Exhibit 4.2


 


Confidential Information


 


RITTER PHARMACEUTICALS,
INC.


 


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 


This Amended and Restated
Investors’ Rights Agreement (this “Agreement”), dated as of November 17, 2010, is made by and among Ritter
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the persons and entities (each, an “Investor”
and collectively, the “Investors”) listed on Exhibit A hereto.  Unless otherwise defined herein,
capitalized terms used in this Agreement have the meanings ascribed to them in Section 1.  This Agreement amends
and restates in its entirety the Investor Rights Agreement entered into by and among the Company and the other parties thereto,
dated as of September 15, 2008 (the “Prior Agreement”).


 


RECITALS


 


WHEREAS:  Certain
of the Investors are parties to the Series B Preferred Stock Purchase Agreement of even date herewith, among the Company and the
Investors listed on the Schedule of Investors thereto (the “Purchase Agreement”), and it is a condition to the
closing of the sale of the Series B Preferred Stock to the Investors listed on such Schedule of Investors that such Investors and
the Company execute and deliver this Agreement.


 


WHEREAS:  In
order to induce the Investors to purchase the Series B Preferred Stock and invest funds in the Company pursuant to the Purchase
Agreement, the Company and the Investors that are party to the Prior Agreement hereby agree that this Agreement shall govern the
rights of the Investors with respect to the matters set forth herein.


 


NOW, THEREFORE:  In
consideration of the mutual promises and covenants set forth herein, and other consideration, the receipt and adequacy of which
is hereby acknowledged, the parties hereto agree as follows:


 


Section
1

Definitions


 


1.1         Certain
Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below:


 


(a)          “Commission”
shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.


 


(b)          “Common
Stock” means the Common Stock of the Company.


 


(c)          “Conversion
Stock” shall mean shares of Common Stock issued upon conversion of the Series A-1 Preferred Stock, Series A-2 Preferred
Stock, the Series A-3 Preferred Stock and the Series B Preferred Stock.


 


(d)          “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules
and regulations thereunder, all as the same shall be in effect from time to time.


 




    	 



    	 



    

 


(e)          “Holder”
shall mean any Investor who holds Registrable Securities and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been duly and validly transferred in accordance with Section 2.12 of this Agreement.


 


(f)          “Indemnified
Party” shall have the meaning set forth in Section 2.6(c) hereto.


 


(g)          “Indemnifying
Party” shall have the meaning set forth in Section 2.6(c) hereto.


 


(h)          “Initial
Closing” shall mean the date of the initial sale of shares of the Company’s Series B Preferred Stock pursuant to
the Purchase Agreement.


 


(i)           “Initial
Public Offering” shall mean the closing of the Company’s first firm commitment underwritten public offering of
the Company’s Common Stock registered under the Securities Act, provided that the aggregate gross proceeds to the Corporation
are greater than $30,000,000.00.


 


(j)           “Initiating
Holders” shall mean any Holder or Holders who in the aggregate hold not less than fifty percent (50%) of the outstanding
Registrable Securities.


 


(k)          “Investors”
shall mean the persons and entities listed on Exhibit A hereto.


 


(l)          “New
Securities” shall have the meaning set forth in Section 4.1(a) hereto.


 


(m)         “Purchase
Agreement” shall have the meaning set forth in the Recitals


 


(n)          “Registrable
Securities” shall mean (i) shares of Common Stock issued or issuable pursuant to the conversion of the Shares and (ii)
any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares
referenced in (i) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described
in clause (i) or (ii) above which have previously been registered or which have been sold to the public either pursuant to a registration
statement or Rule 144, or which have been sold in a private transaction in which the transferor’s rights under this Agreement
are not validly assigned in accordance with this Agreement.


 


(o)          The
terms “register,” “registered” and “registration” shall refer to a registration
effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such registration statement.


 


(p)          “Registration
Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company and one special counsel for all the Holders of Registrable Securities, blue sky fees and expenses, and expenses
of any regular or special audits incident to or required by any


 




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such registration, but shall
not include Selling Expenses, fees and disbursements of other counsel for the Holders and the compensation of regular employees
of the Company, which employee compensation shall be paid in any event by the Company.


 


(q)          “Restricted
Securities” shall mean any Registrable Securities required to bear the first legend set forth in Section 2.8(b)
hereof.


 


(r)          “Rule
144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from
time to time, or any similar successor rule that may be promulgated by the Commission.


 


(s)          “Rule
145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from
time to time, or any similar successor rule that may be promulgated by the Commission


 


(t)          “Rule
415” shall mean Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended from
time to time, or any similar successor rule that may be promulgated by the Commission,


 


(u)          “Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.


 


(v)         “Selling
Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale
of Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of one special
counsel to the Holders included in Registration Expenses).


 


(w)         “Series
A-1 Preferred Stock” shall mean the shares of Series A-1 Preferred Stock issued pursuant to the Agreement and Plan of
Conversion to Corporation dated as of September 11, 2008.


 


(x)          “Series
A-2 Preferred Stock” shall mean the shares of Series A-2 Preferred Stock issued pursuant to the Agreement and Plan of
Conversion to Corporation dated as of September 11, 2008.


 


(y)          “Series
A-3 Preferred Stock” shall mean the shares of Series A-3 Preferred Stock issued pursuant to that certain Series A-3 Preferred
Stock Purchase Agreement dated as of September 15, 2008.


 


(z)          “Shares”
shall mean the Company’s Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock and Series B
Preferred Stock.


 


(aa)        “Significant
Holders” shall have the meaning set forth in Section 4.1 hereof.


 


(bb)       “Series
B Preferred Stock” shall mean the shares of Series B Preferred Stock issued pursuant to the Purchase Agreement.


 




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Section
2

Registration Rights


 


2.1         Requested
Registration.


 


(a)          Request
for Registration.  Subject to the conditions set forth in this Section 2.1, if the Company shall receive from
Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration with respect to
all or a part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed
of and the intended methods of disposition of such shares by such Initiating Holders), the Company will:


 


(i)          promptly
give written notice of the proposed registration to all other Holders; and


 


(ii)         as
soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation,
filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate
compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request received by the Company within twenty (20) days after such written
notice from the Company is mailed or delivered.


 


(b)          Limitations
on Requested Registration.  The Company shall not be obligated to effect, or to take any action to effect, any such
registration pursuant to this Section 2.1:


 


(i)          If
such request is made prior to one hundred eighty (180) days following the effective date of the first registration statement filed
by the Company covering an underwritten offering of any of its securities to the general public (or the subsequent date on which
all market stand-off agreements applicable to the offering have terminated);


 


(ii)         If
the Initiating Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration
statement, propose to sell Registrable Securities with aggregate proceeds (after deduction for underwriter’s discounts and
expenses related to the issuance) less than $10,000,000;


 


(iii)        In
any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting
such registration, qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;


 


(iv)       After
the Company has initiated two (2) such registrations pursuant to this Section 2.1;


 


(v)        During
the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and
ending on a date one hundred eighty


 




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(180) days after the effective
date of, a Company-initiated registration (or ending on the subsequent date on which all market stand-off agreements applicable
to the offering have terminated); provided that the Company is actively employing in good faith commercially reasonable
efforts to cause such registration statement to become effective; or


 


(vi)       If
the Initiating Holders propose to dispose of shares of Registrable Securities which may be immediately registered on Form S-3 pursuant
to a request made under Section 2.3 hereof.


 


(c)          Deferral.  If
(i) in the good faith judgment of the Board of Directors of the Company, the filing of a registration statement covering the Registrable
Securities would be detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is in
the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish
to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be detrimental to the Company for such registration statement to be filed in the near future and that
it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to
the limitations set forth in Section 2.1(b)(v) above) the Company shall have the right to defer such filing for a period
of not more than one hundred twenty (120) days after receipt of the request of the Initiating Holders, and provided further, that
the Company shall not defer its obligation in this manner more than once in any twelve-month period.


 


(d)          Underwriting.  The
right of any Holder to include all or any portion of its Registrable Securities in a registration pursuant to this Section 2.1
shall be conditioned upon such Holder’s participation in an underwriting and the inclusion of such Holder’s Registrable
Securities to the extent provided herein.  If the Company shall request inclusion in any registration pursuant to Section
2.1 of securities being sold for its own account, the Initiating Holders shall, on behalf of all Holders, offer to include
such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons
in such underwriting and the inclusion of the Company’s and such person’s other securities of the Company and their
acceptance of the further applicable provisions of this Section 2 (including Section 2.10).  The Company
shall (together with all Holders and other persons proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting
by the Company, which underwriters are reasonably acceptable to a majority in interest of the Initiating Holders.


 


Notwithstanding any other
provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that marketing factors require
a limitation on the number of shares to be underwritten, the number of Registrable Securities that may be so included shall be
allocated as follows:  (i) first, among all Holders in such registration statement based on the pro rata percentage of
Registrable Securities held by such Holders, assuming conversion and (ii) second, to the Company, which the Company may allocate,
at its discretion, for its own account, or for the account of other holders or employees of the Company.


 




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If a person who has requested
inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded
therefrom by written notice from the Company, the underwriter or the Initiating Holders.  The securities so excluded
shall also be withdrawn from registration.  Any Registrable Securities or other securities excluded or withdrawn from
such underwriting shall also be withdrawn from such registration.  If shares are so withdrawn from the registration and
if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to
this Section 2.1(e), then the Company shall then offer to all Holders who have retained rights to include securities in
the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth
above.


 


2.2         Company
Registration.


 


(a)          Company
Registration.  If the Company shall determine to register any of its securities either for its own account or the
account of a security holder or holders, other than the first registration statement filed by the Company covering an underwritten
offering of any of its securities to the general public, a registration pursuant to Section 2.1 or 2.3, a registration
relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating
to a corporate reorganization or other Rule 145 transaction, or a registration on any registration form that does not permit secondary
sales, the Company will:


 


(i)          promptly
give written notice of the proposed registration to all Holders; and


 


(ii)         use
its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other
compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Registrable
Securities as are specified in a written request or requests made by any Holder or Holders received by the Company within ten (10)
days after such written notice from the Company is mailed or delivered.  Such written request may specify all or a part
of a Holder’s Registrable Securities.


 


(b)          Underwriting.  If
the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i).  In such event, the
right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation
in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided
herein.  All Holders proposing to distribute their securities through such underwriting shall (together with the Company
and the other holders of securities of the Company with registration rights to participate therein distributing their securities
through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or
underwriters selected by the Company.


 


Notwithstanding any other
provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors require a limitation
on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) exclude all


 




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Registrable Securities from,
or limit the number of Registrable Securities to be included in, the registration and underwriting; provided that, in no
event, shall such reduction reduce the value of the Registrable Securities of the Holders included in such registration below fifteen
percent (15%) of the total value of securities included in such registration, unless such offering is the Company’s Initial
Public Offering.  The Company shall so advise all holders of securities requesting registration, and the number of shares
of securities that are entitled to be included in the registration and underwriting shall be allocated, as follows:  (i)
first, to the Company for securities being sold for its own account and (ii) second, to the Holders requesting to include Registrable
Securities in such registration statement based on the pro rata percentage of Registrable Securities held by such Holders, assuming
conversion.


 


If a person who has requested
inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be
excluded therefrom by written notice from the Company or the underwriter.  The Registrable Securities or other securities
so excluded shall also be withdrawn from such registration.  Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such registration.


 


(c)          Right
to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include
securities in such registration.


 


2.3         Registration
on Form S-3.


 


(a)          Request
for Form S-3 Registration.  After its Initial Public Offering, the Company shall use its commercially reasonable
efforts to qualify for registration on Form S-3 or any comparable or successor form or forms.  After the Company has
qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and
subject to the conditions set forth in this Section 2.3, if the Company shall receive from a Holder or Holders of Registrable
Securities a written request that the Company effect any registration on Form S-3 or any similar short form registration statement
with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities
to be disposed of and the intended methods of disposition of such shares by such Holder or Holders), the Company will take all
such action with respect to such Registrable Securities as required by Section 2.1(a)(i) and (ii).


 


(b)          Limitations
on Form S-3 Registration.  The Company shall not be obligated to effect, or take any action to effect, any such registration
pursuant to this Section 2.3:


 


(i)          In
the circumstances described in either Sections 2.1(b)(i), 2.1(b)(iii) or 2.1(b)(v);


 


(ii)         If
the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose
to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public of less than
$1,000,000; or


 




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(iii)        If,
in a given twelve-month period, the Company has effected two (2) such registration in such period.


 


(c)          Deferral.  If
(i) in the good faith judgment of the Board of Directors of the Company, the filing of a registration statement covering the Registrable
Securities would be detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is in
the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish
to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be detrimental to the Company for such registration statement to be filed in the near future and that
it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to
the limitations set forth in Section 2.1(b)(v) above) the Company shall have the right to defer such filing for a period
of not more than ninety (90) days after receipt of the request of the Initiating Holders, and, provided further, that the Company
shall not defer its obligation in this manner more than once in any twelve-month period.


 


(d)          Underwriting.  If
the Holders of Registrable Securities requesting registration under this Section 2.3 intend to distribute the Registrable
Securities covered by their request by means of an underwriting, the provisions of Section 2.1(e) shall apply to such registration.  Notwithstanding
anything contained herein to the contrary, registrations effected pursuant to this Section 2.3 shall not be counted as requests
for registration or registrations effected pursuant to Section 2.1.


 


2.4         Expenses
of Registration.  All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1,
2.2 and 2.3 hereof shall be borne by the Company, including the reasonable fees and expenses, not to exceed $15,000,
of one special counsel to represent all stockholders participating in any such registration; provided, however, that the
Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and
2.3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable
Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum offering conditions
set forth in Sections 2.1 and 2.3 are no longer satisfied (in which case all participating Holders shall bear such
expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders
of a majority of the Registrable Securities agree to forfeit their right to a demand registration pursuant to Section 2.1.


 


2.5         Registration
Procedures.  In the case of each registration effected by the Company pursuant to Section 2, the Company will
keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof.  At its
expense, the Company will use its commercially reasonable efforts to:


 


(a)          Keep
such registration effective for a period of ending on the earlier of the date which is sixty (60) days from the effective date
of the registration statement or such time as the Holder or Holders have completed the distribution described in the registration
statement relating thereto.


 




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(b)          Prepare
and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement for the period set forth in subsection (a) above;


 


(c)          Furnish
such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment
of or supplement to the prospectus, as a Holder from time to time may reasonably request;


 


(d)          Use
its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdiction as shall be reasonably requested by the Holders; provided, that the Company shall
not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service
of process in any such states or jurisdictions.


 


(e)          Notify
each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances
then existing, and following such notification promptly prepare and furnish to such seller a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares,
such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;


 


(f)           Provide
a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective date of such registration;


 


(g)          Cause
all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed; and


 


(h)          In
connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1 hereof, enter
into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting
agreement contains reasonable and customary provisions, and provided further, that each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.


 


2.6         Indemnification.


 


(a)          To
the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners,
legal counsel, and accountants


 




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and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance
has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning
of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions,
proceedings, or settlements in respect thereof) arising out of or based on:  (i) any untrue statement (or alleged untrue
statement) of a material fact contained or incorporated by reference in any prospectus, offering circular, or other document (including
any related registration statement, notification, or the like) incident to any such registration, qualification, or compliance,
(ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any violation (or alleged violation) by the Company of the Securities Act, any state
securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the
Company in connection with any offering covered by such registration, qualification, or compliance, and the Company will reimburse
each such Holder, each of its officers, directors, partners, legal counsel, and accountants and each person controlling such Holder,
each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided
that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises
out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder,
any of such Holder’s officers, directors, partners, legal counsel or accountants, any person controlling such Holder, such
underwriter or any person who controls any such underwriter and stated to be specifically for use therein; and provided, further
that, the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld).


 


(b)          To
the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as
to which such registration, qualification, or compliance is being effected, indemnify and hold harmless the Company, each of its
directors, officers, partners, legal counsel, and accountants and each underwriter, if any, of the Company’s securities covered
by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of
the Securities Act, each other such Holder, and each of their officers, directors, and partners, and each person controlling each
other such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based
on:  (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference
in any such registration statement, prospectus, offering circular, or other document, or (ii) any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and such Holders, directors, officers, partners, legal counsel, and accountants, persons, underwriters,
or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular, or other
document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically


 




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for use therein; provided,
however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses,
damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided that in no event shall any indemnity under this Section 2.6 exceed
the gross proceeds from the offering received by such Holder, except in the case of fraud or willful misconduct by such Holder.


 


(c)          Each
party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice
to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; and
provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 2.6, to the extent such failure is not prejudicial.  No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry
of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.  Each
Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably
request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.


 


(d)          If
the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.  The
relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information,
and opportunity to correct or prevent such statement or omission.  No person or entity will be required under this Section
2.6 to contribute any amount in excess of the gross proceeds from the offering received by such person or entity, except in
the case of fraud or willful misconduct by such person or entity.  No person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was
not guilty of such fraudulent misrepresentation.


 




    	- 11 -



    	 



    

  


(e)          Notwithstanding
the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.


 


2.7         Information
by Holder.  Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder
and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required
in connection with any registration, qualification, or compliance referred to in this Section 2.


 


2.8         Restrictions
on Transfer.


 


(a)          The
holder of each certificate representing Registrable Securities by acceptance thereof agrees to comply in all respects with the
provisions of this Section 2.8.  Each Holder agrees not to make any sale, assignment, transfer, pledge or other
disposition of all or any portion of the Restricted Securities, or any beneficial interest therein, unless and until (x) the transferee
thereof has agreed in writing for the benefit of the Company to take and hold such Restricted Securities subject to, and to be
bound by, the terms and conditions set forth in this Agreement, including, without limitation, this Section 2.8 and Section
2.10 and (y):


 


(i)          There
is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or


 


(ii)         Such
Holder shall have given prior written notice to the Company of such Holder’s intention to make such disposition and shall
have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested
by the Company, such Holder shall have furnished the Company, at its expense, with (i) an opinion of counsel, reasonably satisfactory
to the Company, to the effect that such disposition will not require registration of such Restricted Securities under the Securities
Act or (ii) a “no action” letter from the Commission to the effect that the transfer of such securities without registration
will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder
of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice
delivered by the Holder to the Company.


 


(b)         Each
certificate representing Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable
state securities laws):


 


THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES.  THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT AS PERMITTED UNDER THE ACT AND


 




    	- 12 -



    	 



    

 


APPLICABLE STATE
SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.


 


THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC
OFFERING, AS SET FORTH IN AN INVESTORS’ RIGHTS AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, A COPY
OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.


 


The Holders consent to
the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order
to implement the restrictions on transfer established in this Section 2.8.


 


(c)          The
first legend referring to federal and state securities laws identified in Section 2.8(b) hereof stamped on a certificate
evidencing the Restricted Securities and the stock transfer instructions and record notations with respect to such Restricted Securities
shall be removed and the Company shall issue a certificate without such legend to the holder of such Restricted Securities if (i)
such securities are registered under the Securities Act, or (ii) such holder provides the Company with an opinion of counsel reasonably
acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under
the Securities Act, or (iii) such holder provides the Company with reasonable assurances, which may, at the option of the Company,
include an opinion of counsel satisfactory to the Company, that such securities can be sold pursuant to Rule 144 under the Securities
Act.


 


2.9         Rule
144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that
may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its commercially
reasonable efforts to:


 


(a)          Make
and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after ninety (90) days following the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;


 


(b)          File
with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the
Exchange Act at any time after it has become subject to such reporting requirements; and


 


(c)          So
long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following
the


 




    	- 13 -



    	 



    

  


effective date of the first
registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.


 


2.10       Market
Stand-Off Agreement.  Each Holder hereby agrees that such Holder shall not sell or otherwise transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as
a sale, of any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration)
during the one hundred eighty (180) day period following the effective date of a registration statement for the Company’s
Initial Public Offering filed under the Securities Act (or such other period as may be requested by the Company or an underwriter
to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations
and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any
successor provisions or amendments thereto), provided that:  all executive officers and directors of the Company are
bound by and have entered into similar agreements.  The obligations described in this Section 2.10 shall not apply
to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in
the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future.  The
Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(c)
hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such
one hundred eighty (180) day period.  Each Holder agrees to execute a market standoff agreement with said underwriters
in customary form consistent with the provisions of this Section 2.10.


 


2.11       Delay
of Registration.  No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration
as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.


 


2.12       Transfer
or Assignment of Registration Rights.  The rights to cause the Company to register securities granted to a Holder
by the Company under this Section 2 may be transferred or assigned by a Holder only to (i) current and former limited or general
partners, members and other affiliates of the Holder or (ii) a transferee or assignee who acquires not less than 100,000 shares
of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits, and the like); provided that (1) such transfer or assignment of Registrable Securities is effected in accordance
with the terms of Section 2.8 hereof, and applicable securities laws, (ii) the Company is given written notice prior to
said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect
to which such registration rights are intended to be transferred or assigned and (iii) the transferee or assignee of such rights
assumes in writing the obligations of such Holder under this Agreement, including without limitation the obligations set forth
in Section 2.10.


 




    	- 14 -



    	 



    

 


2.13       Limitations
on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without
the prior written consent of a majority in interest of the Holders, enter into any agreement with any holder or prospective holder
of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are senior
to the registration rights granted to the Holders hereunder.


 


2.14       Termination
of Registration Rights.  The right of any Holder to request registration or inclusion in any registration pursuant
to Section 2.1, 2.2 or 2.3 shall terminate on the earlier of (i) such date, on or after the closing of the
Company’s first registered public offering of Common Stock, on which all shares of Registrable Securities held or entitled
to be held upon conversion by such Holder may immediately be sold under Rule 144 during any ninety (90)-day period, (ii) a Deemed
Liquidation Event (as defined in the Company’s Certificate of Incorporation), and (iii) four (4) years after the closing
of the Company’s Initial Public Offering.


 


Section
3

Information Covenants of the Company


 


The Company hereby covenants
and agrees, as follows:


 


3.1         Basic
Financial Information and Inspection Rights.


 


(a)          Basic
Financial Information.  The Company will furnish the following reports to each Holder who owns at least 400,000 Shares
and/or Conversion Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits, and the like) and is not deemed to be a competitor of the Company by the Board of Directors:


 


(i)          As
soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred eighty (180) days after
the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the
end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for
such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by the Chief
Financial Officer of the Company, or if requested by the Series A-3 Director or the Series B Director, independent public accountants
of recognized national standing selected by the Company.


 


(ii)         As
soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company,
and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each
fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end
of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries,
if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject
to changes resulting from normal year-end audit adjustments.


 




    	- 15 -



    	 



    

 


(iii)        As
soon as practicable, but in any event within forty-five (45) days after the end of each quarterly accounting period of the Company,
a summary capitalization table dated as of the end of such quarterly accounting period, prepared with reasonable detail.


 


(b)          Inspection
Rights.  The Company will afford to each Holder who owns at least 400,000 (as presently constituted and subject to
subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like) Shares and/or Conversion
Stock and to such Holder’s accountants and counsel, reasonable access during normal business hours to all of the Company’s
respective properties, books and records.  Each such Holder shall have such other access to management and information
as is necessary for it to comply with applicable laws and regulations and reporting obligations.  The Company shall not
be required to disclose details of contracts with or work performed for specific customers and other business partners where to
do would violate confidentiality obligations to those parties.  Holders may exercise their rights under this Section
3.1(b) only for purposes reasonably related to their interests under this Agreement and related agreements.  The
rights granted pursuant to this Section 3.1(b) may not be assigned or otherwise conveyed by the Holders or by any subsequent
transferee of any such rights without the prior written consent of the Company except as authorized in this Section 3.1(b).


 


3.2         Confidentiality.  Anything
in this Agreement to the contrary notwithstanding, no Holder by reason of this Agreement shall have access to any trade secrets
or classified information of the Company.  The Company shall not be required to comply with any information rights of
Section 3 in respect of any Holder whom the Company reasonably determines to be a competitor or an officer, employee, director
or holder of more than ten percent (10%) of a competitor.  Each Holder acknowledges that the information received by
them pursuant to this Agreement may be confidential and for its use only, and it will not use such confidential information in
violation of the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees
or agents having a need to know the contents of such information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information available to the public generally.


 


3.3         Disinterested
Board of Directors Approval.  The Company agrees that it will require the Board of Directors to obtain approval from
two-thirds (2/3) of the disinterested directors in connection with any (i) agreement or transaction with a member of the board
of directors or an affiliate of a member of the Board of Directors, (ii) compensation arrangement involving a member of the Board
of Directors or senior management, and (iii) a transaction resulting in a Change of Control.  A member of the Board of
Directors will not be deemed to be an interested party in a transaction resulting in a Change of Control unless the member of the
Board of Directors is the person or entity with which such a transaction is conducted, or is an affiliate of that person or entity.  The
Company further agrees that any such actions approved in violation of this covenant shall be void.


 


3.4         Termination
of Covenants.  The covenants set forth in this Section 3 shall terminate and be of no further force and effect
after the closing of the Company’s Initial Public Offering.


 




    	- 16 -



    	 



    

  


3.5         Attendance
at Board Meetings.  The Company’s Board of Directors shall permit SJ Investment Company, LLC (“SJ”),
the right to designate one individual, who shall initially be Daniel Nathanson (the “SJ Observer”), to attend
all meetings of the Board of Directors, to participate in a non-voting observer capacity, to receive all notices of such meetings,
and to receive the information provided by the Company to the Board of Directors, in accordance with that certain Board Observer
Confidentiality Agreement by and between the Company and SJ’s designee.


 


Section
4

Right of First Refusal


 


4.1         Right
of First Refusal to Significant Holders.  The Company hereby grants to each Holder who owns at least 400,000 Shares
or Conversion Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits and the like) (the “Significant Holders”), the right of first refusal to purchase its pro rata
share of New Securities (as defined in this Section 4.1(a)) which the Company may, from time to time, propose to sell and
issue after the date of this Agreement.  A Significant Holder’s pro rata share, for purposes of this right of first
refusal, is equal to the ratio of (a) the number of shares of Common Stock owned by such Significant Holder immediately prior to
the issuance of New Securities (assuming full conversion of the Shares) to (b) the total number of shares of Common Stock outstanding
immediately prior to the issuance of New Securities (assuming full conversion of the Shares and exercise of all outstanding convertible
securities, rights, options and warrants, directly or indirectly, into Common Stock).


 


(a)          “New
Securities” shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized
or not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever
that are, or may become, exercisable or convertible into capital stock; provided that the term “New Securities”
does not include:


 


(i)          the
Shares and the Conversion Stock;


 


(ii)         securities
issued or issuable to officers, employees, directors, consultants, placement agents, and other service providers of the Company
(or any subsidiary) pursuant to stock grants, option plans, purchase plans, agreements or other employee stock incentive programs
or arrangements approved by the Board of Directors of the Company;


 


(iii)        securities
issued pursuant to the conversion or exercise of any outstanding convertible or exercisable securities as of this date of this
Agreement;


 


(iv)        securities
issued or issuable as a dividend or distribution on Preferred Stock of the Company or pursuant to any event for which adjustment
is made pursuant to paragraph 4(e), 4(f) or 4(g) of Article V of the Certificate of Incorporation of the Company;


 


(v)         securities
offered pursuant to a bona fide, firmly underwritten public offering pursuant to a registration statement filed under the Securities
Act;


 




    	- 17 -



    	 



    

  


(vi)        securities
issued or issuable pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all of
the assets or other reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board
of Directors of the Company;


 


(vii)       securities
issued or issuable pursuant to a commercial leasing or secured debt financing transaction approved by the Board of Directors of
the Company;


 


(viii)      securities
issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other
similar agreements or strategic partnerships approved by the Board of Directors of the Company;


 


(ix)         securities
issued to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions
approved by the Board of Directors of the Company;


 


(x)          securities
of the Company which are otherwise excluded by the affirmative unanimous vote of the Board of Directors of the Company; and


 


(xi)         any
right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities
pursuant to subsections (i) through (x) above.


 


(b)          In
the event the Company proposes to undertake an issuance of New Securities, it shall give each Significant Holder written notice
of its intention, describing the type of New Securities, and their price and the general terms upon which the Company proposes
to issue the same.  Each Significant Holder shall have ten (10) days after any such notice is mailed or delivered to
agree to purchase such Holder’s pro rata share of such New Securities for the price and upon the terms specified in the notice
by giving written notice to the Company, in substantially the form attached hereto as Schedule 1, and stating therein the
quantity of New Securities to be purchased.


 


(c)          In
the event the Holders fail to exercise fully the right of first refusal within said ten (10) day period (the “Election
Period”), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the
sale of New Securities covered thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to
sell that portion of the New Securities with respect to which the Significant Holders’ right of first refusal option set
forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than
specified in the Company’s notice to Significant Holders delivered pursuant to Section 4.1(b).  In the event
the Company has not sold within such ninety (90) day period following the Election Period, or such ninety (90) day period following
the date of said agreement, the Company shall not thereafter issue or sell any New Securities, without first again offering such
securities to the Significant Holders in the manner provided in this Section 4.1.


 


(d)          The
right of first refusal granted under this Agreement shall expire upon, and shall not be applicable on the earlier of (i) the closing
of the Company’s Initial Public Offering, (ii) a Deemed Liquidation Event (as defined in the Company’s Certificate
of


 




    	- 18 -



    	 



    

  


Incorporation), and (iii)
a transfer of more than fifty percent (50%) of the Company’s voting power in a single transaction or series of related transactions.


 


Section
5

Voting Agreements


 


5.1         Election
of the Board of Directors.


 


(a)          The
Company’s Certificate of Incorporation provides that (i) the holders of the majority of the Company’s Series A-1 Preferred,
voting as a single class, shall be entitled to elect two directors (the “Series A-1 Directors”), (ii) the holders
of the majority of the Company’s Series A-3 Preferred, voting as a single class, shall be entitled to elect one director
(the “Series A-3 Director”), (iii) the holders of the majority of the Company’s Series B Preferred, voting
as a single class, shall be entitled to elect one director (the “Series B Director”), and (iv) the holders of
the Company’s Preferred Stock and the holders of the Company’s Common Stock, voting together as one class, shall be
entitled to elect any remaining directors (the “Joint Directors”).  Accordingly, during the term of
this Agreement, each Investor agrees to vote all Shares and shares of the Company’s Common Stock held by such Investor in
such manner as may be necessary to elect (and maintain in office) as members of the Company’s Board of Directors the following
individuals:  (i) two Series A-1 Designees (as defined below) as the Series A-1 Directors, (ii) one Series A-3 Designee
(as defined below) as the Series A-3 Director, (iii) one Series B Designee (as defined below) as the Series B Director, (iv) one
Industry Designee (as defined below) as a Joint Director, and (v) one Joint Designee (as defined below) as a Joint Director.


 


(b)          The
current size of the Board of Directors is six (6) and can be changed by resolution of the Board of Directors.  The designees
to the Company’s Board of Directors described above (each a “Designee”) shall be selected as follows:


 


(i)          the
two “Series A-1 Designees” shall be chosen by a majority-in-interest of the holders of outstanding shares of
the Company’s Series A-1 Preferred and shall initially be Andrew Ritter and Ira Ritter,


 


(ii)         the
one “Series A-3 Designee” shall be nominated by Javelin Venture Partners, or an affiliate thereof (“Javelin”),
and chosen by a majority-in-interest of the holders of outstanding shares of the Company’s Series A-3 Preferred and shall
initially be Noah Doyle,


 


(iii)        the
one “Series B Designee” shall be chosen by a majority-in-interest of the holders of outstanding shares of the
Company’s Series B Preferred.


 


(iv)        the
one “Industry Designee” shall be an individual with relevant industry experience, nominated by a majority-in-interest
of the holders of outstanding shares of Series A-1 Preferred Stock, approved by a majority of the Board of Directors, and chosen
by a majority-in-interest of the holders of Preferred Stock and Common Stock, voting together as a single class and


 




    	- 19 -



    	 



    

 


(v)         the
one “Joint Designee” shall be chosen by a majority-in-interest of the holders of Preferred Stock and Common
Stock, voting together as a single class, and shall initially be Steven Markowitz.


 


Such approval shall take
the form of a notice signed by a majority-in-interest of the holders of Shares and the holders of Common Stock; provided however,
that if no such notice has been delivered to the Secretary of the Company within ten days prior to any regular or special meeting
of stockholders or five days after receiving an Action by Written Consent, the Secretary of the Company shall deliver a ballot
to each holder of Shares and each holder of Common Stock.  Such ballot shall contain the nominee or nominees of any holder
of Shares or any holder of Common Stock, the names of which were delivered to the Secretary prior to the mailing of the ballot,
and shall contain instructions that each holder of Shares and each holder of Common Stock is to complete and return such ballot
to the Secretary of the Company within five days of the effective date of such notice.


 


(c)          Changes
in Designees.  From time to time during the term of this Agreement, Investors who hold sufficient Shares to select
a Designee pursuant to this Agreement may, in their sole discretion:  (i) notify the Company in writing of an intention
to remove from the Company’s Board of Directors any incumbent Designee who occupies a Board seat for which such Investors
are entitled to designate the Designee; or (ii) notify the Company in writing of an intention to select a new Designee for election
to a Board seat for which such Voting Parties are entitled to designate the Designee (whether to replace a prior Designee or to
fill a vacancy in such Board seat).  In the event of such an initiation of a removal or selection of a Designee under
this section, the Company shall take such reasonable actions as are necessary to facilitate such removals or elections, including,
without limitation, soliciting the votes of the appropriate stockholders, and the Investors shall vote their Shares to cause:  (i)
the removal from the Company’s Board of Directors of the Designee or Designees so designated for removal; and (ii) the election
to the Company’s Board Directors of any new Designee or Designees so designated.


 


Section
6

Miscellaneous


 


6.1         Amendment.  Except
as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other
than by a written instrument referencing this Agreement and signed by the Company and the Holders holding a majority of the Registrable
Securities (excluding any of such shares that have been sold to the public or pursuant to Rule 144); provided, however,
that Holders purchasing shares of Series B Preferred Stock in a Closing after the Initial Closing (each as defined in the Purchase
Agreement) may become parties to this Agreement, by executing a counterpart of this Agreement without any amendment of this Agreement
pursuant to this paragraph or any consent or approval of any other Holder.  Any such amendment, waiver, discharge or
termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of all such securities
of Holder.  Each Holder acknowledges that by the operation of this paragraph, the holders of a majority of the Registrable
Securities (excluding any of such shares that have been sold to the public or pursuant to Rule 144) will have the right and power
to diminish or eliminate all rights of such Holder under this Agreement.


 




    	- 20 -



    	 



    

 


6.2         Notices.  All
notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed:


 


(a)          if
to an Investor, at the Investor’s address, facsimile number or electronic mail address as shown in the Company’s records,
as may be updated in accordance with the provisions hereof;


 


(b)          if
to any Holder, at such address, facsimile number or electronic mail address as shown in the Company’s records, or, until
any such holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address
of the last holder of such shares for which the Company has contact information in its records; or


 


(c)          if
to the Company, one copy should be sent to Ritter Pharmaceuticals, Inc., 1880 Century Park East, No. 1100, Los Angeles, California
90067, Attn:  President, or at such other address as the Company shall have furnished to the Investors, with a copy,
which shall not constitute notice, to Quarles & Brady LLP, Two North Central Avenue, Phoenix, Arizona 85004, Attn:  Geoffrey
M. Ossias.


 


Each such notice or other
communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation
of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the electronic mail address
set forth on the Schedule of Investors.


 


6.3         Governing
Law.  This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to
agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts
of law.


 


6.4         Successors
and Assigns.  This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred,
delegated or sublicensed by any Investor without the prior written consent of the Company.  Any attempt by an Investor
without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement
shall be void.  Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.


 


6.5         Entire
Agreement.  This Agreement and the exhibits hereto constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof.  No party hereto shall be liable or bound to any other party in any manner
with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth
herein.


 


6.6         Delays
or Omissions.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing
to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right,
power or remedy


 




    	- 21 -



    	 



    

 


of such non-defaulting party,
nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach
or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the
part of any party of any breach or default under this Agreement, or any waiver on the part of any party 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 or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not
alternative.


 


6.7         Severability.  If
any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void,
portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and
such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable
provision.  The balance of this Agreement shall be enforceable in accordance with its terms.


 


6.8         Titles
and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.  All references in this Agreement to sections, paragraphs and exhibits
shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.


 


6.9         Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such
counterparts, and all of which together shall constitute one instrument.


 


6.10       Telecopy
Execution and Delivery.  A facsimile, telecopy or other reproduction of this Agreement may be executed by one or
more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen.  Such execution and delivery shall be considered valid, binding
and effective for all purposes.  At the request of any party hereto, all parties hereto agree to execute and deliver
an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.


 


6.11       Jurisdiction;
Venue.  With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive
jurisdiction of, and venue in, the state courts in Santa Clara County in the State of California (or in the event of exclusive
federal jurisdiction, the courts of the Northern District of California).


 


6.12       Further
Assurances.  Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability
company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things
as may be necessary to more fully effectuate this Agreement.


 


6.13       Termination
Upon Change of Control.  Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing
obligations) shall terminate upon (a) the


 




    	- 22 -



    	 



    

  


acquisition of the Company
by another entity by means of any transaction or series of related transactions to which the Company is party (including, without
limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising
purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Company outstanding
immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting
securities being converted into voting securities of the surviving entity), as a result of shares in the Company held by such holders
prior to such transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the Corporation
or such surviving entity outstanding immediately after such transaction or series of transactions; or (b) a sale, lease or other
conveyance of all substantially all of the assets of the Company (together, a “Change of Control”).


 


6.14       Conflict.  In
the event of any conflict between the terms of this Agreement and the Company’s Certificate of Incorporation or its Bylaws,
the terms of the Company’s Certificate of Incorporation or its Bylaws, as the case may be, will control.


 


6.15       Attorneys’
Fees.  In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing
party in such dispute shall be entitled to recover from the losing party such reasonable out-of-pocket fees and expenses of attorneys
and accountants, incurred in connection with any such suit or action instituted to enforce the provisions of this Agreement.


 


[Remainder of Page Intentionally
Left Blank]


 




    	- 23 -



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“COMPANY”
	 	 
	 	RITTER PHARMACEUTICALS, INC.
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Andrew J. Ritter
	 	 	Andrew J. Ritter, President & CEO


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	STEVEN M. MARKOWITZ 1999 TRUST
	 	 	 
	 	By:	/s/ Steven M. Markowitz
	 	 	Steven M. Markowitz, Trustee


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	JAVELIN VENTURE PARTNERS, LP
	 	 
	 	By:	/s/ Noah Doyle
	 	 	Noah Doyle, Managing Director


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	SJ INVESTMENT COMPANY, LLC
	 	 	 
	 	By:	/s/ Dan Nathanson
	 	 	Dan Nathanson, Managing Director


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	WS INVESTMENT COMPANY, LLC
	 	 
	 	By:	/s/ James Terranova
	 	 	James Terranova, Director


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	VIVA LAS VEGAS, LLC
	 	 	 
	 	By:	/s/ Jon Price
	 	 	Jon Price, Managing Director


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 	 
	 	By:	/s/ Tod Richard Spieker
	 	 	Tod Richard Spieker
	 	 	 
	 	By:	/s/ Catherine R. Spieker
	 	 	Catherine R. Spieker


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

 


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	By:	/s/ David Stewart
	 	 	David Stewart


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

  


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 	 
	 	By:	/s/ Roger Markowitz
	 	 	Roger Markowitz


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

 


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	By:	/s/ Beverly Markowitz
	 	 	Beverly Markowitz


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT


 




    	 



    	 



    

 


IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Investors’ Rights Agreement effective as of the day and year first
above written.


 


	 	“INVESTORS”
	 	 
	 	By:	/s/ Jerry Offsay
	 	 	Jerry Offsay


 


RITTER PHARMACEUTICALS,
INC.


AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT



 




    	 



    	 



    

 


EXHIBIT A


 


INVESTORS


 


Series A-1 Preferred
Stock


 


Stonehenge Partners, LLC


Jeremy Milken


 


Series A-2 Preferred
Stock


 


Elan Capital, LLC


James H. Simons


Noah Doyle


William A. Davis


Viva Las Vegas, LLC


Stonehenge Partners, LLC


Steven M. Markowitz 1999
Trust*


Beverly Markowitz*


Roger Markowitz*


Derek Yee*


 


Series A-3 Preferred
Stock


 


Javelin Venture Partners,
LP**


Jerry Offsay


 


Series B Preferred
Stock


 


Javelin Venture Partners,
LP


SJ Investment Company, LLC


WS Investment Company


Steven M. Markowitz 1999
Trust


Viva Las Vegas, LLC


Tod Richard and Catherine
R. Spieker


David Stewart


Roger Markowitz


 


* Received Shares upon transfer
by Stockton RNS Investors, LLC.


** Formerly Step5 Venture
Partners.


 




    	 



    	 



    

 


SCHEDULE 1


 


NOTICE AND WAIVER/ELECTION
OF 

RIGHT OF FIRST REFUSAL


 


I do hereby waive or
exercise, as indicated below, my rights of first refusal under the Amended and Restated Investors’ Rights Agreement dated
as of November , 2010 (the “Agreement”):


 


		1.	Waiver of 10 Days’ Notice Period in Which to Exercise
Right of First Offer:  (please check only one)



 


		(  )	WAIVE in full, on behalf of all Holders, the 10-day notice
period provided to exercise my right of first refusal granted under the Agreement.



 


		(  )	DO NOT WAIVE the notice period described above.



 


		2.	Issuance and Sale of New Securities:  (please
check only one)



 


		(  )	WAIVE in full the right of first refusal granted under
the Agreement with respect to the issuance of the New Securities.



 


		(  )	ELECT TO PARTICIPATE in $__________ [PLEASE PROVIDE AMOUNT]
in New Securities proposed to be issued by Ritter Pharmaceuticals, Inc. representing less than my pro rata portion of the aggregate
of $__________ in New Securities being offered in the financing.



 


		(  )	ELECT TO PARTICIPATE in $__________ in New Securities proposed
to be issued by Ritter Pharmaceuticals, Inc., representing my full pro rata portion of the aggregate of $__________ in New Securities
being offered in the financing.



 


		(  )	ELECT TO PARTICIPATE in my full pro rata portion of the
aggregate of $__________ in New Securities being made available in the financing and, to the extent made available in the sole
discretion of Ritter Pharmaceuticals, Inc., up to an additional $__________ [PLEASE PROVIDE AMOUNT] in New Securities being offered
in the financing.



 


Date:  _______________,
20__


 


	 	 
	 	Signature of Stockholder or
	 	Authorized Signatory
	 	 
	 	 
	 	Title, if applicable