Ohr Pharmaceutical 8-K


Exhibit 10.40





PLACEMENT AGENCY AGREEMENT


April 8, 2014


Chardan Capital Markets, LLC


17 State Street, Suite 1600


New York, NY 10004


 


Brean Capital, LLC


1345 Avenues of the Americas, 29th Floor


New York, NY 10105


 


Ladies and Gentlemen:


Introduction.
Subject to the terms and conditions herein (this “Agreement”), Ohr
Pharmaceutical Inc., a Delaware corporation (the “Company”), hereby agrees to sell up to an aggregate of
$18,000,000 of securities of the Company (the “Securities”) directly to various investors (each, an
“Investor” and, collectively, the “Investors”) through Chardan Capital Markets, LLC, as
lead placement agent (the “Lead Agent”) and Brean Capital, LLC,, as co-lead placement Agent (the
“Co-Agent” and together with the Lead Agent, the “Placement Agents”. The Lead Placement
Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the
Offering (as defined below).


The Company hereby
confirms its agreement with the Placement Agent as follows:


Section 1.                
Agreement to Act as Placement Agent.


(a)               
On the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms
and conditions of this Agreement, the Lead Agent shall be the exclusive lead placement agent and the Co-Agent the exclusive co-placement
agent in connection with the offering and sale by the Company of the Securities pursuant to the Company's registration statement
on Form S-3 (File No. 333-193434) (the “Registration Statement”), with the terms of such offering (the “Offering”)
to be subject to market conditions and negotiations between the Company, the Placement Agents and the prospective Investors. The
Placement Agent will act on a reasonable best efforts basis and the Company agrees and acknowledges that there is no guarantee
of the successful placement of the Securities, or any portion thereof, in the prospective Offering. Under no circumstances will
the Placement Agents or any of their respective “Affiliates” (as defined below) be obligated to underwrite or purchase
any of the Securities for their own accounts or otherwise provide any financing. The Placement Agents shall act solely as the Company’s
agents and not as principal. The Placement Agents shall have no authority to bind the Company with respect to any prospective offer
to purchase Securities and the Company shall have the sole right to accept offers to purchase Securities and may reject any such
offer, in whole or in part. Subject to the terms and conditions hereof, payment of the purchase price for, and delivery of, the
Securities shall be made at one or more closings (each a “Closing” and the date on which the Closing occurs,
a “Closing Date”). As compensation for services rendered, on the Closing Date, the Company shall pay to the
Placement Agents the aggregate fees and expenses set forth below:


(i)                
A cash fee equal to 6% of the gross proceeds received by the Company from the sale of the Securities at the closing of the
Offering (the “Closing”) to be split 60% to the Lead Agent and 40% to the Co-Agent.




    	1



    	 



    

(ii)              
 The Company also agrees to reimburse Placement Agents’ reasonable fees and expenses, including reasonable legal fees
and expenses (with supporting invoices/receipts). Such reimbursement shall be payable immediately upon the Closing of the Offering.


(b)              
The term of the Placement Agents’ exclusive engagement will be until the completion of the Offering (the “Exclusive
Term”); provided, however, that a party hereto may terminate this Agreement at any time upon 14 days written
notice to the other parties. Notwithstanding anything to the contrary contained herein, the provisions concerning confidentiality,
indemnification and contribution contained herein and the Company’s obligations contained in the indemnification provisions
will survive any expiration or termination of this Agreement, and the Company’s obligation to pay fees actually earned and
payable and to reimburse expenses actually incurred and reimbursable pursuant to Section 1 hereof and which are permitted to be
reimbursed under FINRA Rule 5110(f)(2)(D), will survive any expiration or termination of this Agreement. Nothing in this Agreement
shall be construed to limit the ability of either Placement Agent or its respective Affiliates to pursue, investigate, analyze,
invest in, or engage in investment banking, financial advisory or any other business relationship with Persons (as defined below)
other than the Company. As used herein (i) “Persons” means an individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind and (ii) “Affiliate” means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed
under Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”).


Section 2.                
Representations, Warranties and Covenants of the Company. Except as set forth in the disclosure schedules delivered
concurrently herewith (“Disclosure Schedule”), which Disclosure Schedules shall be deemed a part hereof and
shall qualify any representation or otherwise made herein or in the Incorporated Documents (as defined below), the Company hereby
represents, warrants and covenants to each Placement Agent as of the date hereof, and as of the Closing Date, as follows:


(a)               
Issuance of the Securities; Registration. The Securities are duly authorized and, when issued and paid for, will
be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has prepared
and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on January
31, 2014 (the “Effective Date”), including the prospectus therein (the “Prospectus”, and
such amendments and supplements (“Prospectus Supplement” and the Registration Statement, the Prospectus and
the Prospectus Supplement, the “Incorporated Documents”) thereto as may have been required to the date of this
Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness
of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings
for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required
by the rules and regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time
the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date,
the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments
or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.




    	2



    	 



    

(b)              
 Offering Materials. Neither the Company nor any of its directors and officers has distributed and none of them will
distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than
the Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein
and any other materials permitted by the Securities Act.


(c)               
Subsidiaries. The Company has no subsidiaries that it controls.


(d)              
Organization and Qualification. The Company is duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, with the requisite corporate power and authority to own and use its properties and assets and to
carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its certificate
of incorporation or bylaws. The Company is duly qualified to conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be
expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any other
agreement entered into between the Company and the Investors, (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under this Agreement or the transactions contemplated
under the Prospectus Supplement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim,
suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition),
whether commenced or threatened (“Proceeding”) has been instituted in any such jurisdiction revoking, limiting
or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. The Company has commenced the process
of qualifying to do business in New York.


(e)               
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and the Prospectus Supplement and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of each of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby and under the Prospectus Supplement have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Company’s Board of Directors (the “Board of
Directors”) or the Company’s stockholders in connection therewith other than in connection with the Required Approvals
(as defined below). This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.


(f)               
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the transactions contemplated
pursuant to the Prospectus Supplement, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby to which it is a party do not and will not (i) conflict with or violate any provision of the Company’s
certificate of incorporation or bylaws, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company,
or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit




    	3



    	 



    

facility, debt or other instrument (evidencing
a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company
is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected;
except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material
Adverse Effect.


(g)               
Filings, Consents and Approvals. To the Company’s knowledge, the Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of this Agreement and the transactions contemplated pursuant to the Prospectus Supplement, other than: (i) the filing with the
Commission of the Prospectus Supplement, (ii) the filing with the Commission of a registration statement under Rule 462(b) covering
up to $3,000,000 of additional Securities (the “462(b) Registration Statement”), (iii) such filings as are required
to be made under the rules of the Financial Industry Regulatory Authority (“FINRA”) or applicable state securities
or blue sky laws (collectively, the “Required Approvals”), and (iv) any consent, waiver, authorization, order,
notice, registration or filing the failure of which to make or obtain would not reasonably be expected to result in a Material
Adverse Effect.


(h)              
Capitalization. The capitalization of the Company is as set forth in the Incorporated Documents. Other than as set
forth in the Prospectus Supplement, the Company has not issued any capital stock since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant
to the conversion and/or exercise of securities of the Company which would entitle the holder thereof to acquire at any time any
Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock
(“Common Stock Equivalents”) outstanding as of the date of the most recently filed periodic report under the
Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement. Except
as disclosed in the SEC Reports (as hereafter defined), there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock
of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities
laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for
the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.




    	4



    	 



    

(i)                
 SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to
file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together
with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.


(j)                
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date
hereof, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by the Prospectus Supplement or disclosed in the Prospectus
Supplement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected
to occur or exist with respect to the Company or its business, prospects, properties, operations, assets or financial condition
that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made
or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.


(k)              
Litigation. Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local
or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement and the transactions contemplated pursuant to the Prospectus Supplement or the Securities
or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company, nor to the knowledge of the Company any director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under




    	5



    	 



    

federal or state securities laws or
a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or to the knowledge of the Company any current or former director or
officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the Exchange Act or the Securities Act.


(l)                
Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to
any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s
employees is a member of a union that relates to such employee’s relationship with the Company, and the Company is not a
party to a collective bargaining agreement, and the Company believes that its relationships with its employees are good. No executive
officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement
or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject
the Company to any liability with respect to any of the foregoing matters. The Company is in compliance with all U.S. federal,
state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment
and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.


(m)            
Compliance. Except in each case as would not have or reasonably be expected to result in a Material Adverse Effect,
the Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice
or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that
it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is not in violation of any judgment, decree or order of any court, arbitrator or governmental body or (iii) has not or has
been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters.


(n)              
Regulatory Permits. The Company possesses all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct its business as described in the SEC Reports, except
where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and the Company has not received any notice of proceedings relating to the revocation or modification of any
Material Permit.


(o)              
Title to Assets. The Company does not own any real property. The Company has good and marketable title in all personal
property owned by it that is material to the business of the Company, in each case free and clear of all Liens, except for Liens
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent
nor subject to penalties. Any real property and facilities held under lease by the Company is held by it under valid, subsisting
and enforceable leases with which the Company is in compliance.


(p)              
Patents and Trademarks. The Company has, or has rights to use, or can acquire on commercially reasonable terms, all
patents, patent applications, trademarks, trademark applications,




    	6



    	 



    

service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection
with its business as described in the SEC Reports and which the failure to so have would have a Material Adverse Effect (collectively,
the “Intellectual Property Rights”). None of, and the Company has not received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within two (2) years from the date of this Agreement. The Company has not received, since the date of the latest
audited financial statements included within the SEC Reports, a notice (written or otherwise) of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement
by another Person of any of the Intellectual Property Rights. The Company has taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.


(q)              
Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the Company is engaged, including, but not limited
to, directors and officers insurance coverage. The Company does not have any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business without a significant increase in cost.


(r)                
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors
of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the
Company.


(s)               
Sarbanes-Oxley; Internal Accounting Controls. The Company is in compliance in all material respects with any and
all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.
The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of
the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently
filed periodic report under the Exchange Act (such date,




    	7



    	 



    

the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined
in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.


(t)                
Certain Fees. Except as set forth in the Prospectus Supplement or as contemplated by this Agreement, no brokerage
or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement and the
transactions contemplated pursuant to the Prospectus Supplement. The Investors shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be
due in connection with the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus
Supplement. The Company recently paid $50,000 in expenses to an investment bank for an unrelated transaction.


(u)              
Investment Company. The Company is not, and immediately after receipt of payment for the Securities, will not be,
an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct
its business in a manner so that it will not become an “investment company” subject to registration under the Investment
Company Act of 1940, as amended.


(v)              
Registration Rights. No Person has any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company.


(w)             
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.


(x)              
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Investors as a result of
the Investors and the Company fulfilling their obligations or exercising their rights under this Agreement and the transactions
contemplated pursuant to the Prospectus Supplement, including without limitation as a result of the Company’s issuance of
the Securities and the Investors’ ownership of the Securities.


(y)              
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by this Agreement
and the transactions contemplated pursuant to the Prospectus Supplement, the Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Investors or their agents or counsel with any information that it believes constitutes
or might constitute material, non-public information which is not otherwise disclosed in the




    	8



    	 



    

Prospectus Supplement. The Company understands
and confirms that the Investors will rely on the foregoing representation in effecting transactions in securities of the Company.
All of the disclosure furnished by or on behalf of the Company to the Investors regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. 


(z)               
No Integrated Offering. Neither the Company nor any Person acting on its behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.


(aa)           
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) except as disclosed in the SEC Reports, the Company’s assets
do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including
its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected
capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds
the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash,
would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to
believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within
one year from the Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company, or for which the Company has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. The Company is not in default with respect to any Indebtedness.


(bb)          
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect, the Company (i) has made or filed all United States federal and state income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all
taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes
for periods subsequent to the periods to which such returns, reports or




    	9



    	 



    

declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and to the knowledge of the Company
there is no basis for any such claim.


(cc)           
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting
on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is
in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.


(dd)          
Accountants. The Company’s accounting firm is set forth in the Incorporated Documents. To the knowledge and
belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii)
shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the
year ending September 30, 2014.


(ee)           
Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s Placement Agents in connection with the placement of the Securities.


(ff)            
Office of Foreign Assets Control. Neither the Company nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”).


(gg)           
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Investor’s
request.


(hh)          
Bank Holding Company Act. The Company is not subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Company
does not own or control, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve. The Company does not exercise a controlling influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve.


(ii)              
Money Laundering. The operations of the Company are and have been conducted at all times in compliance in all material
respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental




    	10



    	 



    

agency, authority or body or any arbitrator
involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.


(jj)              
Certificates. Any certificate signed by an officer of the Company and
delivered to the Placement Agents or to counsel for the Placement Agents shall be deemed to be a representation and warranty
by the Company to the Placement Agents as to the matters set forth therein.


(kk)          
Reliance. The Company acknowledges that the Placement Agents will rely upon the accuracy and truthfulness of
the foregoing representations and warranties and hereby consents to such reliance.


(ll)              
FINRA Affiliations. Except as disclosed in the SEC Reports, to the knowledge of the Company, there are no affiliations
with any FINRA member firm among the Company’s officers, directors or any five percent (5%) or greater stockholder of the
Company.


Section 3.                
Delivery and Payment. The Closing shall occur at the offices of the Ellenoff Grossman & Schole LLP (“Placement
Agent Counsel”) or at such other place as shall be agreed upon by the Placement Agents and the Company. Subject to the
terms and conditions hereof, at the Closing payment of the purchase price for the Securities sold on the Closing Date shall be
made by Federal Funds wire transfer, against delivery of such Securities, and such Securities shall be registered in such name
or names and shall be in such denominations, as the Placement Agents may request at least one business day before the time of purchase
(as defined below).


Deliveries of the
documents with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent Counsel. All
actions taken at a Closing shall be deemed to have occurred simultaneously.


Section 4.                
Covenants and Agreements of the Company. The Company further covenants and agrees with the Placement Agents as follows:


(a)               
Registration Statement Matters. The Company will advise the Placement Agents promptly after it receives notice thereof
of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to any Prospectus
Supplement or any amended Prospectus Supplement has been filed and will furnish the Placement Agents with copies thereof. The Company
will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of any Prospectus Supplement and for
so long as the delivery of a prospectus is required in connection with the Offering. The Company will advise the Placement Agents,
promptly after it receives notice thereof (i) of any request by the Commission to amend the Registration Statement or to amend
or supplement any Prospectus Supplement or for additional information, and (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or any order directed at any
Incorporated Document, if any, or any amendment or supplement thereto or any order preventing or suspending the use of the Prospectus
or any Prospectus Supplement or any amendment or supplement thereto or any post-effective amendment to the Registration Statement,
of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the institution or threatened
institution of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the
Registration Statement or a Prospectus Supplement or for additional information. The Company shall use its reasonable efforts to
prevent the issuance of any such stop order or prevention or suspension of such use.  If the Commission shall enter any such
stop order or order or notice of prevention or suspension at any time, the Company will use its reasonable efforts to obtain the
lifting of such order at the earliest possible moment, or will file




    	11



    	 



    

a new registration statement and use
its reasonable efforts to have such new registration statement declared effective as soon as practicable.  Additionally, the
Company agrees that it shall comply with the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities
Act, including with respect to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) are received in a timely manner by the Commission.


(b)              
Blue Sky Compliance. The Company will cooperate with the Placement Agents and the Investors in endeavoring to qualify
the Securities for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agents and
the Investors may reasonably request and will make such applications, file such documents, and furnish such information as may
be reasonably required for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent,
and provided further that the Company shall not be required to produce any new disclosure document other than a Prospectus Supplement.
The Company will, from time to time, prepare and file such statements, reports and other documents as are or may be required to
continue such qualifications in effect for so long a period as the Placement Agents may reasonably request for distribution of
the Securities. The Company will advise the Placement Agents promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat
of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration
or exemption, the Company shall use its reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.


(c)               
Amendments and Supplements to a Prospectus Supplement and Other Matters. The Company will comply with the Securities
Act and the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the Incorporated Documents and any Prospectus Supplement. If during the period
in which a prospectus is required by law to be delivered in connection with the distribution of Securities contemplated by the
Incorporated Documents or any Prospectus Supplement (the “Prospectus Delivery Period”), any event shall occur
as a result of which, in the judgment of the Company or in the opinion of the Placement Agents or counsel for the Placement Agents,
it becomes necessary to amend or supplement the Incorporated Documents or any Prospectus Supplement in order to make the statements
therein, in the light of the circumstances under which they were made, as the case may be, not misleading, or if it is necessary
at any time to amend or supplement the Incorporated Documents or any Prospectus Supplement or to file under the Exchange Act any
Incorporated Document to comply with any law, the Company will promptly prepare and file with the Commission, and furnish at its
own expense to the Placement Agents and to dealers, an appropriate amendment to the Registration Statement or supplement to the
Registration Statement, the Incorporated Documents or any Prospectus Supplement that is necessary in order to make the statements
in the Incorporated Documents and any Prospectus Supplement as so amended or supplemented, in the light of the circumstances under
which they were made, as the case may be, not misleading, or so that the Registration Statement, the Incorporated Documents or
any Prospectus Supplement, as so amended or supplemented, will comply with law. Before amending the Registration Statement or supplementing
the Incorporated Documents or any Prospectus Supplement in connection with the Offering, the Company will furnish the Placement
Agents with a copy of such proposed amendment or supplement and, before filing any such amendment or supplement will incorporate
reasonable suggestions by the Placement Agents.


(d)              
Copies of any Amendments and Supplements to a Prospectus Supplement. The Company will furnish the Placement Agents,
without charge, during the period beginning on the date hereof and ending on the Closing Date of the Offering, as many copies of
the Incorporated Documents




    	12



    	 



    

and any Prospectus Supplement and any
amendments and supplements thereto (including any Incorporated Documents, if any) as the Placement Agents may reasonably request.


(e)               
Free Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written consent of the
Lead Agent, make any offer relating to the Securities that would constitute a Company Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus” (as defined in Rule 405 of the Securities Act) required to be filed by
the Company with the Commission or retained by the Company under Rule 433 of the Securities Act. In the event that the Lead Agent
expressly consents in writing to any such free writing prospectus (a “Permitted Free Writing Prospectus”), the
Company covenants that it shall (i) treat each Permitted Free Writing Prospectus as a Company Free Writing Prospectus, and (ii)
comply with the requirements of Rule 164 and 433 of the Securities Act applicable to such Permitted Free Writing Prospectus, including
in respect of timely filing with the Commission, legending and record keeping.


(f)               
Transfer Agent. The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock.


(g)               
Earnings Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act,
but in any event not later than 18 months after the last Closing Date, the Company will make generally available to its security
holders and to the Placement Agents an earnings statement, covering a period of at least 12 consecutive months beginning after
the Closing Date, that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.


(h)              
Periodic Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis,
with the Commission and the Trading Market all reports and documents required to be filed under the Exchange Act within the time
periods and in the manner required by the Exchange Act.


(i)                
Additional Documents. The Company will enter into any subscription, purchase or other customary agreements
as the Placement Agents or the Investors deem necessary or appropriate to consummate the Offering, all of which will be in form
and substance reasonably acceptable to the Placement Agents and the Investors. The Company agrees that the Placement Agents may
rely upon, and each is a third party beneficiary of, the representations and warranties, and applicable covenants, set forth in
any such purchase, subscription or other agreement with Investors in the Offering.


(j)                
No Manipulation of Price.  The Company will not take, directly or indirectly, any action designed to
cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.


(k)              
Acknowledgment. The Company acknowledges that any advice given by the Placement Agents to the Company is solely for
the benefit and use of the Board of Directors of the Company and, except as required by applicable law, regulation or legal process,
may not be used, reproduced, disseminated, quoted or referred to, without the each Placement Agent's prior written consent.


(l)                
Market Standstill. Absent prior written consent from the Placement Agents, from the date hereof until the 90th
day following the Closing Date, the Company shall not sell or issue and Common Stock or Common Stock Equivalents other than with
respect to the issuance of (a) shares of Common Stock or options to employees, consultants, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors




    	13



    	 



    

established for such purpose, (b) the
Securities sold to the Investors, or (c) securities upon the exercise or exchange of or conversion of any Securities issued to
the Investors and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities.


Section 5.                
Conditions of the Obligations of the Placement Agents. The obligations of the Placement Agents hereunder shall be subject
to the accuracy of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as
of the date hereof and as of the Closing Date as though then made, to the timely performance by each of the Company of its covenants
and other obligations hereunder on and as of such dates, and to each of the following additional conditions:


(a)               
Accountants’ Comfort Letter. On the date hereof, the Placement Agents shall have received, and the Company
shall have caused to be delivered to the Placement Agents, a letter from MaloneBailey, LLP, (the independent registered public
accounting firm of the Company), addressed to the Placement Agents, dated as of the date hereof, in form and substance satisfactory
to the Placement Agents. The letter shall not disclose any change in the condition (financial or other), earnings, operations,
business or prospects of the Company from that set forth in the Incorporated Documents or the applicable Prospectus Supplement,
which, in the Lead Agent's sole judgment, is material and adverse and that makes it, in the Placement Agents’ sole judgment,
impracticable or inadvisable to proceed with the Offering of the Securities as contemplated by such Prospectus Supplement.


(b)              
Compliance with Registration Requirements; No Stop Order; No Objection from the FINRA. Each Prospectus Supplement
(in accordance with Rule 424(b)) and “free writing prospectus” (as defined in Rule 405 of the Securities Act),
if any, shall have been duly filed with the Commission, as appropriate; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened
by the Commission; no order preventing or suspending the use of any Prospectus Supplement shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission; no order having the effect of ceasing or suspending
the distribution of the Securities or any other securities of the Company shall have been issued by any securities commission,
securities regulatory authority or stock exchange and no proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange;
all requests for additional information on the part of the Commission shall have been complied with; and the FINRA shall have raised
no objection to the fairness and reasonableness of the placement terms and arrangements.


(c)               
Corporate Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration
Statement and each Prospectus Supplement, and the registration, sale and delivery of the Securities, shall have been completed
or resolved in a manner reasonably satisfactory to the Placement Agent's counsel, and such counsel shall have been furnished with
such papers and information as it may reasonably have requested to enable such counsel to pass upon the matters referred to in
this Section 5.


(d)              
No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to the Closing Date,
in the Placement Agents’ sole judgment after consultation with the Company, there shall not have occurred any Material Adverse
Change.


(e)               
Opinion of Counsel for the Company. The Placement Agents shall have received on the Closing Date the favorable opinion
of US legal counsel to the Company, dated as of such Closing




    	14



    	 



    

Date, including, without limitation,
a negative assurance letter, addressed to the Placement Agents and in form and substance satisfactory to the Placement Agents.


(f)               
Officers’ Certificate. The Placement Agents shall have received on the Closing Date a certificate of the Company,
dated as of such Closing Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect
that, and the Placement Agents shall be satisfied that, the signers of such certificate have reviewed the Registration Statement,
the Incorporated Documents, any Prospectus Supplement, and this Agreement and to the further effect that:


(i)                
The representations and warranties of the Company in this Agreement are true and correct in all material respects (except
for those representations and warranties which are qualified by materiality, in which case such representations and warranties
shall be true and correct in all respects), as if made on and as of such Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Closing Date;


(ii)              
No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus or any Prospectus
Supplement has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge,
threatened under the Securities Act; no order having the effect of ceasing or suspending the distribution of the Securities or
any other securities of the Company has been issued by any securities commission, securities regulatory authority or stock exchange
in the United States and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company,
contemplated by any securities commission, securities regulatory authority or stock exchange in the United States;


(iii)            
When the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery
of such certificate, the Registration Statement and the Incorporated Documents, if any, when such documents became effective or
were filed with the Commission, contained all material information required to be included therein by the Securities Act and the
Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects
conformed to the requirements of the Securities Act and the Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, and the Registration Statement and the Incorporated Documents, if any, did not and do not include
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that the preceding
representations and warranties contained in this paragraph (iii) shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by the applicable Placement Agent expressly for use
therein) and, since the effective date of the Registration Statement, there has occurred no event required by the Securities Act
and the rules and regulations of the Commission thereunder to be set forth in the Incorporated Documents which has not been so
set forth; and


(iv)            
Subsequent to the respective dates as of which information is given in the Registration Statement, the Incorporated Documents
and any Prospectus Supplement, there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the
Company, except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is
material to the Company, incurred by the




    	15



    	 



    

Company, except obligations incurred
in the ordinary course of business; (d) any material change in the capital stock (except changes thereto resulting from the exercise
of outstanding stock options or warrants) or outstanding indebtedness of the Company; (e) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company; or (f) any loss or damage (whether or not insured) to the property
of the Company which has been sustained or will have been sustained which has a Material Adverse Effect.


(g)               
Bring-down Comfort Letter.  On the Closing Date, the Placement Agents shall have received from MaloneBailey,
LLP, or such other independent registered public accounting firm of the Company, a letter dated as of such Closing Date, in
form and substance satisfactory to the Placement Agents, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to such Closing Date.


(h)              
Stock Exchange Listing. The Common Stock shall be registered under the Exchange Act and shall be listed on the Trading
Market, and the Company shall not have taken any action designed to terminate, or likely to have the effect of terminating, the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the Trading
Market, nor shall the Company have received any information suggesting that the Commission or the Trading Market is contemplating
terminating such registration or listing.


(i)                
Additional Documents. On or before the Closing Date, the Placement Agents and counsel for the Placement Agent shall
have received such information and documents as they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations
and warranties, or the satisfaction of any of the conditions or agreements, herein contained.


If any condition
specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement
Agents by notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Indemnification and Contribution)
and Section 8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall survive such termination.


Section 6.                
Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with
the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation:
(i) all expenses incident to the issuance, delivery and qualification of the Securities (including all printing and engraving costs),
including the cost of an escrow agent, if required; (ii) all fees and expenses of the registrar and transfer agent of the Common
Stock; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities; (iv) all
fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors; (v) all
costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Prospectus and each
Prospectus Supplement, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’
fees and expenses incurred by the Company or the Placement Agents in connection with qualifying or registering (or obtaining exemptions
from the qualification or registration of) all or any part of the Securities for offer and sale under the state securities or blue
sky laws or the securities laws of any other country, and, if reasonably requested by the Lead Agent, preparing and printing a
“Blue Sky Survey,” an “International Blue Sky Survey” or other memorandum, and any




    	16



    	 



    

supplements thereto, advising the Placement
Agents of such qualifications, registrations and exemptions; (vii) if applicable, the filing fees incident to the review and approval
by the FINRA of the Placement Agents’ participation in the offering and distribution of the Securities; (viii) the fees and
expenses associated with including the Securities on the Trading Market; (ix) all costs and expenses incident to the travel and
accommodation of the Company’s and the Placement Agents’ employees on the “roadshow,” if any; and (x) all
other fees, costs and expenses referred to in Part II of the Registration Statement.


Section 7.                
Indemnification and Contribution.


(a)               
The Company agrees to indemnify and hold harmless each Placement Agent, its respective affiliates and each person controlling
such Placement Agent (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees
of such Placement Agent, its affiliates and each such controlling person (each Placement Agent, and each such entity or person.
an “Indemnified Person”) from and against any losses, claims, damages, judgments, assessments, costs and other
liabilities (collectively, the “Liabilities”), and shall reimburse each Indemnified Person for all fees and
expenses (including the reasonable fees and expenses of one counsel for all Indemnified Persons, except as otherwise expressly
provided herein) (collectively, the “Expenses”) incurred by an Indemnified Person in investigating, preparing,
pursuing or defending any Actions, whether or not any Indemnified Person is a party thereto, (i) caused by, or arising out of or
in connection with, any untrue statement or alleged untrue statement of a material fact contained in any Incorporated Document
or by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (other than untrue statements or alleged untrue statements in, or omissions
or alleged omissions from, information relating to an Indemnified Person furnished in writing by or on behalf of such Indemnified
Person expressly for use in the Incorporated Documents) or (ii) otherwise arising out of or in connection with advice or services
rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified
Person's actions or inactions in connection with any such advice, services or transactions; provided, however, that,
in the case of clause (ii) only, the Company shall not be responsible for any Liabilities or Expenses of any Indemnified Person
that have resulted primarily from such Indemnified Person's (x) gross negligence, bad faith or willful misconduct in connection
with any of the advice, actions, inactions or services referred to above or (y) use of any offering materials or information concerning
the Company in connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the
Company and which use constitutes negligence, bad faith or willful misconduct. The Company also agrees to reimburse each Indemnified
Person for all Expenses as they are incurred in connection with enforcing such Indemnified Person's rights under this Agreement,
 provided, however, each of the Indemnified
Persons shall agree at the time of receipt of such reimbursement of such Expenses (which agreement shall be self-executing through
acceptance of such payment) to reimburse the Company promptly for all such Expenses advanced by the Company in the event and to
the extent that any prior payment the Company made to an Indemnified Person is determined to have been improper by reason of such
Indemnified Person’s (x) gross negligence, bad faith or willful misconduct in connection with any of the advice, actions,
inactions or services referred to above or (y) use of any offering materials or information concerning the Company in connection
with the offer or sale of the Securities in the Offering which were not authorized for such use by the Company and which use constitutes
negligence, bad faith or willful misconduct.


(b)              
Upon receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which
indemnity may be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that
failure by any Indemnified Person so to notify the Company shall not relieve the Company from any liability which the Company may
have on account of this indemnity or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced
by such failure. The Company shall, if requested by the




    	17



    	 



    

Placement Agent, assume the defense
of any such Action including the employment of counsel reasonably satisfactory to the applicable Placement Agent, which counsel
may also be counsel to the Company. Any Indemnified Person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company has failed promptly to assume the defense and employ counsel or (ii) the named parties to any such Action
(including any impleaded parties) include such Indemnified Person and the Company, and such Indemnified Person shall have been
advised in the reasonable opinion of counsel that there is an actual conflict of interest that prevents the counsel selected by
the Company from representing both the Company (or another client of such counsel) and any Indemnified Person; provided that the
Company shall not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for
all Indemnified Persons in connection with any Action or related Actions, in addition to any local counsel. The Company shall not
be liable for any settlement of any Action effected without its written consent (which shall not be unreasonably withheld). In
addition, the Company shall not, without the prior written consent of the applicable Placement Agent (which shall not be unreasonably
withheld), settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened
Action in respect of which indemnification or contribution may be sought hereunder (whether or not such Indemnified Person is a
party thereto) unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified
Person from all Liabilities arising out of such Action for which indemnification or contribution may be sought hereunder. The indemnification
required hereby shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as
such expense, loss, damage or liability is incurred and is due and payable, 
provided, however, each of the Indemnified Persons shall agree at the time of receipt of such indemnification
(which agreement shall be self-executing through acceptance of such payment) to reimburse the Company promptly for all such indemnification
made by the Company in the event and to the extent that any prior payment the Company made to an Indemnified Person is determined
to have been improper by reason of such Indemnified Person’s (x) gross negligence, bad faith or willful misconduct in connection
with any of the advice, actions, inactions or services referred to above or (y) use of any offering materials or information concerning
the Company in connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the
Company and which use constitutes negligence, bad faith or willful misconduct.


(c)               
In the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement,
the Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is
appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the applicable Placement Agent and any
other Indemnified Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by
the immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative fault
of the Company, on the one hand, and the applicable Placement Agent and any other Indemnified Person, on the other hand, in connection
with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided,
however, that in no event will the aggregate contribution of all Indemnified Persons to all Liabilities or Expenses
in connection with any such matters exceed the amount of the fee actually received by the applicable Placement Agent pursuant to
this Agreement. For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the applicable Placement
Agent on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as (a) the
total value paid or contemplated to be paid to or received or contemplated to be received by the Company in the transaction or
transactions that are within the scope of this Agreement, whether or not any such transaction is consummated, bears to (b) the
fees paid to the applicable Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the




    	18



    	 



    

meaning of Section 11(f) of the Securities
Act, as amended, shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.


(d)              
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or
tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person's actions or inactions in connection
with any such advice, services or transactions except for Liabilities (and related Expenses) of the Company that have resulted
primarily from such Indemnified Person's gross negligence, bad faith or willful misconduct in connection with any such advice,
actions, inactions or services.


(e)               
The reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification
of this Agreement and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified
Person's services under or in connection with, this Agreement.


Section 8.                
Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company or any person controlling the Company, of its officers, and of each Placement Agent set forth
in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agents, the Company, or any of its or their partners, officers or directors or any controlling person, as the
case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.
A successor to a Placement Agent, or to the Company, its directors or officers or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.


Section 9.                
Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed
to the parties hereto as follows:


If to the Placement Agents to the address
set forth above.


 


Chardan Capital Markets


17 State Street, Suite 1600


New York, New York 10004


Attention:Kerry Propper


Facsimile:(646) 786-4043


 


Brean Capital, LLC


1345 Avenue of the Americas, 29th Floor


New York, New York 10105


Attention:Jeffrey Sacher


Facsimile:(212) 702-6649


 


With a copy to:


 


Ellenoff Grossman & Schole


1345 Avenue of the Americas


New York, New York 10105


Attention:Robert F. Charron


Facsimile:(212) 401-4741


 




    	19



    	 



    

If to the Company:


 


Ohr Pharmaceutical, Inc.


800 Third Avenue, 11th Floor


New York, New York 10022


Attention:Chief Financial Officer


Facsimile:212-644-0544


 


With a copy to:


 


Hahn & Hessen LLP


488 Madison Avenue


New York, New York 10022


Attention:James Kardon, Esq.


Facsimile:212-478-7400


 


Any party hereto
may change the address for receipt of communications by giving written notice to the others.


Section 10.            
Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of
the employees, officers and directors and controlling persons referred to in Section 7 hereof, and to their respective successors,
and personal representative, and no other person will have any right or obligation hereunder.


Section 11.            
Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid and enforceable.


Section 12.            
Governing Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both this
engagement letter and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect
and in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles thereof.
Each of the Placement Agents and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to
this engagement letter and/or the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County
of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may
have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the
New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such
suit, action or proceeding. Each of the Placement Agents and the Company further agrees to accept and acknowledge service of any
and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed
by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company,
in any such suit, action or proceeding, and service of process upon a Placement Agent mailed by certified mail to such Placement
Agent’s address shall be deemed in every respect effective service process upon such Placement Agent, in any such suit, action
or proceeding. Notwithstanding any provision of this engagement letter to the contrary, the Company agrees that neither Placement
Agent nor any of their respective affiliates, and the respective officers, directors, employees, agents and representatives of
each Placement Agent, its affiliates and each other person, if any,




    	20



    	 



    

controlling such Placement Agent or
any of its affiliates, shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for
or in connection with the engagement and transaction described herein except for any such liability for losses, claims, damages
or liabilities incurred by us that are finally judicially determined to have resulted from the bad faith or gross negligence of
such individuals or entities. If either party shall commence an action or proceeding to enforce any provision of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.


Section 13.            
General Provisions.


(a)This
Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.
Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of
this Agreement.


(b)The
Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agents have acted at arms' length,
are not agents of, and owe no fiduciary duties to the Company or any other person, (ii) the Placement Agents owe the Company only
those duties and obligations set forth in this Agreement and (iii) the Placement Agents may each have interests that differ from
those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Placement
Agents arising from an alleged breach of fiduciary duty in connection with the offering of the Securities


[The remainder of this page has been intentionally
left blank.]




    	21



    	 



    

If the foregoing
is in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.





	 	 	Very truly yours,
	 	 	 
	 	 	Ohr
    Pharmaceutical Inc.
	 	 	 
	 	 	By:	/s/ 
	 	 	Name:	 
	 	 	Title:	 







The foregoing Placement
Agency Agreement is hereby confirmed and accepted as of the date first above written.


 


	Chardan Capital Markets,
LLC	 
	 	 	 
	By:	
        /s/
	 
		Name:	 
		Title:	 




 








	Brean Capital, LLC	 
	 	 	 
	By:	
        /s/
	 
	Name:	Name:	 
		Title: