Item 1.01. Entry into
a Material Definitive Agreement.
Securities Purchase Agreement
On August 15, 2016, Arno Therapeutics, Inc.
(the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers
identified therein (the “Purchasers”) pursuant to which the Company agreed to sell, and the Purchasers agreed to purchase,
an aggregate of 7,929,993 units of the Company’s securities (the “Units”), at a per unit price of $0.35, with
each unit consisting of one share of the Company’s common stock (the “Shares”) and a five-year warrant to purchase,
at an exercise price of $0.4375 per share, one-half share of the Company’s common stock, rounded down to the nearest whole
share (the “Warrant Shares”). The
Company closed on the purchase and sale of 6,501,423 Units on August 15, 2016, resulting in aggregate gross proceeds of approximately
$2.28 million. The closing on the sale of the remaining 1,428,570 Units subject to the Purchase Agreement (for an aggregate gross
purchase price of approximately $500,000) is subject to the satisfaction of customary closing conditions, including the effectiveness
of a registration statement under the Securities Act of 1933, as amended, covering the resale by the Purchasers of the Shares and
Warrant Shares. In addition to such conditions, the Purchase Agreement contains such other customary representations, warranties
and covenants by each of the Company and the Purchasers.
The Purchasers included two entities affiliated
with directors of the Company: an entity affiliated with Arie S. Belldegrun, M.D., the Company’s Chairman of the Board (purchased
Units with an aggregate purchase price of $250,000); and entities affiliated with Pontifax (purchased $250,000 of Units), of which
Tomer Kariv, a director of the Company, is affiliated. All such officers and directors made such investment on the same terms as
all other Purchasers under the Purchase Agreement.
The foregoing summary of the Purchase Agreement
is qualified in its entirety by reference to the complete form of agreement, a copy of which is attached hereto as Exhibit 10.1
and incorporated herein by reference.
Terms of the Warrants
Under the terms of the Purchase Agreement,
each Purchaser received a Series F Common Stock Purchase Warrant (the “Warrants”). The Warrants are exercisable for
a period of 5 years from the issuance date at an initial exercise price of $0.4375 per share, subject to adjustment for stock splits,
combinations, recapitalization events and certain dilutive issuances (as described below). The Warrants are required to be exercised
for cash, provided that if during the term of the Warrants there is not an effective registration statement under the Securities
Act covering the resale of the shares issuable upon exercise of the Warrants, then the Warrants may be exercised on a cashless
(net exercise) basis.
The foregoing summary of the Warrants is qualified
in its entirety by reference to the complete form of the Warrants, a copy of which is attached hereto as Exhibit 4.1, and incorporated
herein by reference.
Registration Rights Agreement
In connection with the entry into the Purchase
Agreement, and as contemplated thereby, on August 15, 2016, the Company also entered into a Registration Rights Agreement with
the Purchasers. Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file within 60 days of the date
of the agreement, a registration statement under the Securities Act covering the resale of the Shares (the “Registration
Statement”), and to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter,
but not later than 120 days following the date of the Registration Rights Agreement (the “Effectiveness Date”). If
the Company does not file the Registration Statement by the Filing Date or obtain its effectiveness by the Effectiveness Date,
then the Company is required to pay liquidated damages to the Purchasers in an amount equal to 1% of the aggregate purchase price
paid by such Purchaser for the Shares per month until the Registration Statement is filed or declared effective, as applicable,
subject to a maximum of 10% of the aggregate purchase price paid by each Purchaser for the Units. The Company is required to maintain
the effectiveness of the Registration Statement until all of the shares covered thereby are sold or may be sold pursuant to Rule
144 under the Securities Act without volume or manner-of-sale restrictions and without the requirement that the Company be in compliance
with the current public information requirements of Rule 144.
The foregoing summary of the Registration Rights
Agreement is qualified in its entirety by reference to the complete form of such agreement, which is attached hereto as Exhibit
10.2 and incorporated herein by reference.