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): January 7, 2016
ARNO THERAPEUTICS, INC.
(Exact name of registrant as specified in
its charter)
Delaware
(State or other jurisdiction of incorporation)
000-52153 |
52-2286452 |
(Commission File Number) |
(IRS Employer |
|
Identification No.) |
200 Route 31 North, Suite 104
Flemington, NJ 08822
(Address of principal executive offices
and Zip Code)
(862) 703-7170
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K 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-14(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.
Entry into a Material Definitive Agreement.
Stock Purchase Agreement
On January 12, 2016, Arno Therapeutics,
Inc. (the “Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with certain purchasers
identified therein (the “Purchasers”) pursuant to which the Company agreed to sell, and the Purchasers agreed to purchase,
an aggregate of 21,153,997 shares of the Company’s common stock (the “Shares”), at a purchase price of $0.35
per Share for an aggregate gross proceeds of approximately $7.4 million, including approximately $2.1 million from the automatic
conversion of outstanding promissory notes, as described below. The Purchase Agreement contains customary representations, warranties
and covenants by each of the Company and the Purchasers. The purchase and sale of the shares was completed on January 12, 2016.
The number of Shares sold pursuant to the
Purchase Agreement included an aggregate of 6,081,858 Shares that were issued upon the automatic conversion of the Company’s
6% Unsecured Convertible Promissory Notes (the “Notes”). The Notes were originally issued in the principal amount of
$2.1 million on October 21, 2015, and such principal amount and all accrued interest were converted into Shares. The terms of the
Notes were previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission
on October 26, 2015, which is incorporated herein by reference.
The Purchasers included
several officers and directors of the Company, or entities affiliated with officers and directors of the Company: Arie S.
Belldegrun, M.D. (including entities affiliated with Dr. Belldegrun), the Company’s Chairman of the Board (purchased
Shares with an aggregate purchase price of $0.75 million, including Shares issuable upon conversion of the Notes); Commercial
Street Capital, LLC ($1.0 million, including Shares issuable upon conversion of Notes), an entity with which Steven B.
Ruchefsky, a director of the Company, is affiliated; entities affiliated with Pontifax (purchased $0.5 million of Shares, all
issuable upon conversion of Notes), of which Tomer Kariv, a director of the Company, is affiliated; David M. Tanen, a
director of the Company (purchased $125,000 of Shares, all issuable upon conversion of Notes); and Alexander Zukiwski
(purchased $50,000 of Shares, all issuable upon conversion of Notes), the Company’s Chief Executive Officer. All such
officers and directors made such investment on the same terms as all other Purchasers under the Purchase Agreement.
The foregoing summary of the Purchase Agreement
is qualified in its entirety by reference to the complete form of agreement, a copy of which is attached hereto as Exhibit 10.1
and incorporated herein by reference.
Registration Rights Agreement
In connection with the entry into the Purchase
Agreement, and as contemplated thereby, on January 12, 2016, the Company entered into a Registration Rights Agreement with the
Purchasers. Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file within 60 days of the date of
the agreement, a registration statement under the Securities Act covering the resale of the Shares (the “Registration Statement”),
and to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter, but not
later than 120 days following the date of the Registration Rights Agreement (the “Effectiveness Date”). If the Company
does not file the Registration Statement by the Filing Date or obtain its effectiveness by the Effectiveness Date, then the Company
is required to pay liquidated damages to the Purchasers in an amount equal to 1% of the aggregate purchase price paid by such Purchaser
for the Shares per month until the Registration Statement is filed or declared effective, as applicable, subject to a maximum of
10% of the aggregate purchase price paid by each Purchaser for the Units. The Company is required to maintain the effectiveness
of the Registration Statement until all of the shares covered thereby are sold or may be sold pursuant to Rule 144 under the Securities
Act without volume or manner-of-sale restrictions and without the requirement that the Company be in compliance with the current
public information requirements of Rule 144.
The foregoing summary of the Registration
Rights Agreement is qualified in its entirety by reference to the complete form of such agreement, a copy of which is attached
hereto as Exhibit 10.2 and incorporated herein by reference.
Item 3.02. Unregistered
Sales of Equity Securities.
The information set forth under Item 1.01
is incorporated herein by reference. The offer and sale of the Shares pursuant to the terms of the Purchase Agreement constituted
a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended, in accordance with Regulation D promulgated
thereunder. The Shares offered and sold pursuant to the Purchase Agreement have not been registered under the Securities
Act of 1933, as amended or state securities laws and may not be offered or sold in the United States absent registration with the
Securities and Exchange Commission or an applicable exemption from such registration requirements. As described under Item 1.01,
above, the Company has agreed to file a registration statement with the Commission covering the resale of the Shares.
Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
2005 Stock Option Plan
On January 7, 2016, the Board of Directors
of the Company extended the expiration date of the Company’s 2005 Stock Option Plan to March 31, 2016, and ratified and confirmed
all of its terms and conditions, as well as all grants previously made pursuant thereto.
Appointment of Director
Effective January 12, 2016, Jay Moorin was
appointed as a director of the Company. Since 1998, Mr. Moorin
has served as a founding general partner of ProQuest Investments, a healthcare venture capital firm. From 1991 to 1998, Mr. Moorin
served as president and chief executive officer of Magainin Pharmaceuticals Inc., a publicly-traded biopharmaceutical company,
and also served as chairman of its Board of Directors from 1996 to 1998. He is also currently Chairman of the Board of Eagle Pharmaceuticals,
Inc., a publicly-traded specialty pharmaceutical company, serves on the Board of Directors of a private radiation therapy company
and serves as a trustee of the Equinox Funds Trust. Previously, Mr. Moorin served as managing director of healthcare banking
at Bear Stearns & Co. Inc. and vice president of marketing and business development at a division of the ER
Squibb Pharmaceutical Company. Mr. Moorin held the position of adjunct senior fellow of the Leonard Davis Institute of Health
Economics at the University of Pennsylvania from 1997 to 2012. Previously, Mr. Moorin served on the board of directors of
numerous public and private healthcare companies. Mr. Moorin
holds a B.A. in economics from the University of Michigan.
Item 8.01. Other Events.
After giving effect to the issuances of
shares of the Company’s common stock pursuant to the Purchase Agreement, as of the close of business on January 12, 2016,
the Company has approximately 41,562,613 shares of its common stock issued and outstanding.
Item 9.01. Financial
Statements and Exhibits.
(d) Exhibits. The following exhibits are filed herewith.
Exhibit No. |
|
Description |
10.1 |
|
Form of Stock Purchase Agreement dated January 12, 2016, among the Company and the Purchasers named therein. |
10.2 |
|
Form of Registration Rights Agreement dated January 12, 2016, among the Company and the Holders identified therein. |
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.
Date: January 13, 2016
|
Arno Therapeutics, Inc. |
|
|
|
By: /s/ Alexander Zukiwski |
|
Alexander Zukiwski, M.D. |
|
Chief Executive Officer |
Exhibit 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase
Agreement (this “Agreement”) is dated as of January 12, 2016, between ARNO THERAPEUTICS, INC., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, subject
to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder, the Company desires to offer, issue
and sell to the Purchasers (the “Offering”), and each of the Purchasers, severally and not jointly, desires
to purchase from the Company, a number of shares (each, a “Share,” and collectively, the “Shares”)
of the Company’s Common Stock.
NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Additional
Purchaser” shall have the meaning ascribed to such term in Section 2.2(b).
“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.
“Agreement”
shall have the meaning ascribed to such term in the recital to this Agreement.
“BHCA” shall
have the meaning ascribed to such term in Section 3.1(nn).
“Board of Directors”
means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are expressly authorized or required by law or other governmental
action to close.
“Closing”
means the Initial Closing and the Subsequent Closing, as applicable.
“Closing
Date” means the Initial Closing Date and the Subsequent Closing Date, as applicable.
“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”
shall have the meaning ascribed to such term in the recital to this Agreement.
“Company
Counsel” means Fredrikson & Byron, P.A., with offices located at 200 South Sixth Street, Suite 4000, Minneapolis,
Minnesota 55402.
“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(jj).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(jj).
“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(nn).
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Initial
Closing” means the first Closing of the purchase and sale of the Securities pursuant to Section 2.2(a) hereof.
“Initial
Closing Date” means the date of the Initial Closing, which shall be on the Trading Day on which all of the Transaction
Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’
obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have
been satisfied or waived, but in no event later than the third Trading Day following the date hereof.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).
“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.
“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(m).
“Minimum
Offering Amount” shall have the meaning ascribed to such term in Section 2.2(a).
“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(oo).
“Note(s)”
means those certain series of related Unsecured Convertible Promissory Notes in the aggregate principal amount of $2,100,000 issued
by the Company pursuant to the terms and conditions of that certain Convertible Note Purchase Agreement dated October 21, 2015,
among the Company and the purchasers identified therein.
“Note
Conversion Shares” means the Shares being issued and sold hereunder upon the automatic conversion of the Notes.
“OFAC”
shall have the meaning ascribed to such term in Section 3.1(ll).
“Offering”
shall have the meaning ascribed to such term in the recital to this Agreement.
“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.
“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(jj).
“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.
“Purchase
Price” means $0.35, subject to appropriate adjustment for stock splits, combinations and similar events effected following
the date hereof, and as otherwise described in Section 5.15.
“Purchaser(s)”
shall have the meaning ascribed to such term in the recital to this Agreement.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Purchaser
Questionnaire” means the questionnaire to be completed by each Purchaser in the form of Exhibit C attached hereto.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of Exhibit D attached hereto.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Shares by each Purchaser as provided for in the Registration Rights Agreement.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule
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
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share(s)”
shall have the meaning ascribed to such term in the recital to this Agreement.
“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 the location and/or reservation of borrowable shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Subsequent
Closing” means the Closing (if any) conducted following the Initial Closing and in accordance with Section 2.2(b)
hereof.
“Subsequent
Closing Date” means the date of the Subsequent Closing, which shall be on the Trading Day on which all of the Transaction
Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’
obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been
satisfied or waived.
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading or quotation, as the case may be.
“Trading
Market” means any of the following markets, exchanges or automated quotation systems on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange, OTC Markets or the OTC Bulletin Board (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Registration Rights Agreement, all exhibits and schedules thereto and hereto and
any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means American Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 10150 Mallard Creek Road
Suite 307, Charlotte, NC 28262 and a facsimile number of (718) 765-8742, and any successor transfer agent of the Company.
“VWAP”
means the dollar volume-weighted average price for the Common Stock on its Trading Market during the period beginning at 9:30:01
a.m., New York City time (or such other time as the Trading Market publicly announces is the official open of trading), and ending
at 4:00:00 p.m., New York City time (or such other time as the Trading Market publicly announces is the official close of trading),
as reported by Bloomberg, L.P. through its “Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security
during the period beginning at 9:30:01 a.m., New York City time (or such other time as the Trading Market publicly announces is
the official open of trading), and ending at 4:00:00 p.m., New York City Time (or such other time as the Trading Market publicly
announces is the official close of trading), as reported by Bloomberg, L.P., or, if no dollar volume-weighted average price is
reported for such security by Bloomberg, L.P. for such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). If the VWAP cannot be calculated for the Common Stock on a particular date on any of
the foregoing basis, the VWAP of the Common Stock shall be the fair market value of the Common Stock on such date as determined
by the Board of Directors in good faith.
ARTICLE II.
PURCHASE AND SALE
2.1 Purchase
and Sale of Shares. Subject to the conditions to closing set forth herein, at the Closing, the Company shall issue and sell
to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, such number of Shares equal
to the quotient resulting from dividing (i) the Subscription Amount for such Purchaser, as indicated below such Purchaser’s
name on the signature page of this Agreement by (ii) the Purchase Price, rounded down to the nearest whole Share.
2.2 Closings.
(a) Initial
Closing. On the Initial 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, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, a number of Shares resulting in a minimum of $3,500,000 in aggregate Subscription Amount, excluding
the conversion of the Notes (the “Minimum Offering Amount”). Each Purchaser shall deliver to the Company, via
wire transfer or certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth
on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser such number of Shares
as set forth on Exhibit A hereto. Notwithstanding the foregoing, Purchasers acquiring Note Conversion Shares by way of the
conversion of a Note shall, in lieu of immediately available funds, satisfy the payment of their respective Subscription Amount
by delivery to the Company of the original Note at such Closing. The Company and each Purchaser purchasing Shares by conversion
of a Note agree that the conversion of each such Note upon the Closing in accordance with the terms of this Agreement into the
number of Shares set forth opposite the applicable Purchaser’s name on Exhibit A shall constitute the full and complete
satisfaction of the Company’s obligations under each such Note. Upon satisfaction of the covenants and conditions set forth
in Sections 2.3 and 2.4, the Initial Closing shall occur remotely by facsimile transmission or other electronic means, or
as the parties may otherwise mutually agree.
(b) Subsequent
Closings. Following the Initial Closing Date and for a period of thirty (30) days thereafter, the Company may sell, on the
same terms and conditions as those contained in this Agreement, additional Shares to one or more additional Purchasers (each such
additional purchaser, an “Additional Purchaser”). Each Additional Purchaser that subscribes to the Subsequent
Closing shall be required to become a party to this Agreement and the Registration Rights Agreement by executing and delivering
a counterpart signature page thereto, and shall otherwise be deemed a “Purchaser” for purposes of this Agreement.
2.3 Deliveries.
(a) On
or prior to each Closing Date, the Company shall deliver or cause to be delivered to each applicable Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a legal
opinion of Company Counsel, substantially in the form of Exhibit B attached hereto;
(iii) a
certificate or certificates, registered in such name or names as the Purchaser may designate, representing the Shares purchased
by the Purchaser;
(iv) the
Registration Rights Agreement duly executed by the Company;
(v) a certificate
of the Secretary of the Company, dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors
of the Company approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of
the Shares, (b) certifying the current versions of the certificate of incorporation, as amended and by-laws of the Company
and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on
behalf of the Company; and
(vi) a certificate
of the Chief Executive Officer or Chief Financial Officer of the Company, dated as of the Closing Date, certifying to the fulfillment
of the conditions specified in Sections 2.4(b)(i), (ii), (iv), (v) and (vii).
(b) On
or prior to each Closing Date, each applicable Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) such
Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company;
(iii) with
respect to any Purchaser holding a Note, such Purchaser’s original Note;
(iv) a Purchaser
Questionnaire completed and duly executed by such Purchaser; and
(v) the
Registration Rights Agreement duly executed by such Purchaser.
2.4 Closing Conditions.
(a) The
obligations of the Company hereunder in connection with a Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed;
(iii) the
delivery by each Purchaser of the items set forth in Section 2.32.3(a)(vi) of this Agreement; and
(iv) the
Company shall have obtained all third party consents necessary to enter into this Agreement and consummate the transactions contemplated
hereby.
(b) The
respective obligations of the Purchasers hereunder in connection with a Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects when made and on such 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 as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to such Closing Date shall have been
performed;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) the
Company shall have obtained all third party consents necessary to enter into this Agreement and consummate the transactions contemplated
hereby;
(vi) the
Purchasers shall have been provided with evidence, reasonably satisfactory to them, that the Company’s outstanding obligations
under the Debentures shall have been fully satisfied, whether by the conversion into shares of Common Stock or otherwise;
(vii) the
Minimum Offering Amount of the Shares shall have been sold at the Purchase Price; and
(viii) 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 such Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth 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, the Company hereby makes the following representations and warranties to each Purchaser:
(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 and any restrictions
on issuing dividends to the Company, 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.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the 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, prospects
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”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. 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: (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.
(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 Shares 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 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
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (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
and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchasers herein, of
any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could 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 or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4 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 Shares
for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Issuance
of the Shares. The Shares have been 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 or imposed by applicable securities laws.
(g) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act. Except 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 a result of the purchase and sale of the Shares, 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 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. Except as set forth on Schedule 3.1(g), the issuance
and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in 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 Shares. 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, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, 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 Company has never been an issuer subject to Rule 144(i) under the Securities Act. 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 specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (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 liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (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. Except as stated in the SEC Reports, the Company does not have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Shares contemplated by this Agreement, 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, 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 1 Trading Day prior to the date that this representation is made.
(j) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation 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”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares
or (ii) could, if there were an unfavorable decision, 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 or a claim of breach of fiduciary duty. 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 imminent 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 could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Except as otherwise described in the SEC Reports, 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 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 to which it is a party
or by which it or any of its properties is bound (whether or not such default or violation has been waived), (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) 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 could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
(n) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal 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) Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) 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.
(o) 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 as described in the SEC Reports as necessary or required for use in connection with their respective businesses
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
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 could 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 could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p) 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.
(q) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, 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 $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.
(r) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002 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 and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient 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.
(s) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries 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 Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents.
(t) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Trading Market.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, 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.
(v) Registration
Rights. Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company or any Subsidiaries, except for such rights which have been satisfied by the Company
pursuant to registration statements previously filed under the Securities Act.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(g) of the Exchange Act. The Company has
not, in the 12 months preceding the date hereof, received 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 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.
(x) 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 Purchasers as a result of the Purchasers 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 Shares and the Purchasers’ ownership of the Shares.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.
All of the disclosure furnished by or on behalf of the Company to the Purchasers 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 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 light of the circumstances under which they were made, not misleading. The Company acknowledges
and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ 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 Shares 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 shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.
(aa) Solvency.
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 sale of the Shares 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, but excluding milestones and contingent payments that may be payable pursuant to material agreement
to which the Company is a party and which have been filed as exhibits to the SEC Reports) 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 jurisdiction
within one year from the Closing Date. Neither the Company nor any Subsidiary has any Indebtedness, except as disclosed in the
SEC Reports. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money
or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties,
endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected
in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.
(bb) 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 by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves
have been set aside on the books of the Company and (iii) has set aside on its books provision reasonably adequate for the payment
of all material taxes 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.
(cc) No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares
by any form of general solicitation or general advertising. The Company has offered the Shares for sale only to the Purchasers
and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(dd) Foreign
Corrupt Practices. 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 law or (iv) violated in any material respect any provision
of FCPA.
(ee) Accountants.
The Company’s accounting firm is identified in its Annual Report on Form 10-K for the year ended December 31, 2014. 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) will 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, 2015.
(ff) No
Disagreements with Accountants. There are no disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants formerly or presently employed by the Company and the Company is current
with respect to any fees owed to its accountants which could affect the Company’s ability to perform any of its obligations
under any of the Transaction Documents.
(gg) Acknowledgment
Regarding Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely
on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(hh) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(l) and 4.10 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any 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 Shares for any
specified term, (ii) past or future open market or other transactions by any 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) any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock and (iv) each 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) one or more Purchasers may engage in hedging activities at various times during the period that the Shares, 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.
(ii) 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 Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company.
(jj) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company.
(kk) Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option 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. 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.
(ll) 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”).
(mm) 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 Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.
(nn) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(oo) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in 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, suit 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.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation 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 such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, 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. Such Purchaser understands that the Shares are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not
with a view to or for distributing or reselling such Shares 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 Shares 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 Shares in violation of the Securities Act or any applicable state securities law (this representation
and warranty not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Shares hereunder in the ordinary
course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(5), (a)(6), (a)(7) or (a)(8) under the Securities Act or (ii)
a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required
to be registered as a broker-dealer under Section 15 of the Exchange Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Shares, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
(e) General
Solicitation. Such Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
(f) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering
of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with respect to the investment.
(g) Brokers
and Finders. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest
or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Purchaser.
(h) Limited
Ownership. The purchase by such Purchaser of the Shares issuable to it at the Closing will not result in such Purchaser (individually
or together with other Person with whom such Purchaser has identified, or will have identified, itself as part of a “group”
in a public filing made with the Commission involving the Company’s securities) acquiring, or obtaining the right to acquire,
in excess of 19.99% of the outstanding shares of Common Stock or the voting power of the Company on a post transaction basis that
assumes that the Closing shall have occurred. Such Purchaser does not presently intend to, alone or together with others, make
a public filing with the Commission to disclose that it has (or that it together with such other Persons have) acquired, or obtained
the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or
have the right to acquire), in excess of 19.99% of the outstanding shares of Common Stock or the voting power of the Company on
a post transaction basis that assumes that the Closing shall have occurred.
(i) Independent
Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Shares pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Shares constitutes legal, tax
or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Shares.
(j) No
Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in
the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.
(k) Reliance
on Exemptions. Such Purchaser understands that the Shares being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Shares.
(l) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases
or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such 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. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this
Agreement. Other than to other Persons party to this Agreement and its legal and accounting advisers, such Purchaser has maintained
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares
to borrow in order to effect Short Sales or similar transactions in the future.
The Company acknowledges and agrees that
the representations contained in Section 3.2 shall not modify, amend or affect such 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 transaction contemplated hereby.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a 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 fees and expenses of
which shall be borne by the Company, to the effect that such transfer does not require registration of such transferred Shares
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this
Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and
the Registration Rights Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares in the
following form:
[NEITHER] THIS SECURITY [NOR
THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company
acknowledges and agrees that a 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 Shares to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged
or secured Shares 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 appropriate Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer
of the Shares, including, if the Shares 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 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 Shares pursuant to Rule 144, (iii) if such Shares are eligible for sale under Rule 144 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). The Company shall cause its counsel to issue a legal opinion to the Transfer
Agent promptly if required by the Transfer Agent to effect the removal of the legend hereunder. The Company agrees that following
such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following
the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares, as applicable, issued with
a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to
such 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 Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent
to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed
by such Purchaser.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $2,000 of Shares (based on the VWAP of the Common Stock on the date such Shares are submitted
to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $5 per Trading Day
for each Trading Day after the 2nd Trading Day following the Legend Removal Date until such certificate is delivered
without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure
to deliver certificates representing any Shares as required by the Transaction Documents, and such 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.
(e) While
a Registration Statement remains effective, each Purchaser hereunder may sell the shares in accordance with the plan of distribution
contained in such Registration Statement and if it does so it will comply therewith and with the related prospectus delivery requirements
unless an exemption therefrom is available. Each Purchaser, severally and not jointly with the other Purchasers, agrees that if
it is notified by the Company at any time after the date any legend is removed pursuant to the Registration Rights Agreement that
no Registration Statement is effective or that the prospectus included in any such Registration Statement no longer complies with
the requirements of Section 10 of the Securities Act, the Purchaser will refrain from selling such Shares until such time as the
Purchaser is notified by the Company that a Registration Statement is effective or such prospectus is compliant with Section 10
of the Exchange Act, unless such Purchaser is able to, and does, sell such Shares pursuant to an available exemption from the registration
requirements of Section 5 of the Securities Act. Each Purchaser further acknowledges that the removal of the restrictive legend
from certificates representing Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance upon
the Purchaser’s acknowledgements and agreements contained in this paragraph.
4.2 Furnishing
of Information; Public Information. Until the earliest of the time that no Purchaser owns Shares, 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.
4.3 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 Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale of the Shares
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.
4.4 Securities
Laws Disclosure; Publicity. The Company shall by 9:00 a.m. (New York City time) on the Trading Day immediately following the
date hereof, (a) issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission. From and after the issuance of
such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or
any regulatory agency or Trading Market, without the prior written consent of such 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 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 Purchasers with prior notice of such disclosure permitted under this clause
(b).
4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares
under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto
such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information.
The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.
4.7 Use of Proceeds.
The Company shall use the net proceeds from the sale of the Shares hereunder for working capital purposes and shall not use such
proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary
course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents,
(c) to pay any dividends on any of the Company’s capital stock, (d) for the settlement of any outstanding litigation or (d)
in violation of FCPA or OFAC regulations.
4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and
its directors, officers, shareholders, members, partners, employees, consultants and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners, consultants 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,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents
or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties
or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect
of which indemnity may be sought pursuant to this Agreement, such 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 the
Purchaser Party. Any 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 Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii) 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 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 Purchaser Party under this Agreement (y) for any settlement by a 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 Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.8 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 Purchaser Party against the Company or others and any
liabilities the Company may be subject to pursuant to law.
4.9 Equal Treatment
of Purchasers. 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 this Agreement unless the same consideration is also offered
to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each
Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as
a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of Shares or otherwise.
4.10 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, 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 (other than the purchases of shares pursuant to this Agreement) 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 4.4. Each Purchaser, severally
and not jointly with the other Purchasers, 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 4.4, such Purchaser will
maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents
and the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) no Purchaser makes any 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 4.4, (ii) no
Purchaser shall 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 4.4 and (iii) no Purchaser shall have any duty of confidentiality
to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Shares covered by this Agreement.
4.11 Form D;
Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and
to provide a copy thereof, promptly upon request of any 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 Shares for, sale to the Purchasers 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 any Purchaser.
ARTICLE V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the applicable
Closing has not been consummated on or before the third Trading Day following the date on which such Purchaser becomes a party
to this Agreement and delivers all of the items set forth in Section 2.32.3(a)(vi) of this Agreement; provided, however,
that such termination will not affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees and
Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the 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 a Purchaser), stamp taxes and other taxes and duties levied in connection with the
delivery of any Shares to the Purchasers.
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, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number 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 date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number 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.
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 and the Purchasers holding at least two-thirds in interest of the Shares then outstanding
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
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
each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect
to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”
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 4.8.
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 state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, 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 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 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 either party shall commence
an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the
Company under Section 4.8, the prevailing party in such action, suit or proceeding shall be reimbursed by the other 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 Shares.
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 facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature 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 Purchaser 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 Purchaser
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.
5.14 Replacement
of Shares. If any certificate or instrument evidencing any Shares 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 Shares.
5.15 Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference in any
Transaction Document to a number of shares or a price per share shall be deemed to be amended to appropriately account for such
event.
5.16 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations 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.
5.17 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.18 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with
the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do
so by any of the Purchasers.
5.19 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.
5.20 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.
5.21 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.
(Signature Pages Follow)
IN WITNESS WHEREOF,
the parties hereto have caused this Stock Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.
ARNO THERAPEUTICS,
INC. |
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By: |
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Alexander Zukiwski, M.D. |
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Chief Executive Officer |
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Address for Notice: |
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200 Route 31 North, Suite 104
Flemington, NJ 08822
Attn: Chief Executive Officer
Fax: (973) 267-0101
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With a copy to (which shall not constitute notice): |
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Fredrikson & Byron, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402
Attn: Christopher J. Melsha, Esq.
Fax: (612) 492-7077
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO ARNI STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF,
the undersigned have caused this Stock Purchase Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
Name of Purchaser: |
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Signature of Authorized Signatory of Purchaser: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Facsimile Number of Authorized Signatory: |
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Address for Notice to Purchaser: |
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Address for Delivery of Shares to Purchaser (if not same as address for notice): |
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Subscription Amount (Purchase Price x No. Shares): |
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Number of Shares to be acquired: |
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Taxpayer ID Number: |
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[SIGNATURE PAGES CONTINUE]
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights
Agreement (this “Agreement”) is made and entered into as of January 12, 2016, between ARNO THERAPEUTICS, INC.,
a Delaware corporation (the “Company”), and each of the several purchasers signatory hereto (each such purchaser,
a “Purchaser” and, collectively, the “Purchasers”).
This Agreement is made
pursuant to the Stock Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “Purchase
Agreement”).
The Company and each
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 6(d).
“Agreement”
shall have the meaning set forth in the recital to this Agreement.
“Company”
shall have the meaning set forth in the recital to this Agreement.
“Effectiveness
Date” means, with respect to the Registration Statement required to be filed under Section 2(a), the 120th
calendar day following the date hereof; provided, however, that in the event the Company is notified by the Commission
that the Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness
Date shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates required
above; provided further, however, that if the Effectiveness Date falls on a Saturday, Sunday or other day on which
the Commission is not open for business, then the Effectiveness Date shall be extended to the next day on which the Commission
is open for business.
“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).
“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 60th calendar day
following the date hereof and, 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; provided further, however, that if the Filing Date falls on a Saturday,
Sunday or other day on which the Commission is not open for business, then the Filing Date shall be extended to the next day on
which the Commission is open for business.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified
Party” shall have the meaning set forth in Section 5(c).
“Indemnifying
Party” shall have the meaning set forth in Section 5(c).
“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Liquidated
Damages Shares” shall have the meaning set forth in Section 2(f).
“Losses”
shall have the meaning set forth in Section 5(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.
“Purchase
Agreement” shall have the meaning set forth in the recital to this Agreement.
“Purchaser”
or “Purchasers” shall have the meaning set forth in the recital to this Agreement.
“Registrable
Securities” means, as of any date of determination, (a) all of the Shares issued by the Company on the date hereof pursuant
to the Purchase Agreement, 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; provided, however, that any such Registrable Securities
shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another,
Registration Statement hereunder with respect thereto) for so long as (i) a Registration Statement with respect to the sale of
such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have
been disposed of by the Holder in accordance with such effective Registration Statement, (ii) such Registrable Securities have
been previously sold in accordance with Rule 144, or (iii) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities
issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable,
were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the
Company.
“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 (a) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (b) the Securities Act.
2. Shelf Registration.
(a) On
or prior to each Filing Date, 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(d)) and shall contain (unless otherwise
directed by at least two-thirds in interest of the Holders) substantially the “Plan of Distribution” attached
hereto as Annex A. Subject to the terms of this Agreement, the Company shall use its 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 Effectiveness Date, and shall use its
best efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities
covered by such 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 telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day.
The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement (notice
shall be provided simultaneously to all Holders first via e-mail) within one Trading Day that the Company telephonically confirms
effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company
shall, by 9:30 a.m. Eastern 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. Failure to so notify the Holder within one (1) Trading Date of such notification of
effectiveness or failure to file a final prospectus as foresaid shall be deemed an Event under Section 2(d).
(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 (or additional Registration Statements if 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(d);
provided, however, that prior to filing such amendment, the Company shall be obligated to use diligent 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, 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 diligent 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:
(i) First,
the Company shall reduce or eliminate any securities to be included by any Person other than a Holder; and
(ii) Second,
the Company shall reduce any Shares issued by the Company on the date
hereof pursuant to the Purchase Agreement.
In
the event of a cutback hereunder, the Company shall give the Holder at least five (5) 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 is not filed on or prior to its Filing Date (if the Company files the Initial Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the
Company shall be deemed to have not satisfied this clause (i)), 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 15 Trading 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, or (v) after the effective date of a Registration Statement, such
Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such
Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than ten (10) consecutive Trading Days or more than an aggregate of fifteen (15) Trading 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 purpose of clause (ii) the date on which
such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such fifteen (15) Trading Day period
is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) Trading 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 partial liquidated damages and not as a penalty, equal to 1.0% of the aggregate purchase price 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 12% 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. Notwithstanding anything to the
contrary contained herein, (A) no liquidated damages shall be payable by the Company in connection with any Event if the Registrable
Securities may be resold pursuant to Rule 144, and, if requested by the Transfer Agent, the Company’s counsel has issued
the opinion described in Section 4.1(c) of the Purchase Agreement, (B) the maximum payment to a Holder associated with all Events
in the aggregate shall not exceed (1) in any monthly period, an aggregate of 1.0% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for its Registrable Securities (plus accrued interest thereon, if applicable) and (2)
10% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for its Registrable Securities, and
(C) no liquidated damages shall be payable by the Company with respect to Registrable Securities that the Company is not permitted
to register as a secondary offering, but subject to the Company’s obligations as described in Section 2(b).
(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 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. Each Holder hereby acknowledges and understands that, as of the date of this Agreement, the Company
is not eligible to use Form S-3.
(f) Notwithstanding
anything to the contrary contained herein, the Company may elect, in its sole discretion, to pay any liquidated damages required
by Section 2(d) in cash, shares of Common Stock (“Liquidated Damages Shares”) or any combination thereof; provided,
however, that the Company may not elect to issue Liquidated Damage Shares to a Holder pursuant to this Section 2(f) to the
extent that such Holder’s beneficial ownership (as determined in accordance with Section 13(d) of the Exchange Act) of Common
Stock would exceed 9.99% after giving effect to the issuance of Liquidated Damages Shares to all Holders hereunder. If electing
to issue Liquidated Damages Shares, the Company shall, on or before the applicable deadline for payment pursuant to Section 2(d),
deliver or cause to be delivered to each Holder: (A) a certificate or certificates representing the number of Liquidated Damages
Shares issued to such Holder in payment of liquidated damages, and (B) a certificate setting forth (i) the aggregate amount of
liquidated damages owed to such Holder, and (ii) the quotient equal to (x) the portion of such aggregate amount that the Company
is electing to pay to such Holder in Liquidated Damages Shares in lieu of cash, divided by (y) $[0.35] (subject to
appropriate adjustment hereafter for stock splits, combinations and similar recapitalization events), which quotient, rounded to
the nearest whole number, shall represent the number of Liquidated Damages Shares issued to such Holder.
3. Registration
Procedures.
In connection with
the Company’s registration obligations hereunder, the Company shall:
(a) Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated
or deemed to be incorporated therein by reference), 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. Notwithstanding the above, the Company shall not be obligated to provide the Holders
advance copies of any universal shelf registration statement registering securities in addition to those required hereunder, or
any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of two-thirds or more 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 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 B (a “Selling Stockholder Questionnaire”) on a date that
is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following
the date on which such Holder receives draft materials in accordance with this Section.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the
Prospectus 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 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, then to the extent permitted by the Securities Act (including the rules and
regulations thereunder) or SEC Guidance, 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 (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably 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 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 covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that
makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a
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, Prospectus or other documents so that, in the case
of a 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, and (vi) of the occurrence or existence of any pending corporate development with respect
to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best
interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided, however,
in no event shall any such notice contain any information which would constitute material, non-public information regarding the
Company or any of its Subsidiaries.
(e) Use
its 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, 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 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 (including those 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 in physical form.
(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) The
Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting
a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the Company
shall pay the filing fee required by such filing within two (2) Business Days of request therefor.
(i) Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not
be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such
jurisdiction.
(j) If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates 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.
(k) Upon
the occurrence of any event contemplated by Section 3(d), 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
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 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 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(k) to suspend the availability of a 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.
(l) Comply
with all applicable rules and regulations of the Commission.
(m) The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive
control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration
of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise
occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
(n) With
respect to any Registration Statement involving an underwritten offering, if requested by the Holders, the Company shall use its
reasonable best efforts to obtain legal opinion letters and negative assurances statements (and updates thereof) from its counsel
and “comfort” letters (and updates thereof) from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are required to be, included in, or incorporated by reference
into, a Registration Statement), addressed to each selling Holder of Registrable Shares included in a Registration Statement and
the underwriters, if any, in customary form and covering such matters of the kind customarily covered by such letters and statements
in transactions of the nature contemplated by such Registration Statement.
4. 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. 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, (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) and (D) if not previously paid by the Company in connection with an issuer filing,
with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable
Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission
in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities), (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, (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by this Agreement, (vii) and the reasonable fees and
disbursements with respect to the review of the Registration Statement, not to exceed $5,000, of one counsel for the selling Holders,
and (viii) to the extent Registrable Securities are not then covered by an effective Registration Statement, the reasonable out-of-pocket
costs and expenses incurred by a Holder related to the resale of such Registrable Securities by such Holder under Rule 144 (but
excluding broker fees or similar commissions incurred by such Holder). 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.
5. 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, reasonable 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, 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,
or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, 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)-(vi), the use by such Holder
of an outdated, defective or otherwise unavailable Prospectus 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 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise
to such Loss would have been corrected. 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 6(h).
(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: (x) such Holder’s
failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or
(y) 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 any information so furnished in writing by such Holder to the Company
expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such
information relates to such Holder’s 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 or (iii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the extent, related to the use by such
Holder of an outdated, defective or otherwise unavailable Prospectus 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 6(d), but only if and to the extent that following the receipt of the Advice the misstatement
or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder under this
Section 3(b) be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all 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 counsel to the Indemnified Party shall reasonably believe 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 reasonable 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 reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with
this Section) 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 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement
or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other 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 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute
pursuant to this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
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.
6. 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 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. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. Other than with respect to registration statements filed on Forms S-4 and S-8 or those required
to be filed pursuant to the 2012 Registration Rights Agreement, the Company shall not file any other registration statements until
all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission; provided,
however, that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements filed prior to
the date of this Agreement; and provided further, however, that in the event the Commission limits the number of Registrable Securities
that may be registered by the initial Registration Statement in accordance with Section 2(b), above, then for purposes of this
sentence the prohibition against filing other registration statements shall not apply following the effectiveness of such initial
Registration Statement.
(c) Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration
Statement.
(d) Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its 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 period 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).
(e) Piggy-Back
Registrations. Subject to Sections 2(b) and 2(c) hereof, if at any time during the Effectiveness Period, there is not an effective
Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with the Company’s stock option or other employee benefit plans or the 2012 Registration
Rights Agreement, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen days
after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration
statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however,
that the Company shall not be required to register any Registrable Securities pursuant to this Section 6(e) that are eligible for
resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the Commission
pursuant to the Securities Act or that are the subject of a then effective Registration Statement.
(f) Rule
144 Reporting. With a view to making available to the Holders the benefits of Rule 144, the Company agrees after the date hereof
to:
(i) make
and keep public information available, as those terms are understood and defined in Rule 144(c) under the Securities Act;
(ii) file
with the Commission all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
(iii) so
long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144, and of the Securities Act and the Exchange Act, a copy of
the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as the
Holder may reasonably request in writing in complying with any rule or regulation of the SEC allowing the Holder to sell any such
securities without registration.
(g) 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 at least two-thirds of the then outstanding Registrable Securities (for purposes of clarification,
this includes any Registrable Securities issuable upon exercise or conversion of any Security). 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 6(f). 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.
(h) 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.
(i) 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 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 their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.
(j) 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. Except as set forth on Schedule 6(i), 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.
(k) 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
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
(l) 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.
(m) Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(n) 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.
(o) 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.
(p) 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 asset 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.
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ARNO THERAPEUTICS,
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Name: Alexander Zukiwski, M.D. Title: Chief Executive Officer |
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[SIGNATURE
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Name of Holder: |
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Signature of Authorized Signatory of Holder: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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[SIGNATURE PAGES CONTINUE]
Annex A
Plan of Distribution
Each Selling Stockholder
(the “Selling Stockholders”) of the securities and any of their pledgees, 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 entered into after the effective date of the registration statement of which this prospectus is a
part; |
| · | 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 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 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.
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. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities. In no event shall any broker-dealer receive
fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).
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.
Because Selling Stockholders
may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.
The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed
sale of the resale securities by the Selling Stockholders.
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 securities 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).
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