Document:

Exhibit
10.29

 

FORM
OF

NOTE AND WARRANT PURCHASE AGREEMENT

 

This
Note and Warrant Purchase Agreement (the “Agreement”) is made effective as of January __, 2016 (the “Effective
Date”) by and among Cancer Prevention Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and
the persons named on the Schedule of Lenders attached hereto as Schedule I (individually a “Lender” and
collectively, the “Lenders”).

 

RECITALS

 

Whereas,
in order to provide the Company with capital needed to conduct its business, the Company desires to borrow and the Lenders
are willing to loan to the Company up to an aggregate principal amount of $3,000,000 (the “Maximum Loan Amount”)
on the terms set forth herein.

 

AGREEMENT

 

Now,
Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1.          The
Notes and Warrants

 

(a)          Issuance
of Notes. At the Closing (as defined below), the Company agrees to issue and sell to each of the Lenders, and, subject to all
of the terms and conditions hereof, each of the Lenders severally agrees to purchase a convertible promissory note in the form
of Exhibit A hereto (each, a “Note” and, collectively, the “Notes”) in an amount
equal to the amount set forth opposite such Lender’s name on Schedule I hereto. The obligations of the Lenders
to purchase Notes are several and not joint. The aggregate principal amount for all Notes issued hereunder shall not exceed the
Maximum Loan Amount.

 

(b)          Issuance
of Warrants. In consideration of the purchase by the Lenders of the Notes, the Company will issue to each Lender a warrant
to purchase shares of the Company’s Common Stock in the form attached hereto as Exhibit B (each, a “Warrant”
and, collectively, the “Warrants”). The number of shares of Common Stock for which the Warrant shall be exercisable
shall be equal to the quotient obtained by dividing (i) thirty percent (30%) of the principal amount of such Note Holder’s
Note by (ii) (A) the per share purchase price of the Common Stock issued in Company’s next equity financing in which it sells
Common Stock, which may be an IPO (as defined below), or (B) $1.20 if there is no IPO and the Note converts into Common Stock in
a Change of Control Transaction or at, the option of the Note Holder, at Maturity (“Issue Price”). The exercise
price of the Warrant shall be equal to 100% of the Issue Price. An “IPO” means a firm commitment underwritten
public offering of Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the
“Securities Act”), covering the offer and sale of Common Stock for the account of the Company. 

 

     

     

    

 

A “Change
of Control Transaction” means (x) any capital reorganization of the Company, any reclassification or recapitalization
or sale of the capital stock of the Company involving more than fifty percent (50%) of the voting power of the Company, or any
transfer of all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving
the Company; or (y) any voluntary or involuntary dissolution, liquidation or winding-up of the Company.

 

(c)          Delivery.
The initial sale and purchase of the Notes and Warrants (the “Initial Closing”) shall take place remotely by
the exchange of signatures electronically, or at such time, place, and manner upon which the Company and the initial Lenders shall
agree, either orally or in writing (the “Initial Closing Date”). The Company may conduct one or more additional
closings (each, an “Additional Closing”) to be held remotely by the exchange of signatures, or at such time
and place as the Company and the Lenders participating in such Additional Closing may determine (each, an “Additional
Closing Date”). Each of the Initial Closing and any Additional Closings may be referred to herein as a “Closing,”
and the Initial Closing Date and each Additional Closing Date may be referred to herein as a “Closing Date.” 
At each Closing, the Company will deliver to each of the Lenders participating in such Closing the respective Note and Warrant
to be purchased by such Lender, against receipt by the Company of the corresponding purchase price set forth on Schedule I
hereto (the “Purchase Price”). Schedule I shall be updated as necessary to reflect the purchase and sale
of additional Notes and Warrants at each Additional Closing.

 

(d)          Use
of Proceeds. The proceeds from the issuance of Notes will be used for working capital purposes, including to pay the Company’s
normal overhead expenses and to continue its research and development activities to bridge until the next financing.

 

2.          Representations
and Warranties of the Company. The Company hereby represents and warrants to each Lender as follows. For purposes of these
representations and warranties, the phrase “to the Company’s knowledge” shall mean the actual knowledge of Jeffrey
Jacob following reasonable investigation and due diligence.

 

(a)          Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the
laws of the state of Delaware and has all requisite corporate power and authority to own its properties and assets and to carry
on its business as now conducted and as presently proposed to be conducted. The Company is duly qualified and authorized to do
business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its
properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so
would not have a material adverse effect on the Company or its business.

 

(b)          Corporate
Power. The Company has all requisite legal and corporate power to execute and deliver this Agreement, issue the Notes and Warrants
and carry out and perform its obligations under the terms of this Agreement and under the terms of the Notes and Warrants.

 

    2 

     

    

 

(c)          Due
Authorization and Valid Issuance. All action on the part of the Company, its officers and directors necessary for the authorization,
execution, delivery of, and the performance of all obligations of the Company under this Agreement, the Notes, Warrants and all
other agreements executed in connection with this Agreement have been taken or will be taken prior to the Closing to which this
Agreement relates (“Current Closing”). This Agreement and the Notes and Warrants, when executed and delivered
by the Company, shall each constitute the valid and legally binding obligations of the Company, enforceable in accordance with
their terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors’ rights, the relief of debtors, (b) the effect of rules of law governing
the availability of equitable remedies and (c) with respect to rights to indemnity, subject to federal and state securities laws.
Shares of capital stock of the Company shall be duly and validly reserved and, when issued in compliance with the provisions of
the Company’s then applicable charter, will be validly issued, fully paid, and nonassessable. The Notes, Warrants and applicable
shares of capital stock issuable upon conversion or exercise thereof, when issued in the foregoing manner and in compliance with
the provisions of this Agreement, will be free of any liens or encumbrances other than as set forth herein and under state or federal
securities laws.

 

(d)          Governmental
Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing
with, any federal, state, or local governmental authority by the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, or any agreement contemplated herein except for such qualifications or filings under
the Securities Act and the regulations thereunder and all other applicable securities laws of the United States as may be required
in connection with the transactions contemplated by this Agreement. All such qualifications will be effective on or prior to each
Closing and all such filings will be made within the time prescribed by applicable law.

 

(e)          Compliance
with Laws. The Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its
properties, the violation of which would materially and adversely affect the business, assets, liabilities, financial condition,
operations or prospects of the Company.

 

(f)          Compliance
with Other Instruments. The Company is not in violation or default of any term of its Certificate of Incorporation or Bylaws,
or of any provision of any mortgage, indenture or contract to which it is a party and by which it is bound or of any judgment,
decree, order or writ, other than such violation(s) that, taken individually or in the aggregate, would not have a material adverse
effect on the Company. The execution, delivery and performance of this Agreement, the Notes, and the Warrants and the consummation
of the transactions contemplated hereby or thereby will not result in any such violation or be in conflict with, or constitute,
with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, decree,
order or writ or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the
suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization or approval applicable
to the Company, its business or operations or any of its assets or properties. Without limiting the foregoing, the Company has
satisfied or obtained all waivers reasonably necessary with respect to any preemptive rights, rights of first refusal or similar
rights in order for the Company to consummate the transactions contemplated hereunder without any third party obtaining any rights
to cause the Company to offer or issue any securities of the Company as a result of the consummation of the transactions contemplated
hereunder.

 

    3 

     

    

 

(g)          Litigation.
There is no action, suit, proceeding, claim, arbitration or investigation pending or, to the Company’s knowledge, threatened
against the Company, its activities, properties or assets or, to the Company’s knowledge, against any director, officer,
or employee of the Company in connection with such director’s officer’s, or employee’s relationship with, or
actions taken on behalf of, the Company. The foregoing includes, without limitation, actions, suits, proceedings, or investigations
pending or threatened involving the prior employment of any of the Company’s employees, their use in connection with the
Company’s business of any information or techniques allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. The Company is not a party or subject to the provisions of any order, writ, injunction,
judgment, or decree of any court or government agency or instrumentality. There is no action, suit, proceeding, or investigation
by the Company currently pending or that the Company intends to initiate.

 

(h)          Proprietary
Information of Third Parties. To the Company’s knowledge, no third party has claimed or has reason to claim that any
person employed by or affiliated with the Company has (a) violated or may be violating to any material extent any of the terms
or conditions of his employment, non-competition, or non-disclosure agreement with such third party, (b) disclosed or may be disclosing,
or utilized or may be utilizing, any trade secret or proprietary information or documentation of such third party, or (c) interfered
or may be interfering in the employment relationship between such third party and any of its present or former employees, or has
requested information from the Company which suggests that any such claim might be contemplated. To the Company’s knowledge,
no person employed by or affiliated with the Company has improperly utilized or proposes to improperly utilize any trade secret
or any information or documentation proprietary to any former employer, and to the Company’s knowledge, no person employed
by or affiliated with the Company has violated any confidential relationship that such person may have had with any third party,
in connection with the development, manufacture, or sale of any product or proposed product or the development or sale of any service
or proposed service of the Company, and the Company has no reason to believe there will be any such utilization or violation. To
the Company’s knowledge, none of the execution or delivery of this Agreement, the Notes or Warrants, and any other related
agreements and documents executed in connection with the Closing, or the carrying on of the business of the Company as officers,
employees, or agents by any officer, director, or key employee of the Company, or the conduct or proposed conduct of the business
of the Company, will materially conflict with or result in a material breach of the terms, conditions, or provisions of or constitute
a material default under any contract, covenant, or instrument under which any such person is obligated.

 

(i)          Title
to Assets. The Company has valid and marketable title to all of its assets now carried on its books free of any liens, charges,
or encumbrances of any kind whatsoever, except such encumbrances and liens that arise in the ordinary course of business and do
not materially impair the Company’s ownership or use of such property or assets. The Company does not own any real property.
The Company is in compliance in all material respects under all leases for property and assets under which it is operating, and
all such leases are valid and subsisting and are in full force and effect.

 

    4 

     

    

 

(j)          Intellectual
Property Assets. The Company owns or possesses adequate licenses or other rights to use all patents, patent applications, trademarks,
trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade
secrets, and know how (collectively, “Intellectual Property”) necessary or material to the conduct of its business
as conducted, without any infringement of the rights of others, and as proposed to be conducted. No claim is pending or, to the
Company’s knowledge, threatened to the effect that the operations of the Company infringe upon or conflict with the asserted
rights of any other person under any Intellectual Property, and, to the Company’s knowledge, there is no basis for any such
claim (whether or not pending or threatened). No claim is pending or, to the Company’s knowledge, threatened to the effect
that any such Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid
or unenforceable by the Company, and, to the Company’s knowledge, there is no basis for any such claim (whether or not pending
or threatened). To the Company’s knowledge, all material technical information developed by and belonging to the Company
that has not been patented has been kept confidential. The Company has not granted or assigned to any other person or entity any
right to manufacture, have manufactured, or assemble the products or proposed products or to provide the services or proposed services
of the Company.

 

(k)          No
Brokers or Finders. No person has or will have, as a result of the transactions contemplated by this Agreement, any right,
interest, or valid claim against or upon the Company for any commission, fee, or other compensation as a finder or broker arising
out of the transactions contemplated by this Agreement.

 

3.          Representations
and Warranties of Lender. Each Lender, for that Lender alone, represents and warrants to the Company upon the acquisition of
the Note and the Warrant as follows:

 

(a)          Binding
Obligation. Such Lender has full legal capacity, power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement is a valid and binding obligation of the Lender, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’
rights generally and general principles of equity.

 

(b)          Securities
Law Compliance. Such Lender acknowledges that:

 

(i) Such Lender has been
advised that the Notes, the Warrants and the underlying securities have not been registered under the Securities Act, or any state
securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities
laws or unless an exemption from such registration requirements is available. The Lender is aware that the Company has filed a
Form S-1 registration statement with the Securities and Exchange Commission for the issuance and sale of Common Stock and Lender
understands that there can be no assurance that such registration statement will become effective.

 

(ii) Such Lender is aware
that the Company is under no obligation to effect any such registration with respect to the Notes, the Warrants or the underlying
securities or to file for or comply with any exemption from registration.

 

    5 

     

    

 

(iii) Such Lender is purchasing the Notes
or Warrants to be acquired by such Lender hereunder for its own account for investment, not as a nominee or agent, and not with
a view to, or for resale in connection with, the distribution thereof.

 

(iv) Such Lender has
such knowledge and experience in financial and business matters that such Lender is capable of evaluating the merits and risks
of such investment, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment
for an indefinite period of time.

 

(v) Such Lender is an
“accredited investor” as such term is defined in Rule 501 of Regulation D under the Securities Act.

 

(vi) The offer to purchase
the Note and Warrant was directly communicated to such Lender by the Company due to the pre-existing relationship between the Company
and the Lender and at no time was Lender presented with or solicited by a leaflet, public promotional meeting, newspaper or magazine
article, radio or television advertisement, registration statement or any other form of general advertising or general solicitation.

 

(c)          Access
to Information. Such Lender acknowledges that the Company has given such Lender access to the corporate records and accounts
of the Company and to all information in its possession relating to the Company, has made its officers and representatives available
for interview by such Lender, and has furnished such Lender with all documents and other information required for such Lender to
make an informed decision with respect to the purchase of the Notes and the Warrants.

 

(d)          Legend.
Lender is aware and agrees that the Notes and Warrants will bear the following legend:

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON
THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
the Arizona securities act or the securities laws of any other state or jurisdiction. They may not be purchased with a view for
distribution or resale, and may only be offered, sold, mortgaged, pledged, hypothecated, or otherwise transferred in compliance
with either an effective registration statement for such security under the act or any applicable state securities act, or an opinion
of counsel for the company that registration is not required under such act or the laws of any other jurisdiction. 

 

(e)          Specific
Disclosures. In addition to the Investment Considerations set forth on Exhibit C, Lender understands that an investment
in the Note and Warrant is speculative and involves the following substantial risks:

 

(i)          The
Company’s success will depend upon its ability to develop and obtain regulatory approval of its targeted pharmaceutical products.

 

    6 

     

    

 

(ii)         Even
if the Company is successful in developing and obtaining patent rights and regulatory approval of its pharmaceutical products,
third parties may challenge or seek to invalidate or circumvent its patents and patent applications.

 

(iii)        The
purchase of a Note and Warrant is a speculative investment that involves a high degree of risk of loss by Lender of its entire
investment. Lender is able to assume the economic risks as holder of the Notes and can absorb a complete loss on such transaction
without significantly affecting its financial well-being.

 

(iv)        The
Company competes in the highly competitive cancer research market and in many cases its competitors are better financed and currently
have more established market awareness and distribution than the Company. The Company’s research and development efforts
may not succeed in developing commercially viable products.

 

(v)         The
Company will be dependent on the availability of its senior executive officers who will be responsible for the overseeing the Company’s
research and development efforts.

 

(vi)        The
sale of the Notes is intended to provide “bridge financing” until the Company can complete one or more financings critical
to its research and development activities. There is no assurance that the Company will be successful in completing an additional
financing or in such research and development activities.

 

4.          Conditions
to Closing of the Lenders. Each Lender’s obligations at the Closing in which such Lender participates are subject to
the fulfillment, on or prior to the applicable Closing Date, of all of the following conditions, any of which may be waived in
whole or in part by a Lender with respect to such Lender’s obligations at such Closing:

 

(a)          Representations
and Warranties. The representations and warranties made by the Company in Section 2 hereof shall have been true
and correct when made, and shall be true and correct on the applicable Closing Date.

 

(b)          Governmental
Approvals and Filings. Except for any notices required or permitted to be filed after the Closing Date with certain federal
and state securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful
sale and issuance of the Notes and Warrants.

 

(c)          Legal
Requirements. At the applicable Closing, the sale and issuance by the Company, and the purchase by the Lenders, of the Notes
and Warrants shall be legally permitted by all laws and regulations to which the Lenders or the Company are subject.

 

(d)          Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated at the applicable Closing
and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to the Lenders.

 

    7 

     

    

 

(e)          Transaction
Documents. The Company shall have duly executed and delivered to the Lenders this Agreement, each Note and each Warrant issued
hereunder.

 

5.          Conditions
to Obligations of the Company. The Company’s obligation to issue and sell the Notes and Warrants at a Closing to the
Lenders participating in such Closing is subject to the fulfillment, on or prior to the applicable Closing Date, of the following
conditions, any of which may be waived in whole or in part by the Company:

 

(a)          Representations
and Warranties. The representations and warranties made by the Lenders in Section 3 hereof shall be true and correct
when made, and shall be true and correct on such Closing Date.

 

(b)          Governmental
Approvals and Filings. Except for any notices required or permitted to be filed after such Closing Date with certain federal
and state securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful
sale and issuance of the Notes and Warrants.

 

(c)          Legal
Requirements. At such Closing, the sale and issuance by the Company, and the purchase by the Lenders participating in such
Closing, of the Notes and Warrants shall be legally permitted by all laws and regulations to which the Lenders or the Company are
subject.

 

(d)          Purchase
Price. Each Lender participating in such Closing shall have delivered to the Company the Purchase Price in respect of the Note
and Warrant being purchased by such Lender referenced in Section 1 hereof.

 

6.          Covenants
of Company. The Company agrees to perform the following obligations:

 

(a)          Reservation
of Stock. The Company shall take all reasonable steps necessary to ensure that the Company has a sufficient number of shares
of capital stock of the Company authorized to cover the conversion of the Notes and the exercise of the Warrants prior to such
conversion and/or exercise.

 

7.          Miscellaneous.

 

(a)          Survival
of Warranties. The representations, warranties and covenants of the Company and each Lender contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the Lender, his counsel or the Company, as the case may be.

 

(b)          Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. Nothing in this Agreement is intended to confer upon any third party any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

(c)          Governing
Law. This Agreement shall be governed by and construed under the internal laws of the State of Arizona without giving effect
to conflict of laws or principles.

 

    8 

     

    

 

(d)          Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Facsimile copies of signed signature pages will be deemed binding originals.

 

(e)          Headings.
The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement. All references in this Agreement to sections, paragraphs, and exhibits shall, unless otherwise provided, refer
to sections and paragraphs hereof and exhibits attached hereto, all of which exhibits are incorporated herein by this reference.

 

(f)          Notices.
Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, upon receipt when sent by telex, electronic mail (email)
or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, or five days after having
been sent by registered or certified mail, postage prepaid; or one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at 1760 E.
River Road, Suite 250, Tucson, AZ  85718, and to the Lender at the address shown on the Signature Page or at such other address
as the parties may designate by giving 10 days advance written notice to the other parties hereto.

 

(g)          Attorneys’
Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement the prevailing party
shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.

 

(h)          Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company
and holders of Notes holding at least a majority of the aggregate principal amount of the Notes outstanding.

 

(i)          Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.

 

(j)          Entire
Agreement. This Agreement, together with all exhibits and schedules hereto, constitutes the entire agreement and understanding
of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with respect to the subject matter hereof.

 

(k)          Further
Assurances. From and after the date of this Agreement, upon the request of Lender or the Company, the Company and the Lender
shall execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm
and carry out and to effectuate fully the intent and purposes of this Agreement.

 

    9 

     

    

 

(l)          Delays
or Omissions. No delay or omission to exercise any right, power or remedy accruing to Lender, upon any breach or default of
the Company under this Agreement, shall impair any such right, power or remedy of Lender nor shall it be construed to be a waiver
of any such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of Lender of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or
otherwise afforded to Lender, shall be cumulative and not alternative.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.

 

CANCER PREVENTION PHARMACEUTICALS, INC.

 

	 	 
	Jeffrey Jacob, Chief Executive Officer	 

 

LENDER

 

	Address:	 	 
	 	 	 
	 	 	 

 

Amount
of Investment: $ 

 

    10 

     

    

 

Schedule
I

 

SCHEDULE
OF LENDERS

 

	 	 	AMOUNT OF	 	 
	NAME	 	INVESTMENT	 	CLOSING  DATE

 

 

 

    11Exhibit 10.30

 

EXECUTION VERSION

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of January 9, 2016 by and between Cancer Prevention Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), and Sucampo AG, a Swiss corporation, and a wholly owned subsidiary
of Sucampo Pharmaceuticals, Inc., a Delaware corporation (together, the “Purchaser”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchaser,
and the Purchaser desires to purchase from the Company the Note (as defined below); and

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement, upon the Closing (as defined below) the Company and the Purchaser shall enter
into the Option and Collaboration Agreement (as further defined below) providing the Purchaser with an option to obtain an exclusive
license for the development and commercialization in North America of products including both eflornithine and sulindac as active
ingredients under terms set forth in the Option and Collaboration Agreement; and

 

WHEREAS, the Purchaser
desires to make, at the request of the Company, the Investment (as defined below, on the terms and conditions set forth herein.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Note (as defined herein); and (b) the following terms have the meanings set forth in this
Section 1.1:

 

“Action”
shall have the meaning ascribed to such term in Section 3.1(j).

 

“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.

 

“Authorizations”
shall have the meaning ascribed to such term in Section 3.1(y).

 

“Board
of Directors” means the board of directors of the Company.

 

    	 	1	 

     

    

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“Closing
Date” means the business day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto in connection with the Closing, and all conditions precedent to: (i) the Purchaser’s obligation to pay the
Subscription and Option Amount as to the Closing; and (ii) the Company’s obligation to deliver the Note and the Option and
Collaboration Agreement as to the Closing, in each case, have been satisfied or waived.

 

“Closing”
shall have the meaning ascribed to such term in Section 2.1.

 

“Closing
Statement” means the Closing Statement in the form of Annex A attached hereto.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common
Stock” means the shares of common stock of the Company.

 

“Common
Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time shares
of Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common
Stock.

 

“Confidential
Information” shall have the meaning ascribed to such term in Section 5.1(g).

 

“Conversion
Shares” means the shares of Common Stock of the Company issued and issuable upon conversion of the Note or Subsequent
Note and in accordance with the terms of the Note or Subsequent Note, as applicable.

 

“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“FDA”
shall have the meaning ascribed to such term in Section 3.1(y).

 

“Futility
Analysis” shall have the meaning ascribed to such term in the Option and Collaboration Agreement.

 

“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).

 

“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(n).

 

    	 	2	 

     

    

  

“Investment”
shall have the meaning ascribed to such term in Section 2.3.

 

“Knowledge”
means, with respect to the Company, the actual knowledge of the Chief Executive Officer after reasonable investigation and due
diligence.

 

“Liens”
means a lien, mortgage, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(i).

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.16.

 

“Note”
means that certain Convertible Promissory Note in the principal amount of $5,000,000 due, subject to the terms therein, three (3)
years from its date of issuance, in the form of Exhibit A attached hereto.

 

“Observer”
shall have the meaning assigned to such term in Section 5.1(a).

 

“Observer
Period” shall have the meaning assigned to such term in Section 5.1(a).

 

“Option”
shall have the meaning assigned to such term in Section 2.2.

 

“Option
and Collaboration Agreement” means that certain Option and Collaboration Agreement in the form of Exhibit B attached
hereto.

 

“Person”
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.

 

“Phase
3 Trial” shall have the meaning ascribed to such term in Section 4.4.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.5.

 

“Qualified
Financing” means the first to occur of (i) a firm commitment underwritten public offering of Common Stock pursuant to
an effective registration statement under the Securities Act covering the offer and sale of Common Stock for the account of the
Company (“IPO”), or (ii) a private placement in one financing transaction or a series of related financing transactions
of debt, equity, preferred or convertible securities, in each case with aggregate gross proceeds (before underwriters’ and/or
financial advisory fees and commissions and offering expenses) to the Company (excluding any investment by the Purchaser in such
offering) of at least Ten Million Dollars ($10,000,000).

 

    	 	3	 

     

    

 

“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Representatives”
shall have the meaning ascribed to such term in Section 5.1(h).

 

“Securities”
means the Note and the Conversion Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subscription
and Option Amount” means, as to the Purchaser, the $8,000,000 aggregate amount to be paid at the Closing for (i) the
Note purchased hereunder at the Closing; and (ii) the Option Fee, which Subscription and Option Amount shall be inserted on the
signature page of this Agreement next to the heading “Subscription and Option Amount” and shall be paid in United States
dollars and in immediately available funds.

 

“Subsequent
Note” shall have the meaning ascribed to such term in Section 2.3(b).

 

“Subsequent
Note Closing” shall have the meaning ascribed to such term in Section 2.3(b).

 

“Subsidiaries”
means any Person in which the Company, directly or indirectly, (i) owns at least a majority of the outstanding capital stock or
equity or similar interest of such Person; or (ii) controls or operates all or any part of the business, operations or administration
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

“Transaction
Documents” means this Agreement, the Note, the Option and Collaboration Agreement, and all exhibits and schedules hereto
and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

ARTICLE II.

PURCHASE AND SALE AND INVESTMENT

 

2.1           Note
Purchase. The Purchaser will purchase the Note from the Company in the aggregate Principal Amount of Five Million Dollars ($5,000,000).
The purchase of the Note will occur in one tranche, which shall be closed upon the satisfaction of the conditions set forth in
Section 2.6 below (the “Closing”).

 

2.2           Option.
At the Closing, the Purchaser and the Company shall enter into the Option and Collaboration Agreement (the “Option”)
pursuant to which the Purchaser shall pay a fee in cash to the Company of $3,000,000 (the “Option Fee”) upon
the execution and delivery of such agreement.

 

    	 	4	 

     

    

 

2.3           Investment.
(a) Subject to Section 2.3(d), in the sole discretion of the Company, the Purchaser shall purchase up to $5,000,000 of the Company’s
securities (the “Investment”) on the same terms and conditions as the other investors in the Qualified Financing.
At least ten (10) days prior to the closing of the Qualified Financing, the Company or the underwriter
or placement agent shall provide the Purchaser with notice of the terms of the Qualified Financing.

 

(b)          Subject
to Section 2.3(d) below, if the Qualified Financing referred to in Section 2.3(a) has not occurred before the Successful Completion
of the Futility Analysis (as described in Section 2.4(B) of the Option and Collaboration Agreement), the Investment would be made,
in the sole discretion of the Company, and subject to the satisfaction of the conditions set forth in Section 2.7 below, in the
form of an additional convertible promissory note in the principal amount of $5,000,000 (the “Subsequent Note”)
whereby the Purchaser would purchase the Subsequent Note upon the same terms and conditions as set forth in the Note, which terms
shall, except as otherwise agreed in writing by the parties, be identical to the Note, except that the maturity date of the Subsequent
Note shall be the third anniversary of the issuance date of the Subsequent Note. The parties shall engage in discussions regarding
the mechanics and precise timing of the closing of the Subsequent Note (the “Subsequent Note Closing”).

 

(c)          Notwithstanding
the foregoing, the Purchaser shall not be required to complete the Investment after the three year anniversary of the date of the
initial Closing hereunder.

 

(d)          In
no event shall Purchaser be required to acquire shares of the Company’s capital stock such that Purchaser’s ownership
interest in the Company would exceed 19.9% of the Company’s outstanding capital stock (or, to the extent permissible under
U.S. GAAP for determining whether the Company is an associate company or subsidiary of the Purchaser, the Company’s issued
capital stock on a fully diluted basis after taking into account the conversion of all convertible securities) (the “Threshold”).
Accordingly, the maximum amount that Purchaser can be obligated to invest pursuant to Section 2.3(a) would be the lesser of (i)
$5,000,000 and (ii) such amount as would result in Purchaser’s ownership being at or below the Threshold; provided, that
an Investment in a Qualified Financing that is an IPO is not subject to this Section 2.3(d). Any remaining amount of Purchaser’s
$5,000,000 Investment commitment would simultaneously be invested in a Subsequent Note pursuant to Section 2.3(b) above.

 

2.4           Closing.
(a) On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchaser agrees to: (i) purchase the
Note for $5,000,000; and (ii) pay the Option Fee of $3,000,000 (for an aggregate Subscription and Option Amount of $8,000,000).
At the Closing, the Purchaser shall deliver to the Company, via wire transfer in immediately available funds an amount equal to
the Purchaser’s Subscription and Option Amount, the Company shall deliver to the Purchaser its Note, and the Company and
the Purchaser shall deliver the other items set forth in Section 2.5 deliverable at such Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.5 and 2.6 for the Closing, the Closing shall occur at the offices of Gracin & Marlow,
LLP, at The Chrysler Building, 405 Lexington Avenue, 26th Floor, New York, New York 10174, or such other location as the parties
shall mutually agree.

 

    	 	5	 

     

    

  

(b)          At
the Subsequent Note Closing (if any) (the “Subsequent Closing”), the Purchaser shall deliver to the Company,
via wire transfer immediately available funds equal to $5,000,000, the Company shall deliver to the Purchaser the Subsequent Note,
and the Company, and the Purchaser shall deliver the other items set forth in Section 2.5 deliverable at such Subsequent Note Closing,
mutatis mutandis. Upon satisfaction of the covenants and conditions set forth in Sections 2.5 and 2.6 for the Subsequent
Note Closing, mutatis mutandis, the Subsequent Note Closing shall occur at the offices of Gracin & Marlow, LLP, at The
Chrysler Building, 405 Lexington Avenue, 26th Floor, New York, New York 10174, or such other location as the parties shall mutually
agree.

 

2.5          Deliveries.

 

(a)          On
or prior to the Closing Date (except as noted), the Company shall deliver or cause to be delivered to the Purchaser the following:

 

(i)          this
Agreement duly executed by the Company;

 

(ii)         the
Note with a principal amount equal to Five Million Dollars ($5,000,000), registered in the name of the Purchaser;

 

(iii)        the
Option and Collaboration Agreement duly executed by the Company; and

 

(iv)        A
Secretary’s certificate of the Company attaching and certifying the charter documents of the Company and the resolutions
of the Board of Directors authorizing the execution and issuance of Transaction Documents.

 

(b)          On
or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following:

 

(i)          this
Agreement duly executed by the Purchaser;

 

(ii)         the
Option and Collaboration Agreement duly executed by the Purchaser;

 

(iii)        the
Purchaser’s Subscription and Option Amount by wire transfer to the account specified in writing by the Company; and

 

(iv)        
a Secretary’s certificate of the Purchaser attaching and certifying the charter documents of the Purchaser and the resolutions
of the Purchaser’s board of directors authorizing the execution and issuance of Transaction Documents.

 

    	 	6	 

     

    

 

2.6          Closing
Conditions for Purchase and Sale of Note.

 

(a)          The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the
accuracy in all material respects on the Closing Date of the representations and warranties of the Purchaser contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)         all
obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and

 

(iii)        the
delivery by the Purchaser of the items set forth in Section 2.5(b) of this Agreement.

 

(b)          The
obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the
accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);

 

(ii)         all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii)        the
delivery by the Company of the items set forth in Section 2.5(a) of this Agreement;

 

(iv)        there
is no existing Event of Default (as defined in the Note) and no existing event which, with the passage of time or the giving of
notice, would constitute an Event of Default;

 

(v)         there
shall be no adverse proceeding initiated, ongoing, or threatened by any governmental or regulatory body; and

 

(vi)        there
shall have been no Material Adverse Effect with respect to the Company since the date hereof.

 

2.7          Closing
Conditions for Investment Pursuant to Section 2.3(b).

 

(a)          The
obligations of the Company hereunder in connection with the Subsequent Closing of an Investment pursuant to Section 2.3(b)
are subject to the following conditions being met:

 

(i)          the
accuracy in all material respects on the date of the Subsequent Closing of the representations and warranties of the Purchaser
contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

    	 	7	 

     

    

 

(ii)         all
obligations, covenants and agreements of the Purchaser required to be performed at or prior to the date of the Subsequent Closing
shall have been performed;

 

(iii)        the
delivery by the Purchaser of the item set forth in Section 2.5(b) (iv) of this Agreement; and

 

(iv)        the
Purchaser’s payment for the Subsequent Note by wire transfer to the account specified in writing by the Company.

 

(b)          The
obligations of the Purchaser hereunder in connection with the Subsequent Closing of an Investment pursuant to Section 2.3(b)
are subject to the following conditions being met:

 

(i)          the
delivery by the Company of the Subsequent Note and item set forth in Section 2.5(a)(iv)of this Agreement;

 

(ii)         there
is no existing Event of Default (as defined in the Note) and no existing event which, with the passage of time or the giving of
notice, would constitute an Event of Default;

 

(iii)        either
(i) the Option and Collaboration Agreement or (ii) the License Agreement (as defined in the Option and Collaboration Agreement)
shall remain in full force and effect (other than as a result of the Company’s termination of such agreement in accordance
with its terms as a result of Purchaser’s material breach of such agreement); and 

 

(iv)        there
shall have been no Material Adverse Effect with respect to the Company since the date hereof (it being understood that a Material
Adverse Effect would include that the data monitoring committee has completed the futility analysis as specified by the FAP Pivotal
Trial Protocol (as defined in the Option and Collaboration Agreement) and statistical analysis plan and has determined that continuing
the FAP Pivotal Trial is futile).

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules attached hereto, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein to the extent of the disclosure
contained in the corresponding section of the Disclosure Schedules (provided that to the extent more than one representation or
warranty contained in this Agreement requires the same disclosure, the appearance of such disclosure in any single section of the
Disclosure Schedules shall serve as disclosure for all other representations and warranties to the extent it is reasonably apparent
on the face of the disclosure that such disclosure is applicable thereto), the Company hereby makes the following representations
and warranties to the Purchaser that shall be true and correct on the date hereof:

 

    	 	8	 

     

    

 

(a)          Subsidiaries.
The Company has the subsidiaries set forth on Schedule 3.1(a). Schedule 3.1(a)
hereto sets forth the jurisdiction of each Subsidiaries’ incorporation or organization and showing the percentage of ownership
of each Subsidiary held by the Company. All of the outstanding shares of capital stock of each Subsidiary has been duly authorized
and validly issued, and are fully paid and non-assessable. 

 

(b)          Organization
and Qualification. The Company is duly incorporated and validly existing under the laws of the State of Delaware and has the
requisite power and authority to own its properties and to carry on its business as now being conducted and as presently proposed
to be conducted. The Company is in good standing under the laws of the State of Delaware. The Company is not in violation or in
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 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,
could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document; (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 any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to
revoke, limit or curtail such qualification.

 

(c)          Authorization;
Enforcement. The Company has the requisite corporate power and authority to issue the Securities and enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company, and no further action is required by the Company, or its Board of Directors or shareholders,
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which the Company is a party have been (or upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with their terms; except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to or affecting generally the enforcement of rights of creditors or by other equitable
principles of general application.

 

    	 	9	 

     

    

 

(d)          No
Conflicts. The execution, delivery and performance by the Company as contemplated herein of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Securities and the consummation by each of the transactions contemplated
hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s certificate of incorporation,
or bylaws; (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
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 could
not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)          Filings,
Consents and Approvals. 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 the Transaction Documents, other than as set
forth on Schedule 3.1(e), the filing of Form D with the Commission and such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”), which have been made or will be made in a timely
manner.

 

(f)          Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens other than restrictions
on transfer provided for in the Transaction Documents. The Conversion Shares, when issued in accordance with the terms of the Note,
will be validly issued, fully paid and non-assessable, free and clear of all Liens other than restrictions on transfer provided
for in the Note and applicable securities laws. The Company has reserved for issuance a sufficient number of shares of Common Stock
issuable as the Conversion Shares.

 

(g)          Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g). No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents
or any registration rights, except as provided in Schedule 3.1(g). Except as set forth on Schedule 3.1(g) or except
as a result of the purchase and sale of the Securities, 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. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid
and non-assessable, have been issued in compliance with all securities laws and U.S. federal and state securities laws, as applicable,
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 the Board of Directors or any shareholder or others is required for the issuance
and sale of the Securities.

 

    	 	10	 

     

    

 

(h)          Financial
Statements. The audited balance sheet of the Company as of December 31, 2014 and the related consolidated statements of operations,
changes in convertible preferred stock and stockholders’ deficit, and cash flows for the period then ended and the unaudited
balance sheet of the Company as of September 30, 2015 and the related consolidated statements of operations and cash flows for
the period of nine months ended September 30, 2015 (the “Interim Financials”), copies of which have been provided
to the Purchaser, comply in all material respects with applicable accounting requirements as in effect as of the date of such financial
statements. 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 and its consolidated Subsidiaries 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, year-end audit adjustments.

 

(i)          Material
Changes; Undisclosed Events, Liabilities or Developments. Except as set forth on Schedule 3.1(i), since December 31,
2014, except as specifically disclosed in the Interim Financials: (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect; (ii) neither the Company nor any of its Subsidiaries
have 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 accrued expenses in connection with proposed financings by the Company, (B)
obligations under contracts and commitments incurred in the ordinary course of business, and (C) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP, which in all such cases individually and in the aggregate
would not have a Material Adverse Effect; (iii) the Company has not altered its method of accounting; (iv) neither the Company
nor any Subsidiary has declared or made any dividend or distribution of cash or other property to its shareholders or purchased,
redeemed or made any agreements to purchase or redeem any of its capital stock; and (v) neither the Company nor any Subsidiary
has issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans.

 

    	 	11	 

     

    

 

(j)          Litigation.
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 the Transaction Documents or the Securities,
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor, to the Company’s Knowledge, any of its directors or officers, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws (including the bad boy acts or the bad actor provisions
of Rule 506(d) of the Securities Act) or a claim of breach of fiduciary duty.

 

(k)          Compliance.
The Company is not and since inception has not been: (i) 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), 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) in violation of any judgment, decree or order of any court, arbitrator or other governmental authority;
or (iii) 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, except in each case as would not reasonably be expected to result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation
of the transactions contemplated hereby and thereby will not result in any such violation or be in conflict with or constitute,
with or without the passage of time and giving of notice, either (x) a default under any such indenture, material loan, judgment,
order, decree, contract or material agreement, or (y) an event which results in the creation of any material lien, charge or encumbrance
upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable
to the Company or any of its assets or properties. The Company is not required under federal, state, local or foreign law, rule
or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations under the Transaction Documents, or issue and sell
the Note, or the Conversion Shares in accordance with the terms hereof or thereof (other than (x) any consent, authorization or
order that has been obtained as of the date hereof, (y) any filing or registration that has been made as of the date hereof or
(z) any filings which may be required to be made by the Company with the Commission or state securities administrators subsequent
to the Closing).

 

(l)          Regulatory
Permits. The Company possesses all certificates, authorizations, franchises, licenses and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct its businesses, except where the failure to possess
such permits could 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.

 

    	 	12	 

     

    

 

(m)          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, free and clear of all Liens. Any real property and facilities held under
lease by the Company is held by it under a valid and subsisting lease, enforceable against the Company with which the Company is
in all material respects in compliance, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to or affecting generally the enforcement of rights of creditors or by other equitable
principles of general application.

 

(n)          Intellectual
Property. To the Knowledge of the Company, the Company has, or has the right to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights as necessary or required for use in connection with its business as currently conducted or currently
proposed to be conducted (collectively, the “Intellectual Property Rights”). 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 any
written notice of a claim or otherwise has any Knowledge that the Intellectual Property Rights violate or infringe upon the rights
of any Person, has not received any written notice of any claim that any Intellectual Property Right owned or controlled by a third
party would be or is infringed or misappropriated by the manufacture, use, sale, offer for sale or importation of the Product (as
defined in the Option and Collaboration Agreement) and, to the Company’s Knowledge, the manufacture, use, sale, offer for
sale or importation of the Product would not and does not infringe or misappropriate any Intellectual Property Right owned or controlled
by a third party. The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of
its Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

(o)          Insurance.
The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as
are customary in the businesses in which the Company is engaged, including, but not limited to, directors and officers insurance
coverage. The Company has no 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.

 

    	 	13	 

     

    

 

(p)          Transactions
with Affiliates and Employees. Other than as set forth in Schedule 3.1(p), 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 providing for the
borrowing of money from or lending of money to, 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, manager, trustee, stockholder, member 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 option agreements under any option plan of the Company.

 

(q)          Certain
Fees. Other than as set forth on Schedule 3.1(q), 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 the Transaction Documents. The Purchaser 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 the Transaction Documents.

 

(r)          Private
Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated hereby.
Neither the Company nor any of its Affiliates, nor any person acting on their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.

 

(s)          Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, 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.

 

(t)          No
Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their 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 or future offerings by the Company for purposes of the Securities Act which would
require the registration of any such securities under the Securities Act. 

 

    	 	14	 

     

    

 

(u)          Tax
Status. The Company: (i) has made or filed all United States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, except for the failure to
make or file such tax returns, reports or declarations that would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect; (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 declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim.

 

(v)         Acknowledgment
Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by the Purchaser or any of its respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company further represents to
the Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and each of its representatives.

 

(w)          Equity
Incentive Plans. Each equity award granted by the Company under the Company’s equity incentive plan was granted: (i)
in accordance with the terms of such plan, and (ii) with an exercise price at least equal to the fair market value of the shares
of Common Stock on the date such option would be considered granted under GAAP and applicable law. All federal and state filings
with respect to such plans have been timely made, except where the failure to make any such filing timely would not have a Material
Adverse Effect. No option granted under the Company’s equity incentive plan has been backdated. The Company has not knowingly
granted, and there is no and has been no Company policy or practice to knowingly grant equity awards prior to, or otherwise knowingly
coordinate the grant of such awards with, the release or other public announcement of material information regarding the Company
or their financial results or prospects.

 

(x)          Material
Agreements. Set forth on Exhibit 3.1(x) is a list of any and all material contracts, instruments, agreements, commitments,
obligations, plans or arrangements, to which the Company and any Subsidiary is a party. Each of the Company and any Subsidiary
has in all respects performed all the obligations required to be performed by them to date under the foregoing agreements, have
received no notice of default and are not in default under any such agreement now in effect, except where the failure to so perform
or the default would not cause a Material Adverse Effect.

 

    	 	15	 

     

    

 

(y)          FDA
Compliance. The Company:  (i) is in material compliance with all statutes, rules or regulations applicable to the
ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer
for sale, storage, import, export or disposal of any product that is under development, manufactured or distributed by the Company;
(ii) has not received any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice
from the U.S. Food and Drug Administration (the “FDA”) or any other federal, state, local or foreign governmental
or regulatory authority alleging or asserting noncompliance with any applicable laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto required by any such applicable laws (“Authorizations”);
and (iii) possesses all material Authorizations necessary for the operation of its business as currently conducted and such Authorizations
are valid and in full force and effect and the Company is not in violation of any term of any such Authorizations. Neither the
Company nor, to the Company’s Knowledge any of its Representatives have made, nor to the Company’s Knowledge has any
third party acting under the Company’s authority made, an untrue statement of a material fact to any regulatory authority
with respect to the Product, or knowingly failed to disclose a material fact required to be disclosed to any regulatory authority
with respect to the Product. The Company, and to the Company’s Knowledge, its Representatives and all such third parties
have complied with all regulatory requirements with respect to the Product and active pharmaceutical ingredients contained therein.
All information within the regulatory filings related to the Product have been generated in material compliance with all applicable
laws, including, as applicable, cGMP, cGCP and cGLP, and all such regulatory filings are true and correct in all material respects.

 

(z)          Disclosure.
The Company has made available to the Purchaser all of the information reasonably available to the Company that the Purchaser has
requested for deciding whether to acquire the Securities, and all such materials were prepared in good faith. No representation
or warranty of the Company contained in this Agreement, as qualified by the Disclosure Schedule, and no certificate furnished or
to be furnished to the Purchaser at the Closing contains any untrue statement of a material fact or, to the Company’s Knowledge,
omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made. It is understood that this representation is qualified by the fact that the Company
has not delivered to the Purchaser, and has not been requested to deliver, a private placement or similar memorandum or any written
disclosure of the types of information customarily furnished to purchasers of securities. 

 

3.2           Representations
and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date
to the Company as follows (unless as of a specific date therein):

 

    	 	16	 

     

    

 

(a)          Organization;
Authority. The Purchaser is an entity duly formed, validly existing and in good standing under the laws of the jurisdiction
of its formation with full right, corporate or similar power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary limited liability company or similar action, as applicable, on the part of the Purchaser.
Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against
it 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.

 

(b)          Own
Account. The Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting the Purchaser’s right to sell the Securities or any security into which
they are converted or exchanged in compliance with applicable federal and state securities laws). The Purchaser is acquiring the
Securities hereunder in the ordinary course of its business.

 

(c)          Purchaser
Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

(d)          Experience
of the Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)          General
Solicitation. The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general solicitation or general advertisement.

 

(f)          Confidentiality.
Other than to other Persons party to this Agreement and to the Purchaser’s employees, officers, directors, attorneys and
advisors, the Purchaser has maintained and will maintain the confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).

 

    	 	17	 

     

    

 

(g)          Full
Access. The Purchaser has had a reasonable opportunity to ask questions of and receive information and answers from a person
or persons acting on behalf of the Company concerning the Securities and has had an opportunity to conduct a due diligence investigation
of the Company. The Purchaser has reviewed the Company’s registration statement on Form S-1 filed with the Commission on
December 23, 2015 and understands and acknowledges that there can be no assurance that such registration statement will be declared
effective by the Commission or that the IPO for which the shares are being registered will be consummated.

 

The Company acknowledges
and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the Purchaser’s right to rely
on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained
in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transaction contemplated hereby.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Transfer
Restrictions.

 

(a)          The
Securities may only be disposed of in compliance with state and federal securities laws.

 

(b)          The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:

 

THIS SECURITY
AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), or the securities laws of any other state or jurisdiction.
They may not be purchased with a view for distribution or resale, and may only be offered, sold, mortgaged, pledged, hypothecated,
or otherwise transferred in compliance with either an effective registration statement for such security under the SECURITIES act
or any applicable state securities act, or an opinion of counsel for the company that registration is not required under SECURITIES
act or the laws of any other jurisdiction. 

 

THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC
OFFERING, AS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE PURCHASER, A COPY OF WHICH MAY BE OBTAINED
AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

    	 	18	 

     

    

 

4.2           Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities.

 

4.3           Disclosure;
Publicity. (a) The Company and the Purchaser shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither the Company nor the Purchaser shall issue any
such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press
release of the Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Company, and
each such consent shall not unreasonably be withheld or delayed, except if such disclosure is required by securities laws
or rules, including those promulgated by the Commission, or any rules or requirements of stock exchanges on which equity securities
of each of the Company and the Purchaser may be listed, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement, disclosure or communication. For the avoidance of
doubt, the Purchaser understands that the U.S. federal securities laws generally require any company that is publicly held or that
is registering its securities for public sale to disclose a broad range of financial and non-financial information in registration
statements, annual reports and other filings made with the Commission. As a result, copies of this Agreement and the Note and descriptions
thereof may be made public in the sole discretion of the Company or the Purchaser in order to comply with such securities laws
and the rules and regulations of the Commission.

 

(b)          Disclosure
by the Company and the Purchaser of the Option and Collaboration Agreement and its terms, and material developments or material
information generated under the Option and Collaboration Agreement shall be governed by Section 5 of the Option and Collaboration
Agreement.

 

4.4           Use
of Proceeds. The Company shall use the net proceeds hereunder primarily to fund the completion of the Company’s Phase
3 clinical trial as currently contemplated with its product candidate CPP-1X/sul for the treatment of familial adenomatous polyposis
(the “Phase 3 Trial”); provided that (a) this Section 4.4 shall not apply to any Investment in a Qualified Financing
that is an IPO, and (b) the Company may use the net proceeds hereunder in its sole discretion in the event that either the Option
and Collaboration Agreement or License Agreement is terminated or the Company’s Phase 3 Trial is terminated.

 

    	 	19	 

     

    

 

4.5           Indemnification
of Purchaser. Subject to the provisions of this Section 4.5 and in consideration of the Purchaser’s execution of the
Transaction Documents and acquiring the Securities, the Company will indemnify and hold the Purchaser and its directors, officers,
shareholders, members, managers, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, managers, partners or employees (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of: (a) any misrepresentation or breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents; or (b) any action instituted against
any Purchaser Party in any capacity, or its Affiliates, by any stockholder of the Company who is neither an Affiliate of such Purchaser
Party nor another Purchaser Party, with respect to (x) any of the transactions contemplated by the Transaction Documents; or (y)
any transaction directly or indirectly financed with the proceeds of the issuance of the Securities (unless such action is based
upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements
or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to
this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party 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 Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing; (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel; or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (y) for any settlement by the Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section
4.5 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar
right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

4.6           Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser
at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide
evidence of such actions promptly upon request of the Purchaser.

 

    	 	20	 

     

    

  

Restrictions on Sale.
The Purchaser hereby agrees not to sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or
enter into any hedging or similar transaction with the same economic effect as a sale, of any Securities or other securities of
the Company held by the Purchaser during the 180-day period following the effective date of the registration statement for the
Company’s IPO (or such other period as may be requested by the Company or an underwriter solely to accommodate regulatory
restrictions on (i) the publication or other distribution of research reports; and (ii) analyst recommendations and opinions,
including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor
provisions or amendments thereto)(the “Lock-Up Period”), provided, that all officers and directors of
the Company and holders of at least 5% of the Company’s voting securities are bound by and have entered into similar agreements.
The obligations described in this Section 4.7 shall not apply to a registration relating solely to employee benefit plans
on Form S-l or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction
on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp
each certificate with a legend as substantially set forth in Section 4.1 with respect to the shares of the Securities
(or other securities of the Company) subject to the foregoing restriction until the end of such 180-day (or other) period. The
Purchaser agrees to execute a market stand-off agreement with the underwriters in the offering in customary form consistent with
the provisions of this Section 4.7. Any discretionary waiver or termination of the restrictions of any or all of such agreements
by the Company or the underwriters shall apply pro rata to all holders subject to such agreements, pro rata based on the
number of shares subject to such agreements.

 

4.7           Option
and Investment. Notwithstanding anything in this Agreement to the contrary, if the Purchaser does not consummate the Investment
in accordance with the terms of this Agreement (including the satisfaction of the conditions set forth in Section 2.7(b) above),
then (a) such failure to purchase shall be a material breach of this Agreement, and (b) the Option described in Section 2.2
and the Option and Collaboration Agreement shall be null and void and not exercisable by the Purchaser.

 

ARTICLE V.

MISCELLANEOUS

 

5.1           Board
Observer Rights. (a) Beginning on the date hereof until the date of exercise of the option in accordance with the terms of
the Option and Collaboration Agreement or the expiration of the option period as set forth therein (the “Observer Period”),
the Company agrees that it will invite one representative designated by the Purchaser (the “Observer”) to attend,
in a non-voting observer capacity, all formal meetings of the Board of Directors in which a quorum is present for the purposes
of permitting Observer to have current information with respect to the affairs of the Company and the actions taken by the Board
of Directors (the “Approved Purposes”); provided that such Observer designated by the Purchaser is subject to
the Company’s approval (which approval shall not be unreasonably withheld). In no event shall Observer: (i) be deemed to
be a member of the Board of Directors; (ii) have the right to vote on any matter under consideration by the Board of Directors
or otherwise have any power to cause the Company to take, or not to take, any action; or (iii) except as expressly set forth in
this Section 5.1, have or be deemed to have, or otherwise be subject to, any duties (fiduciary or otherwise) to the Company or
its stockholders or any duties (fiduciary or otherwise) otherwise applicable to the directors of the Company.  As a non-voting
observer, Observer will also be provided (concurrently with delivery to the directors of the Company and in the same manner delivery
is made to them) copies of all notices, minutes, consents, and all other materials or information (financial or otherwise) that
are provided to the directors with respect to a meeting or any written consent in lieu of meeting (except to the extent Observer
has been excluded therefrom pursuant to clause (d) below).

 

    	 	21	 

     

    

  

(c)          If
a meeting of the Board of Directors is conducted via telephone or other electronic medium (e.g., videoconference), Observer may
attend such meeting via the same medium; provided, however, that Observer shall not provide any other person access to such meeting
without the Company’s express prior written consent (which consent may be by e-mail).

 

(d)          Notwithstanding
the foregoing, the Company may exclude Observer from access to any material or meeting or portion thereof if: (i) the Board of
Directors concludes in good faith, upon advice of the Company’s counsel, that such exclusion is reasonably necessary to preserve
the attorney-client privilege between the Company and such counselor or if the Company in good faith believes that the Observer
has a potential conflict of interest; provided, however, that any such exclusion shall apply only to such portion of the material
or such portion of the meeting which would be required to preserve such privilege and not to any other portion thereof; or (ii)
such portion of a meeting is an executive session limited solely to independent director members of the Board of Directors, independent
auditors and/or legal counsel, as the Board of Directors may designate, and Observer (assuming Observer were a member of the Board
of Directors) would not meet the then-applicable standards for independence adopted by the New York Stock Exchange, or such other
exchange on which the Company’s securities are then traded.

 

(e)          The
Observer shall not receive compensation from the Company for the performance of as an Observer; however, the Company shall reimburse
Observer for all reasonable out-of-pocket expenses incurred by Observer in connection with attendance at Board of Directors meetings.
All reimbursements payable by the Company pursuant to this Section 5.1(d) shall be paid to Observer in accordance with the Company’s
policies and practices with respect to director expense reimbursement then in effect

 

(f)          The
rights described in this Section 5.1 shall terminate upon: (i) the end of the Observer Period; (ii) any material violation of the
terms of this Section 5.1 by Observer that (A) remains uncured within ten (10) business days after receipt of notice thereof,
or (B) if such violation is not subject to cure, directly causes material harm to the Company in the Board of Directors’
sole and absolute discretion.

 

(g)          In
consideration of the Company’s disclosure to Observer of information that is not publicly available concerning the Company
for the Approved Purposes, Purchaser agrees that this Section 5.1 will apply to all information, in any form whatsoever, disclosed
or made available to Observer concerning the Company, its affiliates and/or the Approved Purposes (“Confidential Information”).

 

    	 	22	 

     

    

  

(h)          Except
as otherwise provided herein, Purchaser agrees: (i) to hold Confidential Information in strict confidence; (ii) not to disclose
Confidential Information to any third parties; and (iii) not to use any Confidential Information for any purpose except for the
Approved Purposes. Observer may disclose the Confidential Information to its responsible agents, advisors, affiliates and representatives
with a bona fide need to know (“Representatives”), but only to the extent necessary for the Approved Purposes.
Purchaser agrees that Observer shall instruct all such Representatives not to disclose such Confidential Information to third parties
without the prior written permission of the Company. Purchaser will, at all times, remain liable under the terms of this Agreement
for any unauthorized disclosure or use by Observer or any Representatives of Confidential Information provided to such Representatives
by Observer.

 

(i)          The
foregoing restriction on the use and nondisclosure of Confidential Information will not include information which, as evidenced
by written documentation: (i) is, or hereafter becomes, through no act or failure to act on the part of Observer, generally known
or available to the public; (ii) was acquired by Observer before receiving such information from the Company, without restriction
as to use or disclosure; (iii) is hereafter furnished to Observer by a third party, without, to Observer’s knowledge, restriction
as to use or disclosure; (iv) such information was independently developed by Observer; or (v) is required or requested to be disclosed
pursuant to judicial, regulatory or administrative process or court order, provided, that to the extent permitted by law, rule
or regulation and reasonably practicable under the circumstances, Observer gives the Company prompt notice of such required disclosure
so that the Company may challenge the same

 

(j)          Following
the termination of the rights of Observer described in this Section 5.1 and upon request of the Company, Observer will promptly:
(i) return to the Company all physical materials containing or consisting of Confidential Information and all hard copies thereof;
and (ii) destroy all electronically stored Confidential Information in Observer’s possession or control. Observer may retain
in his confidential files one copy of any item of Confidential Information in order to comply with any legal, compliance or regulatory
requirements. Any Confidential Information that is not returned or destroyed, including, without limitation, any oral Confidential
Information, and all notes, analyses, compilations, studies or other documents prepared by or for the benefit of Observer from
such information, will remain subject to the confidentiality obligations set forth in this Agreement indefinitely.

 

(k)          All
Confidential Information is provided to Observer “as is” and the Company does not make any representation or warranty
as to the accuracy or completeness of the Confidential Information or any component thereof. The Company will have no liability
to Observer resulting from the reliance on the Confidential Information by Observer or any third party to whom such Confidential
Information is disclosed.

 

(l)          Purchaser
acknowledges that all of the Confidential Information is owned solely by the Company (or its licensors) and that the unauthorized
disclosure or use of such Confidential Information would cause irreparable harm and significant injury, the degree of which may
be difficult to ascertain. Therefore, in the event of any breach of this Agreement, the Company is entitled to seek all forms of
equitable relief (including an injunction and order for specific performance), in addition to all other remedies available at law
or in equity.

 

    	 	23	 

     

    

  

(m)          
Purchaser agrees that the Confidential Information is given in confidence in accordance with the terms of this Agreement, and Purchaser
and Observer will not take any action relating to the securities of the Company which would constitute insider trading, market
manipulation, or any other violation of applicable securities law. Observer agrees to instruct all of its Representatives to whom
it discloses Confidential Information that they may not take any action relating to the securities of the Company which would constitute
insider trading, market manipulation, or any other violation of applicable securities law.

 

(n)          Prior
to the designation of any Observer, Purchaser agrees to cause Observer to execute and deliver to the Company a written acknowledgement
of such Observer’s obligations under this Section 5.1.

 

5.2           Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees (including, without limitation any fees required for same day processing of any instruction letter delivered by the Company
and any conversion or exercise notice delivered by the Purchaser), stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchaser.

 

5.3           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (Arizona time)
on a Business Day; (b) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30
p.m. (Arizona time) on a Business Day; (c) the second (2nd) Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service; (d) the fourth (4th) Business Day following the date of mailing if
sent by U.S. Mail, or (e) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto.

 

5.5           Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right.

 

    	 	24	 

     

    

  

5.6           Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

5.7           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company and Purchaser may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the Purchaser (other than by merger).

 

5.8           No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

5.9           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in New York, New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action,
suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company
under Section 4.5, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action
or proceeding.

 

5.10         Survival.
The representations and warranties contained herein shall survive the Closings and the delivery of the Securities.

 

    	 	25	 

     

    

  

5.11         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

5.12         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

5.13         Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

5.14         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser
will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree
to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would
be adequate.

 

5.15         Payment
Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction Document
or the Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently set aside, recovered from, disgorged by or refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state
or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made
or such enforcement or setoff had not occurred.

 

    	 	26	 

     

    

  

5.16         Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plea or in any manner whatsoever claim, and
will resist any and all effort to be compelled to take the benefit or advantage of, usury law wherever enacted, now or at any time
hereafter in force, in connection with any claim, action or proceeding that may be brought by the Purchaser in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such
Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents
is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract
rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof
forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the
Maximum Rate is paid by the Company to the Purchaser with respect to indebtedness evidenced by the Transaction Documents, such
excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company,
the manner of handling such excess to be at the Purchaser’s election.

 

5.17         Saturdays,
Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

5.18         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

5.19         WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

[Signature page follows] 

    	 	27	 

     

    

  

IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.

 

	CANCER PREVENTION PHARMACEUTICALS, INC.
	 	 	 
	By:	/s/ Jeffrey Jacob	 
	 	Name: Jeffrey Jacob	 
	 	Title: Chief Executive Officer	 
	 	 	 
	Address for Notice:	 
	 	 
	1760 East River Road, Suite 250	 
	Tucson, AZ 85718	 
	Attention: Jeffrey Jacob	 
	                 Chief Executive Officer	 
	Fax: (520) 232-2191	 
	 	 
	With a copy to (which shall not constitute notice):	 
	 	 
	Leslie Marlow, Esq.	 
	Gracin & Marlow, LLP	 
	The Chrysler Building	 
	405 Lexington Avenue, 26th Floor	 
	New York, NY 10174	 
	Fax: (212) 208-4657	 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    	 	28	 

     

    

 

 

[PURCHASER
SIGNATURE PAGES TO THE SECURITIES PURCHASE AGREEMENT BY AND BETWEEN CANCER PREVENTION PHARMACEUTICALS, INC. AND SUCAMPO AG]

 

IN WITNESS WHEREOF,
the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.

 

Name of Purchaser: SUCAMPO AG

 

Signature of Authorized Signatory of Purchaser:   /s/
Matthias Alder                                                                                  

 

Name of Authorized Signatory:   Matthias Alder                                                                                                                        

 

Title of Authorized Signatory:   Director                                                                                                                                       

 

Email Address of Authorized Signatory:   
malder@sucampo.com                                                                                          

 

Facsimile Number of Authorized Signatory:   
41 41 726 30 31                                                                                                  

 

Address for Notice to Purchaser:   Baarerstrasse
22, 6300 Zug, Switzerland                                                                          

 

Address for Delivery of Securities to Purchaser (if not same
as address for notice):

 

	 

 

Closing Subscription and Option Amount:   $8,000,000     

 

Principal Amount:  $5,000,000        

 

EIN Number: _______________________

 

    	 	29

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