Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of May 11,
2016, by and between Oncobiologics, Inc., a Delaware corporation (the
“Company”), and Sabby Healthcare Master Fund Ltd., a Cayman Islands exempted
corporation (“Purchaser”).

 

Recitals

 

A.          The Company is planning to offer and sell units of the Company (the
“Units”), each Unit consisting of one share of common stock, par value $0.01 per
share (the “Common Stock”), of the Company, one-half of a Series A warrant to
purchase one share of Common Stock (collectively, the “Series A Warrants”) and
one-half of a Series B warrant to purchase one share of Common Stock (the
“Series B Warrants” and together with the Series A Warrants, the “Warrants”) in
an underwritten initial public offering (the “IPO”) pursuant to the Company’s
registration statement on Form S-1 (File No. 333-209011) (the “Registration
Statement”) and an underwriting agreement (the “Underwriting Agreement”) by and
among the Company and Jefferies LLC, and Barclays Capital Inc., as
representatives of the several underwriters listed therein (together, the
“Underwriters”).

 

B.          The Company and Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (codified at 15
U.S.C. Sec. 77a et seq., and hereinafter the “Securities Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission (the “Commission”) under the Securities Act.

 

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 Purchaser hereby
agree as follows:

 

Article 1
DEFINITIONS

 

1.1         Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

 

“Affiliate” means a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the person specified.

 

“Closing Date” means the third (3rd) trading day after the trading day on which
the Underwriting Agreement has been executed and delivered by all parties
thereto.

 

“Company Covered Person” means, with respect to the Company as an “issuer” for
purposes of Rule 506 promulgated under the Securities Act, any Person listed in
the first paragraph of Rule 506(d)(1).

 

 1. 

 

 

“Company’s Knowledge” means the knowledge of the executive officers (as defined
in Rule 405 under the Securities Act) of the Company, after due inquiry,
assuming the diligent exercise of such officers’ duties.

 

“Material Adverse Effect” means a material adverse effect on the business,
assets (including intangible assets), liabilities, financial condition,
property, or results of operations of the Company.

 

“Material Contract” means any contract of the Company that has been filed or was
required to have been filed as an exhibit to the Registration Statement pursuant
to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Preliminary Prospectus” means the most recent preliminary prospectus included
in the Registration Statement at the time of effectiveness of the Registration
Statement.

 

“Prospectus” means the final prospectus filed by the Company pursuant to Rule
424 under the Securities Act relating to the IPO.

 

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Trading Day” means any day on which the NASDAQ Global Market or the principal
securities exchange upon which the Common Stock is listed is open for trading.

 

“Transaction Documents” means this Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

 

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or
quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Purchaser of a majority
in interest of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.

 

 2. 

 

 

Article 2
PURCHASE AND SALE

 

2.1         Closing.

 

(a)          Amount. Subject to the terms and conditions set forth in this
Agreement, at the Closing, the Company shall issue and sell to Purchaser, and
Purchaser shall purchase from the Company, such number of shares of Common Stock
(the “Shares”) equal to the quotient resulting from dividing (i) $5,000,000 (the
“Subscription Amount”) by (ii) the public offering price of one Unit in the IPO
(the “Per Share Purchase Price”), with any fraction of a share rounded down to
the nearest whole share. For each Share purchased by Purchaser, the Company
shall issue to Purchaser one-half of a Series A Warrant and one-half of a Series
B Warrant; provided that such Warrants will not be exercisable until the date
(the “Exercise Date”) that is the earlier of (x) the date the Resale
Registration Statement referenced in Section 2.2(c) is declared effective and
(y) the date that is six (6) months from Closing Date, and the term of such
Warrants shall be extended accordingly (i.e., 9 months from the Exercise Date
for the Series A Warrants and 24 months from the Exercise Date for the Series B
Warrants). The Shares, the Warrants and the shares of Common Stock underlying
the Warrants (the “Warrant Shares”) purchased by Purchaser shall be referred to
collectively as the “Securities.”

 

(b)          Closing. The purchase and sale of the Securities shall be
contingent on and take place concurrently with the closing of the IPO and
remotely via the exchange of documents and signatures or at such other time and
place as the parties may mutually agree upon, orally or in writing (which time
and place are designated as the “Closing”).

 

(c)          IRA Joinder. In connection with the Closing, if Purchaser is not
already a party, Purchaser shall deliver to the Company a signed counterpart
signature page to the Investor Rights Agreement, dated as of March 10, 2014, as
amended to date (the “Rights Agreement”), by and between the Company and the
investors party thereto, in the form prepared by Company.

 

2.2         Registration Rights.

 

(a)          Timing. The Company agrees to file a registration statement
covering the offer and re-sale of the Securities (the “Resale Registration
Statement”) within 45 days after the Closing (the “Filing Date”) and that the
Resale Registration Statement shall be declared effective by the Commission
within 75 days after the Closing, if there is no review of the Resale
Registration Statement by the Commission, or 105 days after Closing, if there is
a Commission review (the applicable date, the “Effectiveness Date”). The Company
shall not be required to maintain the effectiveness of the Resale Registration
Statement if (a) the Securities have been disposed of by Purchaser in accordance
with such effective Resale Registration Statement, (b) such Securities have been
previously sold in accordance with Rule 144, or (c) such Securities become
eligible for resale without volume or manner-of-sale restrictions and without
current public information pursuant to Rule 144 (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.

 

(b)          Liquidated Damages. If: (i) the Resale Registration Statement is
not filed on or prior to the Filing Date (if the Company files the Resale
Registration Statement

 

 3. 

 

 

without affording the Holders the opportunity to review and comment on the same
as required by Section 2.2(c) 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 the Resale 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 Resale Registration Statement will not be “reviewed” or will not be subject
to further review, or (iii) prior to the effective date of the Resale
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 Resale Registration Statement within 10 Trading Days after the receipt of
comments by or notice from the Commission that such amendment is required in
order for such Resale Registration Statement to be declared effective, or (iv)
the Resale Registration Statement registering for resale all of the Securities
is not declared effective by the Commission by the Effectiveness Date of the
Resale Registration Statement, or (v) after the effective date of the Resale
Registration Statement, such Resale Registration Statement ceases for any reason
to remain continuously effective as to all Securities included in the Resale
Registration Statement, or Purchaser is otherwise not permitted to utilize the
prospectus therein to resell such Securities, for more than ten (10) consecutive
Trading Days or more than an aggregate of fifteen (15) Trading Days (which need
not be consecutive Trading 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 ten (10) 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 Purchaser 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 Purchaser an
amount in cash, as partial liquidated damages and not as a penalty, equal to the
product of 2.0% multiplied by the aggregate Subscription Amount paid by
Purchaser pursuant to this Agreement. If the Company fails to pay any partial
liquidated damages pursuant to this Section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 18% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law)
to Purchaser, 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.

 

(c)          Right to Review. Not less than five (5) Trading Days prior to the
filing of the Resale Registration Statement and not less than one (1) Trading
Day prior to the filing of any related prospectus or any amendment or supplement
thereto, the Company shall (i) furnish to Purchaser copies of all such documents
proposed to be filed, which documents will be subject to the reasonable review
of Purchaser, 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 counsel to Purchaser, to conduct a
reasonable investigation within the meaning of the Securities Act.

 

 4. 

 

 

(d)          Miscellaneous. Sections 2.5 (Furnish Information), 2.7 (Delay of
Registration), 2.8 (Indemnification) and 2.9 (Reports Under Exchange Act) of the
Rights Agreement are incorporated herein by reference and are deemed a part of
this Agreement.

 

2.3         Delivery. At the Closing, upon payment of the Subscription Amount by
wire transfer to a bank account designated by the Company or by such other
methods as may be designated by the Company in writing to Purchaser no later
than three (3) business days before the Closing, the Company shall deliver to
Purchaser evidence of the issuance of the Securities to Purchaser.

 

Article 3
REPRESENTATIONS AND WARRANTIES

 

3.1         Representations and Warranties of the Company. The Company hereby
represents and warrants as of the date hereof and the Closing Date (except for
the representations and warranties that speak as of a specific date, which shall
be made as of such date) to Purchaser that:

 

(a)          Organization, Good Standing, Corporate Power and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as presently conducted and as proposed to
be conducted and to enter into the Transaction Documents to which it is a party.
The Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect.

 

(b)          Authorization. All corporate action required to be taken by the
Company’s Board of Directors and stockholders in order to authorize the Company
to enter into the Transaction Documents, and to issue the Securities at the
Closing, has been taken or will be taken prior to the Closing. All action on the
part of the officers of the Company necessary for the execution and delivery of
the Transaction Documents, the performance of all obligations of the Company
under the Transaction Documents to be performed as of the Closing, and the
issuance and delivery of the Securities has been taken or will be taken prior to
the Closing. The Transaction Documents, when executed and delivered by the
Company, shall constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or any other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

 

(c)          Valid Issuance of Shares.

 

(i)          The Shares, when issued, sold and delivered in accordance with the
terms and for the consideration set forth in this Agreement, will be validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under the Transaction Documents, applicable state
and federal securities laws and liens or encumbrances created by or imposed by

 

 5. 

 

 

Purchaser. The Warrants, when issued, sold and delivered in accordance with the
terms and for the consideration set forth in this Agreement, will constitute
valid and binding obligations of the Company, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to
equitable principles of general applicability. Assuming the accuracy of the
representations of Purchaser in Section 3.2 and subject to the filings described
in Section 3.1(d), the Securities will be issued in compliance with all
applicable federal and state securities laws.

 

(ii)         As of the Closing Date, the Securities that are being purchased by
Purchaser hereunder will conform to the description of the Common Stock and the
Warrants contained in the Prospectus. As of the Closing Date, the statements set
forth in the Prospectus under the caption “Description of Securities,” insofar
as they purport to constitute a summary of the terms of the Securities, are
accurate, complete and fair in all material respects.

 

(iii)        No “bad actor” disqualifying event described in Rule
506(d)(1)(i)-(viii) of Regulation D (a “Disqualification Event”) is applicable
to the Company or, to the Company’s Knowledge, any Company Covered Person,
except as disclosed to Purchaser.

 

(d)          Governmental Consents and Filings. Assuming the accuracy of the
representations made by Purchaser in Section 3.2, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority is required on
the part of the Company in connection with the consummation of the transactions
contemplated by this Agreement, except for filings pursuant to Regulation D and
applicable state securities laws, which have been made or will be made in a
timely manner.

 

(e)          Compliance with Other Instruments. The Company is not in violation
or default (i) of any provisions of its certificate of incorporation or bylaws,
(ii) of any instrument, judgment, order, writ or decree, (iii) under any note,
indenture or mortgage, (iv) under any Material Contract, or (v) to the Company’s
Knowledge, of any provision of federal or state statute, rule or regulation
applicable to the Company, the violation of which statute, rule or regulation
would have a Material Adverse Effect. The execution, delivery and performance of
the Transaction Documents and the consummation of the transactions contemplated
by the Transaction Documents will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either (i) a default under any such provision, instrument, judgment,
order, writ, decree, contract or agreement; or (ii) an event which results in
the creation of any lien, charge or encumbrance upon any assets of the Company
or the suspension, revocation, forfeiture, or nonrenewal of any material permit
or license applicable to the Company.

 

(f)           Registration Statement and Prospectus. The Registration Statement
as of the date when it is declared effective by the Commission will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. The Preliminary Prospectus as of the date

 

 6. 

 

 

hereof does not include any untrue statement of a material fact or omit 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 in which they were made,
not misleading. The Prospectus, as of its date and as of the date of the closing
of the IPO, will not contain any untrue statement of material fact or omit 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 in which they
were made, not misleading.

 

(g)          Brokers and Finders. Except as disclosed in the Registration
Statement, 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 Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company.

 

(h)          Rights Agreement. Attached as an exhibit to the Registration
Statement is a complete and accurate copy of the Rights Agreement.

 

(i)           FINRA. The Securities being offered and sold pursuant to this
Agreement are not covered by the definition of “New issue” pursuant to FINRA
Rule 5130. The Company acknowledges that Purchaser is a “Restricted person” as
defined in Rule 5130 and Purchaser is relying on the Company’s representation as
part of making its investment decision.

 

3.2         Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date (except
for the representations and warranties that speak as of a specific date, which
shall be made as of such date) to the Company as follows:

 

(a)          Authorization. Purchaser has requisite corporate power and
authority to enter into the Transaction Documents to which it is a party. The
Transaction Documents, when executed and delivered by Purchaser, will constitute
valid and legally binding obligations of Purchaser, enforceable in accordance
with their terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or any other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

 

(b)          Purchase Entirely for Own Account. This Agreement is made with
Purchaser in reliance upon Purchaser’s representation to the Company, which, by
Purchaser’s execution of this Agreement, Purchaser hereby confirms, that the
Securities to be acquired by Purchaser will be acquired for investment for
Purchaser’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, Purchaser further represents that
Purchaser does not presently have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant participations to such
Person or to any third Person with respect to any of the Securities.

 

(c)          Disclosure of Information. Purchaser has had an opportunity to
discuss the Company’s business, management, financial affairs and the terms and
conditions of the

 

 7. 

 

 

offering of the Securities with the Company’s management. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 3.1 or the right of Purchaser to rely thereon.

 

(d)          Restricted Securities. Purchaser understands that the Securities
have not been registered under the Securities Act, by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of Purchaser’s representations as expressed herein. Purchaser
understands that the Securities are “restricted securities” under applicable
U.S. federal and state securities laws and that, pursuant to these laws,
Purchaser must hold the Securities indefinitely unless they are registered with
the Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. Purchaser acknowledges
that if an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Securities, and on requirements
relating to the Company which are outside of Purchaser’s control, and which the
Company is under no obligation and may not be able to satisfy. Purchaser
acknowledges that the Company filed the Registration Statement in connection
with the IPO. Purchaser understands that this transaction is not intended to be
part of the IPO, and that Purchaser will not be able to rely on the protection
of Section 11 of the Securities Act with respect to the Securities and the
transaction contemplated hereunder.

 

(e)          Legends. Purchaser understands that the Securities and any
securities issued in respect of or exchange for the Securities, may be notated
with one or all of the following legends:

 

(i)          “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION UNDER THE SECURITIES
ACT OF 1933.”

 

(ii)         Any legend set forth in, or required by, the other Transaction
Documents.

 

(iii)        Any legend required by the securities laws of any state to the
extent such laws are applicable to the Securities represented by the
certificate, instrument, or book entry so legended.

 

(f)           Accredited Investor. Purchaser is an “accredited investor” as
defined in Rule 501(a) of Regulation D.

 

(g)          “Bad Actor” Status. Purchaser is not a “bad actor” within the
meaning of Rule 506(d) of Regulation D.

 

 8. 

 

 

(h)          No General Solicitation. Neither Purchaser, nor any of its
officers, directors, employees or agents, has either directly or indirectly,
including, through a broker or finder (i) engaged in any general solicitation,
or (ii) published any advertisement, in each case, in connection with the offer
and sale of the Securities.

 

(i)           Access to Information. Purchaser acknowledges that it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the Securities and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of Purchaser or
its representatives or counsel shall modify, amend or affect Purchaser’s right
to rely on the truth, accuracy and completeness of the Registration Statement
and the Company’s representations and warranties contained in the Transaction
Documents.

 

(j)           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 Purchaser.

 

Article 4
CONDITIONS PRECEDENT TO CLOSING

 

4.1         Conditions Precedent to the Obligations of Purchaser to Purchase
Securities at the Closing. The obligation of Purchaser to acquire Securities at
the Closing is subject to the fulfillment to Purchaser’s satisfaction, on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by Purchaser in writing:

 

(a)          Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as
to materiality, in which case such representations and warranties shall be true
and correct in all respects) as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date, except for such
representations and warranties that speak as of a specific date.

 

(b)          Performance. The Company shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale of the Securities
described herein.

 

 9. 

 

 

(c)          Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing, other than (i) the filing pursuant to Regulation D and (ii) the
filings required by applicable state “blue sky” securities laws, rules and
regulations.

 

(d)          IPO Units. The Underwriters shall have purchased, concurrent with
the purchase of the Securities by Purchaser hereunder, the Firm Units (as
defined in the Underwriting Agreement) at the purchase price per unit set forth
in the Underwriting Agreement.

 

(e)          Qualified IPO. The IPO shall have satisfied the requirements of a
“Qualified IPO” as defined in the Rights Agreement, and in connection with which
the Common Stock shall have been listed on the NASDAQ Global Market.

 

(f)           No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

4.2         Conditions Precedent to the Obligations of the Company to Sell
Securities at the Closing. The Company’s obligation to sell and issue the
Securities to Purchaser at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company in writing:

 

(a)          Representations and Warranties. The representations and warranties
made by Purchaser in Section 3.2 hereof shall be true and correct in all
material respects as of the date of this Agreement, and as of the Closing Date
as though made on and as of the Closing Date, except for representations and
warranties that speak as of a specific date.

 

(b)          IPO Units. The Underwriters shall have purchased, concurrent with
the purchase of the Securities by Purchaser hereunder, the Firm Units (as
defined in the Underwriting Agreement) at the purchase price per unit set forth
in the Underwriting Agreement.

 

(c)          No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

Article 5
COVENANTS

 

5.1         Legend Removal. Certificates evidencing the Shares or Warrant Shares
shall not contain any legend (including the legend set forth in Section 3.2(e)
hereof), (i) while the Resale Registration Statement is effective under the
Securities Act, (ii) following any sale of such Shares or Warrant Shares
pursuant to Rule 144, (iii) if such Shares or Warrant Shares are eligible for
sale under Rule 144, without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such Shares
and Warrant Shares and

 

 10. 

 

 

without volume or manner-of-sale restrictions, 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 its transfer agent
of Common Stock (the “Transfer Agent”) if required by the transfer agent to
effect the removal of the legend hereunder. If all or any portion of a Warrant
is exercised at a time when there is an effective Resale Registration Statement
to cover the resale of the Warrant Shares, or if such Shares or Warrant Shares
may be sold under Rule 144 and the Company is then in compliance with the
current public information required under Rule 144, or if the Shares or Warrant
Shares may be sold under Rule 144 without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such Shares or Warrant Shares or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then
such Warrant Shares shall be issued free of all legends. The Company agrees that
following the effective date of the Resale Registration Statement or at such
time as such legend is no longer required under this Section 5.1, it will, no
later than three Trading Days following the delivery by Purchaser to the Company
or the transfer agent of a certificate representing Shares or Warrant Shares, as
the case may be, issued with a restrictive legend (such third Trading Day, the
“Legend Removal Date”), deliver or cause to be delivered to 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 Section 5.1. Certificates for Securities subject to legend removal
hereunder shall be transmitted by the Transfer Agent to Purchaser by crediting
the account of Purchaser’s prime broker with the Depository Trust Company System
as directed by Purchaser.

 

In addition to Purchaser’s other available remedies, the Company shall pay to
Purchaser, in cash, the greater of (i) as partial liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares (based on the VWAP of the Common
Stock on the date such Securities are submitted to the Transfer Agent) delivered
for removal of the restrictive legend, $10 per Trading Day (increasing to $20
per Trading Day five (5) Trading Days after such damages have begun to accrue)
for each Trading Day after the Legend Removal Date until such certificate is
delivered without a legend and (ii) if the Company fails to (A) issue and
deliver (or cause to be delivered) to Purchaser by the Legend Removal Date a
certificate representing the Securities so delivered to the Company by Purchaser
that is free from all restrictive and other legends or (B) if after the Legend
Removal Date Purchaser purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by Purchaser of all
or any portion of the number of shares of Common Stock, or a sale of a number of
shares of Common Stock equal to all or any portion of the number of shares of
Common Stock that Purchaser anticipated receiving from the Company without any
restrictive legend, then, an amount equal to the excess of Purchaser’s total
purchase price (including brokerage commissions and other reasonable
out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(including brokerage commissions and other reasonable out-of-pocket expenses, if
any) (the “Buy-In Price”) over the product of (A) such number of Warrant Shares
that the Company was required to deliver to Purchaser by the Legend Removal Date
multiplied by (B) the lowest closing sale price of the Common Stock on any
Trading Day during the period commencing on the date of the delivery by
Purchaser to the Company of the applicable Warrant Shares (as the case may be)
and ending on the date of such delivery and payment under this clause (ii).

 

 11. 

 

 

5.2         Furnishing Information; Public Information. Until the earliest of
the time that (i) Purchaser owns no Securities or (ii) the Warrants have
expired, the Company covenants to maintain the registration of the Common Stock
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended
(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.

 

At any time during the period commencing from the six (6) month anniversary of
the date hereof and ending at such time that all of the Securities may be sold
without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144 and the
Resale Registration Statement is no longer effective, if the Company (i) shall
fail for any reason to satisfy the current public information requirement under
Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or
becomes an issuer in the future, and the Company shall fail to satisfy any
condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in
addition to Purchaser’s other available remedies, the Company shall pay to a
Purchaser, in cash, as partial liquidated damages and not as a penalty, by
reason of any such delay in or reduction of its ability to sell the Securities,
an amount in cash equal to two percent (2.0%) of the aggregate Subscription
Amount of Purchaser’s Securities on the day of a Public Information Failure and
on every thirtieth (30th) day (pro-rated for periods totaling less than thirty
days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer
required  for Purchaser to transfer the Shares and Warrant Shares pursuant to
Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this
Section 5.2 are referred to herein as “Public Information Failure Payments.” 
Public Information Failure Payments shall be paid on the earlier of (i) the last
day of the calendar month during which such Public Information Failure Payments
are incurred and (ii) the third (3rd) Business Day after the event or failure
giving rise to the Public Information Failure Payments is cured.  In the event
the Company fails to make Public Information Failure Payments in a timely
manner, such Public Information Failure Payments shall bear interest at the rate
of 1.5% per month (prorated for partial months) until paid in full. Nothing
herein shall limit Purchaser’s right to pursue actual damages for the Public
Information Failure, and 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.

 

5.3         Non-Public Information. The Company covenants and agrees that
neither it, nor any other Person acting on its behalf will provide Purchaser or
its agents or counsel with any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, unless prior
thereto Purchaser shall have consented to the receipt of such information and
agreed with the Company to keep such information confidential. The Company
understands and confirms that Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

 

5.4         Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Warrant Shares pursuant to any
exercise of the Warrants.

 

 12. 

 

 

5.5         Listing of Common Stock. The Company hereby agrees to use reasonable
best efforts to maintain the listing of the Common Stock on the NASDAQ Global
Market or other national securities exchange (the “Trading Market”) on which it
will be listed upon the Closing, and concurrently with the Closing, the Company
shall, if required, apply to list all of the Shares and Warrant Shares on such
Trading Market and promptly secure the listing of all of the Shares and Warrant
Shares on such Trading Market. The Company further agrees, if the Company
applies to have the Common Stock traded on any other Trading Market, it will
then include in such application all of the Shares and Warrant Shares, and will
take such other action as is necessary to cause all of the Shares and Warrant
Shares to be listed on such other Trading Market as promptly as possible. The
Company will then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply in all
material respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. The Company agrees to maintain
the eligibility of the Common Stock for electronic transfer through the
Depository Trust Company or another established clearing corporation, including,
without limitation, by timely payment of fees to the Depository Trust Company or
such other established clearing corporation in connection with such electronic
transfer.

 

Article 6
MISCELLANEOUS

 

6.1         Removal of Legends. It is understood and agreed by the Company that
the restrictive legends and stop transfer instructions described in Section
3.2(e) will be removed at the time the Securities purchased hereunder are
registered under the Securities Act and sold pursuant to such registration, or
are sold or to be sold under Rule 144 under the Securities Act, or otherwise
with a transfer pursuant to an exemption from registration under the Securities
Act.

 

6.2         Termination. This Agreement shall automatically terminate upon the
earliest to occur of (i) the written consent of the Company and Purchaser,
(ii) the withdrawal by the Company of the Registration Statement,
(iii) following the execution of the Underwriting Agreement, the termination of
such Underwriting Agreement in accordance with its terms, or (iv) 11:59 P.M.
(Eastern Time) on May 15, 2016 (the “Cutoff Time”), if the Registration
Statement has not been declared effective by the Commission by the Cutoff Time.

 

6.3         Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the complete understanding of the
parties with respect to the subject matter hereof and thereof and supersede all
prior understandings and writings relating to the subject matter hereof and
thereof, which the parties acknowledge have been merged into such documents,
exhibits and schedules. At or after the Closing, and without further
consideration, the Company and Purchaser will execute and deliver to the other
such further documents as may be reasonably requested in order to give practical
effect to the intention of the parties under the Transaction Documents.

 

6.4         Notices. All notices, instructions and other communications required
or permitted hereunder or in connection herewith shall be in writing, shall be
sent to the address of the relevant party set forth below and shall be
(i) delivered personally, (ii) sent via a reputable nationwide overnight courier
service, or (iii) sent by facsimile transmission, with a confirmation

 

 13. 

 

 

copy to be sent by registered or certified mail, return receipt requested,
postage prepaid. Any such notice, instruction or communication shall be deemed
to have been delivered upon receipt if delivered by hand and two (2) business
days after it is sent via a reputable nationwide overnight courier service.
Either party may change its address by giving notice to the other party in the
manner provided above.

 

To the Company:

Oncobiologics, Inc.
7 Clarke Drive
Cranbury, NJ 08512
Attention: President and Chief Executive Officer

Fax: (609) 228-4330

With a copy to:

Cooley LLP
1114 Avenue of the Americas
New York, NY 10036
Attention: Yvan-Claude Pierre

Fax: (212) 479-6275

To Purchaser:

Sabby Healthcare Master Fund Ltd.
10 Mountainview Road, Suite 205

Upper Saddle River, NJ 07458
Attention: Robert Grundstein

With a copy to:

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas

New York, NY 10105
Attention: Robert Charron

Fax: (212) 401-4741

 

6.5         Amendment and Waiver. No provision in this Agreement shall be
supplemented, deleted or amended except in a writing executed by an authorized
representative of each of the Company and Purchaser.

 

6.6         Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

 

6.7         Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

6.8         Governing Law. This Agreement and any controversy arising out of or
relating to this Agreement shall be governed by and construed under the laws of
the State of Delaware, without regard to conflict of law principles that would
result in the application of any law other than the law of the State of
Delaware.

 

6.9         Execution. This Agreement may be executed in counterparts, each of
which shall be deemed an original but which together shall constitute one and
the same instrument. In addition, this Agreement may be executed by facsimile or
“PDF” and such facsimile or “PDF” signature shall be deemed to be an original.

 

 14. 

 

 

6.10       Severability. Should one or more provisions of this Agreement be or
become invalid, then the parties hereto will attempt to agree upon valid
provisions in substitution for the invalid provisions, which in their economic
effect come so close to the invalid provisions that it can be reasonably assumed
that the parties would have accepted this Agreement with those new provisions.
If the parties are unable to agree on such valid provisions, the invalidity of
such one or more provisions of this Agreement will not affect the validity of
the Agreement as a whole, unless the invalid provisions are of such essential
importance for this Agreement that it may be reasonably presumed that the
parties would not have entered into this Agreement without the invalid
provisions.

 

6.11       Expenses. Each party shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement.

 

6.12       Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or waiver of
or acquiescence in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on any party’s part of any breach, default or
noncompliance under this Agreement or any waiver on such party’s part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, the organizational documents of the
Company or otherwise afforded to any party, shall be cumulative and not
alternative.

 

6.13       Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, Purchaser and
the Company will be entitled to specific performance under the Transaction
Documents. Each of the parties acknowledges that the rights of each party to
consummate the transactions contemplated hereby are unique and recognizes and
affirms that in the event of a breach of this Agreement by any party, money
damages may be inadequate and the non-breaching party may have no adequate
remedy at law. Accordingly, such non-breaching party shall have the right, in
addition to any other rights and remedies existing in its favor at law or in
equity, to enforce its rights and the other party’s obligations hereunder not
only by an action or actions for damages but also by an action or actions for
specific performance, injunctive and/or other equitable relief (without posting
of bond or other security). Each of the parties agrees that it shall not oppose
the granting of an injunction, specific performance and other equitable relief
when expressly available pursuant to the terms of this Agreement, and hereby
waives (i) any defenses in any action for an injunction, specific performance or
other equitable relief, including the defense that the other parties have an
adequate remedy at law or an award of specific performance is not an appropriate
remedy for any reason at law or equity, and (ii) any requirement under law to
post a bond, undertaking or other security as a prerequisite to obtaining
equitable relief.

 

6.14       Indemnification; Limitations on Liability. The Company shall
indemnify, defend and hold Purchaser harmless from and against all liabilities,
losses, and damages, together with all reasonable costs and expenses related
thereto (including, without limitation, reasonable legal and accounting fees and
expenses), which would not have been incurred if (i) all of the

 

 15. 

 

 

representations and warranties of the Company in Section 3.1 had been true and
correct pursuant to the terms of this Agreement when made and at the time of the
Closing, as applicable, and (ii) all of the covenants and agreements of the
Company in this Agreement had been duly and timely complied with and performed;
provided, however, that the aggregate liability of the Company to Purchaser
under this Section 6.14 shall not exceed the amount paid by Purchaser pursuant
to Section 2.2(a); and provided, further, however, that the representations and
warranties set forth in Section 3.1(f) shall survive the Closing until the first
anniversary of the Closing Date, whereupon they shall expire and any claim for
liabilities, losses or damages arising out of or relating to a breach of the
representations and warranties set forth in Section 3.1(f) must be brought prior
to the first anniversary of the Closing Date.

 

[Signature Pages to Follow]

 

 16. 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

  COMPANY:       ONCOBIOLOGICS, INC.         By:   /s/ Pankaj Mohan, Ph.D.  
Name:   Pankaj Mohan, Ph.D.   Title:   President and Chief Executive Officer

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

  PURCHASER:       Sabby Healthcare Master Fund Ltd.         By:   /s/ Robert
Grundstein   Name:   Robert Grundstein   Title:   COO of Investment Manager