Document:

Term Sheet

 Exhibit 10.42 
 CONFIDENTIAL 
  

			
	 Term Sheet: SCOLR’s Ondansetron ER Licensing Agreement
  
 February 2010

	  
 The purpose of this licensing term sheet
(“Term Sheet”) is to set forth the terms for an exclusive worldwide license agreement between SCOLR Pharma Inc., a Delaware corporation, or any subsidiaries thereof (“SCOLR”) and RedHill Biopharma Ltd.
(“RedHill”), an Israeli corporation or its designee (collectively the “Parties”). This Term Sheet is binding on the Parties and is subject only to satisfactory technical, legal and other customary due diligence by
RedHill, verifying inter alia that no drastic changes emerge vis a vis the currently estimated budgetary requirements, and regulatory, technical, IP and market risks, and the Parties entering into definite documentation (the
“Agreement”) elaborating on the terms of this Term Sheet, and other customary terms including, without limitation, representations and warranties, liability and indemnity, and including a side letter to be executed by the original
inventors/licensors (if other than SCOLR).

	  
 Limited Term
	  	  
 This document will expire and become null if not executed by
both parties on or before Tuesday, February 16, 2010, 5pm EST.
  
 Execution
of the Agreement and closing of the transaction is anticipated no later than Monday, May 17, 2010 (“Closing”).

	  
 Product
	  	  
 Extended release (including, but not limited to, 24 hour
extended release) Ondansetron tablet formulation based on SCOLR’s proprietary and patented CDT® delivery
technology (the “Product”) for the prevention and treatment of nausea and all other indications whatsoever (for both human and animals), in all formulations and dosage forms, including all combination products and all SCOLR’s
assets and IP whatsoever that are needed in any way for the development and commercialization of the Product (diagnostics, therapeutics, etc.)

	  
 License
	  	  
 Exclusive perpetual license to all SCOLR’s rights in and
to the Product, including all patent rights and other intellectual property rights relating thereto to develop, manufacture and commercialize the Product for all indications and all products whatsoever including but not limited to all combination
formulations with right to sub-license (and further sub-license) in all indications whatsoever, and the right to register as the exclusive licensee in all countries of the world.

	  
 Field
	  	  
 All indications whatsoever

	  
 Territory
	  	  
 Worldwide

	  
 R&D, Manufacturing
 and other Data
	  	  
 SCOLR shall provide RedHill, at no cost to RedHill, with all
the information it has about the Products including, but not limited to, all Patents, R&D data, past trials data, communications with regulatory authorities in the US, Europe and elsewhere, manufacturing, supply, external service and other
contracts and any and all other information whatsoever that is relevant for the development,

  

 1 

 CONFIDENTIAL 
  

			
	 	  	marketing approval, marketing and other commercialization of the Product. SCOLR shall make available
to RedHill any quantities of the Product it has on hand at no extra charge
whatsoever.
	  
 Payments (US $)
	  	  
 Within 30 days of Closing: US $100,000 (USD one hundred
thousand)
  
 One-Time Milestones and Royalties: Payments are due only
once and are not payable per indication or per territory (i.e., one-time milestone payments only). All milestone and royalty payments are due 60 days after the end of the relevant quarter in which the relevant milestone or royalty are actually met.
The total aggregated payments shall not exceed a maximum cap amount of US $30 million (the “Cap Amount”). If the Cap Amount is reached, no additional payment of any kind whatsoever shall be due.
  
 •   Final marketing
approval by the FDA: $250,000 (USD 0.25 million)
  
 •   First commercial sale: $250,000 (USD 0.25 million)
  
 •   Net Sales Royalties (in the event of a sub-license to a third party partner or RedHill sells
and distributes on its own): 8% of net sales actually received by RedHill from its own sales or from a third party partner, after recovery of all costs (to be defined) for a period of 10 (ten) years starting on the earlier of the date of the first
commercial sale by RedHill or the third party partner. The detailed definition of “Net Sales” shall be included in the Agreement but generally includes, but is not limited to, generally recognized deductions such as customers allowances
and credits, rebates, charge backs and discounts, freight, transport, packing and insurance charges, taxes and duties, bad debts, samples, liability and other insurance, third party IP royalties. The Agreement shall contain the details of customary
audit rights for SCOLR and the audit process. The Agreement shall contain the details of customary audit rights for SCOLR.

	  
 Exclusivity and Due Diligence
	  	  
 SCOLR understands and acknowledges that RedHill will invest
significant capital, management time and other resources during the due diligence period. Accordingly, for a period of 90 (ninety) days starting on the date of this Term Sheet (the “Due Diligence Exclusivity Period”), SCOLR shall
fully and swiftly cooperate with RedHill and provide RedHill with all requested technical, legal, audit and other information that is reasonably and customarily necessary for conducting and completing such due diligence process. During the Due
Diligence Exclusivity Period SCOLR shall not initiate, engage, or continue any discussions with any party other than RedHill with regard to a transaction covering or otherwise involving the Product in any way. Upon signing this Term Sheet SCOLR
shall immediately discontinue any and all third party discussions regarding or affecting the Product in any way and shall immediately inform all relevant parties that it has formally entered a binding agreement and exclusivity period. SCOLR shall
completely refrain from supplying any information to any third party concerning the Product during the Due Diligence

  

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 CONFIDENTIAL 
  

			
		  	Exclusivity Period. Furthermore, in the event that SCOLR’s corporate approval is not obtained by the end of the Due Diligence Exclusivity Period, or SCOLR otherwise declines
or is unable to complete the transaction for whatever reason, SCOLR shall pay RedHill, within 7 (seven) days, an amount equal to US $100,000 to compensate RedHill for its due diligence costs and expenses, and other costs incurred by it, including
alternative costs (“Breakup Fee”). Should RedHill decline to complete the transaction for reasons other than unsatisfactory due diligence results, RedHill shall pay SCOLR within 30 (thirty) days a Breakup Fee equal to US $100,000 to
compensate SCOLR for hosting the due diligence and other costs incurred by it, including alternative costs.
	  
 Confidentiality
	  	  
 Subject to compulsory regulatory and legal requirements or (in
the absence of such requirements) a written approval from the other party, neither party shall make any public release or other public disclosure to third parties (other than the parties’ professional advisors) concerning this Term Sheet, the
Agreement contemplated hereby or the status of the discussions between or among SCOLR and RedHill without first obtaining a Non Disclosure Agreement from the third party. Subject to confidentiality, RedHill is expressly permitted to generally
describe the Product to its investors provided it is done with the aim of securing the financing needed to continue the development of the Product. SCOLR is expressly permitted to make a public announcement about the Term Sheet and the Agreement
provided no specific details (other than details required to be disclosed by the relevant laws and regulations) are disclosed without first obtaining RedHill’s pre-approval and comments to the relevant draft public
announcements.

	  
 Diligence Obligation
	  	  
 RedHill will make a good faith, continuous and diligent effort
to allocate appropriate financial resources (currently estimated by SCOLR at US $1.3 million) to prepare, initiate and complete the clinical development of the Product and file an application for regulatory marketing approval in accordance with
industry standards (the “Diligence Obligation”). For the avoidance of any doubt, development failures, negative regulatory decisions, and/or other reasons that are beyond RedHill’s control, do not constitute a breach of the
Diligence Obligation. SCOLR’s sole and exclusive remedy for a breach of the Diligence Obligation by RedHill shall be return by RedHill of the license rights to SCOLR.

	  
 Governing Law
	  	  
 This Term Sheet is exclusively governed by English law and the
courts of London, England shall have jurisdiction of disputes regarding this Term Sheet.

  

									
	Acknowledged and agreed:	 		 	
			
	For SCOLR Pharma, Inc.	 		 	For RedHill Biopharma Ltd.
					
	By:	 	/s/ Stephan J. Turner	 		 	By:	 	/s/ Dror Ben-Asher
	Title: 	 	President & CEO	 		 	Title: 	 	CEO
	Date:	 	2/16/10	 		 	Date:	 	2/15/10

  

 3Form of Unit Purchase Agreement

 Exhibit 10.43 
 SCOLR PHARMA, INC. 
 UNIT PURCHASE AGREEMENT 

 UNIT PURCHASE AGREEMENT 
 SCOLR PHARMA, INC. 
 This UNIT
PURCHASE AGREEMENT (as amended or supplemented from time to time, this “Agreement”) is made as of this 12th day of March, 2010, between SCOLR PHARMA, INC., a Delaware corporation with its principal offices at 19204
North Creek Parkway, Suite 100, Bothell, Washington 98011 (the “Company”), and the undersigned (the “Subscriber”). 
 W I T N E S S E T H : 
 WHEREAS, the Company desires to issue, in a private placement, Units each
consisting of one share of common stock, $.001 par value per share (the “Common Stock”), and a warrant which entitles the holder to purchase one-fifth of one share of Common Stock, at an exercise price equal to the closing price of the
Common Stock on the NYSE Amex Exchange on the date prior to the date subscriptions for Units are accepted (each an “Investor Warrant” and, collectively, the “Investor Warrants”), with a minimum aggregate purchase price of
$3,000,000 (the “Minimum Amount”) of Units and a maximum aggregate purchase price of $4,100,000 (the “Maximum Amount”) of Units; and 
 WHEREAS, Subscriber desires to acquire Units having an aggregate purchase price set forth on the signature page hereof (the “Purchase Price”); 
 NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby
agree as follows: 
  

	 	1.	SUBSCRIPTION FOR SECURITIES AND REPRESENTATIONS BY SUBSCRIBER. 

 1.1. Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Company Units having the Purchase Price (and the Company agrees to sell
such Units to the Subscriber for the Purchase Price), subject to the Company’s right to sell to the Subscriber such lesser number of Units as it may, in its sole discretion, deem necessary or desirable. As the Company will not issue fractional
shares of Common Stock, each Subscriber will be issued that number of whole Units which the Purchase Price will purchase (to the extent accepted), rounded down to the next number of whole Units. Any portion of the Purchase Price not applied to the
purchase of Units will be returned to the Subscriber, without interest. The Purchase Price is payable, at or prior to the closing of this Agreement, by wire transfer, subject to collection, as set forth in the “INSTRUCTIONS TO
SUBSCRIBERS” contained in the Subscription Documents Booklet of which this Agreement is a part. 
 1.2. The Subscriber
recognizes that the purchase of the Units involves a high degree of risk in that (i) the Units have not been registered under the Securities Act of 1933, as amended (“1933 Act”), and the Company has no obligation to register the Units
or any securities contained therein or issuable upon exercise of the warrants contained therein, except as set forth

 
in Section 3 below; (ii) an investment in the Units is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company
and the Units; (iii) the Subscriber may not be able to liquidate the Subscriber’s investment; and (iv) the Subscriber could sustain the loss of Subscriber’s entire investment. Such risks are more fully set forth in the
Company’s Confidential Private Placement Memorandum dated March 3, 2010, including the Exhibits thereto (as amended or supplemented from time to time, collectively, the “Memorandum”). 
 1.3. The private placement of the Units by the Company (the “Private Placement Offering”) pursuant to the Memorandum shall
continue for a period commencing on the date of the Memorandum and ending on the date set forth in the Memorandum. 
 1.4.
Treasury Department Circular 230 Disclosure. To ensure compliance with Treasury Department Circular 230, the Subscriber is hereby notified that: (i) any discussion of U.S. Federal tax issues in this Agreement or the Memorandum is not
intended or written to be relied upon, and cannot be relied upon, by the Subscriber for the purpose of avoiding penalties that may be imposed on the Subscriber under the Internal Revenue Code of 1986, as amended (the “Code”);
(ii) such discussion is included herein by the Company in connection with the promotion or marketing (within the meaning of Circular 230) by the Company of the transactions or matters addressed herein or therein; and (iii) the Subscriber
should seek advice based on its particular circumstances from an independent tax advisor. 
 1.5. The Subscriber represents as
follows: 
 (a) The Subscriber represents that the Subscriber is an Accredited Investor (as defined in Rule 501 of Regulation D
promulgated under the 1933 Act) as indicated by the Subscriber’s responses to the Confidential Investor Questionnaire, a copy of which is included in the Subscription Documents Booklet, and that the Subscriber is able to bear the economic risk
of investment in the Units. The Subscriber is not an officer, director or “affiliate” (as defined in Rule 403 under the 1933 Act) of the Company. 
 (b) The Subscriber acknowledges that the Subscriber has significant prior investment experience, including investment in non-listed and non-registered securities. The Subscriber recognizes the highly
speculative nature of this investment. The Subscriber acknowledges that the Subscriber has carefully read the Memorandum, including but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, the
Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2009, the Company’s Current Reports on Form 8-K, dated November 25, November 30 and December 16, 2009, January 4, 2010 and
February 18, 2010, and the Company’s Proxy Statement dated April 29, 2009 for its 2009 Annual Meeting held on June 11, 2009, and fully understands the contents thereof, and the Subscriber has not received any other offering
literature or prospectus and no representations or warranties have been made to the Subscriber by the Company or its employees, affiliates or agents, other than the representations set forth in the Memorandum. 
 (c) The Subscriber acknowledges that the Units were not offered to the Subscriber by any means of general solicitation or general
advertising. In that regard, the Subscriber is not subscribing for the Units: (i) as a result of, or subsequent to, becoming aware of

  

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any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium, generally available electronic communication, broadcast over television or radio
or generally available to the public on the internet or worldwide web; (ii) as a result of, or subsequent to, attendance at a seminar or meeting called by any of the means set forth in (i) above; or (iii) as a result of, or subsequent
to, any solicitations by a person not previously known to the Subscriber in connection with investment in Units generally. 
 (d) The Subscriber hereby acknowledges that the Private Placement Offering and the Memorandum have not been reviewed by the Securities and Exchange Commission (the “SEC”) or by a state securities regulator because it is intended
to be a nonpublic offering pursuant to Sections 4(2) and 4(6) of the 1933 Act and Regulation D promulgated thereunder. The Subscriber represents and warrants that the Units are being purchased for the Subscriber’s own account, for investment
purposes only and not for distribution or resale to others. The Subscriber agrees that the Subscriber will not sell or otherwise transfer the Units or the securities contained in the Units or the Common Stock issuable upon exercise of the warrants
contained in the Units unless they are registered under the 1933 Act or unless an exemption from such registration is available. 
 (e) The Subscriber understands that the Units have not been registered under the 1933 Act by reason of a claimed exemption under the provisions of the 1933 Act which depends, in part, upon the Subscriber’s investment intention. In this
connection, the Subscriber understands that it is the position of the SEC that the statutory basis for such exemption would not be present if the Subscriber’s representation merely meant that the Subscriber’s present intention was to hold
the Units for a short period, such as the capital gains period of tax statutes, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Subscriber realizes that, in the view of the SEC, a purchase
now with an intent to resell after a pre-determined amount of time would represent a purchase with an intent inconsistent with the Subscriber’s representations and warranties to the Company, and the SEC might regard such a sale or disposition
as a deferred sale to which such exemptions are not available. 
 (f) The Subscriber understands that Rule 144 (the
“Rule”) promulgated by the SEC under the 1933 Act requires, among other conditions, a six (6) month 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 1933 Act. The Subscriber understands that the Company makes no representation or warranty regarding its fulfillment in the future of any reporting requirements under the Securities Exchange Act of 1934, as
amended, or its dissemination to the public of any current financial or other information concerning the Company, as is required by the Rule as one of the conditions of its availability. The Subscriber understands and hereby acknowledges that the
Company is the only entity that can register the Securities (and the common stock issuable upon conversion or exercise thereof) under the 1933 Act and that the Company is under no obligation to register the same under the 1933 Act, with the
exception of certain registration rights set forth in Section 3 of this Agreement. The Subscriber acknowledges that the Company may, if it desires, permit the transfer of the Securities out of the Subscriber’s name only when the
Subscriber’s request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the 1933 Act or any applicable state “blue sky”
laws and subject to the provisions of Section 1.5(g) of this Agreement. 
  

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 (g) The Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Units stating that they are “restricted securities” (as defined in the Rule) and may only be publicly offered and sold pursuant to an effective registration statement filed with the SEC or pursuant to an exemption
from the registration requirements. 
 (h) The Subscriber understands that the Company will review this Agreement and the
Confidential Investor Questionnaire; and it is further agreed that the Company reserves the unrestricted right to reject or limit any subscription for any reason or for no reason and to close the Private Placement Offering at any time. 

(i) The Subscriber hereby represents that the address of the Subscriber furnished by the Subscriber at the end of this Agreement is the
Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if the Subscriber is a corporation or other entity. 
 (j) The Subscriber and its advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Company and the Private Placement Offering, and all
such questions, if any, have been answered to the full satisfaction of the Subscriber and its advisors, if any; and the Company shall provide the Subscriber or its advisors, if any, with the opportunity to ask additional questions of and receive
answers (all of which information shall be limited to publicly available information) from the Company concerning the Company during the period which the Subscriber owns the Shares. 
 (k) The Subscriber is not relying on Taglich Brothers Inc., as placement agent (the “Placement Agent”) or the Company with
respect to any legal or tax considerations involved in the purchase, ownership and disposition of the Units or the securities that comprise the Units. 
 (l) The Subscriber has such knowledge and expertise in financial and business matters that the Subscriber is capable of evaluating the merits and risks involved in an investment in the Units. All
information that the Subscriber has provided concerning the Subscriber and the Subscriber’s financial position (including, without limitation, information in this Agreement or in the Confidential Investor Questionnaire included in the
Subscription Documents Booklet) is true, correct and complete. 
 (m) The Subscriber has full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder; and this Agreement is a legally binding obligation of the Subscriber in accordance with its terms. 
 (n) Except as set forth in the Memorandum no representations or warranties have been made to the Subscriber by the Company, the Placement Agent (as defined in the Memorandum) or any of their respective
agents, employees or affiliates and in entering into this transaction, the Subscriber is not relying on any information, other than that contained in the Memorandum or the results of an independent investigation by the Subscriber. 
  

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 (o) The Subscriber agrees that the Subscriber will not sell or otherwise transfer the Units
unless they are registered under the 1933 Act and applicable state “blue sky” laws or unless an exemption from such registration is available. The Subscriber represents and warrants that (i) the Subscriber has adequate means of
providing for the Subscriber’s current needs and possible personal contingencies; (ii) the Subscriber has no need for liquidity in this investment; (iii) the Subscriber is able to bear the substantial economic risk of an investment in
the Units for an indefinite period; and (iv) at the present time the Subscriber could afford a complete loss of such investment. 
 (p) It is understood that all documents, records and books pertaining to this investment have been made available for the inspection by the Subscriber’s attorney and/or accountant and the Subscriber, and that the books and records of
the Company will be available upon reasonable notice during business hours at its principal place of business. 
 (q) The
Subscriber acknowledges and agrees that any changes made by the Subscriber to any of the documents delivered to the Subscriber in connection with the Private Placement Offering shall not be effective unless the Company consents to such changes.

 (r) The Subscriber understands that it and its representative(s) could be subject to fines, penalties and other liabilities
under applicable securities laws if the Subscriber or its representative(s), while in possession of any material, non-public information that may be contained in the Memorandum, trade in the Common Stock or other securities of the Company or
communicate such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such Common Stock or other securities. The Subscriber agrees that it and its representative(s) will
refrain from trading in the Common Stock or other securities of the Company until such time as they are no longer prohibited from trading in such Common Stock or other securities under all applicable securities laws (whether because the Company has
publicly disclosed all material information in the Memorandum, the Memorandum no longer containing material non-public information or otherwise). 
 (s) In the event that the Subscriber is acting as agent, representative or nominee for another party (each, a “Beneficial Owner”), the Subscriber understands and acknowledges that the
representations, warranties and agreements made herein are made by the Subscriber: (i) with respect to the Subscriber; and (ii) with respect to each Beneficial Owner of the Units subscribed for hereby. The Subscriber represents and
warrants that he, she or it has all requisite power and authority from said Beneficial Owner(s) to execute and perform the obligations under this Agreement and has anti-money laundering policies and procedures in place reasonably designed to verify
the identity of each Beneficial Owner and the sources of each Beneficial Owner’s funds. Such policies and procedures are properly enforced and are consistent with anti-money laundering laws or regulations and sanctions and anti-terrorism laws
and regulations, including regulations of OFAC (as defined below) such that the Company may rely on this representation. The Subscriber agrees, except to the extent specifically prohibited by applicable law, to indemnify the Company, the Placement
Agent and their respective officers and agents for any and all costs, fees and expenses (including reasonable legal fees and disbursements) in connection with any damages resulting from the Subscriber’s or any Beneficial Owner’s
misrepresentation or misstatement contained herein, or the assertion of the Subscriber’s lack of proper authorization from each Beneficial Owner of the Units subscribed for hereby to enter into this Agreement or perform the obligations thereof.

  

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 (t) A prospective Subscriber should check the Treasury Department’s Office of Foreign
Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. 
 The Subscriber represents that the Purchase Price was not directly or indirectly derived from activities that may contravene U.S. Federal, state and international laws and regulations, including anti-money laundering laws. 
 OFAC prohibits, among other things, the engagement in transactions with, and the provisions of services to, certain foreign countries,
territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website. 
 The Subscriber hereby represents and warrants, to the best of its knowledge, that none of: 
  

	 	(i)	the Subscriber; 

  

	 	(ii)	any person controlling, controlled by or under common control with, the Subscriber; 

  

	 	(iii)	if the Subscriber is a privately held entity, any person having a beneficial interest in the Subscriber; or 

  

	 	(iv)	any person for whom the Subscriber is acting as agent or nominee in connection with this investment 

 (A) is a country, territory, individual or entity named on an OFAC list, or is an individual or entity that resides or has a place of
business in a country or territory named on such lists; 
 (B) is a senior foreign political
figure1, or any immediate family member2 or close associate3 of a senior foreign political figure within the meaning of the Department of Treasury’s Guidance on
Enhanced Scrutiny for Transactions That May Involve the Proceeds of Foreign Official Corruption4 and as referenced in the USA PATRIOT Act of 2001, as amended (the “Patriot Act”);5 or 
  
  

	1	 A “senior foreign political figure” is defined as a current or former senior official in the executive, legislative, administrative, military
or judicial branches of a non-U.S. government (whether elected or not), a senior official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned corporation. In addition, a “senior foreign political
figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. 

	2	 “Immediate
family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws. 

	3	 A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close
relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.

	4	 For a more extensive discussion of the preceding terms and definitions, see http://www.federalreserve.gov/boarddocs/srletters/2001/sr0103a1.pdf.

	5	 The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56
(2001). 

	6	 A “foreign
shell bank” is a foreign bank that does not have a physical presence in any country. 

	

	

	

  

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 (C) is a “foreign shell bank”6 and does not transact business with a “foreign shell
bank”. 
 The Subscriber agrees to notify the Company promptly should the Subscriber become aware of any change in the
information set forth in these representations. 
 The Subscriber understands that the Company may not accept any portion of the
Purchase Price if the Subscriber cannot make the representation set forth above or if the information provided to the Company is incomplete or is deemed suspicious. 
 If the Subscriber is an investment entity, then the Subscriber hereby represents and warrants to the Company that the Subscriber is aware of the requirements of the Patriot Act, the regulations
administered by OFAC and other applicable U.S. Federal, state or non-U.S. anti-money laundering laws and regulations (as amended, collectively, the “anti-money laundering/OFAC laws”). The Subscriber further warrants and represents that it
has anti-money laundering policies and procedures in place reasonably designed to verify the identity of its beneficial owners and/or underlying investors (as applicable) and their sources of funds. Such policies and procedures are properly enforced
and are consistent with the anti-money laundering/OFAC laws. The Subscriber hereby warrants to the Company that, to the best of its knowledge, the Subscriber’s beneficial owners and/or underlying investors (as applicable) are not individuals,
entities or countries that may subject the Company to criminal or civil violations of any anti-money laundering/OFAC laws. The Subscriber hereby acknowledges and agrees that the Company, or any other party on behalf of the Company, may be required
and shall be entitled to reveal any information regarding the Company and the Subscriber’s investment in the Company, including details of the Subscriber’s identity, to their regulators and/or any other government agency within their
jurisdiction, as they shall, in their sole and absolute discretion, consider appropriate. 
 1.6. Representations in
Placement Agreement. The Company acknowledges and agrees that the Subscriber is entitled to rely on the representations and warranties of the Company to the Placement Agent made in the Placement Agreement between the Company and the Placement
Agent dated on or about the date hereof. 
  

	 	2.	TERMS OF SUBSCRIPTION. 

 The Private Placement Offering of the Units is being made on a “best efforts” basis as more particularly set forth in the Memorandum. 
  

 - 7 - 

	 	3.	REGISTRATION RIGHTS. 

 3.1. As soon as possible after the Final Closing Date (as defined in the Memorandum), but in no event later than sixty (60) days after the Final Closing Date (regardless of whether the Maximum Amount of Units shall have been sold), the
Company shall, at its sole cost and expense, file a registration statement (as amended or supplemented from time to time, the “Registration Statement”) on the appropriate form under the 1933 Act with the SEC covering all of the shares of
Common Stock (the “Registrable Securities”) that are included in the Units and that are issuable upon the exercise of the Investor Warrants and the Placement Agent Warrants (as defined in the Memorandum), time being of the essence. The
Company will use best efforts to have the Registration Statement declared effective, and to keep the Registration Statement effective until the earlier of (x) four years after the Final Closing Date, (y) the date when all the Registrable
Securities have been sold or (z) the date on which all of the Registrable Securities may be sold without any restriction pursuant to the Rule 144. 
 3.2. In the event the Company effects any registration under the 1933 Act of any Registrable Securities pursuant to Section 3.1 or 3.7 of this Agreement, the Company shall indemnify, to the extent
permitted by law, and hold harmless each person whose Registrable Securities are included in such registration statement (each, a “Seller”), any underwriter, any officer, director, employee or agent of any Seller or underwriter, and each
other person, if any, who controls any Seller or underwriter within the meaning of Section 15 of the 1933 Act, against any losses, claims, damages, liabilities, judgment, fines, penalties, costs and expenses, joint or several, or actions in
respect thereof (collectively, the “Claims”), to which each such indemnified party becomes subject, under the 1933 Act or otherwise, insofar as such Claims arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement or prospectus or any amendment or supplement thereto or any document filed under a state securities or blue sky law (as amended or supplemented from time to time, collectively, the
“Registration Documents”) or insofar as such Claims arise out of or are based upon the omission or alleged omission to state in any Registration Document a material fact required to be stated therein or necessary to make the statements
made therein not misleading or a breach of any convenant or obligation of the Company hereunder, and will reimburse any such indemnified party for any legal or other expenses or disbursements reasonably incurred by such indemnified party in
investigating or defending any such Claim; provided that the Company shall not be liable in any such case to a particular indemnified party to the extent such Claim is based upon an untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact made in any Registration Document in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use in the preparation
of such Registration Document or a breach by the indemnified party of any of its covenants or obligations hereunder. 
 3.3. In
connection with any Registration Statement in which a Seller is participating, such Seller, severally and not jointly, shall indemnify, to the extent permitted by law, and hold harmless the Company, each of its directors, each of its officers who
have signed such Registration Statement, each other person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, each other Seller and each underwriter, any officer, director, employee or agent of any such other
Seller or underwriter and each other person, if any,

  

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who controls such other Seller or underwriter within the meaning of Section 15 of the 1933 Act against any Claims to which each such indemnified party may become subject under the 1933 Act
or otherwise, insofar as such Claims (or actions in respect thereof) are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Document, or insofar as any Claims are based upon the omission or
alleged omission to state in any Registration Document a material fact required to be stated therein or necessary to make the statements made therein not misleading, and will reimburse any such indemnified party for any legal or other expenses or
disbursements reasonably incurred by such indemnified party in investigating or defending any such claim; provided, however, that such indemnification or reimbursement shall be payable only if, and to the extent that, any such Claim arises out of or
is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Document in reliance upon and in conformity with written information furnished to the Company by such Seller specifically for use
in the preparation thereof. 
 3.4. Any person entitled to indemnification under Section 3.2 or 3.3 of this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any Claim if a claim for indemnification in respect thereof is to be made against an indemnifying party under this Section 3.4, but the omission of such notice shall not
relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than under Section 3.2 or 3.3 of this Agreement, except to the extent that such failure shall materially adversely affect any indemnifying
party or its rights hereunder. In case any action is brought against the indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it
chooses, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party; and, after notice from the indemnifying party to the indemnified party that it so chooses, the indemnifying party shall not be liable for any legal
or other expenses or disbursements subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take
reasonable steps necessary to defend diligently the Claim within twenty (20) days after receiving notice from the indemnified party that the indemnified party believes it has failed to do so; (ii) if the indemnified party who is a
defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there are legal defenses available to the indemnified party which are not available to the indemnifying party; or
(iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, the indemnified party shall have the right to assume or continue its own defense as set forth above (but
with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have concluded that there are legal defenses available to such party or parties which are
not available to the other indemnified parties or to the extent representation of all indemnified parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct) and the indemnifying party shall be liable
for any reasonable expenses therefor; provided, that no indemnifying party shall be subject to any liability for any settlement of a Claim made without its consent (which may not be unreasonably withheld, delayed or conditioned). If the indemnifying
party assumes the defense of any Claim hereunder, such indemnifying party shall not enter into any settlement without the consent of the indemnified party (which may not be unreasonably withheld, delayed or conditioned) if such settlement attributes
liability to the indemnified party. 
  

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 3.5. If the indemnification under Section 3.2 or 3.3 is unavailable to an indemnified
party (by reason of public policy or otherwise) or insufficient to hold an indemnified party harmless for any Claims, then the indemnifying party shall contribute to the amount paid or payable by such indemnified party, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and indemnified party in connection with the actions, statements or omissions that resulted in such Claims as well as any other relevant equitable considerations. The relative fault
of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of any Claims shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such
party in connection with any litigation or other proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 3.5 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 3.5, no Subscriber shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds
actually received by such Subscriber from the sale of the Registrable Securities subject to any litigation or other proceeding exceeds the amount of any damages that such Subscriber has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, except in the case of fraud by such Subscriber 
 3.6. The provisions
of Section 3.2 through 3.5 of this Agreement shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect
regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Securities by any such party. 
 3.7. If and whenever the Company is required by the provisions of this Section 3 to use its best efforts to register any Registrable Securities under the 1933 Act, the Company shall, as expeditiously
as possible under the circumstances: 
 (a) Prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration statement to become effective as soon as possible after filing and remain effective for the period specified in Section 3.1. 
 (b) Subject to Section 3.1 of this Agreement, prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such registration statement current and effective and to comply with the provisions of the 1933 Act, and any regulations promulgated thereunder, with respect to
the sale or disposition of all Registrable Securities covered by the

  

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registration statement required to effect the distribution of the securities, but in no event shall the Company be required to do so for a period of more than four (4) years following the
effective date of the Final Closing Date. 
 (c) Furnish to the Sellers participating in the offering pursuant to such
registration statement, applicable copies (in reasonable quantities) of summary, preliminary, final, amended or supplemented prospectuses, in conformity with the requirements of the 1933 Act and any regulations promulgated thereunder, and other
documents as reasonably may be required in order to facilitate the disposition of the securities, but only while the Company is required under the provisions hereof to keep the registration statement current. 
 (d) Use its best efforts to register or qualify the Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions of the United States as the Sellers participating in the offering shall reasonably request, and do any and all other acts and things which may be reasonably necessary to enable each participating
Seller to consummate the disposition of the Registrable Securities in such jurisdictions. 
 (e) Notify each Seller selling
Registrable Securities, at any time when a prospectus relating to any such Registrable Securities covered by such registration statement is required to be delivered under the 1933 Act, of the Company’s becoming aware that the prospectus
included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any 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 promptly prepare and furnish to each such Seller selling Registrable Securities a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the
circumstances then existing. 
 (f) As soon as practicable after the effective date of the registration statement, and in any
event within eighteen (18) months thereafter, make generally available to the Sellers participating in the offering an earnings statement (which need not be audited) covering a period of at least twelve (12) consecutive months beginning
after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including, at the Company’s option, Rule 158 thereunder. To the extent that the Company files
such information with the SEC in satisfaction of the foregoing, the Company need not deliver the above referenced earnings statement to the Seller. 
 (g) Upon request, deliver promptly to counsel of each Seller participating in the offering copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating
to discussions with the SEC or its staff with respect to the registration statement and permit each such Seller to do such investigation at such Seller’s sole cost and expense, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably necessary. Each Seller agrees that it will use its best efforts not to interfere unreasonably with the Company’s business when conducting any such investigation and
each Seller shall keep any such information received pursuant to this Section 3 confidential. 
  

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 (h) Provide a transfer agent and registrar located in the United States for all such shares
of Common Stock covered by such registration statement not later than the effective date of such registration statement. 
 (i)
Pay all Registration Expenses (as defined below) incurred in connection with a registration of Registrable Securities, whether or not such registration statement shall become effective; provided that each Seller shall pay all underwriting discounts,
commissions and transfer taxes, and their own counsel and accounting fees, if any, relating to the sale or disposition of such Seller’s Registrable Securities pursuant to such registration statement. As used herein, “Registration
Expenses” means any and all reasonable and customary expenses incident to performance of or compliance with the registration rights set forth herein, including, without limitation, (i) all SEC and stock exchange or Financial Industry
Regulatory Authority (“FINRA”) registration and filing fees, (ii) all fees and expenses of complying with state securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities but no other expenses of or disbursements by the underwriters or their counsel), (iii) all printing, messenger and delivery expenses, and (iv) the reasonable fees and disbursements
of counsel for the Company and the Company’s independent public accountants. 
 (j) Timely make all filings with FINRA and
pay all FINRA filing expenses (including FINRA filing fees and reasonable legal fees of counsel to the Placement Agent in connection with such filings) incurred in connection with filings that are required by Rule 5110 of the FINRA so that FINRA
members (including without limitation the Placement Agent) may resell Registrable Securities pursuant to an effective registration statement without further filings under such rule by them. 
 3.8. The Company acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 3
and that such failure would not be adequately compensable in damages, and therefore agrees that its obligations and agreements contained in this Section 3 may be specifically enforced. In addition, the Company shall also reimburse the
Subscriber for any and all reasonable legal fees, expenses and disbursements incurred by them in enforcing their rights pursuant to this Section 3, regardless of whether any litigation was commenced; provided, however, that the Company shall
not be liable for the fees and expenses of more than one law firm, which firm shall be designated by the Placement Agent. 
 3.9. The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on the NYSE Amex Exchange and, in accordance, therewith, will use commercially reasonable efforts to comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable. The Company will use best efforts to cause Registrable Securities that are covered by an effective registration
statement to be listed on the NYSE Amex Exchange. 
  

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	 	4.	MISCELLANEOUS. 

 4.1. All
notices, consents and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) one (1) business day after the business day of transmission if sent by
telecopier (with receipt confirmed), provided that a copy is mailed by certified mail, return receipt requested, or (c) one (1) business day after the business day of deposit with the carrier, if sent for next business day delivery by
Express Mail, Federal Express or other recognized express delivery service (receipt requested), in each case addressed to the Company at the address indicated on the first page of this Agreement marked “Attention: Chief Financial Officer”
and to the Subscriber at the Subscriber’s address indicated on the last page of this Agreement (or to such other addresses and/or telecopier numbers as a party may designate as to itself by notice to the other parties). 
 4.2. This Agreement shall not be changed, modified or amended except by a writing signed by the parties, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing signed by the parties. 
 4.3. 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. 
 4.4. 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 laws of the
State of New York without regard to New York conflict of law rules. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court located in New York
and they hereby submit to the exclusive jurisdiction of the courts of the State of New York and of the Federal courts in New York with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the
sale of the Units hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in case of the address set forth below or such other address as a party
shall furnish in writing to the other parties. 
 4.5. This Agreement may be executed in counterparts. 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 the Units as herein provided; subject, however, to the right hereby reserved to the Company to enter
into the same agreements with other subscribers and to add and/or to delete other persons as subscribers. 
 4.6. 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. 
  

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 4.7. 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. 
 4.8. 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. 
  

 - 14 - 

 ALL INVESTORS MUST COMPLETE THIS PAGE 
 IN WITNESS WHEREOF, the parties have executed this Agreement on
                    , 2010. 
             Units x $ 0.50 per Unit = $            (minimum subscription = $10,000) 
  

	
	  

	Exact Name in Which Title is to be Held
	  

	(Authorized Signature)
	  

	Print Name of Signatory and Capacity in which Signed if an Entity
	  

	Signature (if Joint Tenants or Tenants in Common)
	  

	Print Name of above Signatory

  

			
	SUBSCRIPTION ACCEPTED:
	
	SCOLR PHARMA, INC.
	  
 By:
	 	  

	Name:	 	
	Title:	 	

  

			
	 Date:                     effective at 12:00 Noon EST

	  
  
 Aggregate Purchase Price Accepted

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