The shares of Series A preferred stock will be convertible, at the option of Arena, into shares of common stock of the Company at a conversion price generally equal to 75% of the public offering price for the common stock or units of common stock and warrants, as the case may be, offered to the Public Offering, except that, with respect to any shares of Series A preferred stock that are outstanding as of the 18 month anniversary of the closing date of the Arena Purchase Agreement (or earlier under certain circumstances), the conversion price will be, if lower, 85% of the market price of the shares of common stock of the Company as of such anniversary date (or such earlier date) (but in no event less than $0.10 per share, subject to adjustment for reverse stock splits and the like). The shares of Series A preferred stock will carry a 12% cumulative dividend and will be redeemable at the Company’s option, subject to certain conditions, provided that the Company pays a redemption premium of 25%. In the event of a liquidation, dissolution or winding-up of the Company, the holders of the Series A preferred stock will be entitled to receive the stated value of the shares of $5,500,000, plus any accrued and unpaid dividends, before any distribution is made to the holders of common stock or other junior securities. Except as required by law, the holders of the Series A preferred stock will not have any voting rights.

The Arena Note will provide for an 18 month maturity date (subject to extension in the event any shares of Series A preferred stock are outstanding as of such date) and interest at the rate of 12% per annum. The principal amount of the Arena Note will be convertible into shares of Series A preferred stock of the Company at a ratio of one share of Series A preferred stock for each dollar of indebtedness converted. The Company will have the right to prepay the Arena Note, subject to certain conditions, provided that the Company pays a 30% prepayment premium and concurrently redeems any outstanding shares of Series A preferred stock. The payment of the Arena Note will be secured by the grant by the Company of a security interest in its tangible and intangible assets.

In connection with the Arena Purchase Agreement, the Company will enter into a separate registration rights agreement with Arena at closing to which the Company will agree to undertake to file a registration statement with the SEC to register the resale of the shares underlying the Series A preferred stock and the Arena Warrant. Arena has agreed to enter into a lock-up agreement with the representative of the underwriters of the Public Offering to which it will agree that it will not sell publicly any shares of common stock of the Company for a period of 135 days following the Public Offering unless the closing price of the shares of common stock of the Company equals or exceeds, for a period of five consecutive trading days, 150% of the public offering price for the securities offered to the Public Offering. If the Company fails to file the registration statement with the SEC within 50 days following the Public Offering or have it declared effective by the SEC within 135 days following the Public Offering, or if the Company fails to maintain the effectiveness of the registration statement until all of such shares of common stock have been sold or are otherwise able to be sold to Rue 144 under the Securities Act of 1933, as amended, without any volume or manner of sale restrictions, then the Company will be obligated to pay to Arena liquidated damages equal to 1% per month of the aggregate amount paid by Arena for its securities (subject to an 8% cap), until such events are satisfied.

Effective as of July 26, 2019, the Company, John M. Desmarais, a director and principal stockholder of the Company, and Tuxis Trust, a trust for which Mr. Desmarais and his wife serve as trustees and which was established for the benefit of his immediate family, agreed that promissory notes held by Mr. Desmarais and Tuxis Trust in the outstanding principal amounts of $175,000 and $500,000, respectively, will be exchanged for shares of common stock and warrants, as described below, in connection with the Public Offering. The exchange price for the indebtedness will be equal to 75% of the public offering price of the common stock or units of common stock and warrants, as the case may be, offered to the Public Offering (the “Desmarais/Tuxis Trust Exchange Price”). The number of shares of common stock issuable to the warrants to be issued to Mr. Desmarais and Tuxis Trust will be in the same ratio to the number of shares of common stock issued upon exchange of their indebtedness as the number of shares of common stock subject to the Public Warrants bears to the number of shares of common stock issued as part of the Public Offering units. The exercise price of the warrants to be issued to Mr. Desmarais and Tuxis Trust will be 125% of the Desmarais/Tuxis Trust Exchange Price and the term of the warrants will be the same term as the Public Warrants. Concurrently with the exchange, the exercise prices of outstanding warrants held by Mr. Desmarais and Tuxis Trust for the purchase of an aggregate of 1,377,842 shares of common stock of the Company will be reduced from between $1.50 and $4.00 per share to $0.75 per share and the expiration dates of such warrants will be extended from between December 31, 2019 and March 1, 2022 to December 31, 2023. The exchange agreements will be submitted for approval by the stockholders of the Company. In the event that such stockholder approval is not obtained prior to the Public Offering, then, in connection with the Public Offering, the promissory notes held by Mr. Desmarais and Tuxis Trust will be paid.

Between June 30, 2019 and July 22, 2019, the holders of $675,000 principal amount of indebtedness entered into agreements with the Company to which the parties agreed that the maturity of the promissory notes held by such holders will be extended to September 30, 2019 and that such notes will be exchanged for shares of common stock and warrants, as described below, in connection with the Public Offering. The exchange price for the indebtedness will be equal to the lesser of (i) 75% of the public offering price of the common stock or units of common stock and warrants, as the case may be, offered to the Public Offering or (ii) $0.60 per share (subject to adjustment for reverse stock splits and the like) (the “Other Indebtedness Exchange Price”). The number of shares of common stock issuable to the warrants to be issued to such holders will be equal to the number of shares of common stock issuable to them upon conversion of the principal amount of their respective notes. The exchange price of the warrants to be issued to such holders will be the lesser of (i) 125% of the Other Indebtedness Exchange Price or (ii) $0.80 per share (subject to adjustment for reverse stock splits and the like).

The foregoing description of the foregoing transactions does not purport to be complete and is qualified in its entirety by reference to the full text of the Arena Purchase Agreement, the Amended and Restated Exchange Agreement (Desmarais), the Amended and Restated Exchange Agreement (Tuxis Trust) and the Form of Exchange Agreement (other debtholders) (Exhibits 10.1 through 10.4 to this Current Report), which are incorporated herein by reference, and the forms of the Certificate of Designation of Preferences, Rights and Limitations of Series A 12% Convertible Preferred Stock, Original Issue Discount Senior Secured Convertible Promissory Note, Common Stock Purchase Warrant, Security Agreement and Registration Rights Agreement (attached as exhibits to the Arena Purchase Agreement), which are also incorporated herein by reference.

See Item 1.01 above.

(d) Exhibits.

10.1 Securities Purchase Agreement, dated as of July 26, 2019, between the Company and Arena Investors LP, including exhibits thereto.

10.2 Amended and Restated Exchange Agreement, dated as of July 26, 2019, between the Company and John M. Desmarais.

10.3 Amended and Restated Exchange Agreement, dated as of July 26, 2019, between the Company and Tuxis Trust.

10.4 Form of Exchange Agreement between the Company and the holders of an aggregate of $675,000 principal amount of indebtedness of the Company.

BioRestorative Therapies, Inc. Exhibit
EX-10.1 2 ex10_1.htm SECURITIES PURCHASE AGREEMENT,…
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About BIORESTORATIVE THERAPIES, INC. (OTCMKTS:BRTX)

BioRestorative Therapies, Inc. develops therapeutic products and medical therapies using cell and tissue protocols, involving adult (non-embryonic) stem cells. The Company offers human and plant stem cell derived cosmetic and skin care products. Its programs relate to the treatment of disc/spine disease and metabolic disorders and include Disc/Spine Program (brtxDISC) and Metabolic Program (ThermoStem). Its curved needle device (CND) is a needle system with a curved inner cannula to allow access to difficult-to-locate regions for the delivery or removal of fluids and other substances. The CND is intended to deliver stem cells and/or other therapeutic products or material to the interior of a human intervertebral disc, the spine region, or other areas of the body. The device relies on the use of pre-curved nested cannulae that allows the cells or material to be deposited in the posterior and lateral aspects of the disc to which direct access is not possible due to outlying structures.