Exhibit 10.10 [ohrpharm-8k_122910.htm]
 
 
OHR PHARMACEUTICAL, INC.
UNIT SUBSCRIPTION AGREEMENT
COMMON STOCK AND WARRANTS
 
UNIT SUBSCRIPTION AGREEMENT (the “Agreement”) dated as of December 30, 2010
between Ohr Pharmaceutical, Inc., a Delaware corporation (the “Company”), and
the persons who execute this agreement as investors (each an “Investor” and,
collectively, the “Investors”).
 
WITNESSETH:
 
WHEREAS, the Company desires to sell to the Investors, and the Investors desire
to purchase, an aggregate of up to 4,200,000 shares of Common Stock (as defined
below) of the Company (the “Shares”), in Units (as defined below) with 5-year
warrants, in substantially the form attached hereto as Exhibit 1  (the “Class I
Warrants”), exercisable to purchase an aggregate of up to 2,520,000 shares,
respectively, of Common Stock of the Company (the “Warrant Shares”) at $0.55 per
share (the “Warrants”), all for an aggregate price of $1,050,000;
 
WHEREAS, the following terms appearing herein shall have the following meanings:
 
“Actions” has the meaning set forth in Section 2.13.
 
“Agreement” has the meaning set forth in the preamble.
 
“Blue Sky Laws” has the meaning set forth in Section 2.9(b).
 
“Capitalization Table” has the meaning set forth in Section 2.2(a).
 
“Certificate of Incorporation” means the Certificate of Incorporation of the
Company filed with the Secretary of State of the State of Delaware.
 
“Closing” and “Closing Date” have the meanings set forth in Section 1.2.
 
“Closing Certificate has the meaning set forth in Section 1.3(d).
 
“Common Stock” shall mean stock of the Company of any class (however designated)
whether now or hereafter authorized, which generally has the right to
participate in the voting and in the distribution of earnings and assets of the
Company without limit as to amount or percentage, including the Company’s Common
Stock $0.0001 par value per share.
 
“Company” has the meaning set forth in the preamble and includes any corporation
that shall succeed to or assume, directly or indirectly, the obligations of the
Company hereunder.
 
 “Contemplated Transactions” has the meaning set forth in Section 2.1(b).
 
The term “corporation” shall mean any corporation, association, joint stock
company, business trust, limited liability company or other similar
organization.
 
 
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“Employee” has the meaning set forth in Section 2.15(c).
 
“Event” has the meaning set forth in Section 2.14.
 
“Exercise Price” shall mean $0.55 per share.
 
“Financial Statements” has the meaning set forth in Section 2.11.
 
“Governmental Body” shall mean any: (a) nation, state, commonwealth,
province,   municipality, or district; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body or entity and
any court or other tribunal).
 
 “Investors” has the meaning set forth in the preamble.
 
“Knowledge” or “Knowledgeable” shall mean the actual knowledge of the Company’s
Chief Executive Officer and Chief Financial Officer.
 
“Legal Requirement” has the meaning set forth in Section 2.10.
 
 “Material Adverse Change” shall mean a material adverse change in the business,
financial condition, results of operation, properties or operations of the
Company taken as a whole.
 
“Material Adverse Effect” shall mean a material adverse effect on the
operations, assets, liabilities, financial condition or business of the Company.
 
“Material Agreement” shall mean any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company is a party or by which the Company or any
property or asset of the Company is bound or affected.
 
“Ordinary Course of Business” has the meaning set forth in Section 2.14.
 
“Own” shall mean own beneficially, as that term is defined in the rules and
regulations of the SEC.
 
“Person” shall mean any individual, sole proprietorship, partnership,
corporation, limited liability company, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity, any
university or similar institution, or any government or any agency or
instrumentality or political subdivision thereof.
 
 “Proprietary Assets” has the meaning set forth in Section 2.15(a).
 
“SEC” shall mean the Securities and Exchange Commission.
 
“Securities” shall mean the Shares and the Warrants.
 
 
 
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“Securities Act” has the meaning set forth in Section 2.5.
 
 “Shares” has the meaning set forth in the preamble.
 
 “Taxes” shall mean all Federal, state, local and foreign income, franchise,
property, sales, use, excise and other taxes, including obligations for
withholding taxes from payments due or made to any other person and any
interest, penalties or additions to tax.
 
“Transaction Documents” shall mean this Agreement and the Warrants.
 
“Transfer Agent” has the meaning set forth in Section 1.2(b).
 
“Underlying Shares” shall mean the shares of Common Stock issued from time to
time upon exercise of the Warrants.
 
“Unit” shall mean (i) one hundred (100) Shares, and (ii) sixty (60) Class I
Warrants.
 
“Unit Price” shall mean $25.00 per Unit.
 
“Warrants” shall mean the Class I Warrants.
 
“Warrant Shares” has the meaning set forth in the preamble, and includes any
shares of Common Stock issuable from time to time upon exercise of the Warrants.
 
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto hereby agree as follows:
 
1. Purchase and Sale of Stock.
 
1.1. Sale and Issuance of Securities.  (a)  The Company shall sell to the
Investors and the Investors shall purchase from the Company, up to 48,000 Units
at a price per Unit equal to the Unit Price.
 
(b) The purchase price of the Units to be purchased by each Investor from the
Company is set forth on Schedule 1.1(b) hereto, subject to acceptance, in whole
or in part, by the Company.
 
1.2. Closing.  The closing (the “Closing”) of the purchase and sale of the
Securities hereunder shall take place no later than 15 days following date first
set forth above, or such other date as agreed to by the Company(the “Closing
Date”).  The Closing shall take place at the offices of Hahn & Hessen LLP,
counsel for the Company, in New York, New York, or at such other location
determined by the Company, subject to fulfillment of the conditions of closing
set forth in the Agreement.  At the Closing:
 
(a) each Investor purchasing Securities at the Closing shall deliver to the
Company or its designees by wire transfer or such other method of payment as the
Company shall approve, an amount equal to the purchase price of the Securities
purchased by such Investor hereunder, as set forth opposite such Investor’s name
on the signature pages hereof; and
 
 
 
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(b) the Company shall authorize its transfer agent (the “Transfer Agent”) to
arrange delivery to each Investor of one or more stock certificates registered
in the name of the Investor, or in such nominee name(s) as designated by the
Investor in writing, representing the number of Shares equal to 100 multiplied
by the number of Units purchased by the Investor; and
 
(c) the Company shall issue and deliver to each Investor the number of Class I
Warrants  equal to the number of Shares as determined under Section 1.2(b)
multiplied by 0.6.
 
1.3. Investors’ Conditions of Closing.  The obligation of the Investors to
complete the purchase of the Securities at the Closing is subject to fulfillment
of the following conditions:
 
(a) the representation and warranties of the Company set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and (to the extent such representations and warranties speak as of a
later date) as of such later date as though made on and as of the Closing Date,
and the Company shall have performed in all material respects all covenants and
other obligations required to be performed by it under this Agreement at or
prior to the Closing Date;
 
(b) the absence of a Material Adverse Change from the date of this Agreement up
to, and including, the Closing Date;
 
(c) the Company shall have executed and delivered all other documents reasonably
requested by counsel for the Investors that are necessary to complete the
Contemplated Transactions;
 
(d) the Investors shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer and Secretary of the Company, in such
capacities, to the effect that all covenants and other obligations required to
be performed by the Company at or prior to the Closing Date under this Agreement
shall have been performed in all material respects (the “Closing Certificate”);
and
 
(e) the Company shall have executed and delivered all other documents reasonably
requested by counsel for the Investors that are necessary to complete the
contemplated transactions.
 
1.3           Waiver of Conditions of Closing by Investors.  Any of the
conditions to the obligation of the Investors to complete the purchase of the
Securities at the Closing that are set forth in Section 1.3 hereof may be waived
by the Investors upon the written consent of Investors subscribing for at least
fifty-one percent (51%) of the aggregate total Shares being sold pursuant to
this Agreement.
 
1.4. Company’s Conditions of Closing.  The obligation of the Company to complete
the sale of the Securities at the Closing is subject to fulfillment of the
following condition, which may be waived by the Company:
 
 
 
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(a) the representation and warranties of the Investors set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and (to the extent such representations and warranties speak as
of a later date) as of such later date as though made on and as of the Closing
Date.
 
2. Representations, Warranties and Covenants of the Company.  The Company hereby
represents and warrants to, and covenants with, each of the Investors as
follows:
 
2.1. Corporate Organization; Authority; Due Authorization.
 
(a) The Company (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (ii) has
the corporate power and authority to own or lease its properties as and in the
places where such business is conducted and to carry on its business as
conducted and (iii) is duly qualified as a foreign corporation authorized to do
business in every jurisdiction where the failure to so qualify, individually or
in the aggregate, would have a Material Adverse Effect.
 
(b) As of the date of this Agreement and as of the Closing, the Company (i) has
the requisite corporate power and authority to execute, deliver and perform this
Agreement and the other Transaction Documents to which it is a party and to
incur the obligations herein and therein and (ii) has been authorized by all
necessary corporate action to execute, deliver and perform this Agreement and
the other Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby (the “Contemplated
Transactions”).  Each of this Agreement and the other Transaction Documents is a
valid and binding obligation of the Company, enforceable in accordance with its
terms except as limited by applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting the enforcement of creditors’ rights and
the availability of equitable remedies (regardless of whether such
enforceability is considered in a proceeding at law or equity) and except as set
forth in Section 2.4.
 
2.2. Capitalization.
 
(a) The authorized capital stock of the Company, prior to Closing shall consist
of (i) 180,000,000 shares of Common Stock, .0001 par value per share, of which
35,502,580 shares of Common Stock are outstanding, and (ii) 15,000,000 shares of
Preferred Stock, .0001 par value per share, of which 5,583,336 shares are
outstanding.  Immediately after the Closing, assuming sale of all the Units, the
capitalization of the Company shall be as set forth on Exhibit 4 (the
“Capitalization Table”).  The Capitalization Table sets forth the (1) warrants,
options, convertible securities and other stock purchase rights outstanding on
the date hereof, the names of the holders thereof, the number of shares of
common stock issuable thereunder and the exercise or conversion price thereof,
as the case may be, and (2) warrants, options, convertible securities and other
stock purchase rights, the names of the holders thereof, the number of shares of
common stock issuable thereunder and the exercise or conversion price thereof,
as the case may be, immediately after the Closing.
 
 
 
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(b) Except as contemplated by this Agreement or as set forth in the
Capitalization Table, there are (i) no outstanding subscriptions, warrants,
options, conversion privileges or other rights or agreements obligating the
Company to purchase or otherwise acquire or issue any shares of capital stock of
the Company (or shares reserved for such purpose), (ii)  no preemptive rights or
contracts to which the Company is a party or rights of first refusal with
respect to the issuance of additional shares of capital stock of the Company,
including without limitation the Shares and the Underlying Shares, and (iii) no
commitments or understandings (oral or written) of the Company to issue any
shares, warrants, options or other rights.  None of the shares of Common Stock
are subject to any stockholders’ agreement, voting trust agreement or similar
arrangement or understanding to which the Company is a party.  The Company has
no outstanding bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of the Company on any
matter.
 
2.3. Validity of Shares.  As of the date of this Agreement and as of the
Closing, the issuance of the Shares has been duly authorized by all necessary
corporate action on the part of the Company, and, when issued to, delivered to,
and paid for by the Investors in accordance with this Agreement, the Shares will
be validly issued, fully paid and non-assessable.
 
2.4. Shares; Warrant Shares.  The issuance of the Shares has been duly
authorized. The Warrant Shares issuable upon exercise of the Warrants will be
duly reserved for issuance upon such exercise and, when issued in accordance
with the terms of the Warrants, will be validly issued, fully paid and
non-assessable.
 
2.5. Private Offering.  Neither the Company nor anyone acting on its behalf has
within the last 12 months issued, sold or offered any security of the Company
(including, without limitation, any Common Stock or warrants or similar tenor to
the Warrants) to any Person under circumstances that would cause the issuance
and sale of the Securities or any other Contemplated Transaction to be subject
to the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”).  Except as contemplated by the Transaction Documents, neither
the Company nor anyone acting on its behalf will offer the Securities or any
part thereof or any similar securities for issuance or sale to, or solicit any
offer to acquire any of the same from, anyone so as to make the issuance and
sale of the Securities subject to the registration requirements of Section 5 of
the Securities Act.
 
2.6. Brokers and Finders.  The Company has not retained any investment banker,
broker or finder in connection with the Contemplated Transactions.
 
2.7. Subsidiaries.  The Company has no Subsidiaries and does not otherwise
directly or indirectly control any other business entity. The Company does not
Own directly or indirectly any interest or investment (whether equity or debt)
in any corporation.
 
2.8. No Conflict; Required Filings and Consents.
 
(a) As of the date of this Agreement and as of the Closing, the execution,
delivery and performance of this Agreement and the other Transaction Documents
by the Company do not, and the consummation by the Company of the Contemplated
Transactions will not, (i) conflict with or violate the Certificate of
Incorporation or By-Laws of the Company, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to the Company or by
which any property or asset of the Company is bound or affected, or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, result in the loss of a material
benefit under, or give to others any right of purchase or sale, or any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company pursuant to, any Material Agreement; except, in the case of
clauses (ii) and (iii) above, for any such conflicts, violations, breaches,
defaults or other occurrences that would not prevent or delay consummation of
any of the Contemplated Transactions in any material respect or otherwise
prevent the Company from performing its obligations under this Agreement or any
of the other Transaction Documents  in any material respect, and would not,
individually or in the aggregate, have a Material Adverse Effect.
 
 
 
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(b) Assuming the accuracy of the representations and warranties of the Investors
set forth in Section 3 herein, the execution and delivery of this Agreement and
the other Transaction Documents by the Company do not, and the performance of
this Agreement and the other Transaction Documents and the consummation by the
Company of the Contemplated Transactions will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Body or violate any state securities or “blue sky” laws (“Blue Sky
Laws”).
 
2.9. Compliance.  The Company is not in conflict with, or in default or
violation of (i) any law, rule, regulation, order, judgment or decree applicable
to it or by which any property or asset of the Company is bound or affected
(“Legal Requirement”) or (ii) any Material Agreement, in each case except for
any such conflicts, defaults or violations that would not, individually or in
the aggregate, have a Material Adverse Effect.  The Company has not received any
written notice or communication from any Governmental Body regarding any actual
or possible violation of, or failure to comply with, any Legal Requirement.  The
Company has obtained all licenses, permits, and other authorizations and has
taken all actions required by applicable law or governmental regulations in
connection with its business as now conducted, where the failure to obtain any
such item or to take any such action would have, individually or in the
aggregate, a Material Adverse Effect.  None of the Company, or to the knowledge
of the Company, any director, officer, agent, employee or other person acting on
behalf of the Company has used any corporate funds for unlawful contributions,
payments, gifts or entertainment or for the payment of other unlawful expenses
relating to political activity, or made any direct or indirect unlawful payments
to governmental or regulatory officials or others.
 
2.10. SEC Documents; Financial Statements.
 
(a) The information contained in the following documents, did not, as of the
date of the applicable document, include 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 the light of the circumstances in which they
were made, not misleading, as of their respective filing dates or, if amended,
as so amended (the following documents, collectively, the “SEC Documents”),
provided that the representation in this sentence shall not apply to any
misstatement or omission in any SEC Document filed prior to the date of this
Agreement which was superseded by a subsequent SEC Document filed prior to the
date of this Agreement:
 
 
 
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(i) the Company’s Annual Report on Form 10-K for the year ended September 30,
2009, as amended by the Form 10-K/A filed on January 19, 2010; and
 
(ii) the Company’s Quarterly Report on Form 10-Q for the quarter ended on June
30, 2010, filed on August 13, 2010.
 
(b) The Company has filed all forms, reports and documents required to be filed
by it with the SEC since December 31, 2007, including without limitation the SEC
Documents.  As of their respective dates, the SEC Documents filed prior to the
date hereof complied as to form in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations thereunder.
 
(c) The Company’s Annual Report on Form 10-K for the year ended September 30,
2009, includes consolidated balance sheets as of September 30, 2008 and 2009 and
consolidated statements of income for the one year periods then ended
(collectively, the “Form 10-K Financial Statements”).
 
(d) The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2010, includes consolidated balance sheets as of June 30, 2010 and September 30,
2009 and consolidated statements of income for the quarters ended June 30, 2010
and 2009 (the “Form 10-Q Financial Statements” and together with the Form 10-K
Financial Statements, the “Financial Statements”).
 
2.11. Financial Statements.  Each of the Financial Statements fairly presents,
in all material respects, the financial position of the Company, or the results
of operations, retained earnings or cash flows, as the case may be, of the
Company as of the referenced date or  for the periods set forth therein
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which would not be material in amount or effect), in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein and that the
unaudited statements may not contain all footnotes required by generally
accepted accounting principles. The Company does not have any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise),
including for Taxes, that would be required to be reflected on, or reserved
against in, Financial Statements, except for (i) liabilities or obligations that
were so reserved on, or reflected in (including the notes to), the Financial
Statements; and (ii) liabilities or obligations which would not, individually or
in the aggregate, have a Material Adverse Effect.  There has been no Material
Adverse Change since the date of the Financial Statements.  Other than the
indebtedness as set forth in the Financial Statements, the Company has no
indebtedness as of the date hereof.
 
2.12. Litigation.  There are no claims, actions, suits, investigations,
inquiries or proceedings (“Actions”) pending against the Company or, to the
knowledge of the Company, threatened against the Company, or any officer,
director, employee or agent thereof in his or her capacity as such, at law or in
equity, or before or by any court, tribunal, arbitrator, mediator or any federal
or state commission, board, bureau, agency or instrumentality that would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.  To the Company’s knowledge, there is no factual or
legal basis for any such Action.  The Company is not a party to or subject to
the provisions of any order, writ, injunction, judgment or decree of any court
or government agency or instrumentality and there is no Action by the Company
currently pending or which the Company intends to initiate.
 
 
 
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2.13. Absence of Certain Changes.  Except as specifically contemplated by this
Agreement or the SEC Documents, since June 30, 2010, there has not been with
respect to the Company (i) to the Company’s knowledge, any event, occurrence,
fact, condition, change, development or effect (“Event”) that would reasonably
be expected to have a Material Adverse Effect; (ii) any declaration, payment or
setting aside for payment of any dividend or other distribution or any
redemption, purchase or other acquisition of any shares of capital stock or
securities of the Company; (iii) any return of any capital or other distribution
of assets to stockholders of the Company; (iv) any acquisition (by merger,
consolidation, acquisition of stock or assets or otherwise) of any person or
business; (v) incurrence of any indebtedness for money borrowed or incurred any
other liabilities individually in excess of $25,000 or in excess of $100,000 in
the aggregate (other than indebtedness or liabilities incurred in the ordinary
course of business, consistent with past practices and reasonable business
operations of the Company (the “Ordinary Course of Business”)); (vi) any loans
or advances to any person, other than ordinary advances for travel and other
expenses in the Ordinary Course of Business; (vii) sale, exchange or other
disposition of any material assets or rights other than the sale of inventory in
the Ordinary Course of Business; (viii) any transactions, other than in the
Ordinary Course of Business, with any of its officers, directors, principal
shareholders or employees or any person affiliated with any of such persons;
(ix) any other action or agreement or undertaking by the Company that, if taken
or done on or after the date hereof would reasonably be expected to have a
Material Adverse Effect; or (x) any material change in its accounting
principles, practices or methods.
 
2.14. Proprietary Assets.
 
(a) For purposes of this Agreement, “Proprietary Assets” shall mean any: (i)
patent, patent application, trademark (whether registered or unregistered),
trademark application, trade name, fictitious business name, service mark
(whether registered or unregistered), service mark application, copyright
(whether registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset relating to the foregoing; or (ii) right to
use or exploit any of the foregoing.
 
(b) The Company, as a whole, has good, valid and marketable title to, or has a
valid right to use, all of the Proprietary Assets used in the Company’s Business
free and clear of all liens and other encumbrances to the knowledge of the
Company; and are not obligated to make any payment to any person for the use of
any Proprietary Asset.  The Company has not developed jointly with any other
person any Proprietary Asset with respect to which such other person has any
rights.  The Company has no knowledge that any other person has any right, title
or interest in any of the Proprietary Assets of the Company, other than security
interests securing indebtedness described the SEC Documents.
 
 
 
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(c) The Company has taken reasonable and customary measures and precautions to
protect and maintain the confidentiality and secrecy of all Proprietary Assets
of the Company (except Proprietary Assets whose value would be unimpaired by
public disclosure) and otherwise to maintain and protect the value of all
Proprietary Assets of the Company.  Each employee, officer, consultant and
contractor (not including contractors without access to confidential information
of the Company) of the Company (each, an “Employee”) has entered into and
executed an agreement providing for (i) the assignment to the Company  of
personal rights or claims to Proprietary Assets for which such Employee’s
personal rights or claims arose out of the scope of his/her employment or
retainer by the Company and (ii) the nondisclosure of confidential information
acquired by the Employee with respect to the Proprietary Assets of the Company
or  an employment or consulting agreement containing substantially similar
terms.  The Company has not disclosed or delivered to any person, or permitted
the disclosure or delivery to any person of, (i) the source code, or any portion
or aspect of the source code, of any Proprietary Asset of the Company, (ii) the
object code, or any portion or aspect of the object code, of any Proprietary
Asset of the Company or (iii) any patent applications (except as required by
law).
 
(d) To the knowledge of the Company, (i) none of the Proprietary Assets of the
Company necessary for the conduct of their businesses infringes or conflicts
with any Proprietary Asset owned or used by any other Person, (ii) the Company
is not infringing, misappropriating or making any unlawful use of, and the
Company has not at any time infringed, misappropriated or made any unlawful use
of, or received any notice or other communication (in writing or otherwise) of
any actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Proprietary Asset owned or used by any other person, and
(iii) no other person is infringing, misappropriating or making any unlawful use
of, and no Proprietary Asset owned or used by any other person infringes or
conflicts with, any Proprietary Asset of the Company.
 
(e) There has not been any claim by any customer or other person alleging that
any Proprietary Asset of the Company (including each version thereof that has
ever been licensed or otherwise made available by the Company to any person)
does not conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the knowledge of the Company, there is no basis
for any such claim.
 
(f) The Company is not knowledgeable of any Proprietary Asset owned or used by
any other person (except for any Proprietary Asset that is licensed to the
Company under any third party license or would otherwise be commercially
available) necessary to enable the Company to conduct its businesses in the
manner in which such businesses have been and are being conducted or are
expected to be conducted.  The Company (i) has not licensed, or agreed to
license, any of its Proprietary Assets to any person on an exclusive,
semi-exclusive or royalty-free basis, and (ii) has not entered into any covenant
not to compete or contract limiting its ability to exploit fully any of its
Proprietary Assets or to transact business in any market or geographical area or
with any person.  Without limitation on the foregoing, to the Company’s
knowledge, no officer or director, either as an individual or through an
affiliate, has any claim to own or any other rights to use any of the
Proprietary Assets.
 
 
 
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2.15. No Adverse Actions.  There is no existing, pending or, to the knowledge of
the Company, threatened termination, cancellation, limitation, modification or
change in the business relationship of the Company, with any supplier, customer
or other Person except such as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
 
2.16. Corporate Documents.  All corporate documents (as amended to date and
prior to the Closing Date), including the Certificate of Incorporation, By-Laws
and minutes of meetings and consents of the Board of Directors and shareholders
of the Company, which have been requested and previously provided to the
Investors are true, correct and complete and contain all amendments thereto.
 
2.17. Disclosure.  No representation or warranty of the Company herein contains
(as of the date of this Agreement) or will contain (as of the Closing Date), as
appropriate, any untrue statement of a material fact or omits (as of the date of
this Agreement) or will omit (as of the Closing Date), as appropriate, to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
 
3. Representations and Warranties of the Investors.  Each Investor represents
and warrants to the Company as follows:
 
3.1. Authorization.   Each Investor (i) has full power and authority to execute,
deliver and perform this Agreement and the other Transaction Documents to which
it is a party and to incur the obligations herein and therein and (ii) if
applicable, has been authorized by all necessary corporate action to execute,
deliver and perform this Agreement and the other Transaction Documents and to
consummate the Contemplated Transactions.  Each of this Agreement and the other
Transaction Documents is a valid and binding obligation of Investor enforceable
in accordance with its terms, except as limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting the enforcement
of creditors’ rights and the availability of equitable remedies (regardless of
whether such enforceability is considered in a proceeding at law or equity).
 
3.2. Brokers and Finders.  Such Investor has not retained any investment banker,
broker or finder in connection with the Contemplated Transactions.
 
3.3. Securities Laws Representations and Covenants of Investors.
 
(a) This Agreement is made with each Investor in reliance upon such Investor’s
representation to the Company, which by such Investor’s execution of this
Agreement such Investor hereby confirms, that the Securities to be received by
such Investor will be acquired for investment for such Investor’s own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof such that such Investor would constitute an “underwriter” under
the Securities Act.  The Investor has not granted any right to any other person
to acquire the Securities purchased by such Investor or the Underlying Shares
except as permitted by the Securities Act and Blue Sky Laws.  Notwithstanding
the foregoing, this representation and warranty shall not limit the Investor’s
right to sell the Shares, Warrant Shares or the Underlying Shares pursuant to
this Agreement, or in compliance with an exemption from registration under the
Securities Act.
 
 
 
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(b) Each Investor understands and acknowledges that the offering of the
Securities pursuant to this Agreement will not be registered under the
Securities Act or qualified under any Blue Sky Laws on the grounds that the
offering and sale of the Securities are exempt from registration and
qualification, respectively, under the Securities Act and the Blue Sky Laws, and
that the Company’s reliance upon such exemption is predicated upon such
Investor’s representations set forth in this Agreement.
 
(c) Each Investor covenants that, unless the Securities, the Underlying Shares
or any other shares of capital stock of the Company received in respect of the
foregoing have been registered pursuant to the Securities Act, such Investor
will not dispose of such securities unless and until such Investor shall have
notified the Company of the proposed disposition and shall have furnished the
Company with an opinion of counsel reasonably satisfactory in form and substance
to the Company and its counsel to the effect that (i) such disposition will not
require registration under the Securities Act and (ii) appropriate action
necessary for compliance with the Securities Act and any applicable state, local
or foreign law has been taken; provided, however, that an Investor may dispose
of such securities without providing the opinion referred to above if the
Company has been provided with adequate assurance, reasonably satisfactory to
the Company and its counsel, that such disposition is made in compliance with
Rule 144 under the Securities Act (or any similar or analogous rule) and any
applicable state, local or foreign law.
 
(d) In connection with the investment representations made herein, each Investor
represents that (i) such Investor is able to fend for itself in the Contemplated
Transactions; (ii) such Investor has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of such
Investor’s prospective investment in the Securities; (iii) such Investor has the
ability to bear the economic risks of such Investor’s prospective investment and
can afford the complete loss of such investment; (iv) such Investor has read the
SEC Filings, including without limitation the Risk Factors set forth in the SEC
Documents (including the Form 10-K/A); (v) such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Securities; and (vi) such Investor has had access to
officers of the Company and an opportunity to ask questions of and receive
answers from such officers and has had all questions that have been asked by
such Investor satisfactorily answered by the Company.
 
(e) Each Investor further represents by execution of this Agreement that such
Investor qualifies as an “accredited investor” as such term is defined under
Rule 501 promulgated under the Securities Act.  Any Investor that is a
corporation, a partnership, a trust or other business entity further represents
by execution of this Agreement that it has not been organized for the purpose of
purchasing the Securities.
 
(f) By acceptance hereof, each Investor agrees that the Securities, the
Underlying Shares and any shares of capital stock of the Company received in
respect of the foregoing held by it may not be sold by such Investor without
registration under the Securities Act or an exemption therefrom, and therefore
such Investor may be required to hold such securities for an indeterminate
period.
 
 
 
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3.4. Legends.  All certificates for the Shares, the Warrants, the Underlying
Shares and each certificate representing any shares of capital stock of the
Company received in respect of the foregoing, whether by reason of a stock split
or share reclassification thereof, a stock dividend thereon or otherwise and
each certificate for any such securities issued to subsequent transferees of any
such certificate (unless otherwise permitted herein) shall bear the following
legend:
 
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT.”
 
In addition, such certificates shall bear any legend that, in the opinion of the
Company’s counsel, is required under the other Transaction Documents or pursuant
to any state, local or foreign law governing the Securities and the Underlying
Shares.
 
3.5. Acknowledgment of Reliance. The Investor hereby agrees and acknowledges
that the Company has been induced to enter into this Agreement and to issue and
sell the Securities hereunder, in part, based upon the representations,
warranties and covenants of the Investor contained herein.
 
4. Additional Covenants of the Company.
 
4.1. Expenses.  The Company agrees to pay on the Closing Date and save the
Investors harmless against liability for the payment of (i) any stamp or similar
taxes (including interest and penalties, if any) that may be determined to be
payable in respect of the execution and delivery of this Agreement or the other
Transaction Documents, the issue and sale of the Securities and the Underlying
Shares, (ii) the expense of preparing and issuing the Securities and the
Underlying Shares, (iii) the cost of delivering the Securities and the
Underlying Shares of each Investor to such Investor’s home office, insured to
such Investor’s satisfaction, and (iv) the costs and expenses incurred in the
preparation of all certificates and letters on behalf of the Company and of the
Company’s performance and compliance with all agreements and conditions
contained herein on its part to be performed or complied with.
 
4.2. Form D.  As soon as is practicable following the Closing, the Company shall
prepare and file with the SEC a Form D concerning the sale of the
Securities.  Thereafter, the Company shall furnish such information statements
to the stockholders of the Company in accordance with the appropriate SEC rules
and regulations and shall take all such other actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable Warrant Shares upon the conversion of all Warrants from time
to time outstanding.
 
 
 
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4.3. Piggy-Back Registrations. If at any time while the Securities are
outstanding there is not an effective registration statement covering all of the
Securities and the Company shall determine to prepare and file with the SEC 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 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 stock option or
other employee benefit plans, then the Company shall send to each Investor a
written notice of such determination and, if within 15 days after the date of
such notice, any Investor shall so request in writing, the Company shall include
in such registration statement all or any part of such Securities such Investor
requests to be registered; provided, however, that, the Company shall not be
required to register any Securities pursuant to this Section 4.4 that are
eligible for resale pursuant to Rule 144 or that are the subject of a then
effective registration statement ; provided further that, if the managing
underwriter of an offering to be made pursuant to such registration statement
shall advise the Company that, in such underwriter’s opinion, the number of
shares of Common Stock requested to be included in such Registration exceeds the
number that can be sold in such offering within a price range acceptable to the
Company, the Company may reduce the amount of Securities requested for inclusion
by such Investor on an equitable basis, taking into account any priorities in
agreements with other holders.  The Investor acknowledges that the Company may
permit other holders of Company securities, whether pursuant to an agreement
(which may provide for priorities on inclusion in such registration) or
otherwise, to include shares of Common Stock or other securities of the Company
in such registration.
 
5. Miscellaneous.
 
5.1. Entire Agreement; Successors and Assigns.  This Agreement (including all
schedules and exhibits thereto) constitutes the entire contract between the
parties relative to the subject matter hereof and thereof.  Any previous
agreement among the parties with respect to the sale of Securities is superseded
by this Agreement.  The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective executors, administrators,
heirs, successors and assigns of the parties.  Except as expressly provided
herein, nothing in this Agreement, expressed or implied, is intended to confer
upon any party, other than the parties hereto, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
 
5.2. Survival of Representations and Warranties. All representations and
warranties of the parties set forth in this Agreement and the Closing
Certificate shall survive the execution and delivery of this Agreement and the
Closing hereunder and shall continue in full force and effect for twenty-four
(24) months after the Closing.
 
5.3. Governing Law; Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the General Corporation Law of the State of
Delaware as to matters within the scope thereof, and as to all other matters
shall be governed by and construed in accordance with the internal laws of the
State of New York without regard to principles of conflicts of law.  Each party
hereby irrevocably consents and submits to the jurisdiction of any New York
State or United States Federal Court sitting in the State of New York, County of
New York, over any action or proceeding arising out of or relating to this
Agreement and irrevocably consents to the service of any and all process in any
such action or proceeding by registered mail addressed to such party at its
address specified on the signature page hereof.  Each party waives any objection
to venue in New York and any objection to an action or proceeding in such state
and county on the basis of forum non-conveniens.  Each party waives any right to
trial by jury.
 
 
 
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5.4. Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 
5.5. Headings.  The headings of the sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
 
5.6. Notices.  Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery and if a
fax number has been provided, upon delivery (with answerback confirmed),
addressed to a party at its address and the fax number, if any, shown below or
at such other address and fax number as such party may designate by three days
advance notice to the other party.
 
Any notice to the Investors shall be sent to the addresses set forth on the
signature pages hereof.
 
Any notice to the Company shall be sent to:
 
Ohr Pharmaceutical, Inc.
489 5th Avenue, 28th Floor
New York, NY 10017
Attention:              Sam Backenroth, Interim Chief Financial Officer
Telephone:            (212) 682-8452
Fax number:           (212) 644-0544

with a copy to:

Hahn & Hessen LLP
488 Madison Avenue
New York, New York 10022
Attention:             James Kardon
Fax Number:         (212) 478-7400

5.7. Rights of Transferees.  Any and all rights and obligations of Investors
herein incident to the ownership of the Securities or the Underlying Shares
shall pass successively to all subsequent transferees of such securities,
provided that such transfers are made in accordance with the requirements and
restrictions governing transfer of the Securities in the Transaction Documents,
until extinguished pursuant to the terms hereof.
 
5.8. Severability.  Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be deemed prohibited or invalid
under such applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or any other provision of this
Agreement.
 
 
 
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5.9. Conflicts.  The Company and each Investor (i) acknowledge that Hahn &
Hessen LLP, counsel to the Company in the transactions contemplated in this
Agreement, has acted, and from time to time continues to act, as counsel to
AIGH Investment Partners, LLC (“AIGH”) in connection with its investments in the
Company and in unrelated matters, (ii) consent to the representation of the
Company and such other representation of AIGH, or affiliates thereof, by Hahn &
Hessen LLP, (iii) acknowledge that partners of Hahn & Hessen LLP own securities
of the Company constituting less than 0.1% of outstanding stock of the Company,
and (iv) waive any conflicts of interest claim which may arise from any or all
of the foregoing
 
5.10. Public Statements.   Neither the Company nor any Investor shall make any
public statement about the Contemplated Transactions without the prior written
consent of the other party, unless that party determines in good faith, on the
advice of legal counsel, that public disclosure is required by law, in which
case that party shall consult with the other party prior to making a statement.
 
5.11. Amendments and Waivers.  Unless a particular provision or section of this
Agreement requires otherwise explicitly in a particular instance, any provision
of this Agreement may be amended and the observance of any provision of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and subscribers for or holders of fifty-one percent (51%) of the aggregate
Securities.  Any amendment or waiver effected in accordance with this Section
5.11 shall be binding upon each holder of any Securities purchased under this
Agreement at the time outstanding (including the Underlying Shares), each future
holder of all such Securities (including the Underlying Shares), and the
Company.
 
[REMAINDER OF PAGE INTENTIONALLY BLANK]
 
 
 
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SIGNATURE PAGE
 
TO
 
OHR PHARMACEUTICAL, INC.
 
SUBSCRIPTION AGREEMENT
 
IF the PURCHASER is an INDIVIDUAL, please complete the following:
 
IN WITNESS WHEREOF, the undersigned has executed this Agreement this __ day of
December 2010.
 
Amount of
Subscription:                                           $______________________
 

___________________________________
Print Name

___________________________________
Signature of Investor

___________________________________
Social Security Number

___________________________________
Address and Fax Number

___________________________________

 

 
ACCEPTED AND AGREED:
 
OHR PHARMACEUTICAL, INC.

By:______________________________________
Name:
Title:

Dated:___________________________________
 
 
 
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SIGNATURE PAGE
 
 
TO
 
OHR PHARMACEUTICAL, INC.
 
SUBSCRIPTION AGREEMENT
 
IF the PURCHASER is a PARTNERSHIP, CORPORATION, TRUST or OTHER ENTITY, please
complete the following:
 
IN WITNESS WHEREOF, the undersigned has executed this Agreement this __ day of
December, 2010.
 
Amount of
Subscription:                                           $______________________
 

_________________________________________
Print Full Legal Name of Partnership,
Company, Trust or Other Entity

By:_X____________________________________
(Authorized Signatory)
Name:
Title:

Address and Fax Number:

_________________________________________
_________________________________________

Employer Identification Number:______________

Date and State of Incorporation or Organization:_____________________________

Date on which Taxable Year Ends:____________

 
ACCEPTED AND AGREED:

OHR PHARMACEUTICAL, INC.

By:______________________________________
Name:
Title:

Dated:___________________________________