed in connection with these transactions.
About Oramed Pharmaceuticals
Oramed Pharmaceuticals (Nasdaq/TASE: ORMP) is
a platform technology pioneer in the field of oral delivery solutions for drugs currently delivered via injection. The company’s
novel Protein Oral Delivery (POD™) technology is designed to protect drug integrity and increase absorption. Oramed has offices
in the United States and Israel.
For more information, please visit www.oramed.com.
Forward-Looking Statements
This
press release contains forward-looking statements, which may generally be identified by the use of the words “anticipates,”
“expects,” “intends,” “plans,” “should,” “could,” “would,” “may,”
“will,” “believes,” “estimates,” “potential,” “target,” or “continue”
and variations or similar expressions and include statements about the benefits of the Securities Purchase Agreement and related transactions
with Scilex and Sorrento, the value of Scilex, its growth trajectory, commercial portfolio and infrastructure and clinical stage pipeline.
These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties
that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties
include, but are not limited to, risks and uncertainties discussed in the Company’s most recent annual or quarterly report and detailed
from time to time in the Company’s other filings with the Securities and Exchange Commission, which factors are incorporated herein
by reference and the following factors: the risk that Scilex may be unable to service the debt provided by the Note and the impact
of the Note obligations on Scilex’s liquidity; risks associated with the Company’s ability to recover the proceeds and/or
collateral under the Note and related agreements; the possibility that the anticipated benefits of the transaction with Scilex and Sorrento
are not realized when expected or at all, including as a result of the impact of, or problems arising from, the ability of Scilex to repay
the Note and the ability of the Company to realize the value of the warrants; risks associated with the fluctuating market price and liquidity
of the Scilex common stock underlying the warrants; exposure to potential litigation in connection with the transactions, all of which
could cause the actual results or performance of Oramed to differ materially from those contemplated in such forward-looking statements.
These forward-looking statements speak only as of the date hereof. Oramed undertakes no obligation to update any of these forward-looking
statements to reflect events or circumstances after the date hereof or to reflect actual outcomes, unless required by law.
Company
Contact:
Zach Herschfus
+1-844-9-ORAMED
zach@oramed.com
v3.23.3
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 2 such as Street or Suite number
+ References
+ Details
Name: |
dei_EntityAddressAddressLine2 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTitle of a 12(b) registered security.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b
+ Details
Name: |
dei_Security12bTitle |
Namespace Prefix: |
dei_ |
Data Type: |
dei:securityTitleItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the Exchange on which a security is registered.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection d1-1
+ Details
Name: |
dei_SecurityExchangeName |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarExchangeCodeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
+ References
+ Details
Name: |
dei_TradingSymbol |
Namespace Prefix: |
dei_ |
Data Type: |
dei:tradingSymbolItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
Oramed Pharmaceuticals (NASDAQ:ORMP)
Historical Stock Chart
From Apr 2024 to May 2024
Oramed Pharmaceuticals (NASDAQ:ORMP)
Historical Stock Chart
From May 2023 to May 2024