Document:

CONFIDENTIAL
TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and,
where applicable, have been marked with an asterisk (“[*****]”) to denote where omissions have been made. The confidential
material has been filed separately with the Securities and Exchange Commission.

 

LICENSE,
DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT

between

JANSSEN
SCIENCES IRELAND UC

and

PROVENTION
BIO, INC.

 

    	 	 	 

     

    

 

TABLE
OF CONTENTS

 

	TABLE
    OF CONTENTS	2
	 	 
	LICENSE,
    DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT	3
	 	 
	BACKGROUND	3
	 	 
	Article
    1 DEFINITIONS	3
	 	 
	Article
    2 FINANCING OF PROVENTION/AUTOMATIC TERMINATION	12
	 	 
	Article
    3 GRANT OF LICENSE RIGHTS	13
	 	 
	Article
    4 DEVELOPMENT OF LICENSED PRODUCTS	13
	 	 
	Article
    5 COMMERCIALIZATION OF LICENSED PRODUCTS	15
	 	 
	Article
    6 FINANCIALS AND REPORTING	16
	 	 
	Article
    7 CONFIDENTIALITY	21
	 	 
	Article
    8 PATENTS AND INTELLECTUAL PROPERTY	23
	 	 
	Article
    9 INDEMNIFICATION	25
	 	 
	Article
    10 TERM AND TERMINATION	26
	 	 
	Article
    11 REPRESENTATIONS AND WARRANTIES	28
	 	 
	Article
    12 DISPUTE RESOLUTION	29
	 	 
	Article
    13 MISCELLANEOUS PROVISIONS	31
	 	 
	Article
    14 HSR Filing	34
	 	 
	OVERVIEW
    OF APPENDICES	36
	 	 
	APPENDIX
    1: LICENSOR PATENTS	37
	 	 
	APPENDIX
    2: PRESS RELEASE	38
	 	 
	APPENDIX
    3: STUDY	39
	 	 
	APPENDIX
    4: STABILITY TESTING ESTIMATED COSTS	41
	 	 
	APPENDIX
    5: MORPHOSYS LICENSE	42

 

    	 	2	 

     

    

 

LICENSE,
DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT

 

This
license, development, and commercialization agreement is effective as of the last date of execution by the parties hereto (“Effective
Date”) and is between Janssen Sciences Ireland UC, a company organized under the laws of Ireland, having offices at
EastGate Village, EastGate, Little Island, Co, Cork, Ireland (“Licensor”) and Provention Bio, Inc., a Delaware
company with its principal offices at 110 Old Driftway Lane, Lebanon, New Jersey 08833 (“Licensee” or “Provention”).

 

BACKGROUND

 

Licensor
owns and controls materials and technology related to anti-TLR3 antibody.

 

Licensee
is interested in developing a pharmaceutical product using anti-TLR3 antibody.

 

Licensor
desires to transfer its materials and license its technology to Licensee, and Licensee desires to receive Licensor’s materials
and obtain the license from Licensor

 

The
parties therefore agree as follows:

 

Article
1

DEFINITIONS

 

1.1       “1st
Indication” or “First Indication” means any indication listed under the header “INDICATIONS AND USAGE”
of a Product’s approved label upon Regulatory Approval for the Product by a Regulatory Authority, including any patient
group, population or subpopulation, including but not limited to an indication for treatment in the Field.

 

1.2       “2nd
Indication” or “Second Indication” means any disease or condition listed under the header “INDICATIONS
AND USAGE” of a Product’s approved label upon Regulatory Approval for the Product by a Regulatory Authority other
than the First Indication.

 

1.3       “Active
Development” means that at any given time Licensee, Sublicensee, or delegated party shall be diligently engaging in one
or more of the following Development activities for the lead. Licensed Product it has selected to Develop: formulation development,
study/protocol design activity, awaiting protocol approval from the applicable institutional review board or FDA, patient recruitment,
patient treatment, data analysis, report writing for any clinical trial, regulatory file(s) being drafted or pending, pricing
or marketing approvals pending, manufacturing investment work, synthetic process development, drug synthesis, packaging development,
manufacturing scale-up and validation, preclinical or in vitro characterization and go/no go decision awaited from a formal research
and development committee within Licensee to initiate any of the preceding activities

 

1.4       “Affiliate”
means, with respect to any person, any other person that directly or indirectly controls, is controlled by or is under direct
or indirect common control with, such person. For purposes of this Section 1.4, the term “control” means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through
the ownership of voting securities, by contract or otherwise. Control of any person by another person shall be presumed if fifty
percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership
interest of the first person are owned, controlled or held, directly or indirectly, by the other person, or by an Affiliate of
the other person. A person, for the purpose of this definition, means any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated organization or government or political subdivision thereof.

 

    	 	3	 

     

    

 

1.5       “Agreement”
means this agreement, including its schedules and Appendices, as the same may be amended from time to time.

 

1.6       “Benchmark
Data” shall mean data owned or controlled by Licensor as of the Effective Date, including any improvements or enhancements
developed over the period during which the Study is being conducted, relating to Products, including: i) ulcerative colitis imaging
(e.g., endoscopy), intestinal biopsy tissue and blood biomarkers (e.g., mRNA expression profiles, disease signature and TLR3 signature);
and ii) pharmacodynamic (PD) markers for JNJ-42915925 (e.g., ex-vivo blood PD assay and results) in healthy volunteers, atopic
subjects and asthmatic patients.

 

1.7       “BLA”
means a biologics license application, or similar application, submitted to a Regulatory Authority.

 

1.8       “Calendar
Quarter” means a calendar quarter during any Calendar Year based on the J&J Universal Calendar for that year consistent
with the J&J Universal Calendar used for Janssen’s internal business purposes; provided, however that the last Calendar
Quarter under this agreement will extend from the first day of such Calendar Quarter until the effective date of the termination
or expiration of this agreement.

 

1.9       “Calendar
Year” means a calendar year during the term of this agreement based on the J&J Universal Calendar for that year consistent
with the J&J Universal Calendar used for Janssen’s internal business purposes; provided, however that the last Calendar
Year under this agreement shall extend from the first day of such Calendar Year until the effective date of the termination or
expiration of this agreement.

 

1.10       “Change
of Control” means a transaction or series of related transactions that result in (a) the holders of outstanding voting securities
of a Party immediately prior to such transaction ceasing to represent at least fifty percent (50%) of the combined outstanding
voting power of the surviving entity immediately after such transaction; (b) any Third Party (other than a trustee or other fiduciary
holding securities under an employee benefit plan) becoming the beneficial owner of fifty percent (50%) or more of the combined
voting power of the outstanding securities of a Party; or (c) a sale or other disposition to a Third Party of all or substantially
all of a Party’s assets or business.

 

1.11       “Clinical
Trial” means any research study of a therapeutic product with human subjects designed to provide specific data to determine
either or both the safety and efficacy of such product.

 

1.12       “Combination
Product” means (i) a Product that contains at least one Compound and at least one additional therapeutically active ingredient
that is not a Compound, or (ii) a product consisting of one or more separate drugs, devices, tests, kits or biological products
and sold together with a Product containing or consisting of a Compound (alone or with other active ingredients) in a single package
or as a unit.

 

    	 	4	 

     

    

 

1.13       “Commercialize”
or “Commercialization” means any action directed to marketing, promoting, distributing, importing or selling a pharmaceutical
product, obtaining pricing or reimbursement approvals for that product and Clinical Trials of a Product conducted after Regulatory
Approval for that Product, including label expansion, pricing/reimbursement, epidemiological, modeling and pharmacoeconomic, voluntary
post-marketing surveillance and health economics studies.

 

1.14       “Compound”
shall mean Licensor’s experimental compound designated as JNJ-42915925 and any fragments, back-up molecules, related compounds,
combinations, precursors, conjugates, derivatives, and other potential modifications thereof.

 

1.15       “Control”
or “Controlled” means possession of the ability to grant a license or sublicense of Patents, know-how or other intangible
rights as provided for herein without violating the terms of any contract or other arrangements with any Third Party.

 

1.16       “Development”
or “Develop” means preclinical and clinical drug development activities, including, among other things: test method
development and stability testing, toxicology, formulation, process development, manufacturing scale-up, development-stage manufacturing,
quality assurance/quality control development, statistical analysis and report writing, clinical studies and regulatory affairs,
product approval and registration. For the purposes of this Agreement, Development shall include, without limitation, Pre-Phase
I, Phase I, Phase II, Phase III, Phase IIIB and Phase IV Clinical Trials. When used as a verb, “Develop” means to
engage in Development.

 

1.17       “Dollars”
means the legal currency of the United States.

 

1.18       “EMA”
means the European Medicines Agency or any successor agency that is responsible for reviewing applications seeking approval for
the sale of pharmaceuticals in the European Union.

 

1.19       “Effective
Date” means the date of this Agreement as set forth above.

 

1.20       “European
Commission” means the European Commission or any successor agency that is responsible for granting marketing approvals authorizing
the sale of pharmaceuticals in the EU.

 

1.21       “European
Union” or “EU” means the countries of the European Union, as the European Union is constituted as of the Effective
Date and as it may be modified from time to time.

 

1.22       “FDA”
means the United States Food and Drug Administration or any successor agency.

 

1.23       “Field”
means the diagnosis, treatment, palliation, amelioration or prevention of disease in humans or animals.

 

1.24       “First
Commercial Sale” means, with respect to any Licensed Product, the first arm’s length sale of such Product to a Third
Party in a country of the Territory by a Party, its Affiliate(s), or Sublicensee(s) for use or consumption in such country following
Regulatory Approval. Sales prior to receipt of marketing and pricing approvals, such as so-called “treatment IND sales,”
“named patient sales” and “compassionate use sales” and any sales to any government, foreign or domestic,
including purchases for immediate sale and/or stockpiling purposes, are not a First Commercial Sale in that country.

 

    	 	5	 

     

    

 

1.25       “Improvements”
means any modifications of a Licensed Product described in the Licensed Patent, provided such modification, if unlicensed, would
infringe one or more claims of the Licensed Patents.

 

1.26       “IND”
means an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. §312.3, as amended from
time to time, or its equivalent in any country. For purposes of this part, “IND” is synonymous with “Notice
of Claim Investigational Exemption for a New Drug” and “FDA” means the Food and Drug Administration.

 

1.27       “Indication”
means a recognized disease or condition as identified in an NDA or BLA for a Licensed Product.

 

1.28       “Information”
means all information including, but not limited to, Benchmark Data, screens, models, inventions, practices, methods, knowledge,
know-how, skill, experience, test data including pharmacological, toxicological and clinical test data, analytical and quality
control data, marketing, pricing, distribution, costs, sales, manufacturing secrets and procedures, secret processes, reports,
plans, designs, prototypes, test results, working drawings, methods including testing methods, formulas, recipes, material and
performance specifications and current accumulated experience acquired as a result of technical research or otherwise, and patent
and legal data or descriptions (to the extent that disclosure thereof would not result in loss or waiver of privilege or similar
protection) and methods as each of the foregoing relate to the Licensed Product and is Controlled by a Party or its Affiliates.

 

1.29       “Know-How”
means all Information, including but not limited to, manufacturing secrets and procedures.

 

1.30       “Licensed
Product” means any Product or Combination Product that the sale, manufacture, importation, or use, but for the license granted
herein, would directly infringe, or contribute to or induce the infringement of a Valid Claim of a Licensor Patent.

 

1.31       “Licensor
Know-How” means Information that (a) Licensor discloses to Licensee under this Agreement or under a separate confidentiality
agreement between the Parties, (b) is within the Control of Licensor during the Term of the Agreement and (c) and that is not
generally known to the public at the time it is disclosed to Licensee or its Affiliates.

 

1.32       “Licensor
Patent” means the patents in the list appended hereto as APPENDIX 1: LICENSOR PATENTS. Upon Licensee’s request,
the Licensor Patents Appendix will be updated by Licensor to reflect changes due to prosecution during the course of this Agreement
and additional Licensor Patents Controlled during the Term. In the event that any Patent Controlled by Licensor as of the date
hereof that claims priority from the Priority Patent was inadvertently omitted from APPENDIX 1: LICENSOR PATENTS, this
Agreement shall be deemed to be amended to include such omitted Patent.

 

1.33       “MAA”
means a marketing authorization application, or similar application: (a) submitted to the EMA in the European Union; or (b) submitted
to a Regulatory Authority in the United Kingdom in the event the United Kingdom ceases to be subject to the jurisdiction of the
EMA, for instance as a consequence of its exit from the European Union.

 

1.34       “MAA
Approval” means (i) receipt of regulatory approval for a Product for the relevant indication in at least one of France,
Germany, Italy, Spain, and United Kingdom, and (ii) if required for marketing, receipt of pricing/reimbursement approval for such
Product for such indication in such country

 

    	 	6	 

     

    

 

1.35       “Major
Market Country” means the United States, Japan, and any country in the EU.

 

1.36       “Manufacturing
Cost” means a supplier’s reasonable and necessary internal and third party costs incurred in manufacturing or acquisition
of product, determined in accordance with supplier’s standard cost accounting policies that are in accordance with U.S.
generally accepted accounting principles and consistently applied across supplier’s manufacturing network to other products
that supplier manufactures.

 

1.37       “MHLW”
means Japan’s Ministry of Health, Labor and Welfare, or any successor government agency that is responsible for approving
the sale of pharmaceuticals in Japan.

 

1.38       “NDA”
means a new drug application filed pursuant to 21 U.S.C. Section 505(b)(1), as amended from time to time, or equivalent submissions
with similar requirements in other countries including all documents, data and other information concerning a Licensed Product
which are necessary for or included in, FDA approval to market a Licensed Product and all supplements and amendments, including
supplemental new drug applications, that may be filed with respect to the foregoing as more fully defined in 21 C.F.R. §314.50
et. seq., as amended from time to time, or equivalent submissions with similar requirements in other countries.

 

1.39       “Net
Sales” means the gross amount invoiced by the Licensee or its Related Parties in arms-length sales of a Licensed Product
in the Field to a Third Party, less the following customary and commercially reasonable deductions, determined in accordance with
U.S. generally accepted accounting principles and internal policies and actually taken, paid, accrued, allocated, or allowed based
on good faith estimates:

 

(a)       trade,
cash and/or quantity discounts, allowances, and credits, excluding commissions for Commercialization;

 

(b)       excise
taxes, use taxes, tariffs, sales taxes and customs duties, and/or other government charges imposed on the sale of Product (including
VAT, but only to the extent that such VAT taxes are not reimbursable or refundable), specifically excluding, for clarity, any
income taxes assessed against the income arising from such sale;

 

(c)       compulsory
or negotiated payments and cash rebates or other expenditures to governmental authorities (or designated beneficiaries thereof)
in the context of any national or local health insurance programs or similar programs; including, but not limited to, pay-for-performance
agreements, risk sharing agreements as well as government levied fees as a result of the Affordable Care Act (in the latter case,
whether or not treated as a gross to net adjustment for GAAP accounting purposes);

 

(d)       rebates,
chargebacks, administrative fees, and discounts (or equivalent thereof) to managed health care organizations, group purchasing
organizations, insurers, pharmacy benefit managers (or equivalent thereof), specialty pharmacy providers, governmental authorities,
or their agencies or purchasers, reimbursers, or trade customers, as well as amounts owed to patients through co-pay assistance
cards or similar forms of rebate to the extent the latter are directly related to the prescribing of the Product;

 

    	 	7	 

     

    

 

(e)       outbound
freight, shipment and insurance costs to the extent included in the price and separately itemized on the invoice price;

 

(f)       retroactive
price reductions, credits or allowances actually granted upon claims, rejections or returns of Product, including for recalls
or damaged or expired goods, billing errors and reserves for returns;

 

(g)       any
invoiced amounts which are not collected by the selling party or its Affiliates, including bad debts; and

 

(h)       any
deductions in the context of payments that are due or collected significantly after invoice issuance.

 

All
aforementioned deductions shall only be allowable to the extent they are commercially reasonable by the licensee and shall be
determined, on a country-by-country basis, as incurred in the ordinary course of business in type and amount verifiable based
on the Licensee and its Related Parties’ reporting system. All such discounts, allowances, credits, rebates, and other deductions
shall be fairly and equitably allocated to Licensed Product and other products, if applicable, of the Licensee and its Related
Parties such that Licensed Product does not bear a disproportionate portion of such deductions.

 

The
following provisions shall also apply to Net Sales:

 

	 	(i)	Sales
    of Licensed Product by and between a licensee and its Affiliates and sublicensees are not sales to Third Parties and shall
    be excluded from Net Sales calculations for all purposes.
	 	 	 
	 	(ii)	Sales
    of Product for the use in conducting clinical trials or other scientific testing of Licensed Product in a country shall be
    excluded from Net Sales calculations for all purposes.
	 	 	 
	 	(Iii)	Compassionate
    and named patient sales or sales on an Affordable Basis shall be excluded from Net Sales calculations for all purposes. “Affordable
    Basis” shall mean making a product available to patients at lowest cost possible. For clarification, Affordable Basis
    is satisfied if a Party sells such product for no more than the cost of goods Sold plus an additional percentage that is required
    to cover the costs and expenses of such Party’s Commercialization and logistics activities with respect to such product
    in the applicable country. In determining Affordable Basis, the Parties recognize that, to the extent that a Party engages
    a Third Party in the Commercialization of a product on an Affordable Basis, such Third Party shall be entitled to a reasonable
    profit margin, as customary in the generic drug industry for such country; provided that the applicable Party uses Commercially
    reasonable efforts to minimize such Third Party profits.
	 	 	 
	 	(iv)	Any
    disposition of the Product as free samples, donations, patient assistance, test marketing programs or other similar programs
    or studies, shall be excluded from Net Sales calculations for all purposes.

 

In
the case of any sale that is not invoiced, Net Sales are calculated at the time of transfer of title of the Product based on the
gross selling price in that transaction. In the case of any sale or disposal for value other than in an arms-length transaction
exclusively for money, such as barter or counter trade, Net Sales are calculated as above on the value of the consideration received
or the fair market value (if higher) of the Product in the country of sale or disposal.

 

    	 	8	 

     

    

 

In
the event that any Licensed Product is sold in the form of Combination Products containing one or more other products, where all
products in such Combination Product are sold separately, Net Sales for such Combination Products will be calculated by multiplying
actual Net Sales of such Combination Products by the fraction A/(A+B) where A is the invoice price of the Product if sold separately,
and B is the total invoice price of any other product or products in the combination if sold separately. To the extent that one
or more of the products, including the Product, in any Combination Product are not sold separately, the following provisions shall
apply:

 

	 	(1)	If
    the Licensed Product contained in the Combination Product is sold separately, but none of the other products included in such
    Combination Product are sold separately, Net Sales shall be calculated by multiplying actual Net Sales of such Combination
    Product as determined under the first paragraph of this Section 1.39, by the fraction A/C, where A is the net invoice price
    of such Product component as sold separately in such country, and C is the net invoice price of the Combination Product in
    such country.
	 	 	 
	 	(2)	If
    the Licensed Product component of the Combination Product is not sold separately, but the other product(s) included in the
    Combination Product are sold separately in such country, Net Sales shall be calculated by multiplying actual Net Sales of
    such Combination Product in such country as determined under the first paragraph of this Section 1.39, by the fraction (C-D)/C,
    where C is the net invoice price of the Combination Product, and D is the sum of the net invoice prices charged for the other
    product(s) in the Combination Product.
	 	 	 
	 	(3)	If
    none of the product(s) included in the Combination Product, including the Licensed Product, are sold separately, or if the
    Licensed Product is intended to be sold as a fixed dose combination, Net Sales for the purpose of determining royalties due
    hereunder for the Combination Product shall be determined by mutual agreement of the Parties in good faith taking into account
    the perceived relative value contributions of the Licensed Product portion of the Combination Product and the other product(s)
    in the Combination Product. In case of disagreement, an independent expert agreed upon by both Parties or, failing such agreement,
    designated by the International Chamber of Commerce, shall determine such relative value contributions and such determination
    shall be final and binding upon the Parties.

 

Net
Sales includes sales of a Licensed Product to the U.S. Strategic National Stockpile, or to equivalent governmental agencies in
U.S. states or foreign jurisdictions that are intended to act as central repositories of medicines and other therapeutic supplies
to be used to safeguard public health and supplement local supplies in the event of potentially catastrophic disease outbreaks,
even if such sales occur prior to receipt of marketing and pricing approvals. Notwithstanding anything above to the contrary,
such sales to governmental stockpiles will be calculated, for each such sale of Product by the licensee or its Related Parties,
at the earlier of the time of delivery to or the invoicing of the applicable governmental agency.

 

1.40       “Party”
means Licensee or Licensor, and “Parties” means Licensee and Licensor.

 

1.41       “Patents”
shall mean all patents and patent applications, including any continuations, continuations-in-part, divisions, provisionals or
any substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal
or extension (including any supplemental patent certificate) of any such patent, and any confirmation patent or registration patent
or patent of addition based on any such patent, and all foreign counterparts of any of the foregoing.

 

    	 	9	 

     

    

 

1.42       “Phase
II Clinical Trial” means a clinical trial generally consistent with 21 CFR §312.21(b) that is required for receipt
of Regulatory Approval of a Product and which is conducted to evaluate the effectiveness and the appropriate dose range of a Product
for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term
side effects and risks.

 

1.43       “Phase
III Clinical Trial” means a clinical trial generally consistent with 21 CFR §312.21(c) that is required for receipt
of Regulatory Approval of a Product and which is conducted after preliminary evidence suggesting effectiveness of the drug has
been obtained, and are intended to gather additional information to evaluate the overall benefit-risk relationship of the drug
and provide an adequate basis for physician labeling.

 

1.44       “Phase
IV Clinical Trial” means any Clinical Trial to be conducted after a Regulatory Approval which was mandated by the applicable
Regulatory Authority as a condition of such Regulatory Approval.

 

1.45       “Pre-Phase
I” means that portion of the development program which starts with the selection of a compound for development into a Product
or the beginning of toxicological studies relating to such Product. Pre-Phase I includes, but is not limited to, toxicological,
pharmacological and any other studies, the results of which are required for filing with an IND, as well as product formulation
and manufacturing development necessary to obtain the permission of regulatory authorities to begin and continue subsequent human
clinical testing. Toxicology as used in this definition means full-scale toxicology using CGMP material for obtaining approval
from a regulatory authority to administer the Product to humans. This toxicology is distinguished from initial dose range finding
toxicology, which usually includes a single and repeated dose ranging study in two species with less than half of the animals
required by the FDA, an Ames test or a related chromosome test.

 

1.46       “Priority
Patent” means Licensor Patent corresponding to US provisional patent application number 61/109974 filed on 31 October 2008,
which is the first filed application of the Licensor Patents and is the application from which all other Licensor Patents claim
priority.

 

1.47       “PoC”
means proof-of-concept.

 

1.48       “PoM”
means proof-of-mechanism.

 

1.49       “Product”
means any and all pharmaceutical compositions or preparations (in any and all dosage forms), in final form, containing the Compound
as an active ingredient either alone or in combination with one or more other active ingredients (Combination Product).

 

1.50       “Regulatory
Approval” means approval and authorization, by governmental entities, required for marketing and commercial sale of a Product
in a country or region, such as an NDA or BLA in the United States, an MAA or BLA in the European Union and a JNDA or BLA in Japan.

 

1.51       “Regulatory
Approval Application” means an application for Regulatory Approval required before Commercial sale or use of a Licensed
Product in a regulatory jurisdiction.

 

    	 	10	 

     

    

 

1.52       “Related
Party” means each of a Licensee’s Affiliates and permitted Sublicensees.

 

1.53       “Regulatory
Authority” means any applicable government regulatory authority involved in granting Regulatory Approval in the Territory,
including the FDA, EMA/European Commission and MHLW.

 

1.54       “Securities
Act” shall mean the Securities Act of 1933, as amended.

 

1.55       “Sublicensee”
shall mean, with respect to a particular Licensed Product, a Third Party to whom Licensee has granted a license or sublicense
under any Licensor Know-How or Licensor Patents to make, use or sell such Licensed Product. As used in this Agreement, “Sublicensee”
shall also include a Third Party to whom Licensee has granted the right to distribute a Licensed Product.

 

1.56       “Tax”
or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature
(including any interest thereon).

 

1.57       “Term”
shall have the meaning ascribed thereto in Section 10.1.

 

1.58       “Territory”
means the entire world.

 

1.59       “Third
Party” means any entity other than Licensor or Licensee and their respective Related Parties.

 

1.60       “Third
Party Know-How” means Information that (a) Licensor Controls but which is owned by a Third Party and (b) and that is not
generally known to the public at the time it is disclosed to Licensee or its Affiliates. Agreements between Licensor and Third
Parties covering the use of Third Party Know-How consist solely of the Lonza License and the Morphosys License.

 

1.61       “Third
Party License” means a license that Licensor has taken in order to conduct research and development on the Compound and
to Commercialize it. Specifically, such Third Party Licenses means exclusively one or both of the following:

 

(a)       “Lonza
License” which means the license Licensor took from Lonza Biologics PLC (“Lonza”) in order to obtain access
to the cell line that is used to produce the Compound.

 

(b)       “Morphosys
License” which means the license Licensor took from Morphosys AG (“Morphosys”) in order to have access to Morphosys’
compound libraries which were used to produce the Compound. A copy of the Morphosys License is attached hereto as APPENDIX 5:
MORPHOSYS LICENSE.

 

1.62       “Valid
Claim” means: (a) any claim of an issued unexpired patent that (i) has not been finally cancelled, withdrawn, abandoned
or rejected by any administrative agency or other body of competent jurisdiction; (ii) has not been permanently revoked, or held
invalid by a decision of a court or other body of competent jurisdiction that is unappealable or unappealed within the time allowed
for appeal; (iii) has not been rendered unenforceable through terminal disclaimer or otherwise; and (iv) is not lost through an
interference proceeding that is unappealable or unappealed within the time allowed for appeal, or (b) a claim of a pending patent
application where such claim has been pending for a period of seven years or less. If a claim of a pending patent application
that ceased to be a Valid Claim under this sub-section (b) of this section later issues or grants as a patent within the scope
of sub-section (a), then such claim is considered to be a Valid Claim from the date of such issue or grant.

 

    	 	11	 

     

    

 

1.63       Additional
Definitions. Each of the following definitions is set forth in the Section of this agreement indicated below:

 

	Definition	 	Section
	Affordable
    Basis	 	0
	ANDA	 	8.3(d)
	Confidential
    Information	 	7.1
	HSR
    Act	 	14.2(a)
	HSR
    Clearance Date	 	14.2(b)
	HSR
    Filing	 	14.2(c)
	Licensor
    Indemnitees	 	9.1(b)
	Losses	 	9.1(b)
	Study	 	4.2
	Transition
    Services Agreement	 	5.15.1(a)

 

Article
2

FINANCING OF PROVENTION/AUTOMATIC TERMINATION

 

2.1       Financing.
The performance of this agreement, including the granting of the licenses under Article 3, is conditional on the occurrence
of the following:

 

(a)       Execution
of an agreement(s) for the Qualified Financing of Provention, where “Qualified Financing”
shall mean a bona fide equity financing in which Provention closes on at least $25,000,000 of equity financing that complies with
the Securities Act or any exemption from registration thereunder.

 

2.2       Automatic
Termination. This agreement, including the licenses granted to Provention under Article 3, shall terminate automatically if
the financing requirements of section 2.1 are not achieved prior to, or within ninety (90) days following, the Effective Date;
provided that Provention may request Janssen’s approval for a ninety (90) day extension, which approval shall not be unreasonably
withheld.

 

    	 	12	 

     

    

 

Article
3

GRANT OF LICENSE RIGHTS

 

3.1       License
for Licensed Products.

 

(a)       Subject
to the terms and conditions of this Agreement, Licensor hereby grants to Licensee an exclusive license (even as to Licensor) under
the Licensor Patents and Licensor Know-How to Develop, make, have made, use, sell, have sold, import, offer to sell and Commercialize
Licensed Products and Improvements in the Field, with the right to sublicense. Notwithstanding the foregoing grant, Licensor reserves
the right to use all Licensor Patents and Licensor Know-How to the extent necessary to solely fulfill its obligations under this
Agreement. In addition, Licensor hereby grants to Licensee a non-exclusive license to any Patents Controlled by Licensor at any
point during the Term and not set forth on APPENDIX 1: LICENSOR PATENTS to the extent that Developing, making, having made, using,
selling, having sold, importing, offering to sell or Commercializing a product claimed by the Licensor Patents would infringe
such other Patents.

 

(b)       The
license granted under Section (a) shall be exclusive for the Term of this Agreement in the Territory and have not been previously
been subject to any licensing, assignment or other encumbrance prior to the Effective Date that would contravene Licensee’s
right to practice exclusively under the Licensed Patents and Know-How in the Territory.

 

(c)       Licensee
may sublicense its rights to Licensed Product to Sublicensees without Licensor’s prior written approval; provided, however,
that any such sublicense occurs pursuant to a written agreement that subjects such Sublicensee to all relevant obligations, restrictions,
and limitations in this Agreement. In addition, and notwithstanding the foregoing, Licensee may, without the need for approval
by Licensor, distribute Licensed Product through a Third Party, granting any necessary licenses or sublicenses using Third Party
distributors. Licensee shall be jointly and severally responsible with its Sublicensees and delegated party for failure by its
Sublicensees and delegated party to comply with, and Licensee guarantees the compliance by each of its Sublicensees and delegated
party with, all such applicable restrictions and limitations in accordance with the terms and conditions of this Agreement.

 

(d)       Licensee
may extend its rights and perform any or all of its obligations under this Agreement, through its Affiliates.

 

(e)       Licensee
shall not permit any Sublicensees to use Licensor Patents or Licensor Know-How without provisions safeguarding confidentiality
which are at least equivalent to those provided in this Agreement and Licensee guarantees the compliance by each of its Sublicensees
with all such applicable provisions safeguarding confidentiality in accordance with the terms and conditions of this Agreement.

 

Article
4

DEVELOPMENT OF LICENSED PRODUCTS

 

4.1       Licensee’s
Right to Select Licensed Products. Licensee shall be solely responsible for and shall have the sole right to Develop the Licensed
Product including making all Regulatory Approval Applications and obtaining all Regulatory Approvals throughout the Territory
and shall use commercially reasonable efforts to do so. In making any determination regarding such commercially reasonable efforts,
the Parties shall take into account the normal course of such programs conducted with sound and reasonable business practices
and judgment.

 

    	 	13	 

     

    

 

4.2       Licensee,
at its own expense, will complete a single Phase IIa Clinical Trial of a Product in ulcerative colitis (the “Study”).
The Study design will be agreed upon between Licensor and Licensee and will focus on biomarker-based PoM. The Study will explore
clinical PoC without powering the clinical endpoints, and will be designated a PoM/PoC study to indicate that clinical PoC is
not expected but may be achieved. The preliminary Study design is outlined in APPENDIX 3: STUDY.

 

(a)       The
Study will commence upon receipt of all information and materials supplied under the Transition Services Agreement, which is defined
in Section 5.1(a), below, and shall conclude within 36 months thereafter. Failure to timely initiate and/or conclude the Study
shall be grounds for Licensor to terminate the Agreement. The Parties may agree to delay completion of the Study, for instance
in the event of circumstances that are outside of Provention’s reasonable commercial control (such as a regulatory hold).
Notwithstanding the foregoing, Provention shall be entitled to an additional three (3) month period in which to complete the Study
in the event the conclusion of the Study is delayed by circumstances beyond its control.

 

(b)       After
the Effective Date, the Parties will arrange for the transfer of the IND related to the Product from Licensor to Licensee.

 

4.3       Information
Sharing.

 

(a)       During
the period of the Term in which Licensee is conducting the Study, at least once per Calendar Year Licensee shall provide a written
update regarding the Study, which shall include, among other things, information related to progress, status and future plans.

 

(b)       During
the time in which the protocol is being designed, Licensee shall periodically provide written updates regarding the progress of
such protocol design.

 

(c)       Upon
the reasonable request of Licensor, Licensee shall make itself and its personnel available to discuss the aforementioned updates
with Licensor at an in-person meeting or via telephone conference.

 

4.4       Licensor’s
Responsibilities. Licensee acknowledges that Licensor has discontinued all work on Licensed Products. Therefore, Licensor
has no obligation to use any efforts to assist Licensee in Licensee’s Development activities relating to any Licensed Product
other than Licensor’s specific obligations hereunder and under the technology transfer and transition services agreements
referred to below.

 

4.5       For
the purpose of designing, implementing and interpreting the Study in collaboration with Licensor, Licensor shall grant access
to Licensor’s Benchmark Data and Licensor Know-How.

 

(a)       Licensor
and Licensee shall enter into a technology transfer agreement setting forth the specific Information to be transferred, how each
Party shall treat such Information, and how such Information shall be disposed of upon termination of this Agreement.

 

(1)       The
Parties understand and agree that Licensor has entered into Third Party agreements which currently restrict its ability to transfer
all Third Party Know-How.

 

(2)       After
the Effective Date, Licensee will negotiate with Lonza to allow the transfer of Lonza’s Know-How from Licensor to Licensee.

 

    	 	14	 

     

    

 

(3)       After
the Effective Date, Licensor shall remain a party to the Morphosys Agreement, and the Parties shall cooperate with each other
in any mutually agreeable, reasonable and lawful arrangements designed to provide to Licensee the benefits of use of the Morphosys
Agreement. Licensor shall, at the request of and for the account of Licensee, exercise any rights of Licensor arising under the
Morphosys Agreement, in each case unless prohibited or not permitted by law or the terms of the Morphosys Agreement.

 

(4)       Licensor
will give all reasonable support to License as it negotiates the licenses contemplated in Section 4.5(a)(2), above.

 

(b)       Licensor
shall, promptly after the Effective Date, transfer and/or provide at reasonable cost, to be negotiated but in any event not to
exceed Licensor’s actual cost of such transfer (which shall include, with respect to any services delivered under subsection
(iv) below, the standard FTE rates charged by Licensor for such services to internal groups), to Licensee: (i) all Licensor Know-How
pertaining to the Compounds that Licensor is permitted to transfer; (ii) the JNJ-42915925 IND/CTA file or equivalent, including
requisite CMC module, and all regulatory correspondence pertaining to the Compounds; (iii) any on-hand dedicated reagents, assay
protocols, or other research tools relevant to the Compounds; (iv) all necessary technology transfer support and consultancy to
reliably set-up the Compounds’ manufacturing processes with a contract manufacturing organization or Licensee’s partner;
(v) any and all other Information, documentation, support, assistance and consultancy necessary to successfully transition and/or
transfer the Compounds to Licensee and/or Licensee’s partners or appointed subcontractors, including such services and support
required to achieve regulatory, ethics board and product release approvals for any Products manufactured by Licensor.

 

4.6       At
the conclusion of the Study, and before Licensee grants any Third Party the right to review the results of the Study, Licensor
shall have a thirty (30) calendar day time period to review the top line results of such Study prior to any such review by a Third
Party.

 

Article
5

COMMERCIALIZATION OF LICENSED PRODUCTS

 

5.1       Manufacture
of Licensed Product. Licensee shall be responsible for manufacturing and supplying Licensed Products in the Territory by itself
or through a Third Party manufacturer for Commercial sale of Licensed Product following receipt of Regulatory Approval on a country-by-country
basis in the Territory. Supplies for human Clinical Trials and related program required for Regulatory Approvals in the Territory
shall be manufactured in accordance with current cGMP standards.

 

(a)       Supply
of Product for Phase IIa Clinical Trial.

 

(1)       The
Parties shall negotiate an agreement (the “Transition Services Agreement”) that shall relate to the following terms
and conditions:

 

	 	(A)	the
    transfer of Licensor’s entire existing inventory, at Licensor’s expense and at no cost to Licensee, of finished
    Compound and placebo for clinical testing, with Licensor making appropriate representations and warranties as to cGMP compliance,
    in at least sufficient quantity for the completion of the Study. If there is not sufficient inventory of finished Compound
    or placebo to complete the study, the Parties will negotiate in good faith the production of additional supplies to meet the
    study requirements.

 

    	 	15	 

     

    

 

	 	(B)	the
    CMC and quality support and documentation necessary to label, package, release and ship the existing inventory cGMP finished
    drug Product and matching placebo vials to clinical trial sites and/or a corresponding storage and distribution subcontractor
    of Licensee’s choice.
	 	 	 
	 	(C)	Licensor
    will continue to conduct stability testing of Product. The Parties will equally share the costs of such testing. An estimate
    of such costs is stated in APPENDIX 4: STABILITY TESTING ESTIMATED COSTS. The Parties agree, though, that the actual costs
    may be different from those stated. Further, should Licensee fail to close on its current financing round by the date that
    is one (1) month from the Effective Date, Licensor may, at its option, cease all further stability testing. In no event shall
    Licensee be required to make any payment with respect to stability testing until one (1) month after the Effective Date; however,
    Licensee will then make payment for an equal share of all stability testing that occurs during the period of time between
    the Effective Date and the date of such payment.
	 	 	 
	 	(D)	Licensee
    will be responsible for the manufacture of clinical supplies for future clinical trials beyond the Study.
	 	 	 
	 	(E)	Licensee
    shall be responsible for the manufacture of Commercial supplies.

 

5.2       Commercial
Responsibilities. Licensee agrees to use commercially reasonable efforts to Commercialize Licensed Products and to cause the
commercial launch of Licensed Products in the Major Market Countries within six (6) months of Regulatory Approval in such Major
Market Countries. In making any determination regarding such commercially reasonable efforts, the Parties shall take into account
the normal course of such programs conducted with sound and reasonable business practices and judgment.

 

5.3       Licensee’s
Marketing Obligations For Licensed Products. All business decisions, including, without limitation, the design, sale, price
and promotion of Licensed Products under this Agreement and the decisions whether to market any particular Licensed Product shall
be within the sole discretion of Licensee. Any marketing of a Licensed Product in one market or country shall not obligate Licensee
to market such Licensed Product in any other market or country, recognizing that the foregoing does not relieve Licensee’s
obligation to launch under Section 5.2.

 

5.4       Trademarks.
Licensee shall select its own trademarks under which it will market the Licensed Products, and no right or license is granted
to Licensor hereunder with respect to such trademarks.

 

Article
6

FINANCIALS AND REPORTING

 

6.1       Licensed
Product Milestone Payments. The following milestones shall become due and payable by Licensee to Licensor when the lead candidate
for a Licensed Product hereunder first achieves each of the following Development milestones:

 

    	 	16	 

     

    

 

(a)                
For a 1st Indication:

 

	(1)
    First dosing of the fifth patient in a pivotal Phase III Clinical Trial for a Licensed Product	 	$	[*****]	 
	(2)
    First FDA Regulatory Approval of a Licensed Product in the US for any Indication	 	$	[*****]	 
	(3)
    First MAA Regulatory Approval of a Licensed Product for any Indication	 	$	[*****]	 
	(4)
    First Regulatory Approval of a Licensed Product in Japan for any Indication	 	$	[*****]	 

 

(b)       For
a 2nd Indication:

 

	(1)
    First FDA Regulatory Approval of a Licensed Product in the US for the 2nd Indication	 	$	[*****]	 
	(2)
    First MAA Regulatory Approval of a Licensed Product for the 2nd Indication	 	$	[*****]	 
	(3)
    First Regulatory Approval of a Licensed Product in Japan for the 2nd Indication	 	$	[*****]	 

 

(c)       For
the avoidance of doubt, if FDA regulatory approval is achieved based on Phase II Clinical Trial results, milestones payments under
both Sections 6.1(a)(1) and 6.1(a)(2) will be payable.

 

6.2       Commercial
Milestone Payments. In addition to any other payments stated in this Article 6, Licensee shall make the following Commercial milestone
payments to Licensor:

 

	(a)
    First Calendar Year in which annual worldwide Net Sales of all Licensed Products exceed $[*****]	 	$	[*****]	 
	(b)
    First Calendar Year in which annual worldwide Net Sales of all Licensed Products exceed $[*****]	 	$	[*****]	 
	(c)
    First Calendar Year in which annual worldwide Net Sales of all Licensed Products exceed $[*****]	 	$	[*****]	 

 

(d)       Milestone
Payments are payable only once upon the initial achievement of the associated Milestone Event. Licensee shall promptly provide
Janssen with written notice upon the achievement of each of the Milestone Events and will pay each associated Milestone Payment
within sixty (60) days after achievement of the Milestone Event in the case of Milestone Events in Section 6.1 and within sixty
(60) days of the end of the Calendar Year in the case of Milestone Events in Section 6.2. If more than one Milestone Event occurs
in the same Calendar Year, then Licensee will need to pay the milestone amount for each of the milestone events in such Calendar
Year. For example, if in a Calendar Year the Net Sales have increased from $[*****] to $[*****] then Licensee would make a milestone
payment to Janssen of $[*****]. If Licensor believes any milestone payment is due in spite of not having received notice from
Licensee, it will so notify Licensee and provide to Licensee the data and information supporting its belief. Licensee will have
30 days after receipt of the data and information from Janssen to address Janssen’s notification. If upon receipt of Licensee’s
answer to Licensor’s notification, Licensor still believes such milestone payment is due it may use the procedure set forth
in section 12.1 to resolve the issue.

 

    	 	17	 

     

    

 

6.3       Royalty
Rate for Licensed Products Developed and Commercialized by Licensee. Royalties Payable. Licensee will pay Licensor royalties
on aggregate Net Sales by Licensee or its Related Parties (including sublicensees) of all Products in each Calendar Year at a
rate of [*****] of Net Sales in such Calendar Year. The period in which royalties are payable for Licensed Product sales in a
given country ends upon the later to occur of (i) ten (10) years from the initial First Commercial Sale of a Licensed Product
in the country or (ii) expiration of the last-to-expire Valid Claim within the Licensor Patent Rights that is issued in such country
of sale and, but for the licenses granted herein, would be infringed by such sale of such Licensed Product.

 

(a)       All
royalties are subject to the following conditions:

 

(1)       Only
one royalty will be due with respect to the same unit of a Product. No multiple royalty will be payable based on being covered
by more than one Valid Claim;

 

(2)       No
royalties will be due upon the sale or other transfer among Licensee or its Related Parties; and

 

(3)       No
royalties will be due on the disposition of a Product by Licensee or its Related Parties in reasonable quantities provided as
samples (promotional or otherwise) or as donations (for example, to non-profit institutions or government agencies for a non-commercial
purpose).

 

6.4       Third
Party Know-How and Third Party Licenses. Licensee acknowledges and agrees that Licensor, in order to conduct the research
and development on the Compound, has entered into the Third Party Licenses which have given access to Third Party Know-How.

 

(a)       With
regard to the Lonza License, Licensee acknowledges that it must obtain its own Third Party License to the Third Party Know-How
owned by Lonza. Such Third Party Know-How owned by Lonza includes the cell line used to produce the Compound.

 

(b)       With
regard to the Morphosys License, Licensor has the right to grant and agrees to grant to Licensee a sublicense to the Morphosys
License to the same extent enjoyed by Licensor, to the extent such rights are able to be sublicensed under the terms of the Morphosys
License.

 

(1)       Licensee
shall be responsible for any payments due under Sections 5.3, 5.4, 5.5, and 5.7 of the Morphosys License to the extent any such
payment becomes due as a result of the activities of Licensee, its Affiliates or any of its Sublicensees in connection with the
rights granted hereunder.

 

(2)       Licensor
shall be responsible for all payments due under the Morphosys License that are not specifically allocated to Licensee in Section
6.4(b)(1) of this Agreement, including without limitation any royalties.

 

(3)       Any
payments due to Morphosys from Licensee’s activities under Section 6.4(b), above, shall be paid by Licensee to Licensor
for final payment to Morphosys. Such payment shall be converted by Licensee into Euros under the exchange rate published by Bloomberg
on the date such payment is due. Royalty payments shall be made to Licensor in Euros quarterly within 30 days following the end
of each calendar quarter for which royalties are due. Each royalty payment shall be accompanied by a report summarizing the total
Net Sales for each Licensed Product during the relevant three-month period and the calculation of royalties, if any, due thereon
pursuant to this Section 6.4(b)

 

    	 	18	 

     

    

 

6.5       Currency
Restrictions. Except as herein provided in this Article 6, all royalties shall be paid in Dollars. If, at any time,
legal restrictions prevent the prompt remittance of part of or all of the royalties with respect to any country where Licensed
Products are sold, Licensee shall have the right and option to make such payments by depositing the amount thereof in local currency
to Licensor’s accounts in a bank or depository in such country.

 

6.6       Royalty
Period. The royalty payments set forth in Section 6.3, above, shall be payable for each Licensed Product on a product-by-product
and country-by-country basis from the date of First Commercial Sale of such Licensed Product in such country until the later of:
(a) ten (10) years from the date of First Commercial Sale of a Licensed Product in such country; or (b) until the last to expire
of any Valid Patent Claim of a Licensor Patent covering the making, using, selling, offering for sale of the Licensed Product.
Once Licensee has paid Licensor for the full term of the periods of time set forth in (a) and (b) above for a Licensed Product
on a country-by-country basis, it shall have a perpetual, paid up, no fee, royalty-free license pursuant to Section 3.1 under
Licensor Know-How for any Licensed Product in such country notwithstanding any changes, improvements, or modifications to Licensed
Products that are incorporated into such products after the First Commercial Sale in a relevant country.

 

6.7       Additional
Sublicensing Compensation. In the event that Licensee grants a sublicense under Section 3.1(c) either (a) prior to
the first dosing of the fifth (5th) patient in a pivotal Phase 2b trial, or (b) prior to the first dosing of the fifth
(5th) patient in a pivotal Phase 3 trial then, in addition to the Milestone Payments and Royalties due under Sections
6.1, 6.1(c), and 6.3, Licensee shall also pay Licensor either [*****] percent ([*****]%) (in the case of part (a), above), or
[*****] percent ([*****]%) (in the case of part (b), above), respectively, of all compensation received by Licensee from the Sublicensee
that is in excess of the foregoing Milestone Payments and Royalties, provided that such obligation shall not apply to any amounts
received as support for future research and development activities, as a loan, for the purchase of an equity interest in Licensee,
as reimbursement for patent costs, as earned royalties on sales, or as consideration for the grant of rights to intellectual property
and/or materials that are not claimed by the Licensor Patent Rights.

 

6.8       Mode
of Payment. All payments to be made by Licensee to Licensor under this agreement shall be made in US Dollars and shall
be paid by bank wire transfer in immediately available funds to such bank account in the United States or elsewhere as may be
designated in writing by Licensor from time to time.

 

6.9       Quarterly
Royalty Reports. Licensee shall promptly provide Licensor with written notice upon the achievement of each of the Milestone
Events listed in Sections 5.1 and 5.2. During the term of this agreement following the First Commercial Sale of a Product in any
country, Licensee shall furnish to Licensor a quarterly written report, as of the end of each Calendar Quarter, showing (i) the
Net Sales of each Product in each country in the world during the reporting period; (ii) the royalties payable under this agreement
on account of those Net Sales and the basis for calculating those royalties; and (iii) the exchange rates and other methodology
used in converting into U.S. Dollars, from the currencies in which sales were made, any payments due which are based on Net Sales.
Licensee will provide such reports to Licensor no later than the thirtieth (30th) day following the last day of each
Calendar Quarter. Royalties shown to have accrued by each royalty report are due and payable to Licensor on the thirtieth (30th)
day following the end of such Calendar Quarter. Licensee will keep complete and accurate records in sufficient detail to enable
the royalties payable to be determined and the information provided to be verified by Licensor’s accounting firm pursuant
to Section 6.10.

 

    	 	19	 

     

    

 

6.10       Audit.
Financial Records under this Agreement shall be open during reasonable business hours for a period of two (2) years from creation
of individual records for examination. Upon the written request of Licensor but not more often than once each year, at Licensor’s
expense, Licensee shall permit an independent public accounting firm of national prominence selected by Licensor and acceptable
to Licensee to have access during normal business hours to those records of Licensee as may be reasonably necessary for the sole
purpose of verifying the accuracy of the Net Sales report and royalty calculation conducted by Licensee pursuant to this Agreement.

 

(a)       Licensee
shall include in each sublicense or Commercialization agreement entered into by it pursuant to this Agreement, a provision requiring,
among others, the Sublicensee or Commercialization partner to keep and maintain adequate Financial Records pursuant to such sublicense
or Commercialization agreement and to grant access to such records by the aforementioned independent public accountant for the
reasons specified in this Agreement.

 

(b)       The
report prepared by such independent public accounting firm, a copy of which shall be sent or otherwise provided to Licensee by
such independent public accountant at the same time as it is sent or otherwise provided to Licensor, shall contain the conclusions
of such independent public accountant regarding the audit and will specify that the amounts paid to Licensor pursuant thereto
were correct or, if incorrect, the amount of any underpayment or overpayment.

 

(c)       If
such independent public accounting firm’s report shows any underpayment, Licensee shall remit or shall cause its Sublicensees
or Commercialization partners to remit to Licensor within 30 days after Licensee’s receipt of such report, (i) the amount
of such underpayment and (ii) if such underpayment exceeds five percent (5%) of the total amount owed for the Calendar Year then
being audited, the reasonable and necessary fees and expenses of such independent public accountant performing the audit, subject
to reasonable substantiation thereof. If such independent public accounting firm’s report shows any overpayment, Licensee
shall receive a credit equal to such overpayment against the royalty otherwise payable to Licensor.

 

6.11       Interest
Due. In case of any delay in payment by Licensee to Licensor not resulting from Force Majeure (as described in Section
13.7), interest at the annual rate of one-twelfth (1/12) of the Prime Rate (as reported by JP Morgan Chase & Co.) plus one
percent (1%) assessed from the thirty-first (31st) day after the due date of the payment shall be due from Licensee.

 

6.12       Tax
Withholding.

 

(a)       Licensee
will make all payments to Licensor under this Agreement without deduction or withholding for taxes except to the extent that any
such deduction or withholding is required by law in effect at the time of payment.

 

(b)       Any
tax required to be withheld on amounts payable under this Agreement will be paid by Licensee on behalf of Licensor to the appropriate
governmental authority, and Licensee will furnish Licensor with proof of payment of such tax.

 

    	 	20	 

     

    

 

(c)       Licensee
and Licensor will cooperate with respect to all documentation required by any taxing authority or reasonably requested by Licensee
to secure a reduction in the rate of applicable withholding taxes. On the date of execution of this Agreement, Licensor will deliver
to Licensee an accurate and complete Internal Revenue Service Form W-8BEN-E certifying that Licensor is entitled to the applicable
benefits under the Income Tax Treaty between Ireland and the United States.

 

(d)       If
Licensee had a duty to withhold taxes in connection with any payment it made to Licensor under this Agreement but Licensee failed
to withhold, and such taxes were assessed against and paid by Licensee, then Licensor will indemnify and hold harmless Licensee
from and against such taxes (including interest). If Licensee makes a claim under this Section (d), it will comply with the obligations
imposed by Section 6.12(b) as if Licensee had withheld taxes from a payment to Licensor.

 

Article
7

CONFIDENTIALITY

 

7.1       Confidentiality
Obligations. The Parties agree that, for the term of this Agreement and for five (5) years thereafter, either Party
that receives Information (a “Receiving Party”) and other confidential and proprietary information and materials furnished
to it by the other Party (a “Disclosing Party”) pursuant to this Agreement or any Information developed during the
term of this Agreement (collectively “Confidential Information”), shall keep confidential and shall not publish or
otherwise disclose and shall not use for any purpose (except as expressly permitted hereunder) such Confidential Information,
except to the extent that it can be established by the Receiving Party that such Confidential Information: (a) was already known
to the Receiving Party, other than under an obligation of confidentiality from the Disclosing Party; (b) was generally available
to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party; (c) became generally
available to the public or otherwise part of the public domain after its disclosure which was other than through any act or omission
of the Receiving Party in breach of this Agreement; (d) was subsequently lawfully disclosed to the Receiving Party by a Third
Party; (e) can be shown by written records to have been independently developed by the Receiving Party without reference to the
Confidential Information received from the Disclosing Party and without breach of any of the provisions of this Agreement; or
(f) is information that the Disclosing Party has specifically agreed in writing that the Receiving Party may disclose.

 

7.2       Written
Assurances and Permitted Uses of Confidential Information.

 

(a)       Each
Party shall inform its employees and consultants who perform work under this Agreement of the obligations of confidentiality specified
in Section 7.1, and all such persons shall be bound by obligations of confidentiality substantially similar to those set forth
herein.

 

(b)       The
Receiving Party may disclose Confidential Information to the extent the Receiving Party is compelled to disclose such information
by a court or other tribunal of competent jurisdiction, provided, however, that in such case the Receiving Party shall give prompt
notice to the Disclosing Party so that the Disclosing Party may seek a protective order or other remedy from said court or tribunal.
In any event, the Receiving Party shall disclose only that portion of the Confidential Information that, in the opinion of its
legal counsel, is legally required to be disclosed and will exercise reasonable efforts to ensure that any such information so
disclosed will be accorded confidential treatment by said court or tribunal.

 

    	 	21	 

     

    

 

(c)       To
the extent it is reasonably necessary or appropriate to fulfill its obligations and exercise its rights under this Agreement,
either Party may disclose Confidential Information to its Affiliates and sublicensees (including potential sublicensees) on a
need-to-know basis on condition that such Affiliates and sublicensees agree to keep the Confidential Information confidential
for the same time periods and to the same extent as such Party is required to keep the Confidential Information confidential under
this Agreement, and to any regulatory authorities to the extent reasonably necessary to obtain Regulatory Approval.

 

(d)       To
the extent that disclosure of Licensor Confidential Information is to consultants, contract research organizations, potential
clinical trial sites, clinical trial sites, clinical investigators, subcontractors of any of the foregoing and any other necessary
Third Parties who are or are anticipated to become directly involved in the design and conduct of a Clinical Trial, the data safety
monitoring and advisory board relating to such Clinical Trial, and regulatory agencies such as the FDA, EMA or other health authorities
working with the sponsor of such Clinical Trial, Licensee shall use commercially reasonable efforts to obtain a confidentiality
period of five (5) years following the expiration or earlier termination of any consultancy agreement, confidential disclosure
agreement, clinical trial agreement or any other agreement necessary for the design and conduct of a Clinical Trial and analysis
and interpretation of data obtained in such Clinical Trial.

 

(e)       The
existence and the terms and conditions of this Agreement that the Parties have not specifically agreed to disclose pursuant to
this Section 7.2 shall be treated by each Party as Confidential Information of the other Party.

 

7.3       Publication.
Each Party shall submit any proposed scientific publication containing Confidential Information of the other Party relating
to its Development and/or Commercialization activities relating to Licensed Products at least thirty (30) days in advance of submission
of an abstract of a proposed publication, if any, and again at least thirty (30) days in advance of submission of the scientific
publication, to allow such other Party to review such planned public disclosure. The reviewing Party will promptly review such
publication and make any objections that it may have to the publication of the Confidential Information contained therein. Should
the reviewing Party make an objection to the publication of the Confidential Information or require its modification, then the
Parties will discuss the merits of publishing and any such modifications; provided, however, that in any case, no publication
of Confidential Information of the other Party shall take place under this Section without the other Party’s prior written
approval thereof or unless the obligations of confidentiality as to such Confidential Information shall be waived or disclosure
of Confidential Information of the other Party is authorized under this Article 7.

 

7.4       Publication
of Clinical Trial Results. In connection with the licenses hereunder, Licensor agrees that it will, and it will cause any
of its Affiliates to agree to, permit Licensee and its Affiliates to register and publish Development data as required by law
or industry best practices, and otherwise comply with all terms therein, notwithstanding the provisions of Sections 7.1 and 7.3.

 

7.5       Public
Announcements. A press release, deemed agreed upon by the Parties, is attached to this Agreement as APPENDIX 2:
PRESS RELEASE. Neither Party shall originate any publicity, news release or public announcements, written or oral, whether
to the public or press, stockholders or otherwise, relating to this Agreement, including its existence, the subject matter to
which it relates, performance under it or any of its terms, to any amendment hereto or performances hereunder without the prior
written consent of the other Party, save only such announcements that are required by law to be made or that are otherwise agreed
to by the Parties. Such announcements shall be brief and factual. If a Party decides to make an announcement required by law,
it shall give the other Party at least five (5) business days advance notice, where possible, of the text of the announcement
so that the other Party shall have an opportunity to comment upon the announcement. To the extent that the receiving Party reasonably
requests the deletion of any information in the materials, the disclosing Party shall delete such information unless, in the opinion
of the disclosing Party’s legal counsel, such Confidential Information is legally required to be fully disclosed. Notwithstanding
the foregoing, this provision shall not apply to any announcements by Licensee that discuss its organization, its status or its
business generally that do not include specific references to Licensor, this Agreement, or data relating to the development of
any Licensed Product.

 

    	 	22	 

     

    

 

Article
8

PATENTS AND INTELLECTUAL PROPERTY

 

8.1       Ownership;
Inventions. Licensee shall own and retain all rights, title, and interest in and to Inventions and Improvements created
by Licensee arising after the Effective Date. Licensor shall have no license, right, or interest whatsoever in or to any and all
such Licensee Inventions and Improvements, except as expressly set forth in this Agreement.

 

8.2       Licensor
Patentable Inventions and Know-How.

 

(a)       Licensor
Patent Prosecution.

 

(1)       Prosecution
and Maintenance. During the term of the Agreement, Licensee shall, through outside counsel mutually agreed by the Parties
and, at Licensee’s expense, prepare, file, prosecute and maintain Licensor Patents. The outside counsel selected pursuant
to this Section 8.2(a)(1) shall, at a minimum, copy Licensor on all correspondence sent to and received from every patent office
in every jurisdiction that relates to Licensor Patents. Notwithstanding the foregoing, Licensee shall have the option to abandon
the prosecution of individual Licensor Patents upon not less than thirty (30) days’ notice to Licensor, at which point Licensor
shall have the right to prepare, file, prosecute and maintain such abandoned Licensor Patent and Licensee shall cooperate with
Licensor as reasonably necessary to facilitate a smooth transition of such activities.

 

(2)       Cooperation.
Licensee will, upon request by Licensor, consult with Licensor and keep Licensor informed of all material matters relating to
the preparation, filing, prosecution and maintenance of Licensor Patents.

 

8.3       Infringement
Claims by Third Parties.

 

(a)       Notice.
If the manufacture, use or sale of any Licensed Product results in a claim or a threatened claim by a Third Party against a Party
hereto for patent infringement or for inducing or contributing to patent infringement (“Infringement Claim”), the
Party first having notice of an Infringement Claim shall promptly notify the other in writing. The notice shall set forth the
facts of the Infringement Claim in reasonable detail.

 

(b)       Defense.
Licensee will have the right but not the obligation to defend any suit resulting from an Infringement Claim at its expense. Licensor
will cooperate and assist Licensee in any such litigation at Licensee’s expense. Licensor may participate in, but not control,
the defense of any such matter with counsel of its choice at its own expense.

 

    	 	23	 

     

    

 

(c)       Settlement.
In the event that the manufacture, use or sale of the Licensed Product in a country would infringe a Third Party Patent and a
license to such Third Party Patent is available, and Licensee in its sole discretion seeks such a license, the Parties agree:

 

(1)       Licensee
shall be responsible for all costs associated with acquiring such Third Party license; and

 

(2)       Licensee
shall use commercially reasonable efforts to obtain required licenses under the Third Party Patents.

 

The
preceding subsections of this Section shall not be deemed to limit any representations or warranties of Licensor hereunder.

 

(d)       Notices
and BPC&I Act.

 

(1)       Licensor
shall inform Licensee of any certification regarding any Licensor Patent Rights it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv)
or (j)(2)(A)(vii)(IV) or its successor provisions or any similar provisions in a country in the Territory other than the United
States and shall provide Licensee with a copy of the certification within ten days of receipt.

 

(2)       Licensor
shall inform Licensee if it receives confidential access to an application made by a subsection (k) or other applicant for a Biosimilar
or interchangeable application under the US Biologics Price Competition and Innovation Act (“BPC&I Act”). Licensee
will select outside counsel separate from counsel engaged in the prosecution of the Licensor Patent Rights to view the confidential
information. Licensee will have sole decision-making authority with respect to the determination of which Licensee Patent Rights
to submit to a Third Party that files a Biosimilar application as required by the BPC&I Act and will direct the exchange of
patents with the subsection (k) applicant. The Parties shall confer regarding which Licensor Patent Rights may be submitted to
a Third Party under any BPC&I proceedings. Licensor shall not object to submission of any Licensor Patent Rights having claims
to the composition of matter or method of manufacture of a Licensed Product or method of treatment claims using a Licensed Product.

 

(3)       Licensee
shall have the first right, but not the obligation, to bring infringement proceedings in connection with the matters described
in the preceding subsections of this Section. If Licensee decides not to bring infringement proceedings against the entity making
such a certification, Licensee shall give notice to Licensor of its decision not to bring suit within twenty-one (21) days after
receipt of notice of such certification.

 

(4)       Licensor
may then, but is not required to, bring suit against the party that filed the certification.

 

(5)       Any
suit shall either be in the name of Licensee or in the name of Licensor, or jointly in the name of Licensee and Licensor, as may
be required to effectively institute and maintain such suit.

 

(6)       For
purposes of this Section, the Parties agree to execute the legal papers necessary for the prosecution of any such suit as may
be reasonably needed.

 

(e)       Each
Party shall promptly give the other Party notice of (i) any infringement of a Licensor Patent or (ii) any misappropriation or
misuse of Licensor Know-How, that may come to a Party’s attention. With respect to infringement of the Licensor Patents
or misappropriation the Licensor Know-How that is not covered under subsection (d) of this Section 8.2, Licensee shall have the
first right but not the obligation, to initiate and prosecute any such legal action at its own expense and in the name of Licensor
and Licensee (or just Licensor or just Licensee if the laws of the jurisdiction so dictate). Licensee shall promptly inform Licensor
if it elects not to exercise that right with respect to Licensor Patent Rights and Licensor shall thereafter have the right at
its sole cost to initiate and prosecute such action in the name of Licensee and, if necessary, Licensor. Each Party shall have
the right to be represented by counsel of its own choice. Irrespective of which Party prosecutes the action, it shall keep the
other Party reasonably informed of strategic decisions and shall consider comments furnished by the other Party in good faith.

 

    	 	24	 

     

    

 

8.4       Patent
Term Extensions. Licensor hereby authorizes Licensee to (a) provide in any BLA a list of patents which includes Licensor
Patents that relate to such Product and such other information as Licensee believes is appropriate; (b) commence suit for infringement
of Licensor Patents under § 271(e) (2) of Title 35 of the United States Code; and (c) exercise any rights that may be exercisable
by Licensor as patent owner under the Act, including without limitation, applying for an extension of the term of any patent included
in Licensor Patents. In the event that applicable law in any country provides for the extension of the term of any patent included
among Licensor Patents, such as under the Act, the Supplementary Certificate of Protection of the Member States of the European
Union and other similar measures in any other country, Licensor shall apply for and use its reasonable efforts to obtain such
an extension or, should the law require Licensee to so apply, Licensor hereby gives permission to Licensee to do so. Licensee
and Licensor agree to cooperate with one another in obtaining such extension. Licensor agrees to cooperate with Licensee or its
Sublicensee, as applicable, in the exercise of the authorization granted herein and shall execute such documents and take such
additional action as Licensee may reasonably request in connection therewith, including, if necessary, permitting itself to be
joined as a Party in any suit for infringement brought by Licensee hereunder.

 

8.5       Validity
of Licensed Patents. In the event that a declaratory judgment action alleging invalidity of any of the Licensor Patents
is brought against either Party, Licensee shall have the right, but not the obligation, to assume the sole defense of the action
at its own expense. Licensee shall keep Licensor informed of the progress of any such declaratory judgment action that it defends
and will consider comments furnished by Licensor in good faith. If Licensee elects not to assume such defense, Licensor may assume
sole defense at its own expense.

 

Article
9

INDEMNIFICATION

 

9.1       Indemnification.

 

(a)       Licensor
agrees to indemnify, defend and hold Licensee and its Affiliates harmless against any action, claims, damages, injuries, losses,
costs and expenses (including reasonable attorney’s fees and disbursements) arising from or alleged or claimed to arise
from personal injury, death or property sustained by any person resulting from any intentionally wrongful act or omission or sole
negligence arising after the Effective Date of Licensor or its employees or agents for any material breach by Licensor of its
obligations under this Agreement.

 

(b)       Licensee
shall indemnify, defend and hold Licensor, and their agents, employees and directors (the “Licensor Indemnitees”)
harmless from and against any and all liability, damage, claim, loss, cost or expense, including reasonable attorneys’ fees,
including any claim of patent infringement (“Losses”), resulting directly from the manufacture, use, handling, storage,
sale or other disposition of Licensed Products by Licensee or its Sublicensees, distributors and agents, except to the extent
such Losses result from the gross negligence or willful misconduct of the Licensor Indemnitees.

 

    	 	25	 

     

    

 

(c)       Licensee
agrees to indemnify, defend and hold Licensor and its Affiliates harmless against any action, claims, damages, injuries, losses,
costs and expenses (including reasonable attorney’s fees and disbursements) arising from or alleged or claimed to arise
from personal injury, death or property sustained by any person resulting from any intentionally wrongful act or omission or sole
negligence of Licensee or its employees or agents or any material breach by Licensee of its obligations under this Agreement.

 

9.2       Indemnification
Procedure. Upon the assertion of any such claim or suit, the Licensor shall promptly notify Licensee thereof and shall permit
Licensee to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary
consideration) and shall cooperate as requested (at the expense of Licensee) in the defense of the claim. The Licensor Indemnities
shall not settle any such claim or suit without the prior written consent of Licensee, unless they shall have first waived their
rights to indemnification hereunder.

 

9.3       Insurance
Proceeds. Any indemnification hereunder shall be made net of any insurance proceeds recovered by the Indemnified Party;
provided, however, that if, following the payment to the Indemnified Party of any amount under this Article 9, such Indemnified
Party recovers any insurance proceeds in respect of the claim for which such indemnification payment was made, the Indemnified
Party shall promptly pay an amount equal to the amount of such proceeds (but not exceeding the amount of such indemnification
payment) to the Indemnifying Party.

 

9.4       Insurance.
Licensee and Licensor shall use all commercially reasonable efforts to maintain insurance, including product liability insurance,
with respect to its activities hereunder. Such insurance shall be in such amounts and subject to such deductibles as the Parties
may agree, based upon standards prevailing in the industry at the time. Licensee may satisfy its obligations under this Section
9.4 through self-insurance to the same extent.

 

Article
10

TERM AND TERMINATION

 

10.1       Term.
This Agreement shall commence on the Effective Date and shall remain in effect until the expiration of Licensee’s obligation
to pay royalties for all Licensed Products, unless earlier terminated as provided in this Article 10.

 

10.2       Termination
of this Agreement by Licensee for any Reason. Licensee may terminate this Agreement for any reason upon ninety (90)
days advance written notice to Licensor. In such case, Licensee shall pay to Licensor: (i) any outstanding fees and expenses due
to Licensor for any services rendered up to the date of termination; (ii) all reasonable direct costs incurred by Licensor to
complete activities associated with such termination and closing of the Development; and any reasonable additional direct costs
incurred by Licensor in connection with the Development that are required to fulfill applicable regulatory and contractual requirements.
Licensor will provide documentary support for any such payment obligations in reasonably sufficient detail to permit Licensee
to verify the amount of such payment obligations and will use its commercially reasonable efforts to minimize the amount of any
such obligations.

 

    	 	26	 

     

    

 

10.3       Termination
for Breach. The failure by a Party to comply with any of the material obligations contained in this Agreement shall
entitle the other Party to give notice to have the default cured. If such default is not cured within sixty (60) days after the
receipt of such notice, or if by its nature such default could not be cured within sixty (60) days, the notifying Party shall
be entitled, without prejudice to any of its other rights conferred on it by this Agreement, and in addition to any other remedies
that may be available to it, to terminate this Agreement. Licensee’s failure to maintain a Licensed Product in Active Development
or failure to use commercially reasonable efforts to Develop or Commercialize the Licensed Product pursuant to Section 5.2, shall
constitute a material breach for which Licensor’s sole remedy shall be termination of this Agreement under this Section
10.3. Provided, however, that in the event of a good faith dispute with respect to the existence of a material breach or cure
thereof, the sixty (60) day cure period shall be tolled until such time as the dispute is resolved pursuant to Article 12 herein
and any cure required by such resolution has not been timely completed.

 

10.4       Termination
for Bankruptcy. Either Party hereto shall have the right to terminate this Agreement forthwith by written notice to
the other Party (i) if the other Party is declared insolvent or bankrupt by a court of competent jurisdiction, (ii) if a voluntary
or involuntary petition in bankruptcy is filed in any court of competent jurisdiction against the other Party and such petition
is not dismissed within ninety (90) days after filing or (iii) if the other Party shall make or execute an assignment of substantially
all of its assets for the benefit of creditors.

 

10.5       Effect
of Termination. In the event of termination by Licensee under Section 10.2 or by Licensor under Section 10.3 or 10.4:
(i) all rights licensed herein shall revert to Licensor; (ii) Licensee shall, at its own expense, promptly provide Licensor with
all data and results pertaining to Licensed Products; (iii) Licensee will, at its own expense, promptly assign or transfer to
Licensor all filings with regulatory authorities concerning Licensed Products, including, without limitation, Regulatory Approval
Applications upon receipt of payment from Licensor equal to the costs incurred for such filings on country-by-country basis; (iv)
Licensee shall provide Licensor with its requirements (to the extent of quantities on hand or as to which Licensee has the right
to acquire)of Licensed Product, at actual cost, for a period of time, not to exceed six (6) months, reasonably sufficient for
Licensor to find an acceptable (at Licensor’s sole discretion) alternative source of both clinical and Commercial supply
of Licensed Product and (v) Licensee shall grant Licensor a worldwide, royalty bearing license under Licensee Patents and Licensee
Know-How that are reasonably necessary for the Development, manufacture and Commercialization of Licensed Products. The royalty
rate shall be [*****] percent ([*****]%) of Net Sales of Licensed Products sold by Licensor, its Affiliates, licensees, or sublicensees
on a Product-by-Product basis, and a country-by-country basis until the later of ten (10) years from the Date of First Sale or
the last to expire of any Licensee Patent, which covers the manufacture, use, or sale of such Licensed Product.

 

10.6       No
Waiver. The right of a Party to terminate this Agreement, as provided in this Article 10, shall not be affected in
any way by its waiver or failure to take action with respect to any prior default.

 

10.7       Consequences
of Termination. Except as otherwise provided herein, upon termination of this Agreement, all remaining records and
materials in its possession or control containing the other Party’s Confidential Information and to which the former Party
does not retain rights hereunder, shall promptly be returned. Notwithstanding the foregoing, one copy of such records may be retained
by legal counsel for the former Party.

 

    	 	27	 

     

    

 

10.8       Results
of Termination by Licensee for Cause. In the event of termination of this Agreement by Licensee pursuant to Section
10.3 or 10.4, Sections 8.3 through 8.5 shall survive termination.

 

10.9       Failure
to Obtain Qualified Financing. Should Provention not obtain Qualified Financing, as provided for in Section 2.1 within 7 days
of the Effective Date, this Agreement shall automatically terminate and, other than the confidentiality obligations set forth
in Article VII, which shall survive termination, neither Party shall have any further obligation hereunder.

 

10.10       Survival
of Obligations. The termination or expiration of this Agreement shall not relieve the Parties of any obligations accruing
prior to such termination, and any such termination shall be without prejudice to the rights of either Party against the other.
The provisions of Sections 3.1 (except in the case of termination by Licensor under Section 10.3 (or 10.4), Article 7, Article
9, Article 12, and Article 13 shall survive any termination of this Agreement.

 

10.11       Termination
Not Sole Remedy. Except as set forth in Section 10.3, termination is not the sole remedy under this Agreement and,
whether or not termination is effected, all other remedies will remain available except as agreed to otherwise herein.

 

Article
11

REPRESENTATIONS AND WARRANTIES

 

11.1       Authority.
Each Party represents and warrants that as of the Effective Date, it has the full right, power and authority to enter into
this Agreement and that this Agreement has been duly executed by such Party and constitutes a legal, valid and binding obligation
of such Party, enforceable in accordance with its terms.

 

11.2       No
Conflicts. Each Party represents and warrants that the execution, delivery and performance of this Agreement by such
Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it
is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction
over it.

 

11.3       No
Existing Third Party Rights. Each Party represents and warrants that it has not, and during the term of the Agreement
will not, grant any right to any Third Party relating to its respective technology in the Field which would conflict with the
rights granted to the other Party hereunder.

 

11.4       Patents
and Know-How Warranties. To the best of its knowledge, as of the Effective Date, each Party represents and warrants
that (i) any Patent, know-how or other intellectual property right owned or controlled by such Party is not currently being infringed
by any Third Party and (ii) the practice of such rights does not infringe any property right of any Third Party.

 

11.5       Control
of Know-How. Licensor and Licensee each represent and warrant that it owns or Controls all of the rights, title and
interest in and to the Licensor Know-How and the Licensee Know-How, respectively.

 

11.6       Disclaimer
of Warranties. EXCEPT AS SET FORTH ABOVE, Licensor MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OR CONDITIONS
OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED PRODUCTS LICENSED HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

    	 	28	 

     

    

 

11.7       Continuing
Representations. The representations and warranties of each Party contained in this Article 11 shall survive the execution
and delivery of this Agreement and shall remain true and correct at all times during the Term with the same effect as if made
on and as of such later date.

 

11.8       In-Licensed
Contracts.

 

(a)       Licensor
has made available to Licensee a true, accurate and complete copy of the Morphosys Agreement.

 

(b)       Each
of the Third Party Licenses is a valid, binding and enforceable obligation of each party thereto, and is in full force and effect,
and will continue to be so enforceable and in full force and effect following the Effective Date. Licensor has exercised all options
under each of the Third Party Licenses that are necessary or useful in connection with the rights granted to Licensee under this
Agreement.

 

(c)       Neither
Licensor nor any of its Affiliates or, to the best of Licensor’s knowledge, any other party to the Third Party Licenses
is in material breach or material violation of, or material default under, or has repudiated any material provision of the License
Agreements, and Licensor has not received notice from Morphosys or Lonza that such Third Party intends to terminate any Third
Party License.

 

Article
12

DISPUTE RESOLUTION

 

12.1       Resolution
of Disputes. The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy
or claim arising from or related to this agreement or the breach thereof. If the Parties initially are unable to resolve a dispute
despite using reasonable efforts to do so, either Party may, by written notice to the other, have the dispute referred to their
respective senior management designated below or their respective successors, for attempted resolution by negotiation in good
faith. The attempted resolution will take place no later than thirty (30) days following receipt of such notice. The designated
management (each designated representative, an “Executive Officer”) are as follows:

 

For
Licensee: Ashleigh Palmer, President & CEO

 

For
Licensor: Sanjay Mistry, Head of External Value Creation, Janssen Research & Development LLC.

 

(a)       If
the Parties are unable to resolve the dispute, controversy or claim within thirty (30) days following the day on which one Party
provides written notice of the dispute to the other in accordance with section 12.1, and a Party wishes to pursue the matter,
each such dispute, controversy or claim that is not an Excluded Claim will be finally resolved by mediation followed by binding
arbitration as set forth below. As used in this section, the term “Excluded Claim” means a dispute, controversy
or claim that concerns the validity or infringement of a patent, trademark or copyright.

 

    	 	29	 

     

    

 

12.2       Mediation.
The parties shall first attempt in good faith to resolve any Dispute by confidential mediation in accordance with the then current
Mediation Procedure of the International Institute for Conflict Prevention and Resolution (“CPR Mediation Procedure”)
(www.cpradr.org) before initiating arbitration. The CPR Mediation Procedure controls, except where that Procedure conflicts with
these provisions, in which case these provisions control. The mediator will be chosen pursuant to the CPR Mediation Procedure.
The mediation will be held in New York, New York.

 

(a)       Either
party may initiate mediation by written notice to the other of the existence of a Dispute. The parties will select the mediator
within twenty (20) days of the notice and the mediation will begin promptly after the selection. The mediation will continue until
the mediator or either party, declares in writing, no sooner than after the conclusion of one full day of a substantive mediation
conference attended on behalf of each party by a senior business person with authority to resolve the Dispute, that the Dispute
cannot be resolved by mediation. In no event, will mediation continue more than sixty (60) days from the initial notice by a party
to initiate meditation unless the parties agree in writing to extend that period.

 

(b)       Any
period of limitations that would otherwise expire between the initiation of mediation and its conclusion is extended until twenty
(20) days after the conclusion of the mediation.

 

12.3       
Arbitration. If the parties fail to resolve the Dispute in mediation, and a party desires to pursue resolution of the Dispute,
the Dispute will be submitted by either party for resolution in arbitration pursuant to the then current CPR Rules for Non-Administered
Arbitration of International Disputes (“CPR Rules”) (www.cpradr.org), except where they conflict with these provisions,
in which case these provisions control. CPR is designated as the Neutral Organization for all purposes. The arbitration will be
conducted in English and held in New York, New York. All aspects of the arbitration will be treated as confidential.

 

(a)       The
arbitrators will be chosen from the CPR Panels of Distinguished Neutrals, unless a candidate not on the CPR Panel is approved
by both parties. Each arbitrator must be a lawyer with at least fifteen (15) years’ experience with a law firm or corporate
law department of over twenty-five (25) lawyers or who was a judge of a court of general jurisdiction. To the extent that the
Dispute requires special expertise, the parties will so inform CPR prior to the beginning of the selection process.

 

(b)       The
arbitration tribunal will consist of three arbitrators, chosen in accordance with Rules 5.3 and 6 of the CPR Rules. If, however,
the aggregate award sought by the parties is less than $5 million and equitable relief is not sought, a single arbitrator will
be chosen in accordance with Rules 5.3 and 6 of the CPR Rules.

 

(c)       Candidates
for the arbitrator position(s) may be interviewed by representatives of the parties in advance of their selection, provided that
all parties are represented.

 

(d)       The
parties will select the arbitrator(s) within forty-five (45) days of initiation of the arbitration. The hearing will be concluded
within nine (9) months after selection of the arbitrator(s) and the award will be rendered within sixty (60) days of the conclusion
of the hearing, or of any post-hearing briefing, which briefing will be completed by both sides within forty-five (45) days after
the conclusion of the hearing. In the event the parties cannot agree upon a schedule, then the arbitrator(s) shall set the schedule
following the time limits set forth above as closely as practical.

 

    	 	30	 

     

    

 

(e)       The
arbitrator(s) will be guided, but not bound, by the IBA Rules on the Taking of Evidence in International Commercial Arbitration
(www.ibanet.org).

 

(f)       The
hearing will be concluded in ten hearing days or less. Multiple hearing days will be scheduled consecutively to the greatest extent
possible. A transcript of the testimony adduced at the hearing will be made available to either party.

 

(g)       The
arbitrator(s) shall decide the merits of any Dispute in accordance with the law governing this agreement, without application
of any principle of conflict of laws that would result in reference to a different law. The arbitrator(s) may not apply principles
such as “amiable compositeur” or “natural justice and equity.”

 

(h)       The
arbitrator(s) shall render a written opinion stating the reasons upon which the award is based. The arbitrator(s) may award the
costs and expenses of the arbitration as provided in the CPR Rules, but each bears its own attorney fees

 

(i)       The
award may be entered and enforced in any court of competent jurisdiction. If a court is called upon to enforce an award in a court
proceeding, the parties consent to the court’s requiring the party resisting enforcement to pay the reasonable attorneys
fees and costs incurred in that proceeding by the party seeking enforcement.

 

(j)       Any
party may seek emergency, interim, or provisional relief prior to the appointment of the arbitrator(s) from any court of competent
jurisdiction, without waiver of the agreements to mediate and arbitrate. After appointment of the arbitrator(s), any request for
emergency, interim, or provisional relief shall either be addressed to the arbitrator(s), which shall have the power to enter
an interim award granting relief using the standards provided by applicable law, or to a court, but only with the permission of
the arbitrator(s). Any interim award of the arbitrator(s) may be enforced in any court of competent jurisdiction.

 

(k)       EACH
PARTY WAIVES: (1) ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY, (2) WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, ANY CLAIM TO
PUNITIVE, EXEMPLARY, MULTIPLIED, INDIRECT, CONSEQUENTIAL OR LOST PROFITS/REVENUES DAMAGES, AND (3) ANY CLAIM FOR ATTORNEY FEES,
COSTS AND PREJUDGMENT INTEREST.

 

Article
13

MISCELLANEOUS PROVISIONS

 

13.1       Entire
Agreement. This Agreement and each of the Appendices hereto constitute and contain the entire understanding and agreement
of the Parties respecting the subject matter of this Agreement and cancels and supersedes any and all prior or contemporaneous
negotiations, correspondence, understandings and agreements between the Parties, whether oral or written, regarding such subject
matter.

 

13.2       Further
Actions. Each Party agrees to execute, acknowledge and deliver such further instruments and to do all such other acts
as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 

    	 	31	 

     

    

 

13.3       Binding
Effect. This Agreement and the rights granted herein shall be binding upon, and shall inure to the benefit of, Licensor,
Licensee and their respective lawful successors and permitted assigns.

 

13.4       Assignment.
Neither Party shall assign this Agreement without the prior written consent of the other Party (such consent not to be unreasonably
withheld) except that a Party may assign this Agreement to an Affiliate or to a successor in connection with the merger, consolidation
or sale of all or substantially all of its assets or that portion of its business pertaining to the subject matter of this Agreement.
Any permitted assignee shall assume all obligations of its assignor under this Agreement.

 

13.5       No
Implied Licenses. No rights to any other patents, know-how or technical information, or other intellectual property
rights, other than as explicitly identified herein, are granted or deemed granted by this Agreement. No right, expressed or implied,
is granted by this Agreement to a Party to use in any manner the name or any other trade name or trademark of the other Party
or its Affiliates in connection with the performance of this Agreement.

 

13.6       No
Waiver. No waiver, modification or amendment of any provision of this Agreement shall be valid or effective unless
made in writing and signed by a duly authorized officer of each Party. The failure of either Party to assert a right hereunder
or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse
a similar subsequent failure to perform any such term or condition.

 

13.7       Force
Majeure. The failure of a Party to perform any obligation under this Agreement by reason of force majeure such as acts
of God, acts of governments, terrorism, riots, wars, strikes, accidents or deficiencies in materials or transportation or other
causes of a similar magnitude beyond its control shall not be deemed to be a breach of this Agreement. The Party which is affected
by any force majeure shall contact the other Party for discussion of possible emergency measures.

 

13.8       Independent
Contractors. Both Parties are independent contractors and not agents or employees of the other Party under this Agreement.
Nothing contained in this Agreement is intended nor is to be construed so as to constitute Licensor or Licensee as partners or
joint venturers with respect to this Agreement. Neither Party shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other Party or to bind the other Party to any other contract, agreement
or undertaking with any Third Party except as may be explicitly provided for herein or authorized in writing.

 

13.9       Notices
and Deliveries. Any notices, request, delivery, approval or consent required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been sufficiently given when it is received, whether delivered in person, transmitted
by facsimile with contemporaneous confirmation, by email, or delivery by registered letter (or its equivalent) or delivery by
certified overnight courier service, to the Party to which it is directed at its address shown below or such other address as
such Party shall have last given by notice to the other Parties.

 

    	 	32	 

     

    

 

If
to Licensee:

 

Provention
Bio, Inc.

110
Old Driftway Lane

Lebanon,
NJ 0883

Attn:
Ashleigh Palmer, President & CEO

Email:
apalmer@celimmune.com

 

with
a copy to:

 

Lowenstein
Sandler LLP

65
Livingston Ave.

Roseland,
NJ 07068

Attn:
Michael J. Lerner, Esq.

Email:
mlerner@lowenstein.com

 

If
to Licensor: 

 

Janssen
Research & Development, LLC

1400
McKean Road

Spring
House, PA 19477

Attn:
Head, External Value Creation

Email:
smistry2@its.jnj.com

 

with
a copy to:

 

Chief
Intellectual Property Counsel

Johnson
& Johnson

1
Johnson & Johnson Plaza

New
Brunswick, NJ 08933

Email:
jnjuspatent@corus.jnj.com

 

13.10       Headings.
The captions to the sections and articles in this Agreement are not a part of this Agreement, and are included merely for
convenience of reference only and shall not affect its meaning or interpretation.

 

13.11       Severability.
In the event that any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such
invalid or unenforceable provision had not been included herein.

 

13.12       Applicable
Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without
reference to its choice of laws or conflicts of laws provisions.

 

13.13       Advice
of Counsel. Licensee and Licensor have each consulted with counsel of their choice regarding this Agreement, and each
acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and will be construed
accordingly.

 

13.14       Counterparts.
This Agreement may be executed in two or more counterparts, or facsimile versions, each of which shall be deemed to be an
original, and all of which together shall be deemed to be one and the same agreement.

 

    	 	33	 

     

    

 

13.15       Waiver.
Except as specifically provided for herein, the waiver from time to time by either of the Parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a continuing waiver of same or of any other of such
Party’s rights or remedies provided in this Agreement.

 

13.16       Bankruptcy.
All rights and licenses granted under or pursuant to this Agreement by Licensee or Licensor are, and shall otherwise be deemed
to be, for purposes of Section 365(n) of Title ll, U.S. Code (the “Bankruptcy Code”), licenses of right to “Intellectual
Property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that the Parties as licensees of such
rights under this Agreement, shall retain and may fully exercise all of their rights and elections they would have in the case
of a licensor bankruptcy under the Bankruptcy Code. Each Party agrees during the term of this Agreement to create or maintain
current copies, or if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual
property licensed to the other Party.

 

13.17       Compliance
with Laws. The Parties shall comply with all applicable laws, rules, regulations and orders of the United States and
applicable European countries and supra-governmental organizations and all jurisdictions and any agency or court thereof in connection
with this Agreement and the transactions contemplated thereby.

 

Article
14

HSR Filing

 

14.1       HSR
Filing. The Parties shall cooperate fully and comply with the HSR Act to file with the Federal Trade Commission (“FTC”)
and the Antitrust Division of the U.S. Department of Justice (“DOJ”) any required notification and report form with
respect to the transactions contemplated hereby. The Parties shall cooperate with one another to the extent necessary in the preparation
of any HSR Filing required to be filed under the HSR Act. Each Party shall be responsible for its own costs, expenses, and filing
fees associated with any filing under the HSR Act. In the event such a filing is required, any payments related to the license
grant under Article 2 made to Licensor shall be held in escrow until after the HSR Clearance Date.

 

14.2       HSR-Related
Definitions. As used in Section 14.1, the following terms have the following meanings:

 

(a)       
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. Sec. 18a), and the
rules and regulations promulgated thereunder.

 

(b)       “HSR
Clearance Date” means the earlier of (i) the date on which the FTC shall notify Licensee and Licensor of early termination
of the applicable waiting period under the HSR Act or (ii) the day after the date on which the applicable waiting period under
the HSR Act expires.

 

(c)       “HSR
Filing” means filings by Licensor and Licensee with the FTC and the Antitrust Division of the DOJ of a Notification and
Report Form for Certain Mergers and Acquisitions (as that term is defined in the HSR Act) with respect to the matters set forth
in this Agreement, together with all required documentary attachments thereto.

 

14.3       HSR
Denial. The licenses granted pursuant to Article 2 shall not be effective until the HSR Clearance Date, if applicable,
otherwise the licenses shall be effective as of the Effective Date. In the event that either (a) the FTC and/or the DOJ shall
seek a preliminary injunction under the HSR Act against Licensee and Licensor to enjoin the transactions contemplated by this
Agreement or (b) the HSR Clearance Date (as defined in Section 14.2) shall not have occurred on or prior to December 31, 2017
this Agreement shall terminate and all payments made to Licensor and held in escrow pursuant to Section 14.1 shall be returned
to Licensee.

 

[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

    	 	34	 

     

    

 

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers as of
the last date of execution by the parties hereto. The Agreement(s) may be executed in two (2) or more counterparts, each of which
shall be an original, and all such counterparts together shall constitute the entire Agreement. Electronically signed and/or electronically
transmitted signatures shall have the full force and effect of an original signature.

 

	JANSSEN
    SCIENCES IRELAND UC	 
	 	 	 
	By:	/s/
    Dave Geelan	 
	Name:	Dave
    Geelan	 
	Title:	Director	 
	 	 	 
	Date:
    4/19/2017	 
	 	 	 
	PROVENTION
    BIO, INC.	 
	 	 	 
	By:	/s/ Ashleigh
    Palmer	 
	Name:	Ashleigh
    Palmer	 
	Title:	President
    & CEO	 
	 	 	 
	Date:
    4/25/2017	 

 

    	 	35	 

     

    

 

OVERVIEW
OF APPENDICES

 

APPENDIX
1: LICENSOR PATENTS

APPENDIX
2: PRESS RELEASE

APPENDIX
3: STUDY

APPENDIX
4: STABILITY TESTING ESTIMATED COSTS

APPENDIX
5: MORPHOSYS LICENSE

 

    	 	36	 

     

    

 

APPENDIX
1: LICENSOR PATENTS

 

	Internal
    Reference	 	Country	 	Status	 	Fi

        ling
        date
	 	Publication
    date	 	Publication
    number	 	Grant
    date	 	Grant
    number

 

[****]

 

    	37

     

    

 

APPENDIX
2: PRESS RELEASE

 

The
Parties will mutually agree on the language of any press release.

 

    	38

     

    

 

APPENDIX 3: STUDY

 

Clinical
Plans for JNJ-42915925 (anti-TLR-3 mAb) in UC

 

V4
- September 23rd, 2016

 

Study
Design for a Rapid Go/No-Go Phase 1B POM(POC) study of JNJ-42915925 in Ulcerative Colitis

 

	○	Design,
    patient population, duration

 

	 	○	Moderate
    to severe Ulcerative Colitis.
	 	 	 	■	Central
    read of endoscopic component of Mayo >=2, and total Mayo score >=6
	 	○	No
    HTLV-1 exclusion
	 	○	Double
    blind, randomized, placebo controlled, parallel group
	 		 	■	Formulation:
    IV
	 	○	One
    active arm vs placebo
	 	○	2:1
    randomization
	 	 	 	■	Consider
    Placebo offered open label drug for 12 weeks after study end
	 	○	12
    weeks dosing, followed by 12 weeks of follow up
	 	○	9-12
    months enrolment at 8-10 active sites US-Canada-EU (Robarts network + a few additional sites)
	 		 	○	Enrollment
    assumption 0.3/site/month

 

	○	Sample
    size:
	 	○	24
    patients, replace drop-outs
	 	○	16
    active, 8 placebo

 

	○	Dose:
	 	○	Maximum
    dose contemplated for planning purposes is 600 mg (10 mg/kg for 60 kg body weight subject)
	 	○	Up
    to 6 doses in 3 months of dosing (loading doses Week 0, 1, 2 then weeks 4, 8, 12)

 

	●	Endpoints:
	 		○	Safety
	 			 	■	Proposed
    as primary endpoint since it’s a small Phase 1B/2A POM study

 

		○	POM

		■	Endoscopy
                                         and Biopsy Weeks 0 and 8:

		●	Endoscopy:
                                         Response, remission (UCEIS or equivalent) [Central read/Robarts/Bioclinica]

		○	Assessments
                                         to be done by standard (location of worse inflammation) as well as segmental methods
                                         (rectum, sigmoid, descending colon or appropriate distribution)

		●	Biopsy
                                         for:

		○	Mucosal
                                         mRNA signature (GS-MISS): reduction in disease signature, compare to Janssen’s
                                         anti-TNF and other benchmarks

 

    	39

     

    

 

		○	Mucosal
                                         Histology: reduction in mucosal damage

		■	Geboes
                                         Score (continuous, and dichotomous measure of histologic remission <2). Possibly,
                                         Robarts Histologic Index (RHI).

		●	Consideration
                                         for biopsy sub-study at week 4 (early onset, benchmark with JAK and others)

		■	CRP:
                                         Reduction in serum CRP

		■	Stool
                                         lactoferrin, calprotectin: reduction in LF, CP (stool stored for potential future
                                         microbiome analysis)

		■	Blood
                                         ex vivo PD assay (poly(I:C)

		○	POC:
                                         (not powered)

		■	Mayo
                                         Score: Response, Remission

		■	Novel
                                         UC PRO

 

		●	Safety:

		○	Throughout,
                                         until week 24

		○	Anti-viral
                                         immunity and viral infection/reactivation monitoring TBD

 

		●	Go/No-Go
                                         to Phase 2B:

		○	Composite
                                         of imaging, clinical endpoints and biomarkers, criteria to be determined

 

		●	Drug
                                         needs:

		○	Maximum
                                         administered drug is 24x600x6=86.4 grams. With 20% overage, ~104 grams should cover the
                                         needs

		○	At
                                         50 mg/vial, it will be approximately 2,000 vials

		○	Inventory
                                         is ~5000 vials into quarantine storage, stability program on hiatus since 2015. Expiration
                                         was 3Q17 with possibility of extension depending on stability data after program resumes

 

    	40

     

    

 

APPENDIX 4: STABILITY TESTING ESTIMATED COSTS

 

 

    	41

     

    

 

APPENDIX 5: MORPHOSYS LICENSE

 

 

    	42PROVENTION
BIO, INC.

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of April 25, 2017, is made and entered into by and
between PROVENTION BIO, INC., a Delaware corporation with its principal executive offices located at 110 Old Driftway Lane, Lebanon,
NJ 08833 (the “Company”), and each of the purchasers listed on Schedule A hereto (the “Purchasers”).

 

RECITALS

 

WHEREAS,
the Company and the Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”);

 

WHEREAS,
the Purchasers, severally and not jointly, desire to purchase and the Company desires to issue and sell to the Purchasers, in
each case upon the terms and subject to the conditions set forth in this Agreement, up to an aggregate of [●] shares of Series
A Preferred Stock, $0.0001 par value per share, of the Company (the “Preferred Stock”), at a purchase price
of $[●] per share (the “Per Share Purchase Price”), which shares are being offered on a Minimum $[●]
and Maximum $[●] basis;

 

WHEREAS,
each Purchaser, severally and not jointly, wishes to purchase, upon the terms and conditions stated in this Agreement, such number
of shares of Preferred Stock as is set forth immediately next to such Purchaser’s name on Schedule A hereto;

 

WHEREAS,
the Company has engaged MDB Capital Group, LLC as its exclusive placement agent (the “Placement Agent”) for
the offering contemplated hereby, which is being conducted on a “reasonable efforts, all or none” basis as to the
Minimum offering amount and a “reasonable efforts” basis for all amounts in excess of the Minimum offering amount;

 

WHEREAS,
the Company prepared a private placement memorandum (the “Memorandum”) for use by the Placement Agent and the
Purchasers, which describes the Company and certain conditions to the closing of the sale of the Securities, among other things.

 

NOW
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained,
the Company and each Purchaser severally (and not jointly) hereby agree as follows:

 

1.       Purchase
and Sale of Preferred Stock.

 

1.1       Purchase
of Preferred Stock. Subject to the terms and conditions set forth in this Agreement, on the Closing Date (as defined below),
the Company shall issue and sell to each Purchaser and each Purchaser, severally and not jointly, agrees to purchase from the
Company such number of shares of Preferred Stock as is set forth next to such Purchaser’s name on Schedule A hereto
for an aggregate purchase price equal to the Per Share Purchase Price multiplied by the number of such shares to be purchased
by such Purchaser (such product, the “Subscription Amount”). The shares of Preferred Stock issued to the Purchasers
pursuant to this Agreement shall be referred to herein as the “Shares”.

 

    	 

     

    

 

1.2       Closing
Date. The date and time of the issuance and sale of the Shares pursuant to this Agreement (the “Closing Date”)
shall be April 19, 2017 at 5:00 p.m., New York time, on the day all of the conditions to closing set forth in Section 6
and Section 7 below have been satisfied (or waived), or such other mutually agreed upon date and time. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location
as may be agreed to by the parties and may be undertaken remotely by facsimile or other electronic transmission.

 

1.3       Closing
Deliverables. Unless other arrangements have been made between the Company and a specific Purchaser, on or prior to the Closing,
each Purchaser shall deliver or cause to be delivered to the Company the following in accordance with the subscription procedures
described in Subsection 1(e) below:

 

(i)       this
Agreement and each Transaction Document to which such Purchaser is a party, duly executed by such Purchaser;

 

(ii)       the
Subscription Amount, in the form of a wire transfer to the Escrow Agent, in accordance with the Escrow Agent’s written instructions;
and

 

(iii)       a
fully completed and duly executed Questionnaire in the form attached as Exhibit A hereto (the “Questionnaire”).

 

1.4       The
Subscription Amounts received pursuant to Subsection 1.3(ii) will be placed with Delaware Trust Company, who will serve
as escrow agent for the Closing (the “Escrow Agent”), pursuant to an Escrow Agreement among the Company, the
Placement Agent and the Escrow Agent substantially in the form attached hereto as Exhibit B (the “Escrow Agreement”).
At the Closing, as evidenced by a written certificate signed by the Company and the Placement Agent certifying that the conditions
to Closing hereon have been satisfied or waived, the Escrow Agent will deliver the Subscription Amounts to the Company. If this
Agreement is terminated, each Purchaser shall receive back its Subscription Amount promptly, without interest. The Closing will
not take place until all the Transaction Documents have been duly delivered as provided herein, the Escrow Agent has received
in escrow the Subscription Amounts for all the Shares being sold to the Purchasers, and all of the conditions set forth in Section
6 and Section 7 below have been satisfied (or waived). At the Closing, the Company shall direct its transfer agent
to credit to each Purchaser the Shares being purchased hereunder by book entry.

 

1.5       Subscription
Procedure. Each Purchaser shall deliver or cause to be delivered a duly executed copy of this Agreement, the Registration
and Investor Rights Agreement, and a fully completed and duly executed Questionnaire to the Placement Agent at the following address:
MDB Capital Group, LLC, Attention: Compliance Department, 2425 Cedar Springs Road, Dallas, TX 75201. Unless other arrangements
have been made with a particular Purchaser, each Purchaser shall also deliver or cause to be delivered the Subscription Amount
pursuant to Subsection 1.3(ii) hereof.

 

    	2

     

    

 

1.6       Acceptance.
This Agreement sets forth various representations, warranties, covenants and agreements of the Company and the Purchasers, as
the case may be, all of which shall be deemed made, and shall be effective without further action by the Company and the Purchasers,
immediately upon the Company’s acceptance of a Purchaser’s subscription and shall thereupon be binding upon the Company
and the applicable Purchasers. Acceptance is evidenced only by execution of this Agreement by the Company on its signature page
attached hereto, and the Company shall have no obligation hereunder to a Purchaser until the Company shall have delivered to such
Purchaser an executed copy of this Agreement.

 

1.7       The
Company shall adopt and file with the Secretary of State of the State of Delaware on or before the Closing, the Amended and Restated
Certificate of Incorporation of the Company in the form attached hereto as Exhibit C (the “Certificate of Incorporation”).

 

2.       Representations
and Warranties of the Purchasers. Each Purchaser severally (and not jointly) represents and warrants to the Company solely
as to such Purchaser that, as of the date hereof and as of the Closing Date:

 

2.1       Investment
Purpose. The Securities to be acquired by such Purchaser are being acquired or will be acquired for investment for such Purchaser’s
own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of
the Securities Act, and such Purchaser has no present intention of selling, granting any participation in, or otherwise distributing
the same in violation of the Securities Act. Such Purchaser does not presently have any contract, undertaking, agreement or arrangement
with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Securities
in violation of the Securities Act. Such Purchaser has not been formed for the specific purpose of acquiring the Securities.

 

2.2       Accredited
Investor Status. Such Purchaser is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation
D promulgated under the Securities Act (an “Accredited Investor”) and satisfies the requirements under “Terms
of this Offering – Accredited Investors” in the Memorandum.

 

2.3       Reliance
on Exemptions. Such Purchaser understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.

 

    	3

     

    

 

2.4       Information.
Such Purchaser and its advisors, if any, have been furnished with the Memorandum, and considered all factors such Purchaser deems
material in deciding on the advisability of investing in the Securities. Such Purchaser and its advisors, if any, have been afforded
the opportunity to ask questions of the Company, and to obtain additional information to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense. Notwithstanding the foregoing representations, neither such
inquiries nor any other due diligence investigation conducted by Purchaser or any of its advisors or representatives shall modify,
amend or affect Purchaser’s right to rely on the Company’s representations and warranties contained in Section
3 below.

 

2.5       No
Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Securities.

 

2.6       Restricted
Securities. Such Purchaser understands that the Securities have not been registered under the Securities Act, by reason of
a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of such Purchaser’s representations as expressed herein. Such Purchaser
understands that the Securities are characterized as “restricted securities” under applicable U.S. federal
and state securities laws and that, pursuant to these laws, such Purchaser must hold the Securities indefinitely unless the Securities
are subsequently registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available.

 

2.7       Legends.
Such Purchaser understands that the book entries evidencing the Shares may bear the following or substantially similar legends:

 

(i)       “The
securities represented hereby have not been registered under the Securities Act of 1933, as amended, and have been acquired for
investment and not with a view to, or in connection with, the sale or distribution thereof. No such transfer may be effected without
an effective registration statement related thereto or an opinion of counsel in a form satisfactory to the Company that such registration
is not required under the Securities Act of 1933. The securities may be pledged in connection with a bona fide margin account
or other loan or financing arrangement secured by the securities.”

 

(ii)       Any
legend set forth in, or required by, the other Transaction Documents; and

 

(iii)       Any
legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate
so legended.

 

2.8       Authorization;
Enforcement. Each Transaction Document to which such Purchaser is a party: (i) has been duly and validly authorized by such
Purchaser, (ii) has been duly executed and delivered by or on behalf of such Purchaser, and (iii) will constitute, upon execution
and delivery by such Purchaser thereof and the Company, the valid and binding agreements of such Purchaser enforceable in accordance
with its terms, except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors’ rights and general principles of equity that restrict the availability
of equitable or legal remedies.

 

    	4

     

    

 

2.9       Residency.
If the Purchaser is an individual, then such Purchaser resides in the state or province identified on the signature pages hereto
as the address for such Purchaser. If the Purchaser is a partnership, corporation, limited liability company or other entity,
then the office or offices of such Purchaser identified on the signature pages hereto as the address of such Purchaser is the
location of its principal place of business and such entity is duly organized in its state of formation.

 

2.10       Investment
Experience. Such Purchaser is experienced in investments and business matters, has made investments of a speculative nature
and has purchased securities of United States companies in private placements in the past, and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to enable such Purchaser to utilize the information
made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to,
the proposed purchase of the Securities, which represents a speculative investment. Such Purchaser is able to bear the economic
risk of an investment in the Securities and is able to afford a complete loss of such investment.

 

2.11       Communication
of Offer. Such Purchaser was contacted by either the Company or the Placement Agent with respect to a potential investment
in the Securities. Purchaser is not purchasing the Securities as a result of any “general solicitation” or “general
advertising,” as such terms are defined in Regulation D of the Securities Act, which includes, but is not limited to, any
advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar
media or on the internet or broadcast over television, radio or the internet or presented at any seminar or any other general
solicitation or general advertisement.

 

2.12       Brokers
and Finders. Other than the Placement Agent with respect to the Company, no Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser for any commission,
fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Purchaser.
The Company has agreed to pay a commission and expense reimbursement to the Placement Agent in connection with the sale of the
Securities as described in the Memorandum. Such Purchaser acknowledges that it is purchasing the Securities directly from the
Company and not from the Placement Agent.

 

2.13       FINRA.
Such Purchaser (i) has had no position, office or other material relationship within the past three years with the Company or
persons known to it to be affiliates of the Company, and (ii) if such Purchaser is a member of the Financial Industry Regulatory
Authority (“FINRA”) or an associated Person of a member of FINRA,
such Purchaser, together with its affiliates and any
other associated persons of such member of FINRA, does not, and as of the Closing will
not, directly or indirectly have a beneficial
interest (as determined under FINRA Rule 5130(i)(1)) of more than 50% of the outstanding
voting securities of the Company.

 

    	5

     

    

 

3.       Representations
and Warranties of the Company. The Company hereby represents and warrants to each Purchaser that, except as set forth on the
Disclosure Schedule attached as Exhibit D to this Agreement (the “Disclosure Schedule”), which exceptions
shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete
as of the date hereof and as of the Closing Date, unless otherwise indicated. The Disclosure Schedule shall be arranged in sections
corresponding to the numbered and lettered sections and subsections contained in this Section 3, and the disclosures in
any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 3 to
the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and
subsections.

 

3.1       Organization
and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation
or default of any of the provisions of its Certificate of Incorporation, Bylaws (as defined below) or other organizational or
charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may be, 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, liabilities, business or condition (financial or otherwise) of the Company,
taken as a whole, 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 of which the Company has received written notice or otherwise has Knowledge (as defined below) has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

3.2       Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated hereby and by each of the Transaction Documents, to issue the Shares at Closing and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of this Agreement, the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby, including the issuance of the Shares and the Common Stock
issuable upon conversion of the Shares (the “Conversion Shares”) and have been duly authorized by all necessary
action on the part of the Company and no further action is required by the Company, its Board of Directors or the Company’s
stockholders in connection therewith other than in connection with the Required Approvals (as defined below). Each Transaction
Document to which the Company is a party has been (or upon the execution and delivery thereof by the Company 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 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.

 

    	6

     

    

 

3.3       Capitalization.

 

(i)       Immediately
prior to Closing, the authorized capital stock of the Company consists of 25,000,000 shares of preferred stock, $0.0001 par value,
of which 13,000,000 shares have been designated as Series A Preferred Stock, none of which are issued and outstanding, and 50,000,000
shares of common stock, $0.0001 par value, of which 10,000,000 shares are issued and outstanding. The Company has reserved 3,721,765
shares of Common Stock (3,986,118 if the Maximum offering is raised) for issuance to officers, directors, employees and consultants
of the Company pursuant to its 2017 Equity Incentive Plan duly adopted by the Board of Directors and approved by the Company stockholders
(the “Stock Plan”). The Company has made available to the Purchasers complete and accurate copies of the Stock
Plan and forms of agreements used thereunder. All of the outstanding shares of the Company’s capital stock are duly authorized,
validly issued, fully paid and non-assessable and free of pre-emptive rights and were issued in compliance in all material respects
with applicable state and federal securities law and any rights of third parties. Except as otherwise provided in the Transaction
Documents, no shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the stockholders
or any mortgage, lien, title claim, assignment, encumbrance, security interest, adverse claim, contract of sale, restriction on
use or transfer or other defect of title of any kind, other than those arising under applicable securities laws (each, a “Lien”).
The Certificate of Incorporation and the Company’s Bylaws, as in effect on the date hereof and as of the Closing Date (the
“Bylaws”) have been made available to the Purchasers.

 

(ii)       Subsection
3.3(ii) of the Disclosure Schedule sets forth the capitalization of the Company immediately following the Closing including
the number of shares of the following: (A) issued and outstanding Common Stock, including, with respect to restricted Common Stock,
vesting schedule and repurchase price; (B) granted stock options, including vesting schedule and exercise price; (C) shares of
Common Stock reserved for future award grants under the Stock Plan; (D) each series of Preferred Stock; and (E) warrants or stock
purchase rights, if any.

 

(iii)       Except
for (A) the conversion privileges of the Shares to be issued under this Agreement, (B) the conversion privileges of the Placement
Agent Warrants as described in Subsection 4.11, (C) the rights provided in Section 13 of the Registration and Investor
Rights Agreement and (D) the stock options described in Subsection 3.3(ii)(B) of the Disclosure Schedule, there are no
outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights)
or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock or Preferred Stock, or
any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock.

 

3.4       Issuance
of Shares. The Shares have been duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens (except as otherwise provided
in the Transaction Documents), with the holders being entitled to all rights accorded to a holder of Preferred Stock. The Conversion
Shares, when issued in accordance with the terms of the Certificate of Incorporation, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens (except as otherwise provided in the Transaction Documents), with the holders being
entitled to all rights accorded to a holder of Common Stock. The Company has reserved from its duly authorized capital stock a
number of shares of Common Stock for issuance of the Conversion Shares underlying the Preferred Stock. Subject to the accuracy
of the representations and warranties of the Purchasers in this Agreement, the offer and issuance by the Company of the Securities
is exempt from registration under the Securities Act.

 

    	7

     

    

 

3.5       Subsidiaries.
The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust,
joint venture, limited liability company, association, or other business entity.

 

3.6       No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision
of the Company’s Certificate of Incorporation, Bylaws or other organizational or charter documents, or (ii) conflict with,
or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit 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 (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 and the rules), or by which any property or asset of the Company is bound; except
in the case of clause (ii), such as could not have and would not reasonably be expected to result in a Material Adverse Effect.

 

3.7       Absence
of Litigation. There is no material action, suit, inquiry, notice of violation, proceeding or, to the Knowledge of the Company,
investigation pending or, to the Knowledge of the Company, threatened against or affecting the Company, or, to the Knowledge of
the Company, any officer, director or key employee of 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 would reasonably be expected to (i) have a Material Adverse Effect or (ii) adversely affect or challenge the legality, validity
or enforceability of any of the Transaction Documents or the Securities. Neither the Company, nor any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. The foregoing includes, without limitation, actions, suits, proceedings or investigations
pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of either Ashleigh
Palmer or Francisco Leon.

 

    	8

     

    

 

3.8       Intellectual
Property. The Company owns, or holds a valid and enforceable license to, all trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses, approvals, governmental
authorizations, trade secrets, licenses, formulae, mask works, customer lists, internet domain names, know-how and other intellectual
property, including trade secrets and other unpatented and/or un-patentable proprietary or confidential information, systems,
procedures or registrations or applications relating to the same, that are owned by the Company, or used (whether by license or
otherwise) by the Company in the conduct of the Company’s business as now conducted or proposed to be conducted (collectively,
“Company Intellectual Property”). The Company owns valid title, free and clear of any Liens, or possesses the
requisite valid and current licenses or rights, free and clear of any Liens, to use all Company Intellectual Property in connection
with the conduct of its business. Except as disclosed in the Subsection 3.8 of the Disclosure Schedule, there is no claim
or action by any Person pertaining to, or proceeding pending, or to the Company’s Knowledge threatened, which challenges
the right of the Company to use any Company Intellectual Property as such Company Intellectual Property is currently being used
in the business. To the Company’s Knowledge, the Company’s current and intended products, services and processes do
not infringe on any intellectual property rights or other rights held by any Person, and to the Company’s Knowledge, there
are no facts or circumstances which might give rise to any of the foregoing. Except as disclosed in the Subsection 3.8
of the Disclosure Schedule, the Company has not received any notice of infringement of, or conflict with, the asserted rights
of others with respect to the Company Intellectual Property.

 

3.9       Tax
Matters. There are no material federal, state, county, local or foreign taxes due and payable by the Company which have not
been timely paid, and no accrued and unpaid federal, state, country, local or foreign taxes of the Company which are due, whether
or not assessed or disputed. The Company has, when applicable, (i) timely filed all necessary federal, state and foreign income
and franchise tax returns, (ii) set aside on its books provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply and timely paid or accrued all taxes shown as due
thereon, and, to the Company’s Knowledge no tax deficiency has been asserted or threatened against the Company.

 

3.10       Certain
Transactions. Other than as provided in the Transaction Documents or disclosed in Subsection 3.10 of the Disclosure
Schedule, none of the officers or directors of the Company nor any of its employees is presently a party to any transaction with
the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the Knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, 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.

 

3.11       Disclosure.
All disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including in the Memorandum and the schedules to this Agreement, is true and correct and does not contain
any untrue statement of a material fact or, to Company’s Knowledge, omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

3.12       No
General Solicitation. Neither the Company nor, to the Company’s Knowledge, any Person acting on behalf of the Company
has (i) offered or sold any of the Securities by any form of general solicitation or general advertising or (ii) offered the Securities
for sale to anyone other than the Purchasers and certain other “accredited investors” within the meaning of
Rule 501 under the Securities Act.

 

    	9

     

    

 

3.13       No
Integrated Offering. 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 offerings by the Company for purposes of the Securities
Act which would require the registration of any such securities under the Securities Act.

 

3.14       No
Brokers. The Company has taken no action which would give rise to any claim by any Person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby, other than to the Placement Agent.

 

3.15       Permits;
Compliance. The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state, local
or foreign regulatory authorities necessary to conduct its business, 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. The Company is not in default
in any material respect under any of such Material Permits.

 

3.16       ERISA.
The Company has not failed to make any required contributions and has no liability to any employee benefit plan which is subject
to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), other than liability for health
plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied with all applicable laws for any such
employee benefit plan.

 

3.17       Title
to Property. The Company has good and marketable title in fee simple to all real property owned by it and good title in all
personal property owned by it that is material to the business of the Company free and clear of all Liens, except for Liens as
do not materially affect the value of such property and do not materially interfere with the use currently made of such property
by the Company and Liens for the payment of federal, state or other taxes, the payment of which it is not delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable
leases with which the Company is in material compliance.

 

3.18       Insurance.
To the Knowledge of the Company, there is no circumstance currently existing that would result in the Company not being able to
renew its existing insurance coverage, if any, as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business and in compliance with its contractual obligations.

 

    	10

     

    

 

3.19       Questionable
Payments. Neither the Company nor, to the Company’s Knowledge, any of its current or former directors, officers, employees,
agents or other Persons acting on behalf of the Company, has on behalf of the Company or in connection with its business: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established
or maintained any unlawful fund of corporate monies or other assets; (d) made any false or fictitious entries on the books and
records of the Company; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment
of any nature.

 

3.20       Investments
in Other Persons. The Company has not made any loan or advance to any Person, nor is it committed or obligated to make any
such loan or advance. The Company does not own any capital stock, assets comprising the business of, obligations of, or any equity,
or ownership in any Person.

 

3.21       No
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be an Affiliate of, an “investment company,” an affiliate of an “investment company,” a company
controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

3.22       Material
Contracts. Except as disclosed herein and in Subsection 3.22 of the Disclosure Schedule, or as contemplated by this
Agreement or another Transaction Document, there are no agreements, understandings, commitments, instruments, contracts, employment
agreements, or proposed transactions or judgments (each, a “Material Agreement”) to which the Company is a
party or by which it is bound which involve (i) obligations (contingent or otherwise), or a related series of obligations (contingent
or otherwise), of, or payments, or a related series of payments, by the Company in excess of $50,000 in any one year, (ii) the
license of any patent, copyright, trademark, trade secret or other proprietary right to or from the Company, (iii) the grant of
rights to manufacture, produce, assemble, license, market, or sell its products to any other Person that limit the Company’s
exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (iv) indemnification by the Company
with respect to infringements of proprietary rights. All Material Agreements are in full force and effect and constitute legal,
valid and binding obligations of the Company and, to the Company’s Knowledge, are enforceable in accordance with their respective
terms. To the Company’s Knowledge, neither the Company nor any other Person is in default under the terms of any Material
Agreement, and no circumstance exists that would, with the giving of notice or the passage of time, constitute a default by the
Company under any Material Agreement.

 

3.23       Material
Liabilities. Except as disclosed in Subsection 3.23 of the Disclosure Schedule, the Company has no liability or obligation,
absolute or contingent (individually or in the aggregate), except (i) obligations and liabilities incurred after the date of incorporation
in the ordinary course of business that are not material, individually or in the aggregate, and (ii) obligations under contracts
made in the ordinary course of business that would not be required to be reflected in financial statements prepared in accordance
with the United States generally accepted accounting principles.

 

    	11

     

    

 

3.24       Employees.
As of the date hereof and as of the Closing Date, except as contemplated by Subsection 3.22(d) and (e) of the Disclosure
Schedule, the Company does not have any employees or consultants. The Company is in compliance with all applicable U.S. federal,
state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment
and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. As of the date hereof and as of the Closing Date, neither the carrying on of the Company’s
business by Ashleigh Palmer or Francisco Leon, nor the conduct of the Company’s business as now conducted and as presently
proposed to be conducted, will conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a
default under, any contract, covenant or instrument under which either such individual is now obligated.

 

3.25       Compliance.
The Company is not (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, the Certificate of Incorporation, Bylaws, any indenture, loan or credit agreement
or any other Material Agreement 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 order of any court, arbitrator or governmental body, or (iii) in violation
of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and
local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or
would not reasonably be expected to result in a Material Adverse Effect.

 

3.26       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 of, delivery and performance by the Company of the Transaction Documents, other than the
filing of Form D with the SEC and such filings as are required to be made under applicable state securities laws (the “Required
Approvals”). Subject to the accuracy of the representations and warranties of each Purchaser set forth in Section
2 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Securities and (ii) the other
transactions contemplated by the Transaction Documents from the provisions of any stockholder rights plan or other “poison
pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to
which the Company or any of its assets and properties may be subject and any provision of the Company’s Certificate of Incorporation
or Bylaws that is or could reasonably be expected to become applicable to the Purchasers as a result of the transactions contemplated
hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities
by the Purchasers or the exercise of any right granted to the Purchasers pursuant to this Agreement or the other Transaction Documents.

 

    	12

     

    

 

3.27       Environmental
Matters. The Company (A) is in compliance with all Environmental Laws (as defined below), (B) has received all permits, licenses
or other approvals required of them under applicable Environmental Laws to conduct its business and (C) is in compliance with
all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (A), (B) and (C), the
failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term
“Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

3.28       No
Undisclosed Events, Liabilities, Developments or Circumstances. Since the Company’s incorporation, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company or
any of its businesses, properties, liabilities, operations (including results thereof) or condition (financial or otherwise),
that would reasonably be expected to have a Material Adverse Effect on the Company.

 

3.29       Foreign
Corrupt Practices. Neither the Company nor, to its Knowledge, any director, officer, agent, employee or other Person acting
on behalf of the Company has, in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

    	13

     

    

 

3.30       Indebtedness
and Other Contracts. The Company, (i) does not have any outstanding Indebtedness (as defined below) in excess of $50,000,
(ii) is not a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies)
to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, other than agreements
or instruments entered into during the ordinary course of business, (iii) is not in material violation of any term of, or in default
under, any contract, agreement or instrument relating to any Indebtedness, and (iv) is not a party to any contract, agreement
or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or
is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (including, without limitation, “capital leases” in accordance with generally
accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection
with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital
lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any mortgage, claim, lien, tax, right of first refusal, pledge,
charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned
by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such
indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

 

3.31       Bank
Holding Company Act. The Company is not subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and is not subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).
Neither the Company nor any of its Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding
shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any equity that
is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor of its Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve.

 

3.32       Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i) promulgated under
the Securities Act.

 

3.33       Money
Laundering. The Company is in compliance with, and has not previously violated, the USA Patriot Act of 2001 or any other applicable
U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations and Executive
Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive
Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B,
Chapter V.

 

3.34       Management.
No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act is applicable to the
Company or, to the Company’s Knowledge, any Company Covered Person. No Company Covered Person has been the subject of:

 

    	14

     

    

 

(i)       a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such Person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such Person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii)       a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations);

 

(iii)       any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such Person from, or otherwise limiting, the following activities:

 

1.       Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other Person regulated by the United States Commodity Futures Trading Commission or an associated Person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated Person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

2.       Engaging
in any type of business practice; or

 

3.       Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv)       any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise
limiting for more than 60 days the right of any such Person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v)       a
finding by a court of competent jurisdiction in a civil action or by any other governmental authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by a governmental authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)       a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

3.35       Public
Utility Holding Act. The Company is not a “holding company,” or an “affiliate” of a “holding
company,” as such terms are defined in the Public Utility Holding Act of 2005.

 

3.36       Federal
Power Act. The Company is not subject to regulation as a “public utility” under the Federal Power Act, as amended.

 

    	15

     

    

 

3.37       No
Additional Agreements. The Company does not have any agreement or understanding with any Purchaser with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

4.       Covenants.
In addition to the other agreements and covenants set forth herein, the Company hereby covenant as follows:

 

4.1       Use
of Proceeds. In accordance with the directions of the Company’s Board of Directors, the Company will use the proceeds
from the sale of the Shares as specified in the Memorandum.

 

4.2       Contingency.
In the event that the Company shall not have received Subscription Amounts or signed, enforceable agreements for Subscription
Amounts, aggregating at least $[•] from
the sale of the Securities as contemplated hereby and/or the Closing does not occur by April 19, 2017, or if extended,
by no later than May 15, 2017, the Escrow Agent shall be instructed to return each Purchaser’s
Subscription Amount deposited with the Escrow Agent.

 

4.3       General
Affirmative Obligations. The Company will furnish to the Purchaser and/or their assignees
such information relating to the Company as is required by law, which is reasonably requested by the Purchasers.

 

4.4       Form
D; Blue Sky Laws. The Company agrees to file a Form D with the SEC with respect to the Securities as required by Regulation
D promulgated under the Securities Act. The Company shall also take such action as the Company shall reasonably determine is necessary
to comply with all applicable securities or “blue sky” laws of the states of the United States. The Company agrees
to file a further state notice for the Company and the Placement Agent in the State of New York.

 

4.5       Corporate
Existence. Subject to appropriate shareholder action, the Company will use reasonable commercial efforts to maintain its corporate
existence for at least two years after the date hereof, except in connection with a consolidation or merger of the Company with
or into another corporation or any transfer of all or substantially all of the assets of the Company.

 

4.6       Sarbanes-Oxley
Matters. When and if required to do so, the Company will comply with any and all requirements applicable to the Company of
the Sarbanes-Oxley Act of 2002 and any and all rules and regulations applicable to the Company promulgated by the SEC thereunder
including, without limitation, implementing such programs and taking such steps as reasonably necessary to provide for compliance
(not later than the relevant statutory and regulatory deadline therefor) with all provisions of Section 404 of the Sarbanes-Oxley
Act of 2002.

 

4.7       No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the Securities Act or cause the offering
of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

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4.8      Financial
Information. For two years after the date hereof, the Company agrees to send promptly the following to each Investor
(as defined in the Registration and Investor Rights Agreement), provided such Investor is a holder of the Securities at such time,
unless the following are filed with or furnished to the SEC through EDGAR and are available to the public through the EDGAR system,
a copy of its financial statements prepared in accordance with generally accepted accounting principles, for its fiscal year and
each fiscal quarter, if and when prepared, which will include any consolidated balance sheets, income statements, stockholders’
equity statements and/or cash flow statements, and copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.

 

 

4.9       Conduct
of Business. The business of the Company shall not be conducted in material violation of any law, ordinance or regulation
of any governmental entity.

 

4.10       Passive
Foreign Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not
be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code
of 1986, as amended.

 

4.11       Initial
Public Offering. The Company intends to file or submit on a confidential basis an S-1 Registration Statement in connection
with the initial public offering of its securities pursuant to the Securities Act (an “IPO”) by no later than
seven (7) months following the Closing and attempt to complete an IPO within fifteen (15) months (the “Initial Term”)
after the Closing; provided, that if the SEC has no material comments to the confidential submission to the Company’s IPO
S-1 Registration Statement, or if all such comments have been resolved to the SEC’s satisfaction, but the Placement Agent
(or other underwriter for the IPO) reasonably believes it will be unable to complete timely the IPO at or above a $75 million
pre-money valuation prior to the expiration of the Initial Term, the Company shall have an additional six (6) months following
the Initial Term in which to attempt to complete the IPO.

 

4.12       Payment
of Placement Agent Commission; Issuance of Warrant. The Company agrees that at the Closing, it will (i) pay to the Placement Agent
a cash commission (the “Placement Agent Fee”) equal to 7% of the gross Purchase Price from the sale of the
Shares (excluding any Shares sold to Johnson & Johnson Innovation – JJDC, Inc. (“JJDC”) and JDRF
Therapeutics Fund, LLC (“JDRF T1D Fund”)); and (ii) issue a warrant to the Placement Agent, substantially in
the form attached hereto as Exhibit E (the “Placement Agent Warrant”) for the purchase of that number
of shares of Common Stock equal to 7% of the number of Conversion Shares underlying Shares sold (excluding any Shares sold to
JJDC and JDRF T1D Fund), which warrant will be exercisable at the price of $[•] per share [i.e., the initial conversion
price of the Preferred Stock] for a period of seven years from the Closing Date.

 

4.13       Audit.
Following Closing, the Company shall engage an independent accounting firm registered under the Public Company Accounting Oversight
Board to perform and complete on or before the date that is seven (7) months following the Closing Date, an audit of the Company’s
financial statements to the extent required to comply with the Securities Act and the rules promulgated by the SEC thereunder
in connection with the IPO and to comply with the listing requirements of NASDAQ and the NYSE.

 

    	17

     

    

 

4.14       Fees
and Expenses. At the Closing, the Company shall pay the reasonable legal fees and expenses of (i) Covington & Burling,
LLP, the counsel for JJDC, in an amount not to exceed, in the aggregate, $[●], (ii) Golenbock Eiseman Assor Bell & Peskoe
LLP, the counsel for the Placement Agent, in an amount not to exceed, in the aggregate, $[●] and (iii) Lowenstein Sandler
LLP, the counsel for the Company, in an amount not to exceed, in the aggregate, $[●].

 

4.15       Publicity.
The Company shall make no written or other public disclosure regarding JJDC without the prior written consent of JJDC, except
as may be required by applicable law.

 

5.       Register;
Transfer Agent Instructions; Legends.

 

5.1       Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Securities and shall record the name and address of the Person to
whom the Securities have been issued (including the name and address of each transferee, to the extent it is appropriately notified
of transfers) and held by such Person. The Company shall keep the register open and available at all times during normal business
hours for inspection of any Purchaser or its legal representatives so long as a Purchaser continues to hold any Securities.

 

5.2       Legend
Removal. In connection with any sale or disposition of the Securities by a Purchaser pursuant to Rule 144 or pursuant to any
other exemption or registration under the Securities Act such that the purchaser acquires freely tradable shares and upon compliance
by the Purchaser with the requirements of this Agreement, the Company shall or, shall cause its transfer agent (the “Transfer
Agent”) to issue replacement certificates representing the Securities sold or disposed of without restrictive legends,
at the Company’s sole expense, provided that the Purchaser has provided at its sole expense (1) a customary representation
by the Purchaser that Rule 144 applies to the Securities represented thereby, or (2) a statement by the Purchaser that such Purchaser
has sold the Securities represented thereby in accordance with a plan of distribution contained in the registration statement,
if any, used in connection with the sale or disposition. Notwithstanding the foregoing, if the Securities are subject to the lock
up provisions set forth herein, the Purchaser will not be entitled to have the restrictive legend removed in respect of Rule 144.

 

6.       Conditions
to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Shares to a Purchaser
at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

6.1       The
applicable Purchaser shall have executed this Agreement and each Transaction Document to which it is a party, and delivered the
same to the Company.

 

6.2       The
applicable Purchaser shall have delivered the Subscription Amount in accordance with Subsection 1.4 above.

 

    	18

     

    

 

6.3       The
representations and warranties of the applicable Purchaser shall be true and correct in all material respects, and the applicable
Purchaser shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement and the other Transaction Documents to be performed, satisfied or complied with by the applicable Purchaser
at or prior to the Closing Date.

 

6.4       No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement and the other Transaction Documents.

 

7.       Conditions
to Each Purchaser’s Obligation to Purchase. The obligation of each Purchaser hereunder to purchase the Shares at the
Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these
conditions are for such Purchaser’s sole benefit and may be waived by such Purchaser at any time in its sole discretion:

 

7.1       The
Company and each Purchaser (other than the Purchaser relying upon this condition to excuse such Purchaser’s performance
hereunder) shall have executed and delivered to such Purchaser this Agreement and each other Transaction Document to which it
is a party.

 

7.2       The
Company shall have provided evidence to the Placement Agent of the filing and acceptance of the Certificate of Incorporation from
the Secretary of State of Delaware.

 

7.3       The
Company shall instruct the Transfer Agent to record such Purchaser’s Shares set forth opposite such Purchaser’s name
on Schedule A, in book entry promptly after the Closing.

 

7.4       The
representations and warranties made by the Company in Section 3 hereof qualified as to materiality shall be true and correct
at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of
an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations
and warranties made by the Company in Section 3 hereof not qualified as to materiality shall be true and correct in all
material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects
as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required
to be performed by it on or prior to the Closing Date.

 

7.5       The
Company shall have obtained any and all consents, permits, approvals, registrations and waivers as necessary or appropriate for
consummation of the purchase and sale of the Securities and the consummation of the other transactions contemplated by the Transaction
Documents, all of which shall be in full force and effect, and the Company will have made all pre-Closing filings under the Blue
Sky laws.

 

    	19

     

    

 

7.6       The
Company shall have executed and obtained from Janssen Pharmaceutica, N.V., Janssen Sciences Ireland UC and Vactech Oy license
agreements for certain rights of each company as described in the Memorandum.

 

7.7       The
Company shall have executed and obtained employment agreements from Ashleigh Palmer and Francisco Leon.

 

7.8       The
Company shall have received Subscription Amounts or signed, enforceable agreements for Subscription Amounts, aggregating at least
$26.5 million from the sale of the Securities as contemplated hereby.

 

7.9       No
judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy
court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have
been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby
or in the other Transaction Documents.

 

7.10       No
event shall have occurred which would reasonably be expected to have a Material Adverse Effect on the Company.

 

7.11       The
Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions of this Section 7.

 

7.12       The
Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date certifying
(i) the Bylaws of the Company, (ii) resolutions of the Board of Directors of the Company approving, this Agreement, the Transaction
Documents and the transactions contemplated hereby and thereby, and (iii) resolutions of the stockholders of the Company approving
the Certificate of Incorporation.

 

7.13       The
Purchasers shall have received from Lowenstein Sandler LLP, counsel for the Company, an opinion, dated as of the Closing Date,
in substantially the form of Exhibit F attached to this Agreement.

 

7.14       The
Company shall have paid or made arrangements to pay to the Placement Agent the Placement Agent Fee and shall have issued and delivered
or made arrangements to issue and deliver to the Placement Agent the Placement Agent Warrant.

 

    	20

     

    

 

8.       Governing
Law; Jurisdiction; Waiver of Jury Trial.

 

8.1       This
Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware without regard to
the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process
in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods
as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction
of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH
OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

9.       Miscellaneous.

 

9.1       Counterparts;
Facsimile. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission or other electronic transmission (such as but not limited to an email attachment in PDF format)
of a copy of this Agreement bearing the signature of the party so delivering this Agreement. This Agreement may also be executed
by electronic or facsimile signature.

 

9.2Titles
and Subtitles.The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

9.3       Gender.
Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter,
singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

9.4       Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	21

     

    

 

9.5       Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the instruments, documents, exhibits and schedules
referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any Purchaser makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument
in writing signed by the Company and the Required Holders (defined below) and (i) if on or prior to the Closing Date, all the
Purchasers or (ii) if after the Closing Date, the Required Holders (but all the Purchasers with respect to any amendment of Subsection
1.2, Schedule A or Section 9 hereof), and any amendment to any provision of this Agreement made in conformity
with the provisions of this Subsection 9.5 shall be binding on all Purchasers; provided that no such amendment shall be
effective to the extent that it (A) applies to less than all of the Purchasers or (B) imposes any obligation or liability on any
Purchaser without such Purchaser’s prior written consent (which may be granted or withheld in such Purchaser’s sole
discretion); and provided, further, that (I) neither Subsection 4.13(i) nor Subsection 4.14 may be amended without
the written consent of JJDC, (II) neither Subsection 4.5 nor Subsection 4.13(ii) may be amended without the written
consent of the Placement Agent, and (iii) Subsection 4.13(iii) may not be amended without the written consent of the Company.
Neither the Company nor the Purchasers make any representation or warranty as to any matter of fact except as expressly contained
in this Agreement or the other Transaction Documents. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party, provided that after the Closing Date, the Required Holders may waive any provision of this
Agreement (other than Subsection 1(b) or this Section 9), and any waiver of any provision of this Agreement made
in conformity with the provisions of this Subsection 9.5 shall be binding on all Purchasers and holders of Securities,
as applicable, provided that no such waiver shall be effective to the extent that it (1) applies to less than all of the holders
of the Securities then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability
on any Purchaser without such Purchaser’s prior written consent (which may be granted or withheld in such Purchaser’s
sole discretion). “Required Holders” means (i) prior to the Closing Date, each Purchaser entitled to purchase
Shares at the Closing and (ii) on or after the Closing Date, holders of a majority of all Shares then outstanding.

 

9.6       Notices.
Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile
transmission and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile transmission,
with printed confirmation of receipt, in each case addressed to a party. The addresses for such communications shall be:

 

If
to the Company:

 

Provention
Bio, Inc.

110
Old Driftway Lane

 Lebanon,
NJ 08833

 Attention:
Mr. Ashleigh Palmer

 Telephone:
(908) 428-9136

 Facsimile:
(908) 428-9136

 

    	22

     

    

 

With
a copy (which will not constitute notice) to:

 

Lowenstein
Sandler LLP,

 1251
Avenue of the Americas

 New
York, NY 10020,

 Telephone:
(973) 597-6394

 Facsimile:
(973) 597-6395

 email:
mlerner@lowenstein.com.

 Attention:
Michael Lerner, Esq.

 

If
to a Purchaser: 

 

To
the address and fax number set forth immediately below such Purchaser’s name on the counterpart signature pages hereto.

 

With
a copy to (which will not constitute notice):

 

MDB
Capital Group, LLC

 2425
Cedar Springs Road

 Dallas,
Texas 75201

 Attention:
Compliance Department

 Telephone:
(310) 526-5000

 Facsimile:
(310) 526-5020

 

Written
confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service.

 

Each
party shall provide notice to the other party of any change in address, telephone or facsimile number (including, if a Purchaser
is holding any Securities purchased hereunder in street name, the address, telephone and facsimile of the beneficial owner of
such Securities), and each Purchaser and its assignees under Section 9.4 acknowledge and agree that such parties must provide
such notice and contact information promptly (but in any event within 30 days of any change in such information or assignment
of any rights hereunder).

 

9.7       Successors
and Assigns. Except as provided herein, this Agreement may not be assigned by a party hereto without the prior written consent
of the Company and the Purchasers. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Without limiting the generality of the foregoing, in the event that the Company
is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Securities are
converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall,
by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company”
shall be deemed to refer to such Person and the term “Shares” and “Conversion Shares” shall be deemed
to refer to the securities received by the Purchasers in connection with such transaction. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

    	23

     

    

 

9.8       Survival.
The representations and warranties of the Company set forth in Section 3 hereof shall survive the Closing. The representations
and warranties of each Purchaser set forth in Section 2 shall survive the Closing.

 

9.9       Further
Assurances. At any time or from time to time after the date hereof, the parties hereto agree to cooperate with each other,
and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further
action as the other parties hereto may reasonably request in order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties hereunder.

 

9.10       Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Preferred Stock
and any other numbers in this Agreement that relate to the Preferred Stock shall be automatically adjusted for stock splits, stock
combinations and other similar transactions that occur with respect to the Preferred Stock after the date of this Agreement.

 

9.11       Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under the Transaction Documents are
several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as, and
the Company acknowledges that the Purchasers do not so constitute, a partnership, an association, a joint venture or any other
kind of group or entity, or create a presumption that the Purchasers are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company
acknowledges that the Purchasers are not acting in concert or as a group, and the Company shall not assert any such claim, with
respect to such obligations or the transactions contemplated by the Transaction Documents. The decision of each Purchaser to purchase
the Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser. Each Purchaser
acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with such Purchaser making its investment
hereunder and that no other Purchaser will be acting as agent of such Purchaser in connection with monitoring such Purchaser’s
investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Purchaser confirms
that each Purchaser has independently participated with the Company in the negotiation of the transactions contemplated hereby
with the advice of its own counsel and advisors. Each Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. The use of a
single agreement to effectuate the purchase and sale of the Shares contemplated hereby was solely in the control of the Company,
not the action or decision of any Purchaser, and was done solely for the convenience of the Company and not because it was required
or requested to do so by any Purchaser. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.

 

    	24

     

    

 

9.12       Definitions.
In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms
shall have the meanings set forth below:

 

“Affiliate”
means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls,
is controlled by, or is under common Control with, such Person.

 

“Company
Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under
the Securities Act, any Person listed in the first paragraph of Rule 506(d)(1).

 

“Company’s
Knowledge,” “Knowledge of the Company” and words of similar import means the actual knowledge of
the executive officers (as defined in Rule 405 under the Securities Act) of the Company, including, but not limited to, Ashleigh
Palmer and Francisco Leon.

 

“Control”
(including the terms “controlling”, “controlled by” or “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

 

“Registration
and Investor Rights Agreement” means the agreement among the Company, the Purchasers and the Placement Agent, dated
as of the date of the Closing, in the form of Exhibit F attached to this Agreement.

 

“Right
of First Refusal and Co-Sale Agreement” means the agreement among the Company, the Purchasers, and certain other stockholders
of the Company, dated as of the date of the Closing, in the form of Exhibit G attached to this Agreement.

 

    	25

     

    

 

“Securities”
means the Shares and the Conversion Shares, collectively.

 

“Transaction
Documents” means the Registration and Investor Rights Agreement, the Right of First Refusal and Co-Sale Agreement, the
Voting Agreement and the Escrow Agreement.

 

“Voting
Agreement” means the agreement among the Company, the Purchasers and certain other stockholders of the Company, dated
as of the date of the Closing, in the form of Exhibit H attached to this Agreement.

 

[Signature
Page to Follow]

 

    	26

     

    

 

IN
WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this Securities Purchase Agreement to be duly executed
as of the date first above written.

 

	 	Provention
    BIO, Inc.
	 	 	 
	 	By:	             
	 	Name:	 
	 	Title:	   
	 	 	 
	 	PURCHASERS
	 	 	 
	 	The
    Purchasers executing the Signature Page in the form attached hereto as Annex A and delivering the same to the Company
    or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof.

 

[Signature
Page to Securities Purchase Agreement for Provention Bio, Inc.]

 

    	 

     

    

 

Annex
A

 

Securities
Purchase Agreement

 

Purchaser
Counterpart Signature Page

 

The
undersigned, desiring to: (i) enter into that certain Securities Purchase Agreement, dated April 25, 2017 (the “Agreement”),
between the undersigned, Provention Bio, Inc., a Delaware corporation (the “Company”), and the other parties
thereto, in or substantially in the form furnished to the undersigned and (ii) purchase the securities of the Company appearing
next to the undersigned’s name on Schedule A to the Agreement, on the terms and subject to conditions contained therein,
hereby agrees to purchase such securities from the Company as of the Closing and further agrees to join the Agreement as a party
thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions
thereof.

 

IN
WITNESS WHEREOF, the undersigned has executed the Agreement as of ______________.

 

	 	PURCHASER:	 
	 	Name, Address, Phone No., Email and Social Security No./EIN of Purchaser:
	 	 	 
	 	 
	 	 
	 	 
	 	 
	 	 	 
	 	Phone
    No.:	 
	 	Email.:	 
	 	Soc.
    Sec. No./EIN:	 
	 	 	 
	 	If a partnership, corporation, trust or other business entity:
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	If
    an individual:	           
	 	Signature	 

 

    	 

     

    

 

Schedule
A

 

    	 

     

    

 

Exhibit
A

 

Form
of Questionnaire

 

    	 

     

    

 

Exhibit
B

 

Form
of Escrow Agreement Available on Request

 

    	 

     

    

 

Exhibit
C

 

 Amended
and Restated Certificate of Incorporation

 

    	 

     

    

 

Exhibit
D

 

Disclosure
Schedules

 

    	 

     

    

 

Exhibit
E

 

Form
of Placement Agent Warrant

 

    	 

     

    

 

Exhibit
F

 

Form
of Registration and Investor Rights Agreement

 

    	 

     

    

 

Exhibit
G

 

Form
of Right of First Refusal and Co-Sale Agreement

 

    	 

     

    

 

Exhibit
H

 

Form
of Voting Agreement

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