Form of Note Purchase Agreement relating to the 2009 bridge financing



 Exhibit 10.2 
 NOTE PURCHASE AGREEMENT 
 This NOTE PURCHASE AGREEMENT (this
“Agreement”) is made as of the last date set forth on the signature page hereof between CORONADO BIOSCIENCES, INC., a Delaware corporation having its principal place of business at 1700 Seventh Avenue, Suite 2100, Seattle,
Washington 98101 (the “Company”), and                              (the
“Subscriber”). 
 W I T N E S S E T H: 

WHEREAS, the Company has retained Paramount BioCapital, Inc. (the “Placement Agent”) to act as its exclusive
placement agent, on a “best efforts, all or none” basis, in a private offering (the “Offering”) of convertible promissory notes in substantially the form attached hereto as Exhibit A (the “Notes”)
included in the Minimum Offering (as defined below) and on a “best efforts” basis in the Offering of such Notes which will provide the Company with aggregate proceeds in excess of the Minimum Offering, and in connection therewith has
authorized Paramount to engage one or more other firms to assist in finding qualified subscribers for the Notes (such other firms, if any, together with Paramount, the “Placement Agent”); 

WHEREAS, the terms of the Offering are summarized in that certain Confidential Offering Memorandum dated July 7, 2009
(together with all amendments, supplements, exhibits and appendices thereto, the “Memorandum”); 

WHEREAS, the Company desires to offer and sell a minimum of $500,000 aggregate principal amount of Notes (which is referred to as
the “Minimum Offering”) and a maximum of $2,000,000 aggregate principal amount of Notes, with an option in favor of the Company and the Placement Agent, by mutual agreement, to sell up to an additional $1,000,000 in aggregate
principal amount of Notes (the “Over-Allotment,” and together with the Maximum Offering, the “Maximum Amount”) (such amount of Notes actually issued, the “Principal Loan Amount”). 

WHEREAS, the Company desires to enter into this Agreement to issue and sell the Notes and the Subscriber desires to purchase the
principal amount of Notes set forth on the signature page hereto on the terms and conditions set forth herein. 
 NOW,
THEREFORE, in consideration of the promises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows: 
  

	I.	SUBSCRIPTION FOR NOTES AND REPRESENTATIONS BY SUBSCRIBER 

 1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company that portion of the aggregate principal amount of
the Principal Loan Amount to be issued by the Company set forth on the signature page hereto (the “Subscriber Loan Amount”), payable in immediately available U.S. dollars in the amount of such Subscription Loan Amount, delivered by
wire transfer to: 
  

					
	Bank:	  	U.S. Bank National Association	  	
	ABA Number:	  	091000022	  	
	Further Credit to Account Name:	  	U.S. Bank N.A.	  	
	Account #:	  	180121167365	  	
	Final Beneficiary Recipient/Subacct:	  	Paramount BioCapital & Coronado	  	
	SEI/Subacct Number:	  	133150000	  	
	Reference:	  	[Investor Name]	  	
	Attention:	  	Stefan Ronchetti	  	
		  	651-495-2148 (phone)	  	
		  	651-495-8087 (fax)	  	








 Upon acceptance by the Placement Agent and the Company of subscriptions for an amount of
Notes equal to at least the Minimum Offering, the Placement Agent and the Company shall have the right at any time thereafter, prior to the Offering Termination Date (as defined in Section 3.2), to effect an initial closing with respect to the
Offering (the “Initial Closing”). Thereafter, the Placement Agent and the Company shall continue to accept additional subscriptions for, and continue to have closings (together with the Initial Closing, each a
“Closing” and the date thereof the “Closing Date”) with respect to subscriptions for Notes from new or existing investors from time to time and at any time up to the Offering Termination Date. 

The Subscriber understands that the Company’s and the Placement Agent’s respective officers, directors, employees and/or
affiliates may purchase Notes in this Offering, which purchases may be used to satisfy the Minimum Offering. In addition, certain employees of the Placement Agent and its affiliates are current stockholders of the Company. 

1.2 The Subscriber recognizes that the purchase of the Notes involves a high degree of risk including, but not limited to, the following:
(a) the Company remains a development stage business with limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who
can afford the loss of their entire investment should consider investing in the Company and the Notes; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Notes and the securities issuable upon
conversion of the Notes (the Notes and such other securities sometimes hereinafter collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition of the Securities, the Subscriber could
sustain the loss of its entire investment; and (f) the Company has not paid any dividends on its capital stock since its inception and does not anticipate paying any dividends in the foreseeable future. Without limiting the generality of the
representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.” 

1.3 The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation
D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article VII hereof. If the Subscriber is a
natural person, the Subscriber has reached the age of majority in the state or other jurisdiction in which the Subscriber resides, has adequate means of providing for the Subscriber’s current financial needs and contingencies, is able to bear
the substantial economic risks of an investment in the Securities for an indefinite period of time, has no need for liquidity in such investment and, at the present time, could afford a complete loss of such investment. 

1.4 The Subscriber hereby acknowledges and represents that (a) the Subscriber has sufficient knowledge and experience in business
and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange, or the Subscriber has employed the services of a “purchaser
representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Securities in
order to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the
Subscriber hereby assumes. 

  
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 1.5 The Subscriber hereby acknowledges receipt and careful review of this Agreement, the
Note and the Memorandum (which includes the Risk Factors), including all exhibits thereto (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the
course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber, its purchaser representative, attorney and/or accountant has requested or desired to
know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering. 

1.6 (a) In making the decision to invest in the Securities, the Subscriber has relied solely upon the information provided by the Company
in the Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase
of the Securities hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Securities other than the Offering
Materials. The Subscriber acknowledges and agrees that (i) the Company has prepared the Offering Materials and that no other person, including without limitation, the Placement Agent, has supplied any information for inclusion in the Offering
Materials other than information furnished in writing to the Company by the Placement Agent specifically for inclusion in those parts of the Offering Materials relating specifically to the Placement Agent, (ii) the Placement Agent has no
responsibility for the accuracy or completeness of the Offering Materials and (iii) the Subscriber has not relied upon the independent investigation or verification, if any, that may have been undertaken by the Placement Agent. 

(b) The Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Securities by the Company or the
Placement Agent (or an authorized agent or representative of the Company or the Placement Agent) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Securities were offered or sold to it by means of any form
of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or
broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising. 

1.7 The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or
the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, including the Placement Agent, directly or
indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby. 
 1.8 The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since
the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities have not been registered under the
Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state
securities or “blue sky” laws or unless an exemption from such registration is available. 

  
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 1.9 The Subscriber understands that the Securities have not been registered under the
Securities Act or any state securities laws by reason of a claimed exemption under the provisions of the Securities Act and such state securities laws that depends, in part, upon the Subscriber’s investment intention. The Subscriber hereby
represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed
for the purpose of purchasing the Securities. 
 1.10 The Subscriber understands that there is no public market for the
Securities and that no market may develop for any of such Securities. The Subscriber understands that even if a public market develops for such Securities, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for
non-affiliates, among other conditions, a minimum holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. The
Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V. 

1.11 The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such
Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is
aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:

 “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS”, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.” 

1.12 The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the
Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity. 
 1.13 The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Securities. This Agreement
constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms. 
 1.14 If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, (a) it is
authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so and (b) it is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. 
 1.15 The Subscriber acknowledges that if he or she is a Registered Representative of
a Financial Industry Regulatory Authority (“FINRA”) member firm, he or she must give such firm the notice required by NASD Rule 3050, receipt of which must be acknowledged by such firm in Section 7.3 below. 

  
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 1.16 Subject to the provision below, the Subscriber hereby agrees that in the case of an
initial offering of the Company’s securities to the public pursuant to an effective registration statement under the Securities Act (the “IPO”), the Subscriber will not, without the prior written consent of the Company, offer,
pledge, sell, contract to sell, grant any option for the sale of, or otherwise dispose of, directly or indirectly, the Registrable Securities (as defined in Section 5.1) purchased or acquired by the Subscriber for a period of up to 180 days
from the effective date of the registration statement relating to the IPO (or such longer period, not to exceed 34 days after the expiration of the 180-day period, as the underwriters or the Company shall request in order to facilitate compliance
with NASD Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation) and that the Subscriber will enter into an agreement with the Company or managing underwriter of the IPO to that effect. 

1.17 (a) The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment
in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or
regulation. 
 (b) The Company agrees not to disclose the names, addresses or any other information about the Subscribers,
except as required by law, including without limitation the use of the name (but not the address) of the Subscriber in any registration statement filed pursuant to Article V in which the Subscriber’s shares are included and the disclosure of
such information in any subsequent offering memorandum if the Subscriber beneficially owns five percent (5%) or more of the Company’s voting capital stock. 
 1.18 The Subscriber represents and warrants that it has not engaged, consented to or authorized any broker, finder or intermediary to act on its behalf, directly or indirectly, as a broker, finder or
intermediary in connection with the transactions contemplated by this Agreement. The Subscriber hereby agrees to indemnify and hold harmless the Company from and against all fees, commissions or other payments owing to any such person or firm acting
on behalf of such Subscriber hereunder. 
 1.19 The Subscriber agrees to hold the Company and its directors, officers,
employees, affiliates, controlling persons and agents (including the Placement Agent and its officers, directors, employees, counsel, controlling persons and agents) and their respective heirs, representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities Act or any applicable state or foreign securities or
“blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained
in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction; provided, however, that in no event shall any indemnity under this Subsection 1.19 exceed the aggregate principal
amount of the Notes subscribed for by the Subscriber pursuant to this Agreement, except in the case of willful fraud by the Subscriber. 
 1.20 The Subscriber understands, acknowledges and agrees with the Company that this subscription may be rejected, in whole or in part, by the Company, in the sole and absolute discretion of the Company,
at any time before the Closing Date notwithstanding prior receipt by the Subscriber of notice of acceptance of the Subscriber’s subscription. 

  
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 1.21 The Subscriber acknowledges that the information contained in the Offering Materials or
otherwise made available to the Subscriber is confidential and non-public and agrees that all such information shall be kept in confidence by the Subscriber and neither used by the Subscriber for the Subscriber’s personal benefit (other than in
connection with this subscription) nor disclosed to any third party for any reason, notwithstanding that a Subscriber’s subscription may not be accepted by the Company; provided, however, that (a) the Subscriber may disclose such
information to its attorneys and advisors who may have a need for such information in connection with providing advice to the Subscriber with respect to its investment in the Company so long as such affiliates and advisors have an obligation of
confidentiality, and (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature
and readily accessible by publication (except as a result of a breach of this provision) or (iii) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of any
confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company). 
 1.22 The Subscriber represents that no authorization, approval, consent or license of any person is required to be obtained for the purchase of the Securities by the Subscriber, other than as have been
obtained and are in full force and effect. 
 1.23 The Subscriber represents that the representations, warranties and agreements
of the Subscriber contained herein and in any other writing delivered in connection with the transactions contemplated hereby shall be true and correct in all respects on the date hereof and as of the Closing Date on which the Subscriber purchases
Notes as if made on and as of such date and shall survive the execution and delivery of this Agreement and the purchase of the Notes. The Subscriber agrees that the Company and the Placement Agent shall be entitled to rely on the representations,
warranties and agreements of the Subscriber contained herein. 
 1.24 The Subscriber understands, acknowledges and agrees with
the Company that, except as otherwise set forth herein, the subscription hereunder is irrevocable by the Subscriber, that, except as required by law, the Subscriber is not entitled to cancel, terminate or revoke this Agreement or any agreements of
the Subscriber hereunder and that this Agreement and such other agreements shall survive the death or disability of the Subscriber and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and permitted assigns. If the Subscriber is more than one person, the obligations of the Subscriber hereunder shall be joint and several and the agreements, representations, warranties and acknowledgments herein
contained shall be deemed to be made by and be binding upon each such person and his/her heirs, executors, administrators, successors, legal representatives and permitted assigns. 

1.25 The Subscriber understands, acknowledges and agrees with the Company that the Offering is intended to be exempt from registration
under the Securities Act by virtue of the provisions of Regulation D thereunder, which is in part dependent upon the truth, completeness and accuracy of the representations and covenants made by the Subscriber in this Agreement. 

1.26 (a) Any Subscriber subject to jurisdiction in the European Economic Area (“EEA”) either (i) is a
qualified investor for the purposes of Directive 2003/71/EC of the European Parliament and the Council (a “Qualified Investor”); that is, a person falling within Article 2.1(e)(i), (ii) or (iii) of such directive or a person
authorized by any such jurisdiction to be considered as a qualified investor for the purposes of such directive, or (ii) it has notified the Placement Agent in writing that it is not a Qualified Investor; 

  
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 (b) Any EEA Subscriber entering into this Agreement and acquiring Securities is either
(i) acting on its own account and not for the account of or otherwise on behalf any other person or persons or (ii) if a Qualified Investor in the United Kingdom, it is acting as an agent in the circumstances contemplated in section 86(2)
of the United Kingdom Financial Services and Markets Act 2000; 
 (c) Any Subscriber, if in the United Kingdom, is (a) a
person falling within Article 19(5) of the United Kingdom Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“FPO”) or (b) a person falling within Article 49(2)(a) to (d) of the FPO; 

(d) Each Subscriber acknowledges that neither the Placement Agent nor any person acting on its behalf is making any recommendations to
it or advising it regarding the suitability or merits of purchasing Securities or any transaction it may enter into in connection with the offering of the Securities, and acknowledges that its participation in the offering of Securities is on the
basis that it is not and will not be a client or customer of the Placement Agent and that neither the Placement Agent nor any person acting on its behalf has any duties or responsibilities to it for providing the protections afforded to their
clients or customers or for providing advice in relation to the offering of the Securities. 
  

	II.	REPRESENTATIONS BY AND COVENANTS OF THE COMPANY 

 The Company hereby represents and warrants to the Subscriber, except as set forth in the Memorandum, including the Risk Factors contained therein, that: 

2.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as currently conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every
jurisdiction in which the property owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or in good standing would not reasonably be expected
to have, individually or in the aggregate, a material adverse effect on the business, operations, conditions (financial or otherwise), properties, assets or results of operations of the Company (a “Material Adverse Effect”). The
Company does not have any subsidiaries. 
 2.2 Capitalization and Voting Rights. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Memorandum and all issued and outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable. Except as set forth in the Memorandum, there are no outstanding
options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering Materials and as otherwise required by law,
there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), By-Laws or
other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound. 
 2.3 Authorization; Enforceability. The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate action
on the part of the Company, its directors and stockholders necessary for the (i) authorization, execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance and delivery of the Notes
contemplated hereby and the performance of the Company’s obligations hereunder has been taken. This Agreement has been duly executed and delivered 

  
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by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating
to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The Notes, when issued and fully paid for in accordance with the
terms of this Agreement, will be validly issued. Upon the issuance and delivery of the equity securities issuable upon conversion of the Notes in accordance with the terms thereof, such equity securities will be validly issued, fully paid and
nonassessable. The issuance and sale of the Securities contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this Offering. 

2.4 No Conflict; Governmental Consents. 
 (a) Except as would not reasonably be expected to have a Material Adverse Effect or have been waived, the execution and delivery by the Company of this Agreement and the consummation of the transactions
contemplated hereby will not result in the violation of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the
Certificate of Incorporation or By-Laws of the Company, and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any
lien upon any of the properties or assets of the Company. 
 (b) No consent, approval, authorization or other order of any
governmental authority or other third party is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Securities, except as have been
obtained or such filings as may be required to be made with the SEC and with any state or foreign blue sky or securities regulatory authority relating to an exemption from registration thereunder. 

2.5 Licenses. Except as would not reasonably be expected to have a Material Adverse Effect, the Company has sufficient licenses,
permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects complying therewith. 

2.6 Litigation. The Company knows of no pending or threatened legal or governmental proceedings against the Company which
(i) adversely questions the validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or
thereby or (ii) could, if there were an unfavorable decision, have a Material Adverse Effect. There is no action, suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company
intends to initiate. 
 2.7 Investment Company. The Company is not an “investment company” within the meaning
of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder. 
 2.8
Placement Agent. The Company has engaged, consented to and authorized the Placement Agent to act as agent of the Company in connection with the transactions contemplated by this Agreement. The Company will pay the Placement Agent a commission
in the form of both cash and warrants to purchase Common Stock as described in the Memorandum (the “Placement Warrants”) and will reimburse the Placement Agent’s reasonable out-of-pocket expenses incurred in connection with the


  
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Offering up to $25,000, and the Company agrees to indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to the Placement Agent
or any other person or firm acting on behalf of the Company hereunder. 
 2.9 Financial Statements. The financial
statements of the Company included in Appendix D to the Memorandum (the “Financial Statements”) have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”)
consistently applied throughout the periods covered thereby, except as may be otherwise specified in such Financial Statements or the notes thereto, and except that unaudited financial statements do not contain all footnotes and do not contain the
cash flow statement required by GAAP, and fairly present in all material respects the financial condition of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal year-end audit adjustments. Since the date of the most recent balance sheet included as part of the Financial Statements, there has not been to the Company’s knowledge: (i) any change in the assets,
liabilities, financial condition or operations of the Company from that reflected in the Financial Statements, other than changes in the ordinary course of business, none of which individually or in the aggregate would reasonably be expected to have
a Material Adverse Effect; or (ii) any other event or condition of any character that, either individually or cumulatively, would reasonably be expected to have a Material Adverse Effect, except for the expenses incurred in connection with the
transactions contemplated by this Agreement. 
 2.10 Title to Properties and Assets; Liens, Etc. The Company has good and
marketable title to its properties and assets, including the properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold estates, in each case subject to no mortgage, pledge,
lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property subject thereto or materially
impair the operations of the Company; (c) those that have otherwise arisen in the ordinary course of business; and (d) those that would not reasonably be expected to have a Material Adverse Effect. The Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound. 
 2.11 Patents and Trademarks. Except as
would not reasonably be expected to have a Material Adverse Effect or as disclosed in the Memorandum, to the Company’s knowledge, (i) the Company owns or possesses adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade secrets, licenses, customer lists and know how (collectively, “Intellectual Property”) ,
(ii) the Company has not received any communications alleging that the Company has violated or, by conducting its business as conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights or processes of any other person or entity, nor is the Company aware of any basis therefor and (iii) no claim is pending or, to the Company’s knowledge after due inquiry, threatened to the effect that any
Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid or unenforceable by the Company. 
 2.12 Obligations to Related Parties. Except as disclosed in the Memorandum or as would not reasonably be expected to have a Material Adverse Effect, there are no obligations of the Company to
officers, directors, stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company, (c) standard
indemnification provisions in the certificate of incorporation and by-laws, and (d) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan
approved by the Board of Directors of the Company). Except as may be disclosed in the Financial Statements, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. 

  
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 2.13 Employee Relations; Employee Benefit Plans. The Company is not a party to any
collective bargaining agreement or a union contract. Except as disclosed in the Memorandum, the Company does not maintain any compensation or benefit plan, agreement, arrangement or commitment (including, but not limited to, “employee benefit
plans”, as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) for any present or former employees, officers or directors of the Company or with respect to which the
Company has liability or makes or has an obligation to make contributions, other than any such plans, agreements, arrangements or commitments made generally available to the Company’s employees. 

2.14 Environmental Laws. To its knowledge, the Company (i) is in compliance with any and all Environmental Laws (as
hereinafter defined), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit,
license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder. 
 2.15 Tax Status. To the best of the Company’s knowledge, the Company (i) has made or filed all federal and state income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in
good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the Company knows of no basis for any such claim. 

2.16 Absence of Certain Changes. Since the date of the Memorandum, there has been no change in the business, operations,
conditions (financial or otherwise), prospects, assets or results of operations of the Company or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect. 

2.17 Ranking of Notes; Issuance of New Debt. On the Closing Date, the Notes will rank pari passu with all of
the Company’s existing indebtedness. Following the Closing Date, as long as any Note remains outstanding, the Company will not, without the prior written consent of the holders of Notes evidencing at least sixty-six and two-thirds percent (66  2/3%) of the Principal Loan Amount then outstanding,
incur indebtedness for borrowed money in favor of any person or entity which indebtedness is secured or otherwise senior in priority to any Note issued to any subscriber pursuant to this Agreement or any substantially similar agreement. No consent
of the holders of Notes will be required for issuances by the Company of unsecured indebtedness that ranks pari passu with, or junior to, the Notes. 

  
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 2.18 Disclosure. The information set forth in the Offering Materials as of the date
hereof contains no untrue statement of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. 

 

	III.	TERMS OF SUBSCRIPTION 


3.1 The minimum purchase that may be made by any prospective investor shall be $50,000 aggregate principal amount of Notes. Subscriptions
for investment below the minimum investment may be accepted at the discretion of the Placement Agent and the Company. The Company and the Placement Agent reserve the right to reject any subscription made hereby, in whole or in part, in their sole
discretion. The Company’s agreement with each Subscriber is a separate agreement and the sale of the Notes to each Subscriber is a separate sale. 
 3.2 Pending the sale of the Notes, all funds paid hereunder shall be deposited by the Company in escrow with US Bank Trust NA, having a branch at 100 Wall Street, Suite 1600, New York, New York 10005.
This Offering will terminate on the earlier of (i) the Company’s acceptance of subscriptions for the Maximum Amount and (ii) July 31, 2009, unless terminated at an earlier time or extended by the mutual agreement of the Placement
Agent and the Company without notice to prospective investors for up to an additional sixty (60) days (the “Offering Termination Date”). The Company reserves the right to withdraw or cancel this Offering and to accept or reject
any subscription in whole or in part, in its sole discretion. The Subscriber hereby authorizes and directs the Company and the Placement Agent to direct the Escrow Agent to return any funds for unaccepted subscriptions to the same account from which
the funds were drawn, without interest. 
 3.3 At any time after the Company has received subscriptions and
related funds for the Minimum Offering amount, but prior to the Offering Termination Date, the Company may conduct a Closing and may conduct subsequent Closings on an interim basis until the Maximum Amount has been obtained or at any time until the
Offering Termination Date. Each Closing shall occur at the offices of the Placement Agent at 787 Seventh Avenue,
48th Floor, New York, NY 10019. 

3.4 The Note purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber promptly following
the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the Note purchased by the Subscriber pursuant to this Agreement to the residential or business address indicated on the signature
page hereto. 
  

	IV.	CONDITIONS TO OBLIGATIONS OF THE PARTIES 

 4.1 In addition to the Company’s right to reject, in whole or in part, any subscription at any time before the Closing Date, the Company’s obligation to issue the Notes at each Closing to the
applicable Subscriber is subject to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of the Company to the extent permitted by law: 

(a) The representations and warranties made by each Subscriber in Article I hereof shall be true and correct in all material respects.

 (b) The Minimum Amount shall have been subscribed for. 

  
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 (c) All covenants, agreements and conditions contained in this Agreement to be performed by
such Subscriber on or prior to the date of such Closing shall have been performed or complied with in all material respects. 

(d) There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.

 (e) There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent
or approval of any person, which shall not have been obtained, to issue the Notes (except as otherwise provided in this Agreement). 
 4.2 The Subscriber’s obligation to purchase the Notes at the Closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such Closing of the following conditions,
which conditions may be waived at the option of each Subscriber to the extent permitted by law: 
 (a) The representations and
warranties made by the Company in Article II hereof shall be true and correct in all material respects. 
 (b) All covenants,
agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or complied with in all material respects. 

(d) There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.

 (e) There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent
or approval of any person, which shall not have been obtained, to issue the Notes (except as otherwise provided in this Agreement). 
 (f) The Placement Agent shall have received an opinion of counsel to the Company addressed to the Subscribers (which the Placement Agent may be permitted to rely on as if it were addressed to it)
containing certain opinions to be substantially as set forth in Exhibit B, which opinion will be subject to standard qualifications and assumptions. 
 (g) The Placement Agent shall have received an Officer’s Certificate addressed to the Subscribers, signed by the authorized officer of the Company and dated as of the Closing. The certificate shall
state, among other things, that the representations and warranties contained herein and in the Offering Materials are true and accurate in all material respects at such Closing Date with the same effect as though expressly made at such Closing Date
and the Placement Agent shall be entitled to rely on such representations of the Company in the Offering Materials as if they were made directly to the Placement Agent. 

 

	V.	REGISTRATION RIGHTS 

 5.1
Definitions. As used in this Agreement, the following terms shall have the following meanings. 
 (a) The term
“Holder” shall mean any holder of Registrable Securities. 

  
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 (b) The terms “register”, “registered” and
“registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or order of effectiveness of such registration statement
or document. 
 (c) The term “Registrable Securities” shall mean (i) the shares of equity securities
issuable upon conversion of the Notes sold in the Offering (or any successor security); and (ii) any shares of equity securities issuable (or issuable upon the conversion or exercise of any warrant, right or other security that is issued)
pursuant to a dividend or other distribution with respect to or in replacement of any Securities; provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of
pursuant to a registration statement declared effective by the SEC; (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of such sale; (C) are held by a Holder or a permitted transferee of a Holder pursuant to Section 5.11; or (D) may not be disposed of under Rule 144(k) under
the Securities Act without restriction. 
 (d) The term “Trading Event” means the first date on which the
Company’s Common Stock trades on a national securities exchange or the Over-the-Counter Bulletin Board. 
 5.2 Piggyback
Registration. 
 (a) The Company agrees that if, at any time, and from time to time, after the earlier to occur of
(i) an initial public offering of the Company’s equity securities pursuant to a registration statement declared effective by the Securities and Exchange Commission (“IPO”) and (ii) a Trading Event, the Board of Directors of
the Company (the “Board”) shall authorize the filing of a registration statement under the Securities Act (other than the filing of a registration statement pursuant to the IPO or a registration statement on Form S-8, Form S-4 or
any other form that does not include substantially the same information as would be required in a form for the general registration of securities) in connection with the proposed offer of any of its securities by it or any of its stockholders, the
Company shall: (A) promptly notify each Holder that such registration statement will be filed and that the Registrable Securities then held by such Holder will be included in such registration statement at such Holder’s request;
(B) subject to Section 5.7, cause such registration statement to cover all of such Registrable Securities issued to such Holder for which such Holder requests inclusion; (C) use reasonable best efforts to cause such registration
statement to become effective as soon as practicable; and (D) take all other reasonable action necessary under any Federal or state law or regulation of any governmental authority to permit all such Registrable Securities that have been issued
to such Holder to be sold or otherwise disposed of, and will maintain such compliance with each such Federal and state law and regulation of any governmental authority for the period necessary for such Holder to promptly effect the proposed sale or
other disposition. 
 (b) Notwithstanding any other provision of this Section 5.2, the Company may at any time, abandon or
delay any registration commenced by the Company. In the event of such an abandonment by the Company, the Company shall not be required to continue registration of shares requested by the Holder for inclusion and the Holder shall retain the right to
request inclusion of shares as set forth above. 

  
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 5.3 Demand Registration. 

(a) Registration on Request. 
 (i) The Company agrees that, at any time, and from time to time, but at least 180 days after the earlier to occur of (i) an IPO and (ii) a Trading Event, Holders of a majority of the Registrable
Securities may make a written request that the Company effect the registration under the Securities Act of outstanding Registrable Securities; provided that such requested registration would cover at least 51% of the Registrable Securities
owned by all the Holders at such time; and provided, further, that the Holders shall be entitled to no more than one such demand registration. 
 (ii) The Company further agrees that if, at any time, and from time to time, after the Company has qualified for the use of Form S-3 or any successor form, one or more of the Holders desire to effect the
registration under the Securities Act on Form S-3 or any successor form (“Short-Form Registration”) of outstanding Registrable Securities, such Holder(s) may make a written request that the Company effect a Short-Form Registration;
provided that the aggregate price to the public of the shares as to which such registration is requested (based on the then current market price and before deducting underwriting discounts and commissions) would equal or exceed $5,000,000. It
is understood and agreed that the Holders may make good faith requests for Short-Form Registrations on an unlimited number of occasions; provided further, that the Company shall not be required to effect more than one Short Form Registration
in any 12-month period. 
 (iii) Each request made by one or more of the Holders pursuant to subsection (i) or
(ii) above (the “Initiating Holders”) will specify the number of shares of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof. Following receipt of any such request, the
Company shall promptly notify all Holders other than the Initiating Holders of receipt of such request and the Company shall use its reasonable best efforts to file, within 60 days of such request, a registration statement under the Securities Act
with respect to the Registrable Securities that the Company has been so requested to register in the request by the Initiating Holders (and in all notices received by the Company from such other Holders within 30 days after the giving of such notice
by the Company), to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities to be registered. If such method of disposition shall be an underwritten public offering,
the Holders of a majority of the shares of Registrable Securities to be sold in such offering may designate the managing underwriter of such offering, subject to the approval of the Company, which approval shall not be unreasonably withheld or
delayed. The Holders will be permitted to withdraw Registrable Securities from a registration at any time prior to the effective date of such registration; provided the remaining number of shares of Registrable Securities subject to a
requested registration is not less than the minimum amount required pursuant to this Section 5.3. 
 (b) Limitations on
Demand Registration. Notwithstanding Section 5.3(a), the Company shall not be obligated to file a registration statement relating to a registration request pursuant to this Section 5.3 at any time during the 180-day period immediately
following the effective date of any registration statement filed by the Company (other than on Form S-8 or S-4 or any other form that does not include substantially the same information as would be required in a form for the general registration of
securities); and if the Board determines, in its good faith judgment, that the Company (i) should not file any registration statement otherwise required to be filed pursuant to Section 5.3 or (ii) should withdraw any such previously
filed registration statement because the Board determines, in its good faith judgment, that the Company is in the possession of material nonpublic information required to be disclosed in such registration statement or an amendment or supplement
thereto, the disclosure of which in such registration statement would be materially disadvantageous to the Company (a “Disadvantageous Condition”), the Company shall be entitled to postpone for the shortest reasonable period of time
(but not exceeding 90 

  
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days from the date of the determination), the filing of such registration statement or, if such registration statement has already been filed, may suspend or withdraw such registration statement
and shall promptly give the Holders written notice of such determination and an approximation of the anticipated delay. Upon the receipt of any such notice, such Holders shall forthwith discontinue use of the prospectus contained in such
registration statement and, if so directed by the Company, shall deliver to the Company all copies of the prospectus then covering such Registrable Securities current at the time of receipt of such notice (or, if no registration statement has yet
been filed, all drafts of the prospectus covering such Registrable Securities). If any Disadvantageous Condition shall cease to exist, the Company shall promptly notify the Holders to such effect. If any registration statement shall have been
withdrawn, the Company shall, at such time as it is possible or, if earlier, at the end of the 90-day period following such withdrawal, file a new registration statement covering the Registrable Securities that were covered by such withdrawn
registration statement. The Company’s right to delay a request for registration or to withdraw a registration statement pursuant to this Section 5.3 may not be exercised more than once in any one-year period. 

5.4 Registration Procedures. Whenever required under this Article V to include Registrable Securities in a Company registration
statement, the Company shall, as expeditiously as reasonably possible: 
 (a) Use reasonable best efforts to (i) cause
such registration statement to become effective, and (ii) cause such registration statement to remain effective in accordance with Section 5.12 hereof. The Company will also use its reasonable best efforts to, during the period that such
registration statement is required to be maintained hereunder, file such post-effective amendments and supplements thereto as may be required by the Securities Act and the rules and regulations thereunder or otherwise to ensure that the registration
statement does not contain any untrue statement of material fact or omit to state a fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they are made, not misleading;
provided, however, that if applicable rules under the Securities Act governing the obligation to file a post-effective amendment permits, in lieu of filing a post-effective amendment that (i) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the Company may incorporate by reference information required
to be included in (i) or (ii) in the preceding sentence to the extent such information is contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement. In the event that the
Company becomes qualified for the use of Form S-3 or any successor form at a time when any registration statement on any other Form which includes Registrable Securities is required to be maintained hereunder, the Company shall, upon the request of
any Selling Holder, subject to Section 5.5, (i) as expeditiously as reasonably possible, use reasonable best efforts to cause a Short-Form Registration covering such Registrable Securities to become effective and (ii) comply with each
of the other requirements of this Section 5.4 which may be applicable thereto. Upon the effectiveness of such Short-Form Registration, the Company shall be relieved of its obligations hereunder to keep in effect the registration statement which
initially covered the Registrable Securities included in such Short-Form Registration. 
 (b) Prepare and file with the SEC
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. 
 (c) Furnish to the selling Holders such numbers of copies of a
prospectus, including a preliminary prospectus as amended or supplemented from time to time, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them. 

  
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 (d) Use reasonable best efforts to register and qualify the securities covered by such
registration statement under the state securities laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided, however, 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, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act. 

(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each selling Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. 

(f) Notify each Holder 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, (i) when the registration statement or any post-effective amendment and supplement thereto has become effective; (ii) of the issuance by the SEC of any stop order or the initiation of
proceedings for that purpose (in which event the Company shall make every effort to obtain the withdrawal of any order suspending effectiveness of the registration statement at the earliest possible time or prevent the entry thereof); (iii) of
the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iv) 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 in the light of the circumstances then existing (and each Holder agrees to suspend any trading under the Registration Statement until such condition is abated). 

(g) Cause all such Registrable Securities registered hereunder to be listed on each securities exchange or quotation service on which
similar securities issued by the Company are then listed or quoted or, if no such similar securities are listed or quoted on a securities exchange or quotation service, apply for qualification and use reasonable best efforts to qualify such
Registrable Securities for inclusion on a national securities exchange or the Over-the-Counter Bulletin Board. 
 (h) Provide a
transfer agent and registrar for all Registrable Securities registered hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration. 

(i) Cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing the Registrable Securities to be sold, which certificates will not bear any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters,
if any, shall request at least two business days prior to any sale of the Registrable Securities to the underwriters. 
 5.5
Furnish Information. It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Article V with respect to the Registrable Securities of any Holder that such Holder shall furnish to the Company such
information regarding the Holder, the Registrable Securities held by the Holder, and the intended method of disposition of such securities as shall be reasonably required by the Company to effect the registration of such Holder’s Registrable
Securities. 

  
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 5.6 Registration Expenses. The Company shall bear and pay all expenses incurred in
connection with any registration, filing or qualification of Registrable Securities with respect to registrations pursuant to Sections 5.2 or 5.3 for each Holder, including (without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or apportionable thereto (“Registration Expenses”), but excluding underwriting discounts and commissions relating to Registrable Securities and excluding any professional fees or costs of
accounting, financial or legal advisors to any of the Holders. 
 5.7 Underwriting Requirements. In connection with any
offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 5.2 to include any of the Holders’ Registrable Securities in such underwriting unless they accept the terms
of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the
underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling Holders according to the total amount of securities entitled to be included
therein owned by each selling Holder or in such other proportions as shall mutually be agreed to by such selling Holders). For purposes of the preceding parenthetical concerning apportionment, for any selling Holder who is a holder of Registrable
Securities and is a partnership or corporation, the partners, retired partners and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single “selling Holder”, and any pro-rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and
individuals included in such “selling Holder”, as defined in this sentence. 
 5.8 Delay of Registration. No
Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article V. 

5.9 Indemnification. In the event that any Registrable Securities are included in a registration statement under this Article V:

 (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in
the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they
may become subject under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations
(collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the 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, the Exchange Act, or any rule or regulation promulgated under the Securities Act, or the Exchange Act, and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any
legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section


  
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5.9 (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), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person or a violation of any provision of this Agreement by a Holder. 

(b) To the extent permitted by law, each Selling Holder will indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder,
against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in
connection with such registration or a violation of any provision of this Agreement by a Holder; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this
Section 5.9(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 5.9(b) 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 Holder, which consent shall not be unreasonably withheld; provided, further, that, in no event shall any
indemnity under this Section 5.9(b) exceed the greater of the cash value of the (i) gross proceeds from the offering received by such Holder or (ii) such Holder’s investment pursuant to this Agreement as set forth on the
signature page attached hereto. 
 (c) Promptly after receipt by an indemnified party under this Section 5.9 of notice of
the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.9, deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof
with counsel selected by the indemnifying party and approved by the indemnified party (whose approval shall not be unreasonably withheld); provided, however, that an indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5.9, but the omission
so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.9. 

(d) If the indemnification provided for in this Section 5.9 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 therein, 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


  
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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 alleged 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. 

(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. 

(f) The obligations of the Company and Holders under this Section 5.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Article V, and otherwise. 
 5.10 Reports Under Securities Exchange Act of
1934. With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to: 
 (a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after 90 days after the effective date of the IPO or Trading Event by the Company; 
 (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and 

(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a copy of the most
recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to such form. 
 5.11 Permitted Transferees.
The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article V may be assigned in full by a Holder in connection with a transfer by such Holder of its Registrable Securities if:
(a) such transferee agrees in writing to comply with the terms and provisions of this Agreement; (b) such transfer is otherwise in compliance with this Agreement; (c) such transfer is otherwise effected in accordance with applicable
securities laws; and (d) such Holder transfers at least 51% of its shares of Registrable Securities to the transferee. Except as specifically permitted by this Section 5.11, the rights of a Holder with respect to Registrable Securities as
set out herein shall not be transferable to any other Person, and any attempted transfer of such registration rights shall by void. 
 5.12 Termination of Registration Rights. The right of any Holder to request or demand inclusion in any registration pursuant to Section 5.2 and Section 5.3 shall terminate if all
Registrable Securities held by such Holder may immediately be sold under Rule 144 without restriction. 

  
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	VI.	MISCELLANEOUS 

 6.1 Any
notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows: 

if to the Company, to it at: 
 Coronado Biosciences, Inc. 
 1700 Seventh Avenue 

Suite 2100 

Seattle, Washington 98101 
 Facsimile: (206) 357-8401 
 Attn: President 

With a copy to: 

Cooley Godward Kronish LLP 
 4401 Eastgate Mall 
 San Diego, CA 92121 

Facsimile: (858) 550-6420 
 Attn: Jason Kent, Esq. 
 Paramount BioCapital, Inc. 

787 Seventh Avenue, 48th Floor 
 New York, NY 10019 
 Facsimile: (212) 554-4355 

Attn: Compliance Department 
 if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement. 
 Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received. 

6.2 Except as otherwise expressly provided herein, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely) with the written consent of the Company and (a) subscribers
holding Notes evidencing at least sixty six and two-thirds percent (66  2/3%) of the then outstanding Principal Loan Amount of the Notes issued pursuant to this Agreement and substantially similar agreements, so long as the Notes are outstanding; and (b) holders of sixty
six and two-thirds percent (66  2/3%) of the
Registrable Securities, if the Notes are no longer outstanding. Any amendment or waiver effected in accordance with this Section 6.2 shall be binding upon the Subscriber and the Company (even if the Subscriber does not consent to such amendment
or waiver), and upon the effectuation of each such amendment or waiver, the Company shall promptly give written notice thereof to the Subscriber if the Subscriber has not previously consented thereto in writing. 

6.3 Subject to the provisions of Section 5.11, this Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them. 

  
 20 









 6.4 Upon the execution and delivery of this Agreement by the Subscriber, this Agreement
shall become a binding obligation of the Subscriber with respect to the purchase of Notes as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or
delete other persons as subscribers. 
 6.5 NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES
HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE AND PROCEDURAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF
CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE STATE AND FEDERAL COURTS SITTING IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK. THE
PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE. 
 6.6 The holding of any
provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared
by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the
remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or
provision unless so expressed herein. 
 6.7 It is agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 
 6.8 The parties agree
to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 

6.9 This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument. 
 6.10 Nothing in this Agreement shall create or be deemed to create any rights in any
person or entity not a party to this Agreement, except (a) for the holders of Registrable Securities; (b) for the Placement Agent pursuant to Sections 1.6(a), 1.23 and 3.1 hereof, (c) for the indemnified parties (including without
limitation the Placement Agent and its sub agents, if any) pursuant to Section 5.9 hereof; and (d) that the Placement Agent may rely upon the representations and acknowledgements of the Subscriber in Articles I and VII hereof and the
representations and warranties of the Company in Article II hereof. 
 Remainder of Page Intentionally Left Blank.


  
 21 










	VII.	CONFIDENTIAL INVESTOR QUESTIONNAIRE 

 7.1 ALL INVESTORS - The undersigned represents and warrants as indicated below by the undersigned’s mark: 

 

			
	A.	 	Individual investors: (Please mark one or more of the following statements)
		
	1.            	 	I certify that I am an accredited investor because I have had individual income (exclusive of any income earned by my spouse) of more than $200,000 in each of the most recent two
years and I reasonably expect to have an individual income in excess of $200,000 for the current year.
		
	2.            	 	I certify that I am an accredited investor because I have had joint income with my spouse in excess of $300,000 in each of the most recent two years and reasonably expect to have
joint income with my spouse in excess of $300,000 for the current year.
		
	3.            	 	I certify that I am an accredited investor because I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000.
		
	4.            	 	I am a director or executive officer of Coronado Biosciences, Inc.
		
	B.	 	Partnerships, corporations, trusts or other entities: (Please mark one of the following seven statements). The undersigned hereby certifies that it is an accredited
investor because it is:
		
	1.            	 	an employee benefit plan whose total assets exceed $5,000,000;
		
	2.            	 	an employee benefit plan whose investments decisions are made by a plan fiduciary which is either a bank, savings and loan association or an insurance company (as defined in
Section 3(a) of the Securities Act) or an investment adviser registered as such under the Investment Advisers Act of 1940;
		
	3.            	 	a self-directed employee benefit plan, including an Individual Retirement Account, with investment decisions made solely by persons that are accredited
investors;
		
	4.            	 	an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, not formed for the specific purpose of acquiring the Shares, with total assets in
excess of $5,000,000;
		
	5.            	 	a corporation, partnership, limited liability company, limited liability partnership, other entity or similar business trust, not formed for the specific purpose of acquiring the
Notes, with total assets excess of $5,000,000;
		
	6.            	 	a trust, not formed for the specific purpose of acquiring the Notes, with total assets exceed $5,000,000, whose purchase is directed by a person who has such knowledge and
experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Notes; or
		
	7.            	 	an entity (including a revocable grantor trust but other than a conventional trust) in which each of the equity owners qualifies as an accredited investor.


  
 22 









 7.2 EUROPEAN ECONOMIC AREA (“EEA”) INVESTORS - The undersigned further
represents and warrants as indicated below by the undersigned’s mark: 
  

	A.	Please mark one of the following statements: 

 either 

1.            The undersigned hereby certifies that it is a Qualified
Investor for the purposes of Directive 2003/71/EC because it is a person falling within Article 2.1(e)(i), (ii) or (iii) of such directive or a person authorized by a jurisdiction in the EEA to be considered as a qualified investor for the
purposes of such directive; 
 or 
 2.            The undersigned hereby certifies that it is not a Qualified Investor for the purposes of Directive 2003/71/EC. 

 

	B.	Please mark one of the following statements. 

 1.            The undersigned hereby certifies that it is acting on its own account and not for the account of or otherwise on behalf of
any person or persons; or 
 2.            The undersigned is
in the United Kingdom and is a Qualified Investor for the purposes of Directive 2003/71/EC and is acting as an agent in the circumstances contemplated in section 86(2) of the United Kingdom Financial Services and Markets Act 2000. 

 

	C.	Please mark the following statement: 

 1.            The undersigned hereby certifies that it has not received any recommendation from the Placement Agent nor any person acting
on their behalf in relation to the purchase of the Securities. 
  

	D.	Please mark one of the following statements: 

 1.            The undersigned hereby certifies that it is not in the United Kingdom. 

2.            The undersigned hereby certifies that it is a person
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“FPO”). 

3.            The undersigned hereby certifies that it is a person
falling within Article 49(2)(a) to the (d) of the FPO. 
 7.3 ALL INVESTORS - The undersigned further represents and
warrants as indicated below by the undersigned’s mark: 
 FINRA AFFILIATION. 

Are you affiliated or associated with an FINRA member firm: 
 Yes                         No
             

  
 23 









 If Yes, please describe: 
  

 
  

 
  

 
  

 

	*	If subscriber is a Registered Representative with an FINRA member firm, have the following acknowledgment signed by the appropriate party: 


The undersigned FINRA member firm acknowledges receipt of the notice required by NASD Rule 3050. 

 

			
	  

	Name of FINRA Member Firm
		
	By:	 	  

		 	    Authorized Officer


			
		
	Date:	 	                    

 7.4 ALL INVESTORS - Indicate manner in which title is to be held (circle one) 

 

	 	(a)	Individual Ownership 


	 	(b)	Community Property 


	 	(c)	Joint Tenant with Right of Survivorship (both parties must sign) 


	 	(d)	Partnership 


	 	(e)	Tenants in Common 


	 	(f)	Corporation 


	 	(g)	Limited Liability Company 


	 	(h)	Trust 


	 	(i)	Other 

 7.5 ALL INVESTORS
- Please answer each question. 
 SUITABILITY 
 (a) For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business: 

 
  
  

 
  

 
  

 
 (b) For an individual Subscriber, please
describe any college or graduate degrees held by you: 
  
  

 
  
  

 

  
 24 









 (c) For all Subscribers, please list types of prior investments: 

 
  
  

 
  

 
 (d) For all Subscribers, please state whether
you have you participated in other private placements before: 

YES                     
        NO              
 (e) If
your answer to question 7.5(d) above was “YES”, please indicate frequency of such prior participation in private placements of: 
  

							
	 	  	 Public
 Companies
	  	 Private
 Companies
	  	 Public or Private
 Biopharmaceutical Companies

	 Frequently
	  		  		  	
	 Occasionally
	  		  		  	
	 Never
	  		  		  	

 (f) For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable
future: 

YES                     
        NO              
 (g)
For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future: 
 YES                             NO  
            
 (h) For all Subscribers, do you have any other investments or
contingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you: 
 YES                             NO  
            
 (i) For all Subscribers, are you familiar with the risk aspects and the
non-liquidity of investments such as the securities for which you seek to subscribe? 

YES                     
        NO              
 (j)
For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment? 
 YES                             NO  
            

  
 25 









 7.6 The undersigned is informed of the significance to the Company of the foregoing
representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them. 

 

			
	Signature:	 	  

		 	  

		 	(If purchased jointly)
		
	Print Name:	 	  

		 	  

		 	(If purchased jointly)
		
	Date:	 	                    


  
 26 









 AGGREGATE PRINCIPAL AMOUNT OF NOTES = $          (TOTAL
INVESTMENT) 
  

					
	  
	 		 	  

	Signature	 		 	Signature (if purchasing jointly)
			
	  
	 		 	  

	Name Typed or Printed	 		 	Name Typed or Printed
			
	  
	 		 	  

	Entity Name	 		 	Entity Name
			
	  
	 		 	  

	Address	 		 	Address
			
	  
	 		 	  

	City, State and Zip Code	 		 	City, State and Zip Code
			
	  
	 		 	  

	Telephone-Business	 		 	Telephone—Business
			
	  
	 		 	  

	Telephone-Residence	 		 	Telephone—Residence
			
	  
	 		 	  

	Facsimile-Business	 		 	Facsimile—Business
			
	  
	 		 	  

	Facsimile-Residence	 		 	Facsimile—Residence
			
	  
	 		 	  

	Tax ID # or Social Security #	 		 	Tax ID # or Social Security #


			
		
	Name in which securities should be issued:	  	  


 Dated:             , 2009 







 This Note Purchase Agreement is agreed to and accepted as of July 27, 2009. 

 

			
	CORONADO BIOSCIENCES, INC.
		
	By:	 	  




			
	Name:	 	RJ Tesi, M.D.
	Title:	 	President and Chief Executive Officer









 Annex A 
 CERTIFICATE OF SIGNATORY 
 (To be completed if Securities are 

being subscribed for by an entity) 
 I,                    , am the
                     of
                             (the “Entity”). 

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Note Purchase Agreement and to purchase and
hold the Securities, and certify further that the Note Purchase Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity. 

IN WITNESS WHEREOF, I have set my hand this      day of         , 2009.

  

	
	  

	(Signature)









 EXHIBIT A 

Form of Note 

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION. THIS NOTE AND SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR SUCH FOREIGN JURISDICTION LAWS HAVE BEEN SATISFIED. 
 CORONADO BIOSCIENCES, INC. 
 CONVERTIBLE PROMISSORY NOTE 

 

			
		  	Seattle, WA
	$         	  	             , 2009

 1. Principal and Interest. 

CORONADO BIOSCIENCES, INC. (the “Company”), a Delaware corporation, for value received, hereby promises to pay to the
order of                     , or his, her or its assigns (“Holder”), in lawful money of the United States of America at the
address for notices to Holder set forth in the applicable Purchase Agreement (as defined below) (or such other address as Holder shall provide to the Company in writing pursuant hereto), the principal amount of
         dollars ($        ), together with interest as set forth below. 
 The Company promises to pay interest on the unpaid principal amount from the date hereof until such principal amount is paid in full at the rate of eight percent (8%), or such lesser rate as shall be the
maximum rate allowable under applicable law. Interest from the date hereof shall be computed on the basis of a 360-day year of twelve 30-day months, shall compound annually and shall be accrued and added to principal on an annual basis. Unless
converted, all unpaid principal and unpaid accrued interest on this Note shall be due and payable on February 20, 2010 (the “Due Date”). Notwithstanding the foregoing, upon an Event of Default (as defined herein) during the
term of this Note, the interest rate on this Note shall be increased to twelve percent (12%) per annum during the term of the default. For purposes of this Note, an “Event of Default” shall occur if (i) the Company shall
default in the payment on this Note, when and as the same shall become due and payable and any such failure to make payment continues for five (5) business days; or (ii) the Company shall default in the due observance or performance of any
material covenant, condition or agreement on the part of the Company contained in this Note or the Purchase Agreement (other than the failure to make payment when due), and any such default shall continue for a period of thirty (30) days after
the date on which the Company receives written notice thereof from the Holder. 







 This Note is being issued pursuant to that certain Note Purchase
Agreement between the Company and the Holder, dated as of the date hereof (the “Purchase Agreement”), and is subject to its terms. Capitalized terms used herein but not defined shall have the meanings given to such terms in the
Purchase Agreement. This Note will rank pari passu with that certain series of convertible promissory notes issued by the Company in connection with an offering described in the Company’s Confidential Offering Memorandum (together with all
amendments, supplements, exhibits and appendices thereto, the “Memorandum”) dated January 23, 2008 (such existing notes, as they may be or have been amended, restated, supplemented or otherwise modified from time to time, shall
be collectively referred to as the “Bridge Notes”). This Note shall also rank pari passu with all other existing indebtedness of the Company and, pursuant to Section 2.17 of the Purchase Agreement, no new indebtedness which is
secured or senior in right of payment to the Note may be issued by the Company without the consent of the holders of Notes representing at least sixty-six and two-thirds percent (66  2/3%) of the outstanding principal amount of all Notes. No consent of
the holders of Notes will be required for issuances by the Company of unsecured indebtedness that ranks pari passu with, or junior to, the Notes. 
 2. Conversion. 
 2.1 (a) All unpaid principal and unpaid accrued interest on
this Note shall be automatically converted into the Company’s equity securities (the “Securities”) issued in the Company’s next equity financing (or series of related equity financings), including without limitation a firm
commitment underwritten initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (such offering, a “Qualified IPO”), involving the sale of Securities in which the Company
receives at least $10,000,000 less the gross proceeds received by the Company pursuant to Notes issued in this Offering in aggregate gross cash proceeds (before brokers’ fees or other transaction related expenses, and excluding any such
proceeds resulting from any conversion of the Bridge Notes) (a “Qualified Financing”), at a conversion price equal to 75% of the lowest per unit price paid for such Securities in cash by investors in such Qualified Financing, and,
with the exception of a Qualified IPO, upon such other terms, conditions and agreements as may be applicable in such Qualified Financing. 
 (b) In the event that the Company consummates a merger, share exchange, or other transaction (or series of related transactions), other than in connection with a Qualified Financing, in which (i) the
Company merges into or otherwise becomes a wholly-owned subsidiary of a company that (A) is subject to the public company reporting requirements of the Securities Exchange Act of 1934, as amended, or the equivalent reporting requirements of the
Ontario Securities Commission, or that is listed on the London Stock Exchange main market, the Euronext markets, or AIM, and (B) does not engage in any active operations and (ii) the aggregate consideration payable to the Company or its
stockholders in such transaction(s) (the “Reverse Merger Consideration”) is greater than or equal to $10,000,000 (a “Reverse Merger”), then immediately prior to such Reverse Merger, all unpaid principal and unpaid
accrued interest on this Note shall be automatically converted into Common Stock at a conversion price per share equal to 75% of the quotient obtained by dividing (i) the Reverse Merger Consideration less the amount of unpaid principal and
unpaid accrued interest on all Bridge Notes and the Existing Notes (as defined below) immediately prior to the Reverse Merger by (ii) the number of shares of Common Stock of the Company then outstanding, on a fully diluted basis (the
“Outstanding Shares”). For this purpose, Outstanding Shares shall (i) exclude any shares of Common Stock issuable upon conversion of the Bridge Notes or the Existing Notes or upon exercise of the warrants issued to the
Placement Agent in connection with the sale of the Bridge Notes but (ii) include all shares of Common Stock issuable upon the exercise of (A) options and other warrants 







 
outstanding (to the extent that such options or warrants are exercised or assumed in connection with the Reverse Merger) and (B) options that the Company is required by agreement to issue to
one or more employees, consultants, or licensors of the Company in connection with such Reverse Merger to maintain a specified percentage interest in the Company (but which have not yet been issued)). For purposes hereof, “Existing
Notes” shall mean collectively, (i) that certain Future Advance Promissory Note, dated as of June 28, 2006, in favor of Paramount Biosciences, LLC, (ii) that certain Future Advance Promissory Note, dated as of July 30,
2007, in favor of The Lindsay A. Rosenwald 2000 Family Trusts Dated December 15, 2000 and (iii) that certain Future Advance Promissory Note, dated as of January 17, 2008, in favor of Capretti Grandi, LLC. 

The shares of Common Stock issuable pursuant to clause 2.1(b) above shall be issued effective prior to the consummation of the Reverse Merger and
conditioned upon the consummation of such Reverse Merger. As a holder of such shares of Common Stock, the Holder will receive the consideration payable in connection with such Reverse Merger on a share-for-share basis with all other stockholders of
the Company and in like kind, at the same time and upon the same conditions as all other stockholders of the Company. 
 If any Reverse Merger
Consideration is other than cash, its value will be deemed to be its fair market value as determined, in good faith, by the Board of Directors of the Company. The value of any securities shall be determined by the Board of Directors of the Company
as set forth for a Sale of the Company in Section 2.1(c) below. 
 (c) This Note plus any unpaid accrued interest thereon
shall automatically convert into shares of Common Stock of the Company effective immediately prior to the consummation of a Sale of the Company. For purposes hereof, “Sale of the Company” shall mean a transaction (or series of
related transactions) with one or more non-affiliates of the Company, pursuant to which such party or parties acquire (i) capital stock of the Company or the surviving entity possessing the voting power to elect a majority of the board of
directors of the Company or the surviving entity (whether by merger, consolidation, sale or transfer of the Company’s capital stock or otherwise) (a “Stock Acquisition”); or (ii) all or substantially all of the
Company’s assets determined on a consolidated basis (an “Asset Sale”); provided, however, that notwithstanding anything to the contrary contained herein, to the extent any transaction (or series of related transactions)
qualifies as a Qualified Financing or a Reverse Merger, such transaction(s) shall not be deemed to constitute a Sale of the Company. For purposes hereof, “Sale Proceeds” shall mean (i) in the event of a Stock Acquisition, the
cash or securities paid by the acquirer to the Company or the selling stockholders to acquire such shares; and (ii) in the event of an Asset Sale, the cash or securities legally available for distribution to the Company’s stockholders,
after creation of adequate reserves for liabilities of the Company. 
 The price per share at which this Note will convert into Common Stock of
the Company upon a Sale of the Company will be equal to the lesser of (i) 75% of the quotient obtained by dividing (x) the value of the Sale Proceeds received in such transaction less the unpaid principal and accrued but unpaid interest on
the Bridge Notes and the Existing Notes immediately prior to the Sale of the Company by (y) the number of Outstanding Shares, and (ii) the quotient obtained by dividing (x) $50,000,000 less the unpaid principal and accrued but unpaid
interest on the Bridge Notes and the Existing Notes by (y) the number of Outstanding Shares. For purposes of this Section 2.1(c), Outstanding Shares shall be determined as set forth in Section 2.1(b) of this Note, except that it shall
not include any shares of Common Stock issuable upon the exercise of any options and warrants outstanding immediately prior to such Sale of the Company if such options or warrants have an exercise price in excess of the Note conversion price
determined under this Section 2.1(c)). 







 (d) In the event the Company completes (in one or a series of related transactions) a
merger, consolidation, sale or transfer of more than fifty percent (50%) of the Company’s capital stock, in each case, which does not constitute a Sale of the Company, a Reverse Merger or a Qualified Financing (an “Other
Transaction”), then the term “Securities” as used herein shall thereafter refer to the equity securities or securities convertible into or exchangeable for equity securities of the surviving, resulting, combined or acquiring entity in
such merger, consolidation, sale or transfer. 
 2.2 Upon consummation of a Qualified Financing, Reverse Merger, Sale or Other
Transaction in accordance with the terms of Section 2.1, the outstanding unpaid principal and unpaid accrued interest of this Note shall be converted without any further action by the Holder and whether or not this Note is surrendered to the
Company or its transfer agent, and the indebtedness evidenced by this Note shall be satisfied in full and no interest shall continue to accrue on this Note and all rights of the Holder hereunder shall terminate. The Company shall not be obligated to
issue certificates evidencing the shares of the securities issuable upon such conversion unless this Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been
lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and
indemnification, issue and deliver to such Holder of such Note, a certificate or certificates for the securities to which the Holder shall be entitled. Such conversion shall be deemed to have been made concurrently with the closing of the Qualified
Financing, the Reverse Merger, the Sale of the Company or the Other Transaction, as applicable. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of
such securities on such date. The Company shall not issue fractional shares but shall round down the number of shares issued to the nearest whole number. Any conversion effected in accordance with this Section 2 shall be binding upon the Holder
hereof. 







 3. Prepayment. 
 This Note may not be prepaid at any time, in whole or in part, prior to their maturity. 
 4. Attorneys’ Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the
hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys’ fees and costs incurred by Holder. 

5. Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to
have been given upon delivery to the address provided pursuant to the Purchase Agreement. In the case of notice to either party, copies should be sent to Cooley Godward Kronish LLP, 4401 Eastgate Mall, San Diego, CA 92121, Facsimile:
(858) 550-6420, Attn: Jason Kent, Esq. 
 6. Notice of Proposed Transfers. Prior to any proposed transfer of this
Note or the Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the Holder shall give written notice to the Company of such Holder’s intention to effect such transfer. Each
such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall, if the Company so requests, be accompanied (except in transactions in compliance with Rule 144) by an unqualified written opinion of
legal counsel, who shall be reasonably satisfactory to the Company, addressed to the Company and reasonably satisfactory in form and substance to the Company’s counsel, to the effect that the proposed transfer of this Note or Securities may be
effected without registration under the Securities Act; provided, however, no such opinion of counsel shall be necessary for a transfer without consideration by a Holder to any affiliate of such Holder, or a transfer by a Holder which
is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any
partner to his spouse or lineal descendants or ancestors, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if such transferee were the original Holder hereunder. Each certificate evidencing Securities or
this Note transferred as above provided shall bear an appropriate restrictive legend, except that this Note or certificate shall not bear such restrictive legend if, in the opinion of counsel for the Company, such legend is not required in order to
establish compliance with any provisions of the Securities Act. 
 7. Acceleration. This Note shall become immediately
due and payable if (i) the Company commences any proceeding in bankruptcy or for dissolution, liquidation, winding-up, composition or other relief under state or federal bankruptcy laws; or (ii) there is any material breach of any material
covenant, warranty, representation or other term or condition of this Note or the Purchase Agreement at any time which is not cured within the time periods permitted therein, or if no cure period is provided therein, within thirty (30) days
after the date on which the Company receives written notice thereof from the Holder. 
 8. No Dilution or Impairment. The
Company will not, by amendment of its Certificate of Incorporation or Bylaws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Note, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of
the Holder of this Note against dilution or other impairment. 







 9. Waivers. The Company hereby waives presentment, demand for performance, notice of
non-performance, protest, notice of protest and notice of dishonor. No delay on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or any other right. This Note is being delivered in and shall be
construed in accordance with the laws of the State of New York, without regard to the conflicts of laws provisions thereof. 

10. No Stockholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other person the
right to vote or to consent or to receive notice as a stockholder of the Company. 
 11. Amendment.
Any term of this Note may be amended with the written consent of the Company and the holders of not less than sixty six and two-thirds percent (66
 2/3%) of the then outstanding principal amount of
the Notes, even without the consent of the Holder hereof. Any amendment effected in accordance with this Section 11 shall be binding upon each holder of any Note, each future holder of all such Notes, and the Company; provided, however, that no
special consideration or inducement may be given to any such Holder in connection with such consent that is not given ratably to all such holders, and that such amendment must apply to all such holders ratably in accordance with the principal amount
of their then outstanding Notes. The Company shall promptly give notice to all holders of outstanding Notes of any amendment effected in accordance with this Section 11. 

* * * * * 







 ISSUED as of the date first above written. 

 

			
	CORONADO BIOSCIENCES, INC.
		
	By:	 	  

	Name:	 	RJ Tesi, M.D.
	Title:	 	President and Chief Executive Officer









 EXHIBIT B 

Substantive Paragraphs of Legal Opinion 
 1. The Company has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of Delaware. 
 2. The Company has the requisite corporate power to own its property and assets and to conduct its business as it is currently being conducted as described in the Memorandum. 

3. The Company has the requisite corporate power to execute, deliver and perform its obligations under the Transaction Documents. 

4. Each of the Purchase Agreement and the Escrow Agreement has been duly and validly authorized, executed and delivered by the Company and such agreement
constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as rights to indemnity and contribution under Section 5.9 of the Purchase Agreement may be limited by applicable laws
and except as enforcement may be limited by applicable bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights, and subject to and limited by general
equity principles and to limitations on availability of equitable relief, including specific performance. 
 5. The Notes have been duly
authorized and executed by the Company and when delivered to and paid for by the Subscribers each such Note will be a valid and binding obligation of the Company in accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights, and subject to and limited by general equity principles and to limitations on availability of
equitable relief, including specific performance. 
 6. To our knowledge, the issuance of the Notes will not violate any preemptive or similar
rights under the DGCL or the Company’s Certificate of Incorporation which have not been waived. 
 7. The execution and delivery of the
Transaction Documents by the Company and the issuance of the Notes pursuant thereto (i) do not violate any provision of the Company’s Certificate of Incorporation or Bylaws, (ii) do not constitute a default under or a material breach
of any Material Agreement, and (iii) do not violate (a) the DGCL or any other governmental statute, law, rule or regulation which in our experience is typically applicable to transactions of the nature contemplated by the Transaction
Documents or (b) any order, writ, judgment, injunction, decree, determination or award which has been entered against the Company and of which we are aware, in each case to the extent the violation of which would materially and adversely affect
the Company. 
 8. To our knowledge, there is no action, proceeding or investigation pending or overtly threatened against the Company before
any court or administrative agency that questions the validity of the Transaction Documents or that could reasonably be expected to result, either individually or in the aggregate, in a material adverse effect on the Company. 







 9. The offer and sale of the Notes, the Conversion Shares and the Placement Agent Warrant are exempt from
the registration requirements of the Securities Act of 1933, as amended, subject to the timely filing of a Form D pursuant to Securities and Exchange Commission Regulation D.