EXCHANGE AGREEMENT (this “Agreement”), dated as of February 12, 2016, by and among Atrinsic, Inc. (the
“Company”) and each investor that is a signatory to this Agreement (together, the “Investors”).
Investor currently holds those secured convertible promissory notes as set forth below such Investor’s name on its signature page attached hereto (the “Investor Notes”).
B. The Company and the Investors desire to enter into this Agreement, pursuant to which, among other things, each Investor shall exchange (the
“Exchange”) the Investor Notes, and all accrued but unpaid interest thereon, for such number of warrants (the form of which warrant is attached as Exhibit A) to purchase shares of the Company’s Series B Preferred Stock, par
value $0.000001 per share (the “Series B Shares”), as set forth below such Investor’s name on its signature page attached hereto (the “Exchange Warrants”) in reliance upon the exemption from registration
provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).
C. The Company,
Protagenic Acquisition Corp. (“Acquisition Subsidiary”), a wholly-owned subsidiary of the Company, and Protagenic Therapeutics, Inc. (“PTI”) have entered into a Merger Agreement (the “Merger Agreement”)
whereby Acquisition Subsidiary shall merge with and into PTI with PTI remaining as the surviving entity after the merger, whereby the stockholders of PTI will receive Series B Shares, in exchange for all of the capital stock of PTI.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the Company and the Investors hereby
agree as follows:
1. EXCHANGE OF INVESTOR NOTES. Simultaneous with the Closing (as defined in the Merger Agreement), each
Investor shall, and the Company shall, pursuant to Section 3(a)(9) of the Securities Act, exchange the Investor Notes, and all accrued but unpaid interest thereon, for the Exchange Warrants, without the payment of any additional consideration
(the “Exchange”), as follows:
(a) In exchange for the Investor Notes, on the date hereof the Company shall record
the Exchange Warrants in the name of Strategic Bio Partners, LLC, the designee of the Investors, without need for the Investors to deliver or cause to be delivered to the Company the Investor Notes. Immediately upon the issuance of the Exchange
Warrants, the Investor Notes shall be cancelled.
(b) Other Documents. The Company and the Investors shall execute and/or
deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange.
(c) UCC Termination Statements. Each Investor on the date hereof shall file UCC
termination statements in all appropriate jurisdictions evidencing the termination of such Investor’s security interest in and to the assets of the Company.
2. REPRESENTATIONS AND WARRANTIES
(i) Investor Representations and Warranties. Each Investor hereby represents and warrants to the Company that, as of the date
hereof, such Investor is the sole owner of the Investor Notes set out on such Investor’s signature page and transfers and delivers to the Company valid title to the Investor Notes, free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances. Each Investor further represents and warrants that immediately upon the exchange of the Investor Notes that it no longer has any rights under the First Amended and Restated Security Agreement among the Company such
investor, each such dated as of December 18, 2014 and as subsequently amended, and it hereby relinquishes any such rights that it may otherwise have.
(ii) Company Representations and Warranties. The Company hereby represents and warrants to each Investor that, as of the date
Authorization of Transaction. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder and thereunder. The execution and delivery by the
Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Company. Specifically, the Exchange and the issuance of
the Exchange Warrants is duly authorized and upon issuance in accordance with the terms of this Agreement, the Exchange Warrants will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof. This Agreement has been duly and validly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against it in accordance with
Organization, Qualification and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate
power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.
Noncontravention. Neither the execution and delivery by the Company of this Agreement, nor the consummation by the Company of the transactions
contemplated hereby, will (a) conflict with or violate any provision of the articles or certificate of incorporation or bylaws of the Company, (b) require on the part of the Company any filing with, or permit, authorization, consent or
approval of, any governmental entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any person any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument
to which the Company is a party or by which either is bound or to which any of their assets are subject, (d) result in the imposition of any security interest upon any assets of the Company or (e) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company or any of their properties or assets.
(a) Disclosure of Transactions and Other Material Information. On or before 5:30 p.m., New York time, on or before the fourth
(4th) Business Day following the date of this Agreement, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by this Agreement in the form required by the Exchange Act and
attaching the form of this Agreement (including all attachments, the “8-K Filing”).
(b) Section 3(a)(9). The Company represents that the exchange of the Investor Notes for the Exchange Warrants is being made
in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act and agrees not to take any position contrary to this Section 3(b). For the purposes of Rule 144 of the Securities Act, the Company
acknowledges that the holding period of the Exchange Warrants may be tacked onto the holding period of the Investor Notes.
(a) Applicable Law; Venue.
(i) This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to
any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of New York.
(ii) Each party hereto (a) submits to the jurisdiction of any state or federal court sitting in the County of New York in the State of
New York in any action or proceeding arising out of or relating to this Agreement, (b) agrees that all claims in respect of such action or proceeding may be heard and determined in any such court, and (c) agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each party waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be
required of any other party with respect thereto.
(b) Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
(c) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
(d) Severability. In case any provision in or obligation
hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) Headings. Section headings herein are included herein for convenience of reference only and
shall not constitute a part hereof for any other purpose or be given any substantive effect.
[Signature Page Follows]
IN WITNESS WHEREOF, the Investors and the Company have caused their respective signature
pages to this Investor Note Exchange Agreement to be duly executed as of the date first written above.