Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (this “Agreement”), dated as of June 19, 2017 (the “Effective Date”),
is by and among Eton Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the investors listed
on the Schedule of Buyers, attached hereto as Exhibit A (individually, a “Buyer” and collectively,
the “Buyers”).

 

RECITALS

 

A.           The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D
(“Regulation D”), as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.

 

B.           The
Company has authorized the issuance of Series A Convertible Preferred Stock, par value $0.001 (the “Shares”)
in accordance with the form of the Amended and Restated Certificate of Incorporation attached hereto as Exhibit B (the
“Certificate”), which Shares shall be convertible into shares of the Company’s common stock, par value
$0.001 (the “Common Stock”) (as converted, collectively, the “Conversion Shares”), in accordance
with the terms of the Certificate.

 

C.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the aggregate
number of Shares set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers.

 

D.           At
each Closing (as defined below), the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached
hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company has agreed
to provide certain registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement),
under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

E.           In
connection with the Offering, the Company, together with National Securities Corporation (the “Placement Agent”),
have entered into an escrow agreement, in the form attached hereto as Exhibit D (the “Escrow Agreement”),
with Delaware Trust Company (the (“Escrow Agent”), to hold the Purchase Price (as hereinafter defined), to be
released at each Closing to the Company, upon the written consent of the Company and the Placement Agent.

 

F.           The
Shares and the Conversion Shares are collectively referred to herein as the “Securities.”

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

 

     

     

    

 

1.           AUTHORIZATION,
SALE AND ISSUANCE OF SERIES A CONVERTIBLE PREFERRED STOCK.

 

(a)          Authorization.
The Company will, prior to the Initial Closing Date (as defined below), authorize (a) the sale and issuance of the Shares,
having the rights, privileges, preferences and restrictions set forth in the Certificate; and (b) the reservation of Conversion
Shares for issuance upon conversion of the Shares.

 

(b)          Series
A Convertible Preferred Stock. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on each
Closing Date, the number of Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers.

 

(c)          Closing.
The closing of the purchase of the Shares by the Buyers shall occur at one or more closings (each of which is referred to as a
“Closing” and the date of each is referred to as a “Closing Date”). Each Closing shall take
place at the offices of Greenberg Traurig, LLP, 3161 Michelson Drive, Suite 1000, Irvine, CA 92612. The date and time of the
initial Closing (the “Initial Closing Date”) shall be 11:00 a.m., New York time, on the first Business Day on
which the conditions to the initial Closing (“Initial Closing”) set forth in Sections 6 and 7 below are satisfied
or waived (or such later date as is mutually agreed to by the Company and each Buyer). As used herein “Business Day”
means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required
by law to remain closed.

 

(d)          Purchase
Price. The aggregate of all Shares purchased and sold shall be no less than Fifteen Million Dollars ($15,000,000) at a cash
purchase price of $3.00 per share. The aggregate purchase price for the Shares to be purchased by each Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.

 

(e)          Payment
of Purchase Price; Delivery of Shares. On each Closing Date, (i) each Buyer shall pay its respective Purchase Price to
the Company through the Escrow Agent for their respective Shares to be issued and sold to such Buyer at such Closing, and (ii)
the Company shall deliver to each Buyer either (i) a certificate registered in such Buyer’s name (representing the number
of Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers) or (ii) an irrevocable instruction
letter to the Company’s transfer agent to issue a certificate registered in such Buyer’s name (representing the number
of Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers) and deliver such certificate
to the Buyer as soon thereafter as possible.

 

2.           BUYER’S
REPRESENTATIONS AND WARRANTIES.

 

Each Buyer represents and warrants to the
Company with respect to only itself that:

 

(a)          Organization;
Authority. Such Buyer (i) if an entity, is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder,
or (ii) if an individual, has the legal capacity to enter into and to consummate the transactions contemplated by the Transaction
Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

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(b)          No
Public Sale or Distribution. Such Buyer (i) is acquiring its Shares, and (ii) upon conversion of its Shares will acquire the
Conversion Shares issuable upon conversion thereof, in each case, for its own account and not with a view towards, or for resale
in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales
registered or exempted under the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree,
or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933
Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person (as defined below)
to distribute any of the Securities in violation of applicable securities laws.

 

(c)          Accredited
Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

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

 

(e)          Information.
Such Buyer and its advisors, if any, have been furnished with the Company’s private placement memorandum, dated May 17, 2017,
(the “Private Placement Memorandum”), and all other materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

(f)          No
Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(g)          Transfer
or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement or Section 4(h) hereof: (i)
the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company (if requested by the Company) an opinion of counsel to such Buyer, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Buyer provides the Company with reasonable assurance and documentation as may be requested by the
Company or its legal counsel that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities
made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable,
any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under
any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder.

 

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(h)          Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and constitutes
the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

 

(i)          No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such
Buyer is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect
on the ability of such Buyer to perform its obligations hereunder.

 

(j)          Buyer’s
Principal Residence/Office. The address of Buyer’s principal residence, if Buyer is a natural Person, or principal office,
if Buyer is a non-natural Person, such as a corporation, limited liability company or other entity, is set forth in column (2)
of the Schedule of Buyers.

 

(k)          No
Engagements. Such Buyer has not engaged any brokers, finders or agents, and the Company has not, nor will, incur, directly
or indirectly, as a result of any action taken by such Buyer, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with the transactions consummated under this Agreement. Neither such Buyer, nor
any of Buyer’s officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including
through a broker or finder: (i) engaged in or received any general solicitation or (ii) published or received any advertisement
in connection with the offer or sale of the Securities.

 

3.           REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to each
Buyer as of the date of this Agreement and as of the Closing relative to such Buyer that:

 

(a)          Organization
and Qualification. The Company is an entity duly organized and validly existing and in good standing under the laws of the
jurisdiction in which it is formed, and has the requisite power and authorization to own its properties and to carry on its business
as now being conducted and as presently proposed to be conducted. The Company is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not be
reasonably expected to have a Material Adverse Effect. “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations (including results thereof) or condition (financial or
otherwise) of the Company, either individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the
other Transaction Documents, or (iii) the authority or ability of the Company to perform any of its obligations under any of the
Transaction Documents. The Company has no Subsidiaries. “Subsidiaries” means any Person in which the Company,
directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or
(II) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing,
is individually referred to herein as a “Subsidiary.” Additionally, to the extent that any Subsidiary is hereafter
created, and the context of the provision of this Agreement would ordinarily include a Subsidiary, then the term “Company”
will be deemed to include such Subsidiary.

 

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(b)          Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares and the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of the Shares) have been duly authorized by the Company’s
board of directors or other governing body, as applicable, and (other than the filing with the SEC of one or more Registration
Statements in accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings
as may be required by any state securities agencies) no further filing, consent or authorization is required by the Company, its
respective boards of directors or the stockholders or other governing body. The Shares, when issued in accordance with the terms
of this Agreement, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes,
liens, charges and other encumbrances with respect to the issue thereof under the terms thereof. This Agreement has been, and the
other Transaction Documents will be prior to the Initial Closing, duly executed and delivered by the Company, and each constitutes
the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction
Documents” means, collectively, this Agreement, the Registration Rights Agreement, the Irrevocable Transfer Agent Instructions
(as defined in the Registration Rights Agreement and each of the other agreements and instruments entered into or delivered by
any of the parties hereto in connection with the consummation of the transactions contemplated hereby and thereby, as may be amended
from time to time.

 

(c)          Issuance
of Conversion Shares. The Conversion Shares, when issued in accordance with the terms of the Certificate, will be validly issued,
fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with
respect to the issue thereof under the terms thereof, with the holders being entitled to all rights accorded to a holder of Common
Stock. The Company shall have reserved from its duly authorized capital stock not less than one hundred ten percent (110%) of the
maximum number of Conversion Shares issuable upon conversion of the Shares in accordance with the terms of the Certificate. Subject
to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company of
the Securities is exempt from registration under the 1933 Act.

 

(d)          No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares, the Conversion
Shares upon conversion of the Shares, the reservation for issuance of the Conversion Shares) will not (i) result in a violation
of the Certificate of Incorporation (as defined below) (including, without limitation, the Certificate or any other certificate
of designation contained therein) or other organizational documents of the Company, any capital stock of the Company or Bylaws
(as defined below) of the Company, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company is a party or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations) applicable
to the Company or by which any property or asset of the Company is bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.

 

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(e)          Consents.
The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with (other
than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights
Agreement, a Form D with the SEC and any other filings as may be required by any state securities agencies), any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its
respective obligations under, or contemplated by, the Transaction Documents, in each case, in accordance with the terms hereof
or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain at or prior
to the Initial Closing have been obtained or made on or prior to the Initial Closing Date, and the Company is not aware of any
facts or circumstances which might prevent the Company from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents.

 

(f)          Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company, (ii) an “affiliate” (as defined in Rule
144) of the Company or (iii) to its knowledge, a “beneficial owner” of more than ten percent (10%) of the shares of
Common Stock (as defined for purposes of Rule 13d-3 of the Securities and Exchange Act of 1934 Act, as amended (“1934
Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any
advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents
to each Buyer that the Company’s decision to enter into the Transaction Documents to which it is a party has been based solely
on the independent evaluation by the Company and its respective representatives.

 

(g)          No
General Solicitation; Placement Agent’s Fees. Except as set forth in Schedule 3(g) attached to the Disclosure
Letter, neither the Company nor any Person acting on its behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for
the payment of any Placement Agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons
engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby. Other than
the Placement Agent, to which a cash fee of 10% of the gross proceeds and a warrant equal to 10% of the Conversion Shares, the
Company has not engaged any placement agent or other broker or dealer in connection with the offer or sale of the Securities.

 

(h)          No
Integrated Offering. None of the Company or, to the Company’s knowledge, any of their affiliates, nor any Person acting
on 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 require registration of the issuance of any of the Securities under the 1933 Act, whether through
integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of
the Company (other than any required approval of holders of a majority of the outstanding common stock of the Company received
before the Initial Closing) under any applicable stockholder approval provisions. None of the Company, nor its affiliates nor any
Person acting on their behalf will take any action or steps that would require registration of the issuance of any of the Securities
under the 1933 Act or cause the offering of any of the Securities to be integrated with other offerings of securities of the Company.

 

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(i)          Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares may increase in certain circumstances.
The Company further acknowledges that its obligation to issue the Conversion Shares upon conversion of the Shares in accordance
with this Agreement and the Certificate is absolute and unconditional, regardless of the dilutive effect that such issuance may
have on the ownership interests of other stockholders of the Company.

 

(j)          Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of
Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which
is or could become applicable to any Buyer as a result of the consummation of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities.
The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder
rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control
of the Company.

 

(k)          Placement
Documents. The Private Placement Memorandum provided to the Buyers in connection with the sale of the Shares, at the time of
the date thereon, as it may be amended from time to time, did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. No other information provided by or on behalf of the Company to any of the Buyers taken
together with such Private Placement Memorandum contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or
were made.

 

(l)           Absence
of Certain Changes. Since the date of the Company’s Private Placement Memorandum, there has been no material adverse
change and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company. Since the date of the Company’s Private Placement Memorandum,
the Company has not (i) declared or paid any dividends (whether by cash, property or securities), (ii) sold any assets, individually
or in the aggregate, outside of the ordinary course of business or (iii) made any capital expenditures, individually or in the
aggregate, outside of the ordinary course of business. The Company has not taken any steps to seek protection pursuant to any law
or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company have
any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company is not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at each Closing, will not be Insolvent (as defined below).
“Insolvent” means (i) the present fair saleable value of the Company’s assets is less than the amount
required to pay the Company’s total Indebtedness (as defined below), (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (iii) the Company intends to
incur or believe that it will incur debts that would be beyond its ability to pay as such debts mature.

 

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(m)          No
Undisclosed Events, Liabilities, Developments or Circumstances. The Company has no knowledge of any event, liability, development
or circumstance that has occurred or exists, or that is reasonably expected to occur or exist with respect to the Company or any
of its business, properties, liabilities, operations (including results thereof) or condition (financial or otherwise), that (i)
could have a material adverse effect on any Buyer’s investment hereunder or (ii) could have a Material Adverse Effect.

 

(n)          Conduct
of Business; Regulatory Permits. The Company is not in violation of any term of or in default under its Certificate of Incorporation
or Bylaws. The Company is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable
to the Company, and the Company will not conduct its business in violation of any of the foregoing, except in all cases for possible
violations which could not, individually or in the aggregate, have a Material Adverse Effect. The Company possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material
Adverse Effect, and the Company has not received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

 

(o)          Foreign
Corrupt Practices. The Company and, to its knowledge, none of its directors, officers, agents, employees or other Persons 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.

 

(p)          Sarbanes-Oxley
Act. The Company is in compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 and all applicable rules
and regulations promulgated by the SEC thereunder.

 

(q)          Transactions
With Affiliates. Except as set forth on Schedule 3(q) attached to the Disclosure Letter and in the Private Placement
Memorandum, none of the officers, directors, employees or affiliates of the Company is presently a party to any transaction with
the Company (other than for ordinary course services as employees, officers or directors and immaterial transactions), 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 such officer, director, employee or affiliate or,
to the knowledge of the Company, any corporation, partnership, trust or other Person in which any such officer, director, employee
or affiliate has a substantial interest or is an employee, officer, director, trustee or partner.

 

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(r)          Equity
Capitalization. As of the date hereof, the authorized capital stock of the Company consists solely of 50,000,000 shares of
Common Stock, of which, 6,000,000 are issued and outstanding and 750,000 shares are reserved for issuance pursuant to Convertible
Securities (as defined below) (other than the Shares), and 10,000,000 shares of Series A Preferred Stock, none of which are issued
or outstanding as of the date of this Agreement. No approval of the shareholders is required for the issuance of the Shares or
the Conversion Shares or any of the Convertible Securities. No shares of Common Stock are held in treasury. All of such outstanding
shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and non-assessable. 6,000,000
shares of the Company’s issued and outstanding Common Stock on the date hereof are owned by Persons who are “affiliates”
(as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at
least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding that any such
Persons are “affiliates” for purposes of federal securities laws) of the Company. To the Company’s knowledge,
no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption
that all Convertible Securities, whether or not presently exercisable or convertible, have been fully exercised or converted (as
the case may be) taking account of any limitations on exercise or conversion (including “blockers”) contained therein
without conceding in the private placement documentation that such identified Person is a 10% stockholder for purposes of federal
securities laws). (i) None of the Company’s capital stock is subject to preemptive rights or any other similar rights or
any liens or encumbrances suffered or permitted by the Company; (ii) there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company
is or may become bound to issue additional capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any capital stock of the Company (except pursuant to an agreement to issue common stock to the Placement Agent in connection
with patent and intellectual property services); (iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing Indebtedness of the Company or by which the Company is or may
become bound; (iv) there are no financing statements securing obligations in any amounts filed in connection with the Company;
(v) there are no agreements or arrangements under which the Company is obligated to register the sale of any of their securities
under the 1933 Act (except pursuant to the Registration Rights Agreement and a warrant issued to the Placement Agent); (vi) there
are no outstanding securities or instruments of the Company which contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the
Company; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by
the issuance of the Securities; and (viii) the Company has not issued any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement. The Company has furnished to the Buyers true, correct and complete copies
of the Certificate and the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights
of the holders thereof in respect thereto. “Convertible Securities” means preferred stock, options, warrants
or other securities directly or indirectly convertible into, exchangeable for or exercisable for Common Stock of the Company.

 

(s)          Indebtedness
and Other Contracts. The Company, except as disclosed on Schedule 3(s) attached to the Disclosure Letter or in the Private
Placement Memorandum, (i) has no outstanding Indebtedness (as defined below), (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, (iii) is not in violation of any term of, or in default under, any
contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually
or in the aggregate, in a Material Adverse Effect, or (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. “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,
lien, 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. “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. “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

    	 	9	 

     

    

 

(t)          Absence
of Litigation. Except as set forth on Schedule 3(t) attached to the Disclosure Letter, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company, threatened against or affecting the Company, the Common Stock or any of the Company’s
officers or directors which is outside of the ordinary course of business or individually or in the aggregate material to the Company.
There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC or
other United States governmental agency involving the Company or any current or former director or officer of the Company.

 

(u)          [Reserved].

 

(v)         Employee
Relations. The Company is not a party to any collective bargaining agreement or employs any member of a union. The Company
believes that its relations with their respective employees are good. No executive officer (as defined in Rule 501(f) promulgated
under the 1933 Act) or other key employee of the Company has notified the Company that such officer intends to leave the Company
or otherwise terminate such officer’s employment with the Company. To the Company’s knowledge, no executive officer
or other key employee of the Company is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement
or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may
be) does not subject the Company to any liability with respect to any of the foregoing matters. The Company is in compliance with
all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(w)          Title.
The Company has good and marketable title to all personal property owned by it which is material to the business of the Company,
in each case, free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property by the Company.

 

    	 	10	 

     

    

 

(x)          Intellectual
Property Rights. To the Company’s knowledge, the Company owns or possesses adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (“Intellectual Property Rights”) necessary to conduct is business as now conducted and
as presently proposed to be conducted. None of the Company’s Intellectual Property Rights have expired, terminated or been
abandoned, or are expected to expire, terminate or be abandoned, within three years from the date of this Agreement. The Company
has no knowledge of any infringement by the Company of Intellectual Property Rights of others. There is no claim, action or proceeding
being made or brought, or to the knowledge of the Company, being threatened, against the Company regarding their Intellectual Property
Rights. The Company is not aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims,
actions or proceedings. The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of
all of its Intellectual Property Rights.

 

(y)          Environmental
Laws. The Company (i) is in compliance with all Environmental Laws (as defined below), (ii) has received all permits, licenses
or other approvals required of them under applicable Environmental Laws to conduct its business, and (iii) is in compliance with
all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. “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.

 

(z)          Tax
Status. The Company (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in Section
1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(aa)         Internal
Accounting and Disclosure Controls. The Company maintains internal control over financial reporting (as such term is defined
in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes, including that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect
to any difference. The Company has not received any notice or correspondence from any accountant or other Person relating to any
potential material weakness or significant deficiency in any part of the internal controls over financial reporting of the Company.

 

    	 	11	 

     

    

 

(bb)         Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship involving the Company in respect of
an off-balance sheet entity that would be required to be disclosed by the Company in a 1934 Act filing or that otherwise could
be reasonably likely to have a Material Adverse Effect.

 

(cc)         Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
or, to the knowledge of the 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” as such terms are defined in the Investment Company Act of 1940, as amended.

 

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

 

(ee)         Transfer
Taxes. On each Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(ff)          Bank
Holding Company Act. The Company is not subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the
Company nor, to its knowledge, 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, to its knowledge, any 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.

 

(gg)         Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(hh)          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.

 

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

 

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

 

(kk)         Real
Property. The Company holds good title to all real property, leases in real property, or other interests in real property stated
as owned or held by the Company (the “Real Property”). The Real Property is free and clear of all mortgages,
defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances
(collectively “Encumbrances”) and is not subject to any rights of way, building use restrictions, exceptions,
variances, reservations, or limitations of any nature except for (i) liens for current taxes not yet due, and (ii) zoning laws
and other land use restrictions that do not impair the present or anticipated use of the property subject thereto. Any Real Property
held under lease by the Company is held under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such property and buildings by the Company.

 

    	 	12	 

     

    

 

(ll)         Fixtures
and Equipment. The Company has good title to, or a valid leasehold interest in, the tangible personal property, equipment,
improvements, fixtures, and other personal property and appurtenances that are used by the Company in connection with the conduct
of its business (the “Fixtures and Equipment”). The Fixtures and Equipment are structurally sound, are in good
operating condition and repair, are adequate for the uses to which they are being put, are not in need of maintenance or repairs
except for ordinary, routine maintenance and repairs and are sufficient for the conduct of the Company’s business in the
manner as conducted prior to each Closing. The Company owns all of its Fixtures and Equipment free and clear of all Encumbrances
except for (i) liens for current taxes not yet due, and (ii) zoning laws and other land use restrictions that do not impair the
present or anticipated use of the property subject thereto.

 

(mm)       Illegal
or Unauthorized Payments; Political Contributions. The Company nor, to the best of the Company’s knowledge (after reasonable
inquiry of its officers and directors), any of the officers, directors, employees, agents or other representatives of the Company
or any other business entity or enterprise with which the Company is or has been affiliated or associated, has, directly or indirectly,
made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable
law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective
or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the
Company.

 

(nn)         Money
Laundering. The Company is in compliance with, and has not previously violated, the USA Patriot Act of 2001 and all other applicable
U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws, regulations and Executive
Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, without limitation, (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.

 

(oo)         Disclosure.
The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting the transactions
consummated hereunder. All disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated
hereby, including the private placement memorandum, the Disclosure Letter and the schedules to this Agreement, furnished by or
on behalf of the Company does not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The
Company acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 2.

 

4.           COVENANTS.

 

(a)          Best
Efforts. Each Buyer shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in
Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the conditions to be satisfied by
it as provided in Section 7 of this Agreement.

 

    	 	13	 

     

    

 

(b)          Form
D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to the Placement Agent promptly after such filing. The Company shall, on or before the Initial Closing Date, take
such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities
for sale to the Placement Agent at each Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any
such action so taken to the Buyers on or prior to each Closing Date. Without limiting any other obligation of the Company under
this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required
in connection with the consummation of the transactions consummated hereunder under all applicable securities laws (including,
without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall
comply with all applicable federal, foreign, state and local laws, statutes, rules, regulations and the like relating to the offering
and sale of the Securities to the Buyers.

 

(c)          Reporting
Status. After the date the Company becomes subject to the periodic reporting requirements under Sections 13 or 15(d) of the
1934 Act, as amended from time to time, together with the regulations promulgated thereunder (a “Reporting Company”),
and until the date on which the Buyers shall have sold all of the Registrable Securities (such period, to end in any event, whether
or not such securities have been sold, not later than five years after such date, the “Reporting Period”), the
Company shall use commercially reasonable efforts to timely file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would no longer require or otherwise permit such termination unless such termination
is approved by the holders of a majority stockholders of the voting power of the Company, or unless no Buyer has demand registration
rights under the Registration Rights Agreement or unless no Buyer is a holder of record of Conversion Shares (collectively, the
“Termination Conditions”).

 

(d)          Use
of Proceeds. The Company shall use the proceeds from the sale of the Shares for general corporate purposes as set forth in
the Private Placement Memorandum; provided, however, that the Company shall not use any of the proceeds to make or repay loans
to any officer or director of the Company.

 

(e)          [Reserved].

 

(f)          Listing.
In connection with the Company becoming a Reporting Company, the Company shall in connection with any proper demand for registration
of Registrable Securities under the Registration Rights Agreement (if the same has not previously occurred) promptly secure the
listing or designation for quotation (as the case may be) of all of the Registrable Securities upon each national securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed or designated for quotation (as the case may
be) (subject to official notice of issuance) and shall thereafter maintain such listing or designation for quotation (as the case
may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents on such national
securities exchange or automated quotation system unless one of the Termination Conditions has occurred. During any period that
the Common Stock is listed or designated, the Company shall use commercially reasonable efforts to maintain the Common Stock’s
listing or designation for quotation (as the case may be) on The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select
Market, the Nasdaq Global Market or the Nasdaq Capital Market (each, an “Eligible Market”). During the Reporting
Period, the Company shall use commercially reasonable efforts not to take any action which could be reasonably expected to prevent
a listing or result in the delisting or suspension of the Common Stock from an Eligible Market. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 4(f).

 

    	 	14	 

     

    

 

(g)          Fees.
The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s
commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby and
resulting from the retention by the Company of any placement agent, financial advisor or broker (including, without limitation,
any fees payable to the Placement Agent, who is the Company’s sole placement agent in connection with the transactions contemplated
by this Agreement). Except where Buyer has breached Section 2(k) hereof, the Company shall pay, and hold each Buyer harmless against,
any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising
in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party
to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.

 

(h)          Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by a Buyer in connection with a bona fide margin agreement or other bona fide loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer making a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute
and deliver such documentation as a holder of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.

 

(i)          Reservation
of Shares. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance,
no less than one hundred ten percent (110%) of the maximum number of Conversion Shares issuable upon conversion of the Shares.

 

(j)          Conduct
of Business. So long as any of the Securities are held by the Buyers and their successors in interest and assigns, the business
of the Company shall not be conducted in violation of any law, ordinance or regulation of any governmental entity, except where
such violations would not result, either individually or in the aggregate, in a Material Adverse Effect.

 

(k)          Subsequent
Placements. So long as the Shares are outstanding, the Company shall, without the prior written consent of the Required Buyers
(as defined below), be prohibited from effecting or entering into an agreement to effect any offering or placement of equity or
equity linked securities of the Company, including without limitation any shares of Series A Preferred Stock that remain authorized
and unissued following the termination of the offering pursuant to this Agreement (“Subsequent Placement”);
provided that the term “Subsequent Placement” shall not include (i) a firm commitment underwritten initial public
offering through a registered broker-dealer (an “IPO”), (ii) with the prior written consent of Liquid Venture
Partners, LLC, an affiliate of the Placement Agent (“LVP”), a placement (or series of placements), based on
a pre-issuance valuation of the Company of at least $50 million, in which in the aggregate gross proceeds to the Company do not
exceed $2 million, or (iii) ) the issuance of equity or equity linked securities, other than Series A Preferred Stock, based on
a pre-issuance valuation of the Company of at least $50 million, to one or more of the Company’s strategic partners and/or
licensors in consideration of non-cash assets or license rights from the strategic partner or licensor, which issuances in the
aggregate shall not exceed securities worth $5 million. All shares of Common Stock issued or issuable pursuant to the securities
of the Company issued under this Section 4(k) shall be subject to the 12 month lock-up set forth in Section 4(u).

 

(l)          Change
of Control. Prior to an IPO, the Company may not effect a Change of Control without the prior written consent of the Required
Buyers. “Change in Control” means (x) the acquisition of the Company by another entity by means of any transaction
(including, without limitation, any stock acquisition, reorganization, merger or consolidation) that contemplates an enterprise
value of the Company of less than $60 million, or (y) a sale of all or substantially all of the assets of the Company for an aggregate
purchase price of less than $60 million (including, for purposes of this section, the sale or exclusive license of intellectual
property rights which, in the aggregate, constitutes substantially all of the corporation’s material intellectual property
assets).

 

    	 	15	 

     

    

 

(m)          Variable
Rate Transaction. Notwithstanding anything in this Agreement to the contrary, until the later of none of the Shares not having
been converted to Conversion Shares or three years after the Company becomes a Reporting Company, the Company shall be prohibited
from effecting or entering into any Subsequent Placement involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any Convertible Securities either (A) at a conversion, exercise or
exchange rate or other price that is based upon and/or varies with the trading prices of, or quotations for, the shares of Common
Stock at any time after the initial issuance of such Convertible Securities, or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such Convertible Securities or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock,
other than pursuant to a customary “weighted average” anti-dilution provision or (ii) enters into any agreement (including,
without limitation, an “equity line of credit” or an “at the market offering”) whereby the Company may
sell securities at a future determined price (other than standard and customary “preemptive” or “participation”
rights). Each Buyer shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy
shall be in addition to any right to collect damages. Notwithstanding the foregoing, the offer or sale of the Series A Preferred
Stock shall not be deemed to be a Variable Rate Transaction.

 

(n)          Passive
Foreign Investment Company. For the period ending on the third year anniversary after the Company becomes a Reporting 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.

 

(o)          Restriction
on Redemption and Cash Dividends. So long as any Shares are outstanding and have not been converted to Conversion Shares, the
Company shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the
Company without the prior express written consent of the Required Buyers.

 

(p)          Corporate
Existence. So long as any Shares are outstanding and have not been converted to Conversion Shares, the Company shall maintain
its corporate existence and shall not sell, assign or transfer all or substantially all of the Company’s assets.

 

(q)          Board
of Directors; Size. So long as any Shares are outstanding and have not been converted to Conversion Shares, the Company will,
within one hundred twenty (120) days of the Effective Date, have a board of directors and committees thereof that conform to the
requirements of Nasdaq Listing Rule 5605 applicable to smaller reporting companies. So long as the Shares are outstanding, LVP
shall have the right to advise and consent on all board of director nominees, provided however, such consent shall not be unreasonably
withheld. Subject to any legal rights under Delaware law of the shareholders, the board of directors of the Company and committees
thereof shall conform to Nasdaq Listing Rule 5605 and the foregoing sentence for so long as any Shares are outstanding and have
not been converted to Conversion Shares, except as approved by LVP, which approval may be withheld in its discretion and subject
to reasonable conditions, including the requirement of additional independent directors.

 

    	 	16	 

     

    

 

(r)          Intellectual
Property Strategy. Within three months of the Effective Date, the Company will adopt an intellectual property strategy reasonably
acceptable to LVP, and provide a written summary of the strategy to the Placement Agent.

 

(s)          Incentive
Equity. The Company has adopted an incentive stock or equity award plan (the “Plan”), the Plan provides for awards
of shares equal to 5,000,000 shares of Common Stock. As of the Effective Date, 2,350,000 shares of Common Stock remain eligible
for issuance under the Plan for future issuance (the “Reserved Shares”). The Reserved Shares shall not be in
excess of fifteen percent (15%) of the number of fully diluted shares of Common Stock up to and including the date of an IPO. The
Plan will not be amended to increase the number of shares subject thereto until the Company becomes a Reporting Company or upon
the approval of LVP.

 

(t)          Independent
Accountants. Within three months after the date of initial issuance of the Shares, the Company will engage independent certified
public accountants, which firm is actively registered with the PCAOB, to perform an audit of the financial statements that would
be necessary and sufficient to meet the filing requirements of a registration statement for the registration of securities of the
Company either for issuance by the Company or resale of the Conversion Shares, which audit will be completed no later than nine
(9) months after the date of the initial issuance of the Shares.

 

(u)          Lock
Up. In connection with any initial public offering, the Company will use its best efforts to obtain lock-up agreements from
all officers, directors and employees of the Company and the Company’s parent, Imprimis Pharmaceuticals, Inc., any direct
or beneficial owner of five percent (5%) or more of the Common Stock (excluding any Conversion Shares for purposes of calculating
the five percent (5%)), and NSC and any beneficial holders of shares of Common Stock who are affiliates of NSC in respect of shares
of Common Stock issued under any agreement for the provision of patent and intellectual property services and issuable or issued
upon exercise of any warrants issued in connection with the offering by the Company of the Shares (the “Financing Shares”)
(for clarity, the lock up for NSC and its affiliates will not apply to any other shares of Common Stock, including any shares of
Common Stock acquired in the public markets); the foregoing lock up to extend for a period of 12 months after the effective date
of the registration statement for such initial public offering.

 

(v)         Investor
Market Stand-Off. In connection with the initial public offering of the Company’s Common Stock, if any, each Buyer hereby
agrees that, for one hundred eighty (180) days from the effective date of such registration (the “Restricted Period”),
it will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock, whether now owned or hereafter acquired or with
respect to which such Buyer has or hereafter acquires the power of disposition; or (ii) enter into any swap or other agreement,
arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequence
of ownership of any Common Stock or any securities convertible into or exercisable or exchangeable for any Common Stock, whether
any transaction described in clause (i) or (ii) is to be settled by delivery of Common Stock, other securities, in cash or otherwise,
without the prior written consent of the managing or lead underwriter of such offering. In order to enforce the restrictions agreed
to by Buyer in this Section 4(v), the Company may impose stop-transfer instructions with respect to any security acquired under
or subject to this Agreement until the end of the Restricted Period. The Company’s underwriters shall be third-party beneficiaries
of the restrictions set forth in this Section 4(v).

 

(w)          IPO
Commitment. The Company shall, no later than nine (9) months following the Initial Closing Date, subject to extension upon
the prior written approval of the Required Holders, file with the SEC a registration statement on Form S-1 (or any successor from
thereto) to register and sell Common Stock in an IPO and complete the IPO by December 31, 2018, subject to extension upon the prior
written approval of the Required Holders.

 

    	 	17	 

     

    

 

5.           REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a)          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 Shares and, if issued, the Conversion Shares in which the Company shall
record the name and address of the Person in whose name the Shares and/or Conversion Shares have been issued (including the name
and address of each transferee), the aggregate number of Shares or Conversion Shares held by such Person, and any tax related information
required to be maintained. The Company shall keep the register open and available at all times during business hours for inspection
of any Buyer or its legal representatives.

 

(b)          Transfer
Agent Instructions. If a Buyer effects a sale, assignment or transfer of the Conversion Shares, the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance
accounts at the Depository Trust Company (“DTC”) in such name and in such denominations as specified by such
Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion Shares
sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule 144, the transfer agent
shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance
with Section 5(d) below. The Company acknowledges that a breach by it of its obligations under this Section 5(b) will cause irreparable
harm to each Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section
5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section
5(b), that each Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining
any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or
other security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer
Agent Instructions to the Company’s transfer agent on each Effective Date (as defined and provided in the Registration Rights
Agreement), provided that the applicable Buyer(s) or its or their representatives and/or brokers have provided the documentation
to counsel reasonably necessary or required for the basis of such legal opinion. Any fees (with respect to the transfer agent,
counsel to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on any of the Securities
shall be borne by the Company.

 

(c)          Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares) pursuant to
an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth
below, the Securities shall bear any legend as required by the “Blue Sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

[NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN]/[THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

    	 	18	 

     

    

 

(d)          Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above
or any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities
is effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not
an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided
that a Buyer provides the Company with reasonable assurances that such Securities are eligible and will remain for sale, assignment
or transfer under Rule 144 which shall not include an opinion of counsel), (iv) in connection with a sale, assignment or other
transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in
a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made and thereafter
made without registration under the applicable requirements of the 1933 Act, or (v) if such legend is not required under applicable
requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements issued by
the SEC, provided that Buyer provides the Company with a reasonable description of the authority Buyer is relying upon). If the
Company is a Reporting Company and a legend is not required pursuant to the foregoing, the Company, at its expense, shall no later
than two (2) Business Days following the delivery by a Buyer to the Company or the transfer agent (with notice to the Company)
of a legended certificate representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise
in form necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries from such Buyer
as may be required above in this Section 5(d), as directed by such Buyer, either: (A) provided that the Company’s transfer
agent is participating in the DTC Fast Automated Securities Transfer Program and such Securities are Conversion Shares, credit
the aggregate number of shares of Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s
balance account with the DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch for delivery (via reputable overnight
courier) to such Buyer, a certificate representing such Securities that is free from all restrictive and other legends, registered
in the name of such Buyer or its designee (the date by which such credit is so required to be made to the balance account of such
Buyer’s or such Buyer’s nominee with DTC or such certificate is required to be delivered to such Buyer pursuant to
the foregoing is referred to herein as the “Required Delivery Date”).

 

(e)          Failure
to Timely Deliver; Buy-In. If the Company is a Reporting Company and the Company improperly fails to (i) issue and dispatch
for delivery (or cause to be so dispatched) to a Buyer by the Required Delivery Date a certificate representing the Securities
so delivered to the Company by such Buyer that is free from all restrictive and other legends or (ii) credit the balance account
of such Buyer’s or such Buyer’s nominee with DTC for such number of Conversion Shares so delivered to the Company,
and if on or after the business day immediately following the Required Delivery Date such Buyer (or any other Person in respect,
or on behalf, of such Buyer) purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by such Buyer of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common
Stock equal to all or any portion of the number of shares of Common Stock, that such Buyer so anticipated receiving from the Company
without any restrictive legend, then, in addition to all other remedies available to such Buyer, the Company shall, within five
(5) Business Days after such Buyer’s request and in such Buyer’s sole discretion, either (x) pay cash to such Buyer
in an amount equal to such Buyer’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any)
(the “Buy-In Price”), at which point the Company’s obligation to so deliver such certificate or credit
such Buyer’s balance account shall terminate and such shares shall be cancelled, or (y) promptly honor its obligation to
so deliver to such Buyer a certificate or certificates or credit such Buyer’s DTC account representing such number of shares
of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay cash to
such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion
Shares that the Company was required to deliver to such Buyer by the Required Delivery Date multiplied by (B) the lowest closing
sale price of the Common Stock on any Business Day during the period commencing on the date of the delivery by such Buyer to the
Company of the applicable Conversion Shares and ending on the date of such delivery and payment under this clause (y).

 

    	 	19	 

     

    

 

6.           CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

 

(a)          The
obligation of the Company hereunder to issue and sell the Shares to each Buyer 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 by providing each Buyer with prior written notice thereof:

 

(i)          Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and a Rule 506 “Bad Actor”
Questionnaire, and delivered the same to the Company.

 

(ii)         Such
Buyer and each other Buyer shall have delivered to the Escrow Agent on behalf of the Company the Purchase Price for the Shares
being purchased by such Buyer at the Closing by check in collected funds through the Escrow Agent or wire transfer of immediately
available funds pursuant to the wire instructions provided by the Company.

 

(iii)        The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by
such Buyer at or prior to the Closing Date.

 

(iv)        A
minimum of 5,000,000 Shares, for the minimum gross proceeds of $15,000,000, are purchased by the Buyers at the Initial Closing.

 

7.           CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.

 

(a)          The
obligation of each Buyer hereunder to purchase its 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 each Buyer’s sole benefit and may be waived
by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

    	 	20	 

     

    

 

(i)          The
Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to such Buyer either (A) a certificate registered in such Buyer’s name (representing
the number of Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers) or (B) an irrevocable
instruction letter to the Company’s transfer agent to issue a certificate registered in such Buyer’s name (representing
the number of Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers) and deliver such
certificate to the Buyer as soon thereafter as possible.

 

(ii)         Buyer
shall have received an opinion of Golenbock Eiseman Assor Bell & Peskoe, the Company’s counsel, dated the date of the
issuance of the Shares to such Buyer, stating that the Company is duly incorporated, the Transaction Documents have been duly authorized,
that the Shares are be duly authorized, fully paid and non-assessable and that the Conversion Shares, if and when issued will be
duly authorized, fully paid and non-assessable, which opinion may be subject to such assumptions and conditions are normally set
forth in opinions of legal counsel in respect of such matters.

 

(iii)        The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in its jurisdiction
of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within ten
(10) days of the Closing Date.

 

(iv)        The
Company shall have delivered to such Buyer a certificate or other reasonably acceptable evidence evidencing the Company’s
qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction
in which the Company conducts business and is required to so qualify, as of a date within ten (10) days of the Closing Date.

 

(v)         The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Secretary of
State of the Company’s jurisdiction of incorporation within ten (10) days of the Closing Date.

 

(vi)        The
Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s
board of directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and (iii)
the Bylaws of the Company as in effect at the Closing.

 

(vii)       Each
and every representation and warranty of the Company shall be true and correct as of the applicable Closing Date in all material
respects (except for representations and warranties that include an express materiality qualification, which shall be true and
correct in all respects and, except further, representations and warranties that speak as of a specific date, which shall be true
and correct as of such date) and the Company shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date (except
for covenants, agreements and conditions that include an express materiality qualification, which shall performed, satisfied or
complied in all respects. Such Buyer shall have received a certificate, executed by the President of the Company, dated as of the
Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form reasonably
acceptable to such Buyer.

 

    	 	21	 

     

    

 

(viii)      The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.

 

(ix)         No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(x)          Since
the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.

 

(xi)         The
Company shall not have amended, modified, waived compliance with or terminated, revoked or rescinded in any manner or respect (and
the Company shall not have taken any action, or permitted any action to be taken (whether through the Company’s inaction
or otherwise), that has a similar effect to any of the foregoing) any provision of any of material agreements and all of such agreements
shall be in full force and effect.

 

(xii)        The
Company shall have delivered to such Buyer a letter dated as of the Closing Date, in a form reasonably acceptable to such Buyer,
executed by the Company (the “Disclosure Letter”).

 

(xiii)       The
Company shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions contemplated
by this Agreement as such Buyer or its counsel may reasonably request.

 

(xiv)      A
minimum of 5,000,000 Shares, for the minimum gross proceeds of $15,000,000, are purchased by the Buyers at the Initial Closing.

 

8.           TERMINATION.

 

(a)          This
Agreement may be terminated prior to the Initial Closing:

 

(i)          by
written agreement of the Buyers and the Company; or

 

(ii)         by
either the Company or a Buyer (as to itself but no other Buyer) upon written notice to the other, if the Initial Closing shall
not have taken place by 4:30 p.m. Eastern time on June 19, 2017, subject to extension to August 10, 2017 pursuant to the mutual
agreement of the Company and the Placement Agent; provided, that the right to terminate this Agreement under this Section 8(a)(ii)
shall not be available to any party whose failure to comply with its obligations under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before such time.

 

(b)          No
termination of this Agreement shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses
described in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right
of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction
Documents.

 

    	 	22	 

     

    

 

9.          MISCELLANEOUS.

 

(a)          Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed
or operate to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

 

(b)          Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

(c)          Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. 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.

 

    	 	23	 

     

    

 

(d)          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). Notwithstanding
anything to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following
is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company, or
payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts that would
be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law. Accordingly,
if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially
determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been
made by mutual mistake of such Buyer, and the Company and such amount shall be deemed to have been adjusted with retroactive effect
to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment
shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of interest or any
other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid
to or received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time
to which they relate.

 

(e)          Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein, and
this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein;
provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have
any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the Company prior
to the date hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend
in any respect any obligations of the Company, or any rights of or benefits to any Buyer or any other Person, in any agreement
entered into prior to the date hereof between or among the Company and any Buyer, or any instruments any Buyer received from the
Company prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the Required Buyers, and any amendment to any provision
of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities,
as applicable, provided that no such amendment shall be effective to the extent that it (1) applies to less than all of the holders
of the Securities then outstanding or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written
consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be effective unless it is in
writing and signed by an authorized representative of the waiving party, provided that the Required Buyers may waive any provision
of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e)
shall be binding on all Buyers 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 Buyer without such Buyer’s prior written consent (which
may be granted or withheld in such Buyer’s sole discretion). No consideration shall be offered or paid to any Person to amend
or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also
is offered to all of the parties to the Transaction Documents who are holders of Shares. The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents
except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth
in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company
or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees
that no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives
shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other Transaction Document. “Required Buyers”
means Buyers having Purchase Prices in the aggregate that are at least equal to a majority of the aggregate Purchase Prices for
all Buyers.

 

    	 	24	 

     

    

 

(f)          Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server
that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Business Day
after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party
to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

 

If to the Company:

 

Eton Pharmaceuticals, Inc.

12264 El Camino Real, Suite
350

San Diego, CA 92130

Facsimile: (858) 345-1743

E-mail: mark@imprimispharma.com

Attention: Mark L. Baum

 

with a copy (for informational
purposes only) to:

 

Golenbock Eiseman Assor Bell &
Peskoe LLP

711 Third Avenue, 17th Floor

New York, NY 10017

Facsimile: (212) 754-0330

E-mail: ahudders@golenbock.com

cvandemark@golenbock.com

Attention: Andrew D. Hudders, Esq.

      Carl Van Demark,
Esq.

 

If to a Buyer, to its address, facsimile
number or e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on
the Schedule of Buyers,

 

    	 	25	 

     

    

 

with a copy (for informational
purposes only) to:

 

Greenberg Traurig, LLP

3161 Michelson Drive, Suite 1000

Irvine, CA 92612

Facsimile: (949) 732-6501

E-mail: DonahueD@gtlaw.com

Attention: Daniel K. Donahue, Esq.

 

or to such other address, facsimile number
or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change. 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 and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i),
(ii) or (iv) above, respectively. A copy of the e-mail transmission containing the time, date and recipient e-mail address shall
be rebuttable evidence of receipt by e-mail in accordance with clause (iii) above.

 

(g)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including, as contemplated below, any assignee of any of the Securities. The Company shall not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the Required Buyers, except in the event of a Change in
Control. A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without
the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.

 

(h)          No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 9(k).

 

(i)          Survival.
The representations, warranties, agreements and covenants shall survive the Closing and shall expire on the conversion of the Shares
into Conversion Shares. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants
hereunder.

 

(j)          Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

    	 	26	 

     

    

 

(k)          Indemnification.
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements for one (1) counsel to all the Buyers (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the Company in any of the Transaction Documents, (b)
any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents or (c) any cause
of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative
action brought on behalf of the Company) or which otherwise involves such Indemnitee that arises out of or results from (i) the
execution, delivery, performance or successful enforcement of any of the Transaction Documents, (ii) any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status
of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by the
Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any
action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures
with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of the Registration
Rights Agreement. No Indemnitee shall be entitled to indemnification under this Section 9(k) to the extent an Indemnified Liability
arises out of the gross negligence or willful misconduct of such Indemnitee.

 

(l)          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 Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for stock dividends, stock
splits, stock combinations and other similar transactions that occur with respect to the Common Stock after the date of this Agreement.

 

(m)          Remedies.
Each Person having any rights under any provision of this Agreement shall have all rights and remedies set forth in the Transaction
Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents,
any remedy at law may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled
to seek specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of
competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security.

 

(n)          Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

 

    	 	27	 

     

    

 

(o)          Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of
the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the
U.S. Dollar exchange rate as published in The Wall Street Journal on the relevant date of calculation.

 

(p)          Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers 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 Buyers 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 Buyers 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 Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer
confirms that each Buyer has independently participated with the Company in the negotiation of the transaction contemplated hereby
with the advice of its own counsel and advisors. Each Buyer 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 Buyer 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 Securities contemplated hereby was solely in the control of the Company, not
the action or decision of any Buyer, and was done solely for the convenience of the Company and not because it was required or
requested to do so by any Buyer. 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 Buyer, solely, and not between the Company and the Buyers collectively
and not between and among the Buyers.

 

[Signature pages follow]

 

    	 	28	 

     

    

 

IN WITNESS WHEREOF,
Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.

 

	 	COMPANY:
	 	 
	 	ETOn PHARMACeuticaLS, Inc.

 

	 	By:	/s/ Mark L. Baum
	 	 	Name: Mark L. Baum
	 	 	Title: Executive Director

 

[Buyer Signature Page Follows]

 

     

     

    

 

BUYER SIGNATURE PAGE FOR SECURITIES PURCHASE
AGREEMENT

 

ETOn
PHARMACeuticaLS, Inc.

 

[Buyer’s signature
to be provided by way of its execution of the Omnibus Signature Page to the Agent’s “Omnibus Signature Page and Investor
Questionnaire” with respect to this Offering.]

 

     

     

    

 

BUYER ADDENDUM RE ESCROW

( this information is required )

 

By signing above the above signed Buyer
hereby certifies and confirms that: In the event that the Escrow Agent makes a disbursement to the above signed Buyer, which may
or may not occur, such Buyer hereby confirms that such disbursement is to be made by wire transfer using the following wire transfer
instructions. The Escrow Agent, the Company and the Placement Agent can rely on this confirmation and I will not revoke this confirmation
unless I confirm to the Company on this form replacement wire transfer instructions at least two Business Days before revoking
this confirmation. The Company may instruct the Escrow Agent to, or the Escrow Agent may on its own, withhold any such disbursement
until the Company is reasonably satisfied and the Escrow Agent is satisfied in its sole discretion with the instructions and procedures
for making such disbursement.

 

Bank Name: ____________________

 

Bank Address: ____________________

 

ABA Number: ____________________

 

Account Number: ____________________

 

Account Name: ____________________

 

Reference: ____________________

 

     

     

    

 

EXHIBIT A

 

SCHEDULE OF BUYERS

  

	(1)	 	(2)	 	(3)	 	(4)	 	(5)
	Buyer	 	Address, E-mail
 and/or Facsimile
 Number	 	Number of
 Shares	 	Purchase
 Price	 	Legal
 Representative’s
 Address and
 Facsimile
 Number
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

 

     

     

    

 

EXHIBIT B

 

CERTIFICATE

 

     

     

    

 

EXHIBIT C

 

Registration
Rights Agreement

 

     

     

    

 

EXHIBIT D

 

ESCROW
AGREEMENTExhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT FOR
INVESTORS

 

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of June 19,
2017,1 by and among Eton Pharmaceuticals, Inc., a Delaware corporation (“Company”), and the persons
listed on Schedule A hereto, referred to individually as the “Stockholder” and collectively as the “Stockholders”.

 

A.           In
connection with the Securities Purchase Agreement by and among the parties hereto, dated June 19,
2017 (the “Securities Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions
of the Securities Purchase Agreement, to issue and sell to each Investor Shares (as defined in the Securities Purchase Agreement),
which will be convertible into Conversion Shares (as defined in the Securities Purchase Agreement) in accordance with the terms
of the Series A Preferred Stock, par value $0.001 (the “Series A Preferred Stock”), set forth in the Company’s
Certificate of Incorporation, including the Certificate of Designations of Preferences and Rights of Series A Convertible Preferred
Stock (the “Certificate”).

 

B.           To
induce the Stockholders to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act, and applicable state securities laws to the Stockholders, and
their assignees or successors in interest, certain rights to provide for the registration for resale of the Conversion Shares by
means of a Registration Statement under the Securities Act, pursuant to the terms of this Agreement. Such Conversion Shares acquired
by the Stockholders and their assignees or successors in interest, are referred to collectively as the “Registrable Securities”.

 

C.           Unless
otherwise provided in this Agreement, capitalized terms used herein shall have the respective meanings set forth in Section 13
hereof.

 

NOW, THEREFORE,
in consideration of the above premises and the mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and Stockholder hereby agree as follows:

 

		1.	Registration.

 

(a)          Piggyback
Registrations Rights. If, at any time after the Company shall become subject to the periodic reporting obligations (a “Reporting
Company”) under the Securities and Exchange Act of 1934, as amended (the “1934 Act”) through the date
that is five years after the date the Company becomes a Reporting Company, there is not an effective Registration Statement covering
the Registrable Securities, and the Company shall determine to prepare and file with the Commission a Registration Statement relating
to an offering for its own account or the account of others under the Securities Act of any of its equity securities (other than
on Form S-4 or Form S-8, each as promulgated under the Securities Act, or their then equivalent relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
stock option or other employee benefit plans), then the Company shall send to the Stockholders a written notice of such determination
at least twenty (20) days prior to the filing of any such Registration Statement and shall, include in such Registration Statement
all Registrable Securities requested by any Stockholder hereunder to be included in the registration within ten (10) days after
the Company sends such notice to the Stockholders (the “Piggyback Shares”) for resale and offer on a continuous
basis pursuant to Rule 415; provided, that (i) if, at any time after giving written notice of its intention to register any securities
and prior to the effective date of the Registration Statement filed in connection with such registration, the Company determines
for any reason not to proceed with such registration, the Company will be relieved of its obligation to register any Registrable
Securities in connection with such registration, (ii) in case of a determination by the Company to delay registration of its securities,
the Company will be permitted to delay the registration of Registrable Securities for the same period as the delay in registering
such other securities, (iii) each Stockholder is subject to confidentiality obligations with respect to any information gained
in this process or any other material non-public information he, she or it obtains, (iv) each Stockholder or assignee or successor
in interest is subject to all applicable laws relating to insider trading or similar restrictions; and (v) if all of the Registrable
Securities of the Stockholders cannot be so included due to Commission Comments or Underwriter Cutbacks, then the Company may reduce,
in accordance with the provisions of Section 1(c) hereof, the number of securities covered by such Registration Statement to the
maximum number which would enable the Company to conduct such offering in accordance with the provisions of Rule 415.

 

 

1 The Agreement will be dated
as of the Initial Closing Date.

 

    	 	1	 

     

    

 

 

(b)          Initial
Registration Statement. At the election of each Stockholder, the Company shall be required to include up to all Piggyback Shares
held by such Stockholder for resale and offer on a continuous basis pursuant to Rule 415 in the first Registration Statement filed
after the date that it becomes a Reporting Company (the “Initial Registration Statement”); provided, however,
that if all of the Registrable Securities of the Stockholders cannot be so included due to Commission Comments or Underwriter Cutbacks,
then the Company may reduce, in accordance with the provisions of Section 1(c) hereof, the number of securities covered by the
Initial Registration Statement to the maximum number which would enable the Company to conduct such offering in accordance with
the provisions of Rule 415.

 

(c)          Cutback
Provisions. In the event all of the Registrable Securities cannot be or are not included in a Registration Statement due to
Commission Comments or Underwriter Cutbacks, the Company and the Stockholders agree that securities shall be removed from such
Registration Statement in the following order until no further removal is required by Commission Comments or Underwriter Cutbacks:

 

(i)          First,
any securities held by any former employee, consultant or affiliate of the Company shall be removed, pro rata based on the number
of securities being registered for such former employees, consultants or affiliates held by all of the former employees of the
Company and any of their affiliates and successors in interest, whether pursuant to agreement or otherwise and any other person
with any registration rights outstanding on the date hereof;

 

(ii)         Second,
the securities held by National Securities Corporation (“National Securities”) and its members and affiliates,
if any, obtained solely by reason of providing services to the Company, which are being registered pursuant to any registration
rights agreement or otherwise (for clarity, any securities held by National Securities or its members or affiliates which were
acquired upon payment of a purchase price in cash or property will not be subject to this provision (c)(ii)); and

 

(iii)        Third,
the Registrable Securities held by the Stockholders that are requested to be included in the Registration Statement shall be removed,
pro rata based on the number of Registrable Shares held by each Stockholder in comparison to the number of Registrable Securities
held by all Stockholders who have requested to include any Registrable Securities in the Registration Statement.

 

    	 	2	 

     

    

 

(d)          Mandatory
Registrations. In the event all of the Piggyback Shares of the Stockholders are not included in a Registration Statement due
to Commission Comments or Underwriter Cutbacks, the Company shall prepare and file an additional Registration Statement (the “Follow-up
Registration Statement”) with the Commission within sixty (60) days following the effectiveness of the previously filed
Registration Statement; provided, however, that the time period for filing the Follow-up Registration shall be extended
to the extent that the Commission publishes written Commission Guidance or the Company receives written Commission Guidance which
provides for a longer period before a Follow-up Registration Statement may be filed. The Follow-up Registration Statement shall
cover the resale of all of the Registrable Securities that were excluded from any previously filed Registration Statement. In the
event that all of the Piggyback Shares have not been registered in a Registration Statement after the Follow-up Registration Statement
has been declared effective, the Company shall use commercially reasonable efforts thereafter to register any remaining unregistered
Registrable Securities, subject to the provisions of Section 1(e) hereof.

 

(e)          Filing;
Content. The Company will use its commercially reasonable efforts to cause each Registration Statement pursuant to which any
Registrable Securities are included, including the Initial or Follow-up Registration Statement, to contain the Plan of Distribution
substantially similar to that attached hereto as Schedule B. The Company shall use its commercially reasonable efforts to
cause any Registration Statement filed under this Section 1, including the Initial and Follow-up Registration Statement, to be
declared effective under the Securities Act as promptly as practicable after the filing thereof and shall keep such Registration
Statement continuously effective under the Securities Act until the earlier of (i) one year after its Effective Date (provided,
however, the one year period shall be extended for any Grace Period), (ii) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by the Stockholders, or (iii) such time as all of the Registrable Securities
covered by such Registration Statement may be sold by the Stockholders pursuant to Rule 144 without regard to both the volume limitations
for sales as provided in Rule 144 and the limitations for such sales provided in Rule 144(i), if applicable, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer
agent and the affected Stockholder (“Effectiveness Period”). By 5:00 p.m. (New York City time) on the business
day immediately following the Effective Date of a Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement
(whether or not such filing is technically required under such Rule).

 

(f)          Termination
of Registration Rights. The registration rights afforded to the Stockholders under this Section 1 shall terminate on the earliest
date when all Registrable Securities of the Stockholder either: (i) have been publicly sold by the Stockholder pursuant to a Registration
Statement, (ii) have been covered by an effective Registration Statement which has been effective for an aggregate period of sixteen
(16) months (whether or not consecutive), provided, however, the time period shall be calculated so as to exclude any Grace Period,
or (iii) may be sold by the Stockholder pursuant to Rule 144 without regard to both the volume limitations for sales as provided
in Rule 144 and the limitations for such sales provided in Rule 144(i), if applicable, as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected
Stockholder.

 

    	 	3	 

     

    

 

		2.	Demand Registration Rights.

 

(a)          Demand
Right. Commencing on the date that is one hundred eighty (180) days after the Company becomes a Reporting Company, the Stockholders
as a group representing at least 50% of the Registrable Securities (a “Requesting Group”) shall have a separate
one-time right, by written notice to the Company, signed by such Stockholders (the “Demand Notice”), to request
the Company to register for resale all Registrable Securities included by the Requesting Group in the Demand Notice (the “Demand
Shares”) under and in accordance with the provisions of the Securities Act by filing with the Commission a Registration
Statement covering the resale of such Demand Shares (the “Demand Registration Statement”). A copy of the Demand
Notice also shall be provided by the Company to each of the other Stockholders who will have fifteen (15) days to notify the Company
in writing to include their Registrable Securities as part of the Demand Shares, the failure of which, however, shall not in any
way affect the rights of the Requesting Group pursuant to this Section 2(a). The Demand Registration Statement required hereunder
shall be on any form of registration statement then available for the registration of the Registrable Securities, as selected by
the Company in accordance with applicable law and regulation. The Company will use its commercially reasonable efforts to file
the Demand Registration Statement within forty-five (45) days of the receipt of the Demand Notice, provided if the Demand Notice
is given within the forty-five (45) days after the prior fiscal year end, then the Company will use its reasonably commercial efforts
to file the Demand Registration Statement within ninety (90) days of the fiscal year end of the Company. The Company shall use
its commercially reasonable efforts to cause the Demand Registration Statement to be declared effective under the Securities Act
as promptly as practicable after the filing thereof and to keep the Demand Registration Statement continuously effective under
the Securities Act during the Effectiveness Period.

 

(b)          Inclusion
of Other Registrable Shares and Cutback Provisions. If as a result of Commission Comments, not all shares are included that
are desired to be included in a Registration Statement for the Demand Shares, the provisions of Section 1(c) shall apply, subject
to the Demand Priority (as defined below) of the Requesting Group. Pursuant to the piggyback registration rights granted under
this Agreement, the Company may include the Registrable Shares of the other Stockholders which will be subject to the provision
of Section 1(c) hereof, except that under Section 1(c)(iii), there will be no cutback of the Registrable Securities of the Requesting
Group until the Stockholders of Piggyback Shares and the shares of any other person exercising piggyback rights under any other
registration rights agreement (except for National Securities and their current and former affiliates, which shall have the priority
established in Section 1(c)) have been removed, and thereafter if any further Registrable Securities have to be removed then those
of the Requesting Group will be removed pro rata (the “Demand Priority”). Notwithstanding the foregoing, if
any other securities of any person other than the Stockholders or the Requesting Group or National Securities and their current
and former affiliates are included on the Demand Registration Statement, such securities will be removed, if required pursuant
to Commission Comments, after removal of the securities indicated in Section 1(c)(i) and before the securities indicated in Section
1(c)(ii), as such persons decide among themselves, and if there is no agreement at to such removal provided to the Company within
a reasonable time, time being of the essence, then all the such securities will be removed.

 

(c)          Termination
of Demand Registration Rights. The registration rights afforded to each Stockholder under this Section 2 shall terminate on
the earliest date when all Registrable Securities of the Stockholder either: (i) have been publicly sold by the Stockholder pursuant
to a Registration Statement, or (ii) may be sold by the Stockholder pursuant to Rule 144 without regard to both the volume limitations
for sales as provided in Rule 144 and the limitations for such sales provided in Rule 144(i), if applicable, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer
agent and the affected Holder in its reasonable discretion.

 

3.            Registration
Procedures. Whenever any Registrable Securities are to be registered pursuant to this Agreement, the Company shall use its
commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company shall have the following obligations:

 

(a)          The
Company shall prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use
its commercially reasonable efforts to cause such Registration Statement to become effective.

 

    	 	4	 

     

    

 

(b)          The
Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to a Registration
Statement and the Prospectus used in connection with such Registration Statement, which Prospectus is to be filed pursuant to Rule
424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during
the Effectiveness Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof
as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required
to be filed pursuant to this Agreement by reason of the Company filing a report on Forms 10-K, 10-Q or Current Report on Form 8-K,
or any analogous report under the Securities Exchange Act, the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which
the Securities Exchange Act report is filed which created the requirement for the Company to amend or supplement such Registration
Statement.

 

(c)          The
Company shall furnish to each Stockholder holding Registrable Securities in any Registration Statement, without charge, (i) promptly
after the same is prepared and filed with the Commission at least one copy of such Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by such seller,
all exhibits and each preliminary Prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the
Prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as
such seller may reasonably request), and (iii) such other documents, including copies of any preliminary or final Prospectus, as
such seller may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned
by such seller.

 

(d)          The
Company shall use its commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by any seller of the Registrable Securities covered by a Registration Statement under such other securities
or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Effectiveness Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Effectiveness Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.

 

(e)          The
Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest practicable time and to notify
the Stockholders holding any Registrable Securities included in the offering under such Registration Statement of such order and
the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

    	 	5	 

     

    

 

(f)          The
Company shall notify the Stockholder in writing of the happening of any event, as promptly as practicable after becoming aware
of such event, as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice
contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment
to the Stockholder (or such other number of copies as the Stockholder may reasonably request).

 

(g)          The
Company shall promptly notify the Stockholder in writing (i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness
shall be delivered to the Stockholder by facsimile on the same day of such effectiveness or by overnight delivery), (ii) of any
request by the Commission for amendments or supplements to a Registration Statement or related Prospectus or related information,
and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be
appropriate.

 

(h)          If
the Stockholder is required under applicable securities laws to be described in a Registration Statement as an underwriter, at
the reasonable request of such Stockholder, the Company shall use its best efforts to furnish to such Stockholder, on the date
of the effectiveness of such Registration Statement and thereafter from time to time on such dates as the Stockholder may reasonably
request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance
as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed
to the Stockholder, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Stockholder.

 

(i)          If
the Stockholder is required under applicable securities laws to be described in a Registration Statement as an underwriter, then
at the request of such Stockholder in connection with such Stockholder’s due diligence requirements, the Company shall make
available for inspection by (i) the Stockholder, (ii) the Stockholder’s legal counsel, and (iii) one firm of accountants
or other agents retained by the Stockholder (collectively, the “Inspectors”), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall
be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all
information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold
in strict confidence and shall not make any disclosure (except to the Stockholder) or use of any Record or other information which
the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a)
the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is
otherwise required under the Securities Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any other agreement of which the Inspector has knowledge.
Each Stockholder agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential.
Nothing herein (or in any other confidentiality agreement between the Company and the Stockholder) shall be deemed to limit the
Stockholder’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

 

    	 	6	 

     

    

 

(j)          The
Company shall hold in confidence and not make any disclosure of information concerning the Stockholder provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent
jurisdiction, (iv) such information has been made generally available to the public other than by disclosure in violation of this
Agreement or any other agreement, or (v) the Stockholder provides information to the Company intended for inclusion in a Registration
Statement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Stockholder is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Stockholder
if permitted by applicable law or regulation and allow the Stockholder, at the Stockholder’s expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such information.

 

(k)         The
Company shall (i) if applicable, use its best efforts to cause all of the Registrable Securities covered by a Registration Statement
to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed,
if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) otherwise, use
its commercially reasonable efforts to secure designation and quotation of all of the Registrable Securities covered by a Registration
Statement on any one of the different levels of The NASDAQ Stock Market, or (iii) if, despite the Company’s best efforts
or commercially reasonable efforts, as applicable, to satisfy, the preceding clauses (i) and (ii) the Company is unsuccessful in
satisfying the preceding clauses (i) and (ii), to instead secure the inclusion for quotation on the Over-the-Counter Bulletin Board
for such Registrable Securities and, without limiting the generality of the foregoing, to use its commercially reasonable efforts
to encourage at least two market makers to register with the Financial Industry Regulatory Authority, Inc. (“FINRA”)
as such with respect to such Registrable Securities. For the avoidance of doubt, subject to and in accordance with Section 5, the
Company shall pay all fees and expenses of the Company in connection with satisfying its obligation under this Section 3(k).

 

(l)          If
requested by the Stockholder, the Company shall (i) as soon as practicable incorporate in a Prospectus supplement or post-effective
amendment such information as the Stockholder reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being
offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) as soon as practicable make all required filings of such Prospectus supplement or post-effective amendment
after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment; and (iii) as
soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by the Stockholder holding
any Registrable Securities.

 

(m)        The
Company shall cooperate with each Stockholder who holds Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Stockholder may reasonably request and registered in such names as the Stockholder may request.

 

(n)         The
Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to
be registered with or approved by such other U.S. governmental agencies or authorities, but only in matters not contemplated Section
3(d) by or reasonably related to such matters (which matters are to be governed exclusively by Section 3(d)), as may be strictly
necessary to consummate the disposition of such Registrable Securities by the Stockholder strictly in accordance with the Plan
of Distribution included in the Registration Statement (as such Plan of Distribution may be modified from time to time in any filing
with the Commission).

 

    	 	7	 

     

    

 

(o)         The
Company shall make generally available to its security holders as soon as practicable, but not later than ninety (90) days after
the close of the period covered thereby (or, if different, within the period permitted for the filing of reports on Forms 10-K
or 10-Q), an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities
Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following
the Effective Date of a Registration Statement.

 

(p)         The
Company shall otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission
in connection with any registration hereunder.

 

(q)         Within
two (2) business days after a Registration Statement which covers Registrable Securities is ordered effective by the Commission,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Stockholder whose Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the Commission in the form attached hereto as Exhibit A
and the Irrevocable Transfer Agent Instructions in the form attached hereto as Exhibit B.

 

(r)          Notwithstanding
anything to the contrary herein, at any time after the Effective Date of a Registration Statement, the Company may delay the disclosure
of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion
of the Board of Directors of the Company, in the best interest of the Company and not, after consultation with legal counsel, otherwise
required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Stockholder in writing
of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will
not disclose the content of such material, non-public information to the Stockholder) and the date on which the Grace Period will
begin, and (ii) notify the Stockholder in writing of the date on which the Grace Period ends; and, provided further, that no Grace
Period shall exceed sixty (60) consecutive days and during any three hundred sixty-five (365) day period such Grace Periods shall
not exceed an aggregate of one hundred twenty (120) days (each, an “Allowable Grace Period”). For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Stockholder receives the
notice referred to in clause (i) and shall end on and include the later of the date the Stockholder receives the notice referred
to in clause (ii) and the date referred to in such notice. The provisions of Section 3(f) hereof shall not be applicable during
the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by Section 3(f)
with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee
of the Stockholder in connection with any sale of Registrable Securities with respect to which the Stockholder has entered into
a contract for sale, and delivered a copy of the Prospectus included as part of the applicable Registration Statement (unless an
exemption from such Prospectus delivery requirements exists), prior to the Stockholder’s receipt of the notice of a Grace
Period or, if earlier, Stockholders knowledge of the material, non-public information concerning the Company that gave rise to
the Grace Period, and for which the Stockholder has not yet settled.

 

    	 	8	 

     

    

 

		4.	Obligations of the Stockholders.

 

(a)          At
least five (5) business days prior to the first anticipated filing date of a Registration Statement, the Company shall notify the
Stockholders in writing of the information the Company requires from each Stockholder if the Stockholder’s Registrable Securities
are to be included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to any Registrable Securities of the Stockholder that the Stockholder
shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration
of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request.

 

(b)          The
Stockholder, by the Stockholder’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless the Stockholder
has notified the Company in writing of the Stockholder's election to exclude all of the Stockholder’s Registrable Securities
from such Registration Statement.

 

(c)          The
Stockholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Sections
3(e) or 3(f) or of a Grace Period under Section 3(r), the Stockholder will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities until the Stockholder’s receipt of the copies
of the supplemented or amended Prospectus contemplated by Sections 3(e) or 3(f) or receipt of notice that no supplement or amendment
is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares
of Common Stock to a transferee of the Stockholder in connection with any sale of Registrable Securities with respect to which
the Stockholder has entered into a contract for sale prior to the Stockholder’s receipt of a notice from the Company of the
happening of any event of the kind described in Sections 3(e) or 3(f) or of any Grace Period, or, if earlier, Stockholders knowledge
of the material, non-public information concerning the Company or the facts or circumstances that gave rise to the Grace Period
or of the Section 3(e) or 3(f) event, and for which the Stockholder has not yet settled.

 

(d)          The
Stockholder covenants and agrees that it will comply with the Prospectus delivery requirements of the Securities Act as applicable
to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to a Registration Statement.

 

5.            Registration
Expenses. All expenses incident to the Company’s performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, fees and disbursements of custodians, and fees and disbursements of counsel for the Company and
all independent certified public accountants, underwriters (excluding discounts, commissions and placement agent fees) and other
Persons retained by the Company (all such expenses being herein called “Registration Expenses”), shall be borne
by the Company. Further, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange
on which similar securities issued by the Company are then listed.

 

    	 	9	 

     

    

 

		6.	Indemnification.

 

In the event any Registrable
Securities are included in a Registration Statement under this Agreement:

 

(a)          To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Stockholder, the
directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls the Stockholder
within the meaning of the Securities Act or the Securities Exchange Act (each, an “Indemnified Person”), against
any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts
paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing
or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court
or governmental, administrative or other regulatory agency, body or the Commission, whether pending or threatened, whether or not
an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue
sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the
omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary Prospectus
if used prior to the effective date of such Registration Statement, or contained in the final Prospectus (as amended or supplemented,
if the Company files any amendment thereof or supplement thereto with the Commission) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements
therein were made, not misleading, (iii) any violation or alleged violation by the Company of the Securities Act or the Securities
Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating
to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement
(the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section
6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for
any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person or by a Related Information Provider expressly for use
in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto and (ii) shall
not be available to the extent such Claim is based on a failure of the Stockholder to deliver or to cause to be delivered the Prospectus
made available by the Company, including a corrected Prospectus, if such Prospectus or corrected Prospectus was timely made available
by the Company pursuant to Section 3(c); and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement
is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such
indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Stockholder pursuant to Section 10. “Related Information
Provider” means, in respect of any Indemnified Person, the Stockholder to which such Indemnified Person is related or
another Indemnified Person that is related to the Stockholder to which such Indemnified Person is related.

 

    	 	10	 

     

    

 

(b)          To
the fullest extent permitted by law, in connection with any Registration Statement in which a Stockholder’s Registrable Securities
are included or in which a Stockholder is otherwise participating, such Stockholder will severally and not jointly indemnify and
hold harmless the Company, each of its directors, each of its officers who has signed the Registration Statement, each Person,
if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Stockholder or other Person
selling securities in such Registration Statement and any controlling person of any such underwriter or other Stockholder or other
Person (each an “Other Indemnified Person”), against any Claims or Indemnified Damages to which any of them
may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished by such Stockholder or by a Related Information Provider expressly for
use in connection with such Registration Statement; and each such Stockholder will pay, as incurred, any legal or other expenses
reasonably incurred by any Other Indemnified Person intended to be indemnified pursuant to this Section 6(b), in connection with
investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section
6(b) shall not apply to amounts paid in settlement of any such Claim if such settlement is effected without the prior written consent
of the Stockholder, which consent shall not be unreasonably withheld; provided, further, however, that the
Stockholder shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the
net proceeds to the Stockholder as a result of the sale of Registrable Securities pursuant to such Registration Statement, except
in the case of fraud by such Stockholder. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Other Indemnified Person and shall survive the transfer of the Registrable Securities by the Stockholder
pursuant to Section 10.

 

(c)          Promptly
after receipt by an Indemnified Person or Other Indemnified Person under this Section 6 of notice of the commencement of any action
or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Other Indemnified
Person shall, if a claim for indemnification in respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and reasonably satisfactory
to the Indemnified Person or the Other Indemnified Person, as the case may be; provided, however, that an Indemnified
Person or Other Indemnified Person shall have the right to retain its own counsel with the fees and expenses of not more than one
counsel for all such Indemnified Persons or all such Other Indemnified Persons to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person
or Other Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between
such Indemnified Person or Other Indemnified Person and any other party represented by such counsel in such proceeding. The Other
Indemnified Person or Indemnified Person, as applicable, shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to such Other Indemnified Person or such Indemnified Person which relates to such action or Claim. The indemnifying
party shall keep the Other Indemnified Person or Indemnified Person, as applicable, reasonably apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior written consent; provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent
of the Other Indemnified Person or Indemnified Person, as applicable, consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Other
Indemnified Person or such Indemnified Person of a release from all liability in respect to the Claim at issue, and such settlement
shall not include any admission as to fault on the part of such Other Indemnified Person or such Indemnified Person. Following
indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Other Indemnified Person
or Indemnified Person, as applicable, with respect to all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Other Indemnified
Person, as applicable, under this Section 6, except to the extent that the indemnifying party is materially prejudiced in its ability
to defend such action.

 

    	 	11	 

     

    

 

(d)          The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred, subject to an undertaking by the Indemnified Person
or the Other Indemnified Person, as applicable, to return such payments to the extent a court of competent jurisdiction or other
competent authority determines that such payments were unlawful or were not required under this Agreement.

 

(e)          Without
any duplication or multiplication of damages, the indemnity agreements contained herein shall be in addition to (i) any cause of
action or similar right of the Other Indemnified Person or Indemnified Person against the indemnifying party or others, and (ii)
any liabilities the indemnifying party may be subject to pursuant to the law.

 

(f)          Unless
suspended by the underwriting agreement applicable to any registration, the obligations of the Company and Stockholders under this
Section 6 shall survive the completion of any offering of Registrable Securities in a Registration Statement under this Agreement,
or otherwise.

 

7.            Contribution.
To the extent any indemnification by an indemnifying party is prohibited or limited by law, such indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) in connection with such sale
shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement

 

8.            No
Delay of Registration. No Stockholder shall have any right to obtain or seek an injunction restraining or otherwise delaying
any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this
Agreement.

 

9.            Reports
under Securities Exchange Act. With a view to making available to the Stockholder the benefits of Rule 144 promulgated under
the Securities Act or any other similar rule or regulation of the Commission that may at any time permit the Stockholder to sell
securities of the Company to the public without registration, once the Company becomes a Reporting Company, the Company agrees
to use its commercially reasonable efforts to continue to be a Reporting Company for five years and further during such time it
is a Reporting Company the Company agrees to use its best efforts to:

 

(a)          make
and keep public information available, as those terms are understood and defined in Rule 144;

 

    	 	12	 

     

    

 

(b)          file
with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the
Securities Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and

 

(c)          furnish
to the Stockholder so long as the Stockholder owns Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Securities Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to permit the Stockholder to sell such securities
pursuant to Rule 144 without registration.

 

10.          Assignment
of Registration Rights. The rights under this Agreement shall be automatically assignable by the Stockholder to any transferee
of all or any portion of the Stockholder’s Registrable Securities if: (i) the Stockholder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a)
the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are
being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities
by the transferee or assignee is or might be restricted under the Securities Act and applicable state securities laws; and (iv)
at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions contained herein.

 

11.          Subsequent
Registration Rights. The Company agrees that after the date hereof and excluding any registration rights agreement with National
Securities or its members and affiliates, it will not grant to any person any registration right or proceed to register any securities
of any person unless it provides in such agreement or registration that any securities being registered under such agreement or
registration will be subject to the cutback provisions of this Agreement as provided in Section 1(c) and Section 2(b).

 

12.          Amendment
of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally
or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders
of at least a majority of the then outstanding Registrable Securities. Any amendment so effected will be binding upon all Holders,
whether or not such Stockholder consents thereto.

 

13.          Definitions.

 

(a)          “Commission”
means the Securities and Exchange Commission.

 

(b)          “Commission
Comments” means written comments pertaining solely to Rule 415 or other comments to the extent they relate to Rule
415 which are received by the Company from the Commission, and a copy of which shall have been provided by the Company to the Stockholder,
to a filed Registration Statement which limit the amount of shares which may be included therein to a number of shares which is
less than such amount sought to be included thereon as filed with the Commission.

 

(c)          “Commission
Guidance” means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission
staff, (ii) the Securities Act or (iii) the Securities Exchange Act.

 

    	 	13	 

     

    

 

(d)          “Common
Stock” means the common stock, $0.001 par value per share, of the Company.

 

(e)          “Effective
Date” means, as to a Registration Statement, the date on which such Registration Statement is first declared effective
by the Commission.

 

(f)          “Person”
means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(g)          “Prospectus”
means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus

 

(h)          “Registrable
Securities” means (i) the Conversion Shares issued or issuable to the Stockholder or its assignees or successor in interest
pursuant to conversion of the Shares and (ii) any other shares of Common Stock or any other securities issued or issuable with
respect to the securities referred to in clause (i) by way of a stock dividend or stock split or in connection with an exchange
or combination of shares, recapitalization, merger, consolidation or other reorganization.

 

(i)          “Registration
Statement” means any registration statement (including, without limitation, the Initial Registration Statement or the
Follow-up Registration Statement) required to be filed hereunder (which, at the Company’s option, may be an existing registration
statement of the Company previously filed with the Commission, but not declared effective), including (in each case) the Prospectus,
amendments and supplements to the Registration Statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in the Registration Statement.

 

(j)          “Reporting
Company” means a company that is obligated to file periodic reports under Sections 13 or 15(d) of the Securities Exchange
Act.

 

(k)          “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission that may at any time permit the Stockholder to sell
securities of the Company to the public without registration.

 

(l)          “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

(m)         “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

(n)         “Securities
Act” means the Securities Act of 1933, as amended from time to time together with the regulations promulgated thereunder.

 

    	 	14	 

     

    

 

(o)          “Securities
Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, together with the regulations
promulgated thereunder.

 

(p)          “Underwriter
Cutbacks” means any reduction in the number of shares suggested by any managing underwriter to be included in a registration
under a Registration Statement based upon the guidance in this Section 13(p). In connection with any offering involving an underwriting
of shares of the Company’s capital stock, the Company shall not be required under Section 1 to include any of the Stockholders’
securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters,
and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering
by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities to be sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that
number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling shareholders according
to the total amount of securities entitled to be included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders); provided, that any such cutback will be effected in accordance with
the priorities established by Section 1(c); provided further that in no event shall the amount of securities of the selling Stockholders
included in the offering be reduced below 30% of the total amount of securities included in such offering.

 

14.          Market
Stand-Off. In connection with the Initial Public Offering of the Company’s securities, if any, each Stockholder hereby
agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities
of the Company however or whenever acquired (other than those included in the registration, if any) without the prior written consent
of the managing or lead underwriter of such offering, for a period of one hundred eighty (180) days from the effective date of
such registration (the “Restricted Period”), and to the extent requested by the underwriter, each Stockholder
shall, at the time of such offering, execute an agreement reflecting these requirements binding on such Stockholder that are substantially
consistent with this Section 14; provided, however, that if during the last seventeen (17) days of the Restricted
Period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to
the expiration of the Restricted Period the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required
by any FINRA rules, the restrictions imposed by this Section 14 shall continue to apply until the end of the third (3rd) trading
day following the expiration of the fifteen (15) day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event. In no event will the Restricted Period extend beyond two hundred sixteen (216) days after
the effective date of the registration statement. In order to enforce the restriction set forth above or any other restriction
agreed by Stockholder, including without limitation any restriction requested by the underwriters of any Initial Public Offering
of the securities of the Company agreed by such Stockholder, the Company may impose stop-transfer instructions with respect to
any security acquired under or subject to this Agreement until the end of the applicable stand-off period. The Company’s
underwriters shall be third-party beneficiaries of the agreement set forth in this Section 14. Each Stockholder agrees that prior
to the Company’s Initial Public Offering it will not transfer securities of the Company unless each transferee agrees in
writing to be bound by all of the provisions of this Section 14, provided that this Section 14 shall not apply to transfers
pursuant to a Registration Statement.

 

Each Stockholder agrees that a legend reading
substantially as follows shall be placed on all certificates representing all Registrable Securities of each Stockholder issued
before the Company’s Initial Public Offering (and the shares or securities of every other person subject to the restriction
contained in this Section 14):

 

    	 	15	 

     

    

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO A LOCK-UP PERIOD OF UP TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER
THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH
MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES.

 

After the Company’s Initial Public
Offering and expiration of any lock-up period, upon request of any Stockholder who is a holder of record of the shares represented
by any stock certificate(s) bearing such legend and the surrender of such certificate(s) in connection with such request, the Company
shall cause its transfer agent to promptly issue replacement certificate(s) not bearing such legend representing the shares represented
by such surrendered stock certificate(s).

 

		15.	Miscellaneous.

 

(a)          A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record
owner of such Registrable Securities.

 

(b)          Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

Eton Pharmaceuticals, Inc.

12264 El Camino Real, Suite
350

San Diego, CA 92130

Facsimile: (858) 345-1743

E-mail: mark@imprimispharma.com

Attention: Mark L. Baum

 

with a copy (for informational
purposes only) to:

 

Golenbock Eiseman Assor Bell &
Peskoe LLP

711 Third Avenue, 17th Floor

New York, NY 10017

Facsimile: (212) 754-0330

E-mail: ahudders@golenbock.com

 cvandemark@golenbock.com

Attention: Andrew D. Hudders, Esq.

   Carl Van Demark,
Esq.

 

and

 

    	 	16	 

     

    

 

If to any Stockholder,
at the address for such Stockholder on the records of the Company, which may include the information on Schedule A hereto.

 

or to such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other
party five (5) days prior to the effectiveness of such change. 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 in accordance with clause (i), (ii) or (iii) above, respectively.

 

(c)          Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 

(d)          All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the
State of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction
or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(e)          This
Agreement and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the instruments referenced herein and therein supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter hereof and thereof.

 

    	 	17	 

     

    

 

(f)          Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

 

(g)         The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(h)         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 signature of such Person.

 

(i)          Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(j)          All
consents and other determinations required to be made by the Stockholder pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Stockholder.

 

(k)          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.

 

(l)          This
Agreement is intended for the benefit of, and shall be binding upon, the parties hereto and their respective successors and permitted
assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(m)        The
obligations of each Stockholder hereunder are several and not joint with the obligations of any other Stockholder, and no provision
of this Agreement is intended to confer any obligations on a Stockholder vis-à-vis any other Stockholder. Nothing contained
herein, and no action taken by any Stockholder pursuant hereto, shall be deemed to constitute the Stockholder as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Stockholder are in any way acting
in concert or as a group with respect to such obligations or the transactions contemplated herein.

 

(n)         Currency.
As used herein, “Dollar”, “US Dollar” and “$” each mean the lawful money of the United States.

 

[Signature pages follow immediately]

 

    	 	18	 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	ETON PHARMACEUTICALS, INC.
	 	 	 
	 	By: 	 
	 	 	Name:
	 	 	Title:

 

[Stockholder Signature Page Follows]

 

    	 	19	 

     

    

 

STOCKHOLDER SIGNATURE PAGE FOR REGISTRATION
RIGHTS AGREEMENT

 

WITH EATON PHARMACEUTICALS, INC.

 

[Stockholder’s
signature to be provided by way of its execution of the Omnibus Signature Page to the Agent’s “Omnibus Signature Page
and Investor Questionnaire” with respect to this Offering.]

 

    	 	20	 

     

    

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

[Transfer Agent]

[Address]

Attention:

 

Re: Eton Pharmaceuticals,
Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel
to Eton Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection
with that certain Registration Rights Agreement with _____________ (the “Stockholder”) (the “Registration Rights
Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), under the Securities Act of 1933, as amended (the “1933 Act”). In connection
with the Company's obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company filed a registration
statement on Form S-[1] (File No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) relating to the Registrable Securities which names the Stockholder as a selling stockholder
thereunder.

 

In connection with the
foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered
an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]
and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

 

If applicable, you may
receive notices from the Company pursuant to the Company’s rights or obligations under the Registration Rights Agreement
in connection with stop orders or other restrictions on transfer of the shares included in such Registration Statement, but [we][I]
[are][am] not obligated to update this letter or otherwise inform you of any such stop order or restriction.

 

[Other applicable disclosure
to be inserted here, if appropriate.]

 

	 	Very truly yours,

 

    	 	 	 

     

    

 

EXHIBIT B

 

IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

_______________, 2017

 

[Addressed to Transfer Agent]

_______________________

_______________________

 

		Attention:	[________________________]

 

Ladies and Gentlemen:

 

Reference
is made to that certain Registration Rights Agreement, dated as of [●], 2017 (the
“Agreement”), by and among Eton Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and _________________________ (the “Stockholder”), pursuant to which the Company is obligated to register certain
shares held by the Stockholder (the “Stockholder Shares”) of Common Stock of the Company, par value $0.001 per
share (the “Common Stock”).

 

This letter shall serve
as our irrevocable authorization and direction to you (provided that you are the transfer agent of the Company at such time) to
issue shares of Common Stock upon transfer or resale of the Stockholder Shares, unless we have otherwise informed you of the termination
of effectiveness of the registration statement in which the Stockholder Shares are included, a stop order or another transfer restriction.
We may also later inform you that after the termination of effectiveness of such registration statement that a registration statement
in which the Stockholder’s Shares are included, or that such stop order has been lifted or that such transfer restriction
is not applicable, in which case this authorization and direction shall be reinstated and be effective.

 

You acknowledge and agree
that so long as you have previously received (a) written confirmation from the Company's legal counsel that either (i) a registration
statement covering resales of the Stockholder Shares has been declared and remains effective by the Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), or (ii) sales
of the Stockholder Shares may be made in conformity with Rule 144 under the 1933 Act (“Rule 144”), (b) if applicable,
a copy of such registration statement, and (c) notice from legal counsel to the Company or any Stockholder that a transfer of Stockholder
Shares has been effected either pursuant to the registration statement (and a prospectus delivered to the transferee) or pursuant
to Rule 144, then as promptly as practicable, you shall issue the certificates representing the Stockholder Shares
registered in the names of such transferees, and such certificates shall not bear any legend restricting transfer of the Common
Stock evidenced thereby and should not be subject to any stop-transfer restriction; provided, however, that if such shares of Common
Stock and are not registered for resale under the 1933 Act or able to be sold under Rule 144, then the certificates for such Common
Shares shall bear the following legend:

 

    	 	 	 

     

    

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

A form of written confirmation
from the Company’s outside legal counsel that a registration statement covering resales of the Stockholder Shares has been
declared effective by the SEC under the 1933 Act is attached hereto. We will inform you of any stop orders or other transfer restrictions.

 

Please execute this letter
in the space indicated to acknowledge your agreement to act in accordance with these instructions. Should you have any questions
concerning this matter, please contact me at ____________.

 

	 	Very truly yours,
	 	 
	 	Eton Pharmaceuticals, Inc.
	 	 	 
	 	By:  	 
	 	 	Name:
	 	 	Title:

 

THE FOREGOING INSTRUCTIONS ARE

ACKNOWLEDGED AND AGREED TO

 

this ___ day of ________________, 2017

 

[TRANSFER AGENT]

 

	By: 	 	 	 
	 	Name: 	 	 
	 	Title: 	 	 

 

Enclosures

 

Copy: Stockholder

 

    	 	 	 

     

    

 

SCHEDULE A

 

LIST OF STOCKHOLDERS

 

	Name	 	Address
	 	 	 

 

    	 	 	 

     

    

 

SCHEDULE B

 

SELLING STOCKHOLDERS

 

The shares of common
stock being offered by the selling stockholders are those issuable to the selling stockholders upon [conversion of the Series A
Convertible Preferred Stock and exercise of the warrants]. For additional information regarding the issuance of the [Series A Convertible
Preferred Stock and the warrants], see “Private Placement of Series A Convertible Preferred Stock” above. We are registering
the shares of common stock in order to permit the selling stockholders to offer the shares for resale [from time to time]. Except
for the ownership of [the Series A Convertible Preferred Stock issued pursuant to and in connection with the Securities Purchase
Agreement, and the warrants issued pursuant to and the agreements governing our engagement of National Securities Corporation as
a placement agent for the private placement of the Series A Convertible Preferred Stock and the engagement of National Securities
Corporation as an underwriter for a public offering of common stock by the Company, and our engagement of an affiliate of National
Securities Corporation as a consultant in respect of our patents and intellectual property] the selling stockholders have not had
any material relationship with us within the past three years.

 

The table below lists
the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based
on their respective ownership of shares of common stock [, Series A Convertible Preferred Stock and warrants,] as of ________,
20__, [assuming conversion of the Series A Convertible Preferred Stock and exercise of the warrants held by each such selling stockholder
on that date but taking account of any limitations on conversion and exercise set forth therein].

 

The third column lists
the shares of common stock being offered by this prospectus by the selling stockholders [and does not take into account any limitations
on (i) conversion of the Series A Convertible Preferred Stock or (ii) exercise of the warrants set forth therein].

 

In accordance with
the terms of a registration rights agreement with the holders of the Series A Convertible Preferred Stock and the warrants, this
prospectus generally covers the resale of [(i) the shares of common stock issued upon conversion of the Series A Convertible Preferred
Stock and (ii) the maximum number of shares of common stock issuable upon exercise of the warrants, in each case, determined as
if the outstanding Series A Convertible Preferred Stock and warrants were converted or exercised (as the case may be) in full (without
regard to any limitations on conversion or exercise contained therein) as of the trading day immediately preceding the date this
registration statement was initially filed with the SEC]. Because the conversion price of the Series A Convertible Preferred Stock
and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than
the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling
stockholders pursuant to this prospectus.

 

See “Plan of
Distribution.”

 

    	 	 	 

     

    

 

	Name of Selling Stockholder	 	
        Number of Shares of 

Common Stock

Owned Prior to the

Offering
	 	Maximum Number
    of

Shares of Common 
 Stock to be Sold 
 Pursuant
    to this 
 Prospectus	 	Number of  Shares of 

Common Stock 

Owned After the 

Offering
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	 	 	 

     

    

 

PLAN OF DISTRIBUTION

 

We are registering
the shares of common stock issued upon conversion of the Series A Convertible Preferred Stock to permit the resale of these shares
of common stock by the holders of Common Stock from time to time after the date of this prospectus. We will not receive any of
the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and expenses incident
to our obligation to register the shares of common stock.

 

The selling stockholders
may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one
or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve
crosses or block transactions, pursuant to one or more of the following methods:

 

		●	on any national securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale;

		●	in the over-the-counter market;

		●	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

		●	through the writing or settlement of options, whether such options are listed on an options exchange
or otherwise;

		●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

		●	block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;

		●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

		●	an exchange distribution in accordance with the rules of the applicable exchange;

		●	privately negotiated transactions;

		●	short sales made after the date the Registration Statement is declared effective by the SEC;

		●	broker-dealers may agree with a selling security holder to sell a specified number of such shares
at a stipulated price per share;

		●	a combination of any such methods of sale; and

		●	any other method permitted pursuant to applicable law.

 

The selling stockholders
may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather
than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described
in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions
or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of
common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders
may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.

 

    	 	 	 

     

    

 

The selling stockholders
may pledge or grant a security interest in some or all of the [Series A Convertible Preferred Stock, warrants or] shares of common
stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer
and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling stockholders to include
the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees
or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

To the extent required
by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in
the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered
and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed
or paid to broker-dealers.

 

Under the securities
laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.

 

There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.

 

The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and in each case together with the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases
and sales of any of the shares of common stock by the selling stockholders and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares
of common stock and the ability of any Person to engage in market-making activities with respect to the shares of common stock.

 

We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[     ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in
accordance with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written
information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related
registration rights agreements or we may be entitled to contribution.

 

Once sold under the
registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands
of persons other than our affiliates.

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