Exhibit 10.1

 

EXECUTION VERSION

 

AMICUS THERAPEUTICS, INC.

 

$40,000,000 OF SHARES

 

COMMON STOCK (PAR VALUE $0.01 PER SHARE)

 

SALES AGREEMENT

 

March 4, 2014

 

Cowen and Company, LLC

599 Lexington Avenue

New York, NY 10022

 

Ladies and Gentlemen:

 

Amicus Therapeutics, Inc., a Delaware corporation (the “Company”), confirms its
agreement (this “Agreement”) with Cowen and Company, LLC (“Cowen”), as follows:

 

1.             Issuance and Sale of Shares.  The Company agrees that, from time
to time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it may issue and sell through Cowen, acting as
agent and/or principal, shares of the Company’s common stock, par value $0.01
per share (the “Common Stock”), having an aggregate offering price of up to
$40,000,000 (the “Offering”).  Notwithstanding anything to the contrary
contained herein, the parties hereto agree that compliance with the limitation
set forth in this Section 1 on the number of shares of Common Stock issued and
sold under this Agreement shall be the sole responsibility of the Company, and
Cowen shall have no obligation in connection with such compliance.  The issuance
and sale of Common Stock through Cowen will be effected pursuant to the
Registration Statement (as defined below) filed by the Company and declared
effective by the Securities and Exchange Commission (the “Commission”), although
nothing in this Agreement shall be construed as requiring the Company to use the
Registration Statement (as defined below) to issue the Common Stock.

 

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively, the
“Securities Act”), with the Commission a registration statement on Form S-3
(File No. 333-185307), including a base prospectus, relating to certain
securities, including the Common Stock, to be issued from time to time by the
Company, and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the “Exchange Act”). The Company has prepared a prospectus supplement
specifically relating to the Offering (the “Prospectus Supplement”) to the base
prospectus included as part of such registration statement.  The Company has
furnished to Cowen, for use by Cowen, copies of the prospectus included as part
of such registration statement, as supplemented by the Prospectus Supplement,
relating to the Offering.  Except where the context otherwise requires, such
registration statement, as amended when it became effective, including all
documents filed as part thereof or incorporated by reference therein, and
including any information contained in a Prospectus (as

 

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defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act or deemed to be a part of such registration
statement pursuant to Rule 430B or 462(b) of the Securities Act, is herein
called the “Registration Statement.”  The base prospectus, including all
documents incorporated therein by reference, included in the Registration
Statement, as it may be supplemented by the Prospectus Supplement, in the form
in which such prospectus and/or Prospectus Supplement have most recently been
filed by the Company with the Commission pursuant to Rule 424(b) under the
Securities Act, together with any “issuer free writing prospectus,” as defined
in Rule 433 of the Securities Act (“Rule 433”), relating to the Offering that
(i) is required to be filed with the Commission by the Company or (ii) is exempt
from filing pursuant to Rule 433(d)(5)(i), in each case in the form filed or
required to be filed with the Commission or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule 433(g), is herein called
the “Prospectus.” Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to refer to
and include the documents incorporated by reference therein, and any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing after the execution hereof of any document with the Commission deemed
to be incorporated by reference therein. For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the Commission
pursuant to either the Electronic Data Gathering Analysis and Retrieval System
or Interactive Data Electronic Applications (collectively “IDEA”).

 

2.             Placements.  Each time that the Company wishes to issue and sell
the Common Stock hereunder (each, a “Placement”), it will notify Cowen by email
notice (or other method mutually agreed to in writing by the parties) (a
“Placement Notice”) containing the parameters in accordance with which it
desires the Common Stock to be sold, which shall at a minimum include the number
of shares of Common Stock to be issued (the “Placement Shares”), the time period
during which sales are requested to be made, any limitation on the number of
Common Stock that may be sold in any one Trading Day (as defined in Section 3)
and any minimum price below which sales may not be made, a form of which
containing such minimum sales parameters necessary is attached hereto as
Schedule 1.  The Placement Notice shall originate from any of the individuals
from the Company set forth on Schedule 2 (with a copy to each of the other
individuals from the Company listed on such schedule), and shall be addressed to
each of the individuals from Cowen set forth on Schedule 2, as such Schedule 2
may be amended from time to time. The Placement Notice shall be effective upon
receipt by Cowen unless and until (i) in accordance with the notice requirements
set forth in Section 4, Cowen declines to accept the terms contained therein for
any reason, in its sole discretion, (ii) the entire amount of the Placement
Shares have been sold, (iii) in accordance with the notice requirements set
forth in Section 4, the Company suspends or terminates the Placement Notice,
(iv) the Company issues a subsequent Placement Notice with parameters
superseding those on the earlier dated Placement Notice, or (v) the Agreement
has been terminated under the provisions of Section 11.   The amount of any
discount, commission or other compensation to be paid by the Company to Cowen in
connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule 3.  It is expressly acknowledged
and agreed that neither the Company nor Cowen will have any obligation
whatsoever with respect to a Placement or any Placement Shares unless and until
the Company delivers a Placement Notice to Cowen and Cowen does not decline such
Placement Notice pursuant to the terms set forth above, and then

 

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only upon the terms specified therein and herein.  In the event of a conflict
between the terms of this Agreement and the terms of a Placement Notice, the
terms of the Placement Notice will control.

 

3.             Sale of Placement Shares by Cowen.  Subject to the terms and
conditions herein set forth, upon the Company’s issuance of a Placement Notice,
and unless the sale of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms of this
Agreement, Cowen, for the period specified in the Placement Notice, will use its
commercially reasonable efforts consistent with its normal trading and sales
practices and applicable state and federal laws, rules and regulations and the
rules of the Nasdaq Stock Market, Inc. (“Nasdaq”) to sell such Placement Shares
up to the amount specified, and otherwise in accordance with the terms of such
Placement Notice.  Cowen will provide written confirmation to the Company
(including by email correspondence to each of the individuals of the Company set
forth on Schedule 2, if receipt of such correspondence is actually acknowledged
by any of the individuals to whom the notice is sent, other than via auto-reply)
no later than the opening of the Trading Day (as defined below) immediately
following the Trading Day on which it has made sales of Placement Shares
hereunder setting forth the number of Placement Shares sold on such day, the
price per share that such Placement Shares were sold, the compensation payable
by the Company to Cowen pursuant to Section 2 with respect to such sales, and
the Net Proceeds (as defined below) payable to the Company, with an itemization
of the deductions made by Cowen (as set forth in Section 5(a)) from the gross
proceeds that it receives from such sales.  Cowen may sell Placement Shares by
any method permitted by law deemed to be an “at the market” offering as defined
in Rule 415 of the Securities Act, including without limitation sales made
through Nasdaq, on any other existing trading market for the Common Stock or to
or through a market maker.  If expressly authorized by the Company in a
Placement Notice, Cowen may also sell Placement Shares in negotiated
transactions.  Notwithstanding the provisions of Section 6(dd), Cowen shall not
purchase Placement Shares for its own account as principal unless expressly
authorized to do so by the Company in a Placement Notice.  The Company
acknowledges and agrees that (i) there can be no assurance that Cowen will be
successful in selling Placement Shares, and (ii) Cowen will incur no liability
or obligation to the Company or any other person or entity if it does not sell
Placement Shares for any reason other than a failure by Cowen to use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares as required under this Section 3. 
During the term of this Agreement and notwithstanding anything to the contrary
herein, Cowen agrees that in no event will Cowen or its affiliates engage in any
market making, bidding, stabilization or other trading activity with regard to
the Common Stock or related derivative securities if such activity would be
prohibited under Regulation M or other anti-manipulation rules under the
Securities Act.  For the purposes hereof, “Trading Day” means any day on which
the Company’s Common Stock is purchased and sold on the principal market on
which the Common Stock is listed or quoted.

 

4.             Suspension of Sales.

 

(a)           The Company or Cowen may, upon notice to the other party in
writing (including by email correspondence to each of the individuals of the
other party set forth on Schedule 2, if receipt of such correspondence is
actually acknowledged by any of the individuals to whom the notice is sent,
other than via auto-reply) or by telephone (confirmed immediately by verifiable

 

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facsimile transmission or email correspondence to each of the individuals of the
other party set forth on Schedule 2), suspend any sale of Placement Shares;
provided, however, that such suspension shall not affect or impair either
party’s obligations with respect to any Placement Shares sold hereunder prior to
the receipt of such notice.  Each of the Parties agrees that no such notice
under this Section 4 shall be effective against the other unless it is made to
one of the individuals named on Schedule 2 hereto, as such schedule may be
amended from time to time.

 

(b)           Notwithstanding any other provision of this Agreement, during any
period in which the Company’s is in possession of material non-public
information, the Company and Cowen agree that (i) no sale of Placement Shares
will take place, (ii) the Company shall not request the sale of any Placement
Shares, and (iii) Cowen shall not be obligated to sell or offer to sell any
Placement Shares.

 

5.             Settlement.

 

(a)           Settlement of Placement Shares.  Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
“Settlement Date” and the first such settlement date, the “First Delivery
Date”).  The amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be
equal to the aggregate sales price received by Cowen at which such Placement
Shares were sold, after deduction for (i) Cowen’s commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof,
(ii) any other amounts due and payable by the Company to Cowen hereunder
pursuant to Section 7(g) (Expenses) hereof, and (iii) any transaction fees
imposed by any governmental or self-regulatory organization in respect of such
sales.

 

(b)           Delivery of Placement Shares.  On or before each Settlement Date,
the Company will, or will cause its transfer agent to, electronically transfer
the Placement Shares being sold by crediting Cowen’s or its designee’s account
(provided Cowen shall have given the Company written notice of such designee
prior to the Settlement Date) at The Depository Trust Company through its
Deposit and Withdrawal at Custodian System or by such other means of delivery as
may be mutually agreed upon by the parties hereto which in all cases shall be
freely tradeable, transferable, registered shares in good deliverable form.  On
each Settlement Date, Cowen will deliver the related Net Proceeds in same day
funds to an account designated by the Company on, or prior to, the Settlement
Date.  The Company agrees that if the Company, or its transfer agent (if
applicable), defaults in its obligation to deliver duly authorized Placement
Shares on a Settlement Date, the Company agrees that in addition to and in no
way limiting the rights and obligations set forth in
Section 9(a) (Indemnification and Contribution) hereto, it will (i) hold Cowen
harmless against any loss, claim, damage, or expense (including reasonable legal
fees and expenses), as incurred, arising out of or in connection with such
default by the Company and (ii) pay to Cowen any commission, discount, or other
compensation to which it would otherwise have been entitled absent such default.

 

6.             Representations and Warranties of the Company.  The Company
represents and warrants to, and agrees with, Cowen that as of the date of this
Agreement and as of each Applicable Time (as defined in Section 20(a)):

 

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(a)           Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act.  The Company has to its
knowledge complied to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information.  No stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.  The Company meets the requirements for use of
Form S-3 under the Securities Act.  The sale of the Placement Shares hereunder
meets the requirements of General Instruction I.B.1 of Form S-3.

 

(b)           No Misstatement or Omission.  The Prospectus when filed complied
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act.  Each of the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendment thereto, at
the time it became effective, complied and, as of each of the Settlement Dates,
if any, will comply in all material respects with the Securities Act and did not
and, as of each of the Settlement Dates, if any, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date, did not and, as of each
of the Settlement Dates, if any, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to Cowen furnished to the Company in writing by Cowen expressly for use
therein. There are no contracts or other documents required to be described in
the Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.

 

(c)           Offering Materials Furnished to Cowen. The Company has delivered
to Cowen one complete copy of the Registration Statement and a copy of each
consent and certificate of experts filed as a part thereof, and conformed copies
of the Registration Statement (without exhibits) and the Prospectus, as amended
or supplemented, in such quantities and at such places as Cowen has reasonably
requested.

 

(d)           Distribution of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the completion of Cowen’s
distribution of the Common Stock, any offering material in connection with the
Offering other than the Prospectus or the Registration Statement.

 

(e)           The Sales Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.

 

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(f)            Authorization of the Common Stock. The Common Stock to be sold by
Cowen, acting as agent and/or principal for the Company, has been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company to Cowen pursuant to this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable.

 

(g) Description of Capital Stock.  The capital stock of the Company, including
the Common Stock to be sold by Cowen, acting as agent and/or principal for the
Company, conforms in all material respects to the description thereof contained
in the Prospectus.

 

(h) No Applicable Registration or Other Similar Rights. There are no persons
with registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as have been duly waived.

 

(i)            No Material Adverse Change.  Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a “Material Adverse Change”); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for regular quarterly dividends publicly announced by the Company or
dividends paid to the Company or other subsidiaries, by any of its subsidiaries
on any class of capital stock or repurchase or redemption by the Company or any
of its subsidiaries of any class of capital stock; (iv) there has not been any
transaction which is material to the Company, except obligations incurred in the
ordinary course of business consistent with past practice, (v) there has not
been any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, which is material to the Company, except
obligations incurred in the ordinary course of business consistent with past
practice, and (vi) there has not been any material change in the capital stock
of the Company.

 

(j) Capitalization. As of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth or incorporated by
reference in the Prospectus (subject to the issuance of shares of Common Stock
upon conversion of existing convertible securities, the exercise of existing
stock options and warrants disclosed as outstanding in the Prospectus and the
grant of options under existing stock option plans described in the Prospectus).

 

(k) Stock Options.  Except as described in the Prospectus, with respect to the
stock options (the “Stock Options”) granted pursuant to the stock-based
compensation plans of the Company and its subsidiaries (the “Company Stock
Plans”), (i) each Stock Option designated by the Company at the time of grant as
an “incentive stock option” under Section 422 of the Internal Revenue code of
1986, as amended (the “Code”) so qualifies, (ii) each grant of a Stock Option
was duly authorized no later than the date on which the grant of such Stock
Option was by its terms to be effective (the “Grant Date”) by all necessary
corporate action, including, as applicable, approval by the board of directors
of the Company (or a duly constituted and

 

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authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto,
(iii) each such grant was made in accordance with the terms of the Company Stock
Plans, the Exchange Act and all other applicable laws and regulatory rules or
requirements, including the rules of NASDAQ, (iv) the per share exercise price
of each Stock Option was equal to or greater than the fair market value of a
share of Common Stock on the applicable Grant Date and (v) each such grant was
accounted for in accordance with GAAP (as defined below) in the financial
statements of the Company and disclosed in the Company’s filings with the
Commission in accordance with the Exchange Act and all other applicable laws;
there is no and has been no policy of the Company of granting Stock Options
prior to, and the Company does not otherwise coordinate the grant of Stock
Options with, the release or other public announcements of material information
regarding the Company or its subsidiaries or their results of operations.

 

(l) Incorporation and Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with the requisite corporate power and authority
to own, lease and operate its properties and conduct its business as described
or incorporated by reference in the Prospectus.

 

(m) Incorporation and Good Standing of the Subsidiaries.  Each subsidiary of the
Company (collectively, the “Subsidiaries”) has been duly organized and is
validly existing and is in good standing under the laws of its jurisdiction of
organization, with the requisite power and authority to own, lease and operate
its properties and conduct its business as described or incorporated by
reference in the Prospectus, and all of the issued shares of each Subsidiary
have been duly and validly authorized and issued, are fully paid and are
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims except (i) for liens and
encumbrances specifically referenced in the financial statements of the Company,
(ii) as described in the Prospectus or (iii) as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Change.

 

(n) Foreign Qualification. Each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified and in good standing would not have a Material Adverse Change.

 

(o) Organizational Documents.  Complete and correct copies of the certificate of
incorporation and the bylaws, of the Company and its Subsidiaries and all
amendments thereto have been made available to Cowen.

 

(p) No Default.  Neither the Company nor its Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which with notice,
lapse of time or both would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a part of such indebtedness under) its (i) certificate of incorporation
or bylaws or similar organizational documents of the Subsidiaries, or (ii) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the

 

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Company is a party or by which it or any of its properties may be bound or
affected, except, in the case of clause (ii) above, where such breach, violation
or default would not, individually or in the aggregate, have a Material Adverse
Change, and the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby will not conflict with,
result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in
any breach or violation of or constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (x) the certificate of incorporation or bylaws of the
Company or similar organizational documents of the Subsidiaries, (y) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, license, lease, contract or other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them or any of its properties may be bound or affected, or (z) any federal,
state, local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any Subsidiary, except, in the case of clauses
(y) and (z) above, where such breach, violation or default, would not,
individually or in the aggregate, have a Material Adverse Change.

 

(q) No Consent.  No approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency or of or with NASDAQ, or approval of the
stockholders of the Company, is required in connection with the Offering or the
consummation by the Company of the transactions contemplated hereby other than
(i) filings or applications with NASDAQ, (ii) filings with the Commission in
relation to the registration of the offering contemplated hereby under the
Securities Act and the Offering (iii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Placement
Shares are being offered under the terms of this Agreement or under the
rules and regulations of the Financial Industry Regulatory Authority (“FINRA”)
and (iv) such notices or filings that would not individually or in the aggregate
have a Material Adverse Change.

 

(r) No Preemptive Rights.  Except as set forth in the Prospectus, (i) no person
has the right, contractual or otherwise, to cause the Company to issue or sell
to it any shares of Common Stock or shares of any other capital stock or other
equity interests of the Company, (ii) no person has any preemptive rights,
resale rights, rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock or other securities of the
Company, and (iii) except as provided herein, no person has the right to act as
an underwriter, placement agent or financial advisor to the Company in
connection with the Offering, in the case of each of the foregoing clauses (i),
(ii) and (iii), whether as a result of the filing or effectiveness of the
Registration Statement or the Offering as contemplated thereby or otherwise and
except, in each case, for such rights as have been duly and validly satisfied or
waived.

 

(s) Licenses.  Each of the Company and its Subsidiaries has all licenses,
authorizations, consents and approvals and has made all filings required under
any federal, state, local or foreign law, regulation or rule, and has obtained
all authorizations, consents and approvals from other persons, necessary in
order to conduct its business as described in the Prospectus except where such
failure to do so would not, individually or in the aggregate, have a Material
Adverse Change; neither the Company nor its Subsidiaries is in violation of, or
in default under, or has received notice of any proceedings relating to
revocation or modification of, any such license,

 

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authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or
its Subsidiaries, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Change

 

(t) Clinical Trials.  The preclinical and clinical trials conducted by or on
behalf of the Company that are described in the Prospectus were and, if still
pending, are being conducted in all material respects in accordance with
procedures and controls pursuant to accepted professional scientific standards
and all applicable local, state and federal and foreign laws, rules, regulations
and published guidance, including, but not limited to, the Federal Food, Drug
and Cosmetic Act and implementing regulations at 21 C.F.R. Parts 50, 54, 56, 58
and 312; the Company has orally or in writing, to Cowen or to counsel to Cowen,
fairly summarized in all material respects the substance of all of its material
communications with representatives of the U.S. Food and Drug Administration or
any foreign, state or local governmental body exercising comparable authority
and has no knowledge of any pending communication from the U.S. Food and Drug
Administration or any foreign, state or local governmental body exercising
comparable authority that would cause the Company to materially revise in an
adverse way its strategy for seeking marketing approval from the U.S. Food and
Drug Administration or any foreign, state or local governmental body exercising
comparable authority for any of the Company’s products under development as
described in the Prospectus; the descriptions of the results of such studies,
tests and trials contained in the Prospectus are accurate and complete in all
material respects; other than as described in the Prospectus, the Company is not
aware of any studies, tests or trials the results of which reasonably call into
question the clinical trial results described or referred to in the Prospectus
when viewed in the context in which such results are described and the clinical
state of development; and other than as described in the Prospectus, the Company
has not received any written notices or correspondence from the U.S. Food and
Drug Administration or any foreign, state or local governmental body exercising
comparable authority requiring the termination or suspension of any preclinical
or clinical trials conducted by or on behalf of the Company.

 

(u) Disclosure. All legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described under the Securities Act in
the Prospectus or to be filed as an exhibit to the Registration Statement have
been so described or filed as required.

 

(v) No Proceedings.  Except as disclosed in the Prospectus, there are no
actions, suits, claims, investigations or proceedings pending or, to the
Company’s knowledge, threatened to which the Company or any of its Subsidiaries
or any of their directors or officers is or would be a party or of which any of
its properties is or would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency, except any such action, suit, claim, investigation or
proceeding which would not, if determined adversely to the Company, result in a
judgment, decree or order having, individually or in the aggregate, a Material
Adverse Change or prevent consummation of the transactions contemplated hereby

 

(w) Independent Accountants.  Ernst & Young LLP, who have expressed their
opinion with respect to the consolidated financial statements (which term as
used in this Agreement includes the notes thereto) of the Company filed with the
Commission and incorporated by

 

9

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reference as a part of the Registration Statement and Prospectus, is an
independent registered public accounting firm as required by the Securities Act
and the Exchange Act; and Windham Brannon, P.C., who have expressed their
opinion with respect to the financial statements of Callidus Biopharma, Inc.
(“Callidus”) filed with the Commission and incorporated by reference as a part
of the Registration Statement and Prospectus, are an independent registered
public accounting firm as required by the Securities Act and the Exchange Act
with respect to Callidus as of the date of its report incorporated by reference
in the Registration Statement and Prospectus.  Except as pre-approved in
accordance with the requirements set forth in Section 10A of the Exchange Act,
Ernst & Young LLP have not been engaged by the Company to perform any
“prohibited activities” (as defined in Section 10A of the Exchange Act).

 

(x)           Preparation of the Financial Statements. The financial statements
of the Company and Callidus incorporated by reference in the Registration
Statement and Prospectus, together with the related notes and schedules, present
fairly in all material respects the consolidated financial position of the
Company or Callidus, as applicable, as of the dates indicated and the
consolidated results of operations and cash flows of the Company or Callidus, as
applicable, for the periods specified subject, in the case of unaudited interim
statements, to normal, year-end audit adjustments and have been prepared in
compliance with the requirements of the Securities Act and in conformity with,
generally accepted accounting principles in the United States as applied by the
Company or Callidus, as applicable, on a consistent basis during the periods
involved (“GAAP”), except (i) as may be otherwise specified in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements; the other financial data of the Company or Callidus set
forth in the Registration Statement and the Prospectus are accurately presented
and prepared on a basis consistent with the financial statements and books and
records of the Company or Callidus, as applicable; the assumptions used in
preparing the pro forma financial statements included in the Registration
Statement and Prospectus provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts; there are no financial statements (historical or pro forma)
that are required by the Securities Act to be included in the Registration
Statement and the Prospectus that are not included as required by the Securities
Act; and the Company does not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement or the Prospectus.

 

(y)           The interactive data in eXtensible Business Reporting Language
included or incorporated by reference in the each Registration Statement fairly
presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

 

(z) [Reserved.]

 

(aa)         Company Not an “Investment Company”. The Company is not an
“investment company” or an entity “controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”), nor is the Company a “passive foreign investment
company” or a “controlled foreign corporation” as such terms are defined in the
Code.

 

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(bb) Title to Property. Except as described in the Prospectus, the Company and
its Subsidiaries have good and marketable title to all material property (real
and personal) described in the Prospectus as being owned by each of them, free
and clear of all liens, claims, security interests or other encumbrances, or
subject only to liens, claims, security interests or other encumbrances
(i) specifically referenced in the financial statements of the Company;
(ii) that are disclosed in the Prospectus, or (iii) that do not individually or
in the aggregate materially affect the value of such property or materially
interfere with the use made of such property by the Company and its
Subsidiaries; and all the property described in the Prospectus as being held
under lease by the Company is held thereby under valid, subsisting and
enforceable leases except as would not reasonably be expected to result in a
Material Adverse Change.

 

(cc) Intellectual Property.  Except as described in the Prospectus, the Company
and its Subsidiaries own, or has obtained valid and enforceable licenses for, or
other rights to use, the inventions, patent applications, patents, trademarks
(both registered and unregistered), tradenames, copyrights, trade secrets and
other proprietary information (collectively, “Intellectual Property”) described
in the Prospectus as being owned or licensed by it, except where such failure to
do so would not, individually or in the aggregate, have a Material Adverse
Change; to the Company’s knowledge and except as described in the Prospectus,
the Company and its Subsidiaries own, or has obtained valid and enforceable
licenses for, or other rights to use, all Intellectual Property used in, or
necessary for the conduct of, its business as described in the Prospectus except
as would not reasonably be expected to result in a Material Adverse Change; to
the Company’s knowledge, there is no pending or threatened action, suit,
proceeding or claim by others that the Company or any of its Subsidiaries
infringes or otherwise violates any Intellectual Property rights of others,
except as could not reasonably be expected to have a Material Adverse Change,
and the Company is unaware of any facts which could form a reasonable basis for
any such claim; and none of the technology employed by the Company or any of its
Subsidiaries has been obtained or is being used by the Company or any of its
Subsidiaries in violation of any contractual obligation binding on the Company
or any of its Subsidiaries or, to the Company’s knowledge, upon any of its
officers, directors or employees except as would not reasonably be expected to
result in a Material Adverse Change.

 

(dd) Exclusive Intellectual Property.  To the Company’s knowledge, there are no
third parties who have rights to any Intellectual Property described in the
Prospectus as owned or exclusively licensed by the Company (“Exclusive
Intellectual Property”), except as could not reasonably be expected to have a
Material Adverse Change or except for licenses granted in writing by the Company
or its Subsidiaries to any third-parties; there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the Company’s ownership or rights in or to any Exclusive
Intellectual Property, and the Company is unaware of any facts which could form
a reasonable basis for any such claim except as would not reasonably be expected
to have a Material Adverse Change; there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Exclusive Intellectual Property, and the Company is
unaware of any facts which could form a reasonable basis for any such claim
except as could not reasonably be expected to have a Material Adverse Change.

 

(ee) No Patent Claims.  To the Company’s knowledge, there is no patent that
contains claims that interfere with the issued or pending claims of any of the
Company’s Intellectual

 

11

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Property except as would not reasonably be expected to have a Material Adverse
Change; and to the Company’s knowledge, there is no prior art material to any
patent or patent application of the Exclusive Intellectual Property that has not
been disclosed to the U.S. Patent and Trademark Office, except as would not
reasonably be expected to have a Material Adverse Change.

 

(ff) Labor Practices.  The Company is not engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate, have a
Material Adverse Change, (i) there is (A) no unfair labor practice complaint
pending or, to the Company’s knowledge, threatened against the Company or any
Subsidiary before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending or, to the Company’s knowledge, threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened
against the Company or any Subsidiary and (C) no union representation dispute
currently existing concerning the employees of the Company, and (ii) to the
Company’s knowledge, (A) no union organizing activities are currently taking
place concerning the employees of the Company or any Subsidiary and (B) there
has been no violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any applicable wage
or hour laws or any provision of the Employee Retirement Income Security Act of
1974 (“ERISA”) or the rules and regulations promulgated thereunder concerning
the employees of the Company or any Subsidiary.

 

(gg) Environmental.  The Company and its Subsidiaries and its properties, assets
and operations are in compliance with, and hold all permits, authorizations and
approvals required to conduct its business under, Environmental Laws (as defined
below), except to the extent that failure to so comply or to hold such permits,
authorizations or approvals would not, individually or in the aggregate, have a
Material Adverse Change; there are no past, present or, to the Company’s
knowledge, reasonably anticipated future events, conditions, circumstances,
activities, practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the Company or any
Subsidiary under, or to interfere with or prevent compliance by the Company
with, Environmental Laws, except as would not, individually or in the aggregate,
have a Material Adverse Change; the Company (i) is not the subject of any
investigation, (ii) has not received any notice or claim, (iii) is not a party
to or affected by any pending or threatened action, suit or proceeding, (iv) is
not bound by any judgment, decree or order or (v) has not entered into any
agreement, in each case relating to any alleged violation of any Environmental
Law or any actual or alleged release or threatened release or cleanup at any
location of any Hazardous Materials (as defined below) and in each case except
as would not, individually or in the aggregate, have a Material Adverse Change
(as used herein, “Environmental Law” means any federal, state, local or foreign
law, statute, ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or common law
related to the protection of the environment, including ambient air, surface
water, groundwater or land, or Hazardous Materials, or emissions, discharges or
releases of Hazardous Materials into the environment, or otherwise relates to
the handling of Hazardous Materials or the investigation, clean-up or other
remediation, in each case, that are applicable to the business as conducted by
the Company on the Execution Date, and “Hazardous Materials” means any
“hazardous substance,” “hazardous waste,” “pollutant,” “contaminant” or “toxic
substance” (as defined or regulated by any Environmental Law) and also includes
petroleum and petroleum products, polychlorinated biphenyls or asbestos).

 

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(hh) Taxes.  The Company (i) has timely filed all necessary federal, state,
local and foreign tax returns, and all such returns were true, complete and
correct, (ii) has paid all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which it is liable, including,
without limitation, all sales and use taxes and all taxes which the Company is
obligated to withhold from amounts owing to employees, creditors and third
parties, and (iii) does not have any tax deficiency or claims outstanding or
assessed or, to its knowledge, proposed against any of them, except those, in
each of the cases described in clauses (i), (ii) and (iii) of this paragraph,
that would not, singularly or in the aggregate, reasonably be expected to have a
Material Adverse Change; the Company has not engaged in any transaction which to
the Company’s knowledge a corporate tax shelter or could be characterized as
such by the Internal Revenue Service or any other taxing authority; the accruals
and reserves on the books and records of the Company in respect of tax
liabilities for any taxable period not yet finally determined are adequate to
meet any assessments and related liabilities for any such period, and since
December 31, 2013, the Company has not incurred any liability for taxes other
than in the ordinary course.

 

(ii) Insurance.  The Company and each of its Subsidiaries maintain insurance
covering its properties, operations, personnel and businesses as the Company or
such Subsidiary deems appropriate; such insurance insures against such losses
and risks to an extent which is adequate and customary for the business and the
locations in which the Company or such Subsidiary is engaged; all such insurance
is fully in force on the date hereof and the Company or such Subsidiary has no
reason to believe that such insurance will not be fully in force at the Closing
Time; the Company has not received any notice and has no reason to believe that
it will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not result in a Material Adverse Change; the
Company has not been denied any insurance coverage that it has sought or for
which it has applied.

 

(jj) Internal Controls.  Except as otherwise disclosed in the Prospectus, the
Company maintains (i) effective internal control over financial reporting as
defined in Rule 13a-15 under the Exchange Act, as amended, and (ii) a system of
internal accounting controls sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with management’s general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to assets
is permitted only in accordance with management’s general or specific
authorization; (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences and (E) the interactive data in eXtensible Business
Reporting Language included as an exhibits to the Registration Statement is
accurate.

 

(kk) Material Weakness.  Since the end of the Company’s most recent audited
fiscal year, there has been (i) no material weakness in design or operation of
the Company’s internal control over financial reporting (whether or not
remediated) which are not reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information and
(ii) no change in the Company’s internal control over financial reporting that
has materially

 

13

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adversely affected, or is reasonably likely to materially adversely affect, the
Company’s internal control over financial reporting.

 

(ll) Disclosure Controls.  The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) and
15d-15(e) under the Exchange Act); the principal executive officers (or their
equivalents) and principal financial officers (or their equivalents) of the
Company have made all certifications required by the Sarbanes-Oxley Act of 2002
and any related rules and regulations promulgated by the Commission (the
“Sarbanes-Oxley Act”), and the statements contained in any such certification
are complete and correct; and the Company is otherwise in compliance in all
material respects with all applicable provisions of the Sarbanes-Oxley Act that
are effective.

 

(mm) No Unlawful Payments.  Neither the Company nor any of its Subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense 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 Foreign Corrupt Practices Act of 1977; or
(iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.

 

(nn) Money Laundering.  The operations of the Company and its Subsidiaries are
and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.

 

(oo) OFAC.  None of the Company, any of its Subsidiaries or, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Department of
the Treasury (“OFAC”); and the Company will not, directly or indirectly, use the
proceeds of the offering of the Placement Shares hereunder, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

 

(pp) No Stabilization.  Neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any of its directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common Stock.

 

(qq) Minute Books.  The minute books of the Company have been made available to
Cowen and counsel for Cowen, and such books (i) contain a complete and accurate
summary of

 

14

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all meetings and actions of the board of directors (including each board
committee) and stockholders of the Company (or analogous governing bodies and
interest holders, as applicable) from February 2011 to February 2014, and
(ii) accurately in all material respects reflect all transactions referred to in
such minutes.

 

(rr) There is no franchise, lease, contract, agreement or document required by
the Securities Act to be described in the Prospectus or to be filed as an
exhibit to the Registration Statement or a document incorporated by reference
therein which is not described or filed therein as required; and all
descriptions of any such franchises, leases, contracts, agreements or documents
contained in the Prospectus are accurate descriptions of such documents in all
material respects, which descriptions are sufficiently comprehensive to fulfill
the Company’s obligations under applicable law with respect to thereto; other
than as described in the Prospectus, no such franchise, lease, contract or
agreement has been suspended or terminated for convenience or default by the
Company or any of the other parties thereto, and the Company has not received
notice nor does the Company have any other knowledge of any such pending or
threatened suspension, termination or non-renewal, except for such pending or
threatened suspensions, terminations or non-renewals that would not reasonably
be expected to, singularly or in the aggregate, have a Material Adverse Change.

 

(ss) Relationships.  No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its affiliates on the other
hand, which is required under the rules and regulations of the Securities Act or
the Exchange Act to be described in the Prospectus and which is not so
described.

 

(tt) Margin Securities.  The Company does not own any “margin securities” as
that term is defined in Regulation U of the Board of Governors of the Federal
Reserve System (the “Federal Reserve Board”), and none of the proceeds of the
sale of the Placement Shares will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause any of
the Placement Shares to be considered a “purpose credit” within the meanings of
Regulation T, U or X of the Federal Reserve Board.

 

(uu)                          Exchange Act Compliance.  The documents
incorporated or deemed to be incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Exchange Act, and,
when read together with the other information in the Prospectus, at the
Settlement Dates, will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the 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.

 

(vv)                          Forward-Looking Statements.  No forward-looking
statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.

 

15

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(ww) Reporting Compliance.  The Company is subject to and in compliance in all
material respects with the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act. The Offering is registered pursuant to
Section 12(b) of the Exchange Act and is listed on Nasdaq, and the Company has
taken no action designed to, or reasonably likely to have the effect of,
terminating the registration of the Offering under the Exchange Act or delisting
the Common Stock from Nasdaq, nor has the Company received any notification that
the Commission or Nasdaq is contemplating terminating such registration or
listing; no consent, approval, authorization or order of, or filing,
notification or registration with, Nasdaq is required for the listing and
trading of the shares of Common Stock on Nasdaq, except for (i) a Notification:
Listing of Additional Shares and (ii) a Notification: Change in the Number of
Shares Outstanding.

 

(xx) Corporate Governance.  The Company is in compliance in all material
respects with all corporate governance requirements set forth in the
rules promulgated by Nasdaq applicable to the Company.

 

(yy) There are no transactions, arrangements or other relationships between
and/or among the Company, any of its affiliates (as such term is defined in
Rule 405 of the Securities Act) and any unconsolidated entity, including, but
not limited to, any structured finance, special purpose or limited purpose
entity that would reasonably be expected to materially affect the Company’s
liquidity or the availability of or requirements for its capital resources
required to be described in the Prospectus which have not been described as
required.

 

(zz) No Loans.  There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company, or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus.

 

(aaa) Statistical Data.  The statistical and market related data included in the
Registration Statement and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and such data agree with
the sources from which they are derived.

 

(bbb) No FINRA Members.  To the Company’s knowledge, neither the Company nor any
of its affiliates (within the meaning of NASD Conduct Rule 2720(b)(1)(a))
directly or indirectly controls, is controlled by, or is under common control
with, or is an associated person (within the meaning of Article I, Section 1(ee)
of the By-laws of the NASD) of, any member firm of FINRA.

 

(ccc) No Approval.  No approval of the stockholders of the Company under the
rules and regulations of Nasdaq is required for the Company to sell the Common
Stock as contemplated by this Agreement.

 

(ddd) Brokers.  Other than the compensation set forth in Schedule 3, there is no
broker, finder or other party that is entitled to receive from the Company any
brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.

 

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(eee) No Reliance.  The Company has not relied upon Cowen or legal counsel for
Cowen for any legal, tax or accounting advice in connection with the offering
and sale of the Placement Shares.

 

(fff) Cowen Purchases.  The Company acknowledges and agrees that Cowen has
informed the Company that Cowen may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell shares of Common Stock
for its own account while this Agreement is in effect, provided, that no such
purchase or sales shall take place while a Placement Notice is in effect (except
to the extent Cowen may engage in sales of Placement Shares purchased or deemed
purchased from the Company as a “riskless principal” or in a similar capacity).

 

(ggg) Compliance with Laws.  The Company has not been advised, and has no reason
to believe, that it and each of its subsidiaries are not conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, except where failure to be so in compliance
would not result in a Material Adverse Change.

 

Any certificate signed by an officer of the Company and delivered to Cowen or to
counsel for Cowen shall be deemed to be a representation and warranty by the
Company to Cowen as to the matters set forth therein.

 

The Company acknowledges that Cowen and, for purposes of the opinions to be
delivered pursuant to Section 7 hereof, counsel to the Company and counsel to
Cowen, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.

 

7.             Covenants of the Company.  The Company covenants and agrees with
Cowen that:

 

(a)           Registration Statement Amendments.  After the date of this
Agreement and during any period in which a Prospectus relating to any Placement
Shares is required to be delivered by Cowen under the Securities Act (including
in circumstances where such requirement may be satisfied pursuant to Rule 172
under the Securities Act), (i) the Company will notify Cowen promptly of the
time when any subsequent amendment to the Registration Statement, other than
documents incorporated by reference, has been filed with the Commission and/or
has become effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional information, (ii) the
Company will prepare and file with the Commission, promptly upon Cowen’s
request, any amendments or supplements to the Registration Statement or
Prospectus that, in Cowen’s reasonable opinion, may be necessary or advisable in
connection with the distribution of the Placement Shares by Cowen (provided,
however, that the failure of Cowen to make such request shall not relieve the
Company of any obligation or liability hereunder, or affect Cowen’s right to
rely on the representations and warranties made by the Company in this
Agreement); (iii) the Company will not file any amendment or supplement to the
Registration Statement or Prospectus, other than documents incorporated by
reference, relating to the Placement Shares or a security convertible into the
Placement Shares unless a copy thereof has been submitted to Cowen within a
reasonable period of time before the filing and Cowen has not reasonably
objected thereto (provided, however, that the failure of Cowen to make such
objection shall not relieve the Company of any obligation or liability
hereunder, or

 

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affect Cowen’s right to rely on the representations and warranties made by the
Company in this Agreement) and the Company will furnish to Cowen at the time of
filing thereof a copy of any document that upon filing is deemed to be
incorporated by reference into the Registration Statement or Prospectus, except
for those documents available via IDEA; and (iv) the Company will cause each
amendment or supplement to the Prospectus, other than documents incorporated by
reference, to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Securities Act.

 

(b)           Notice of Commission Stop Orders.  The Company will advise Cowen,
promptly after it receives notice or obtains knowledge thereof, of the issuance
or threatened issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Placement Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such purpose; and
it will promptly use its commercially reasonable efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such a stop order should be
issued.

 

(c)           Delivery of Prospectus; Subsequent Changes.  During any period in
which a Prospectus relating to the Placement Shares is required to be delivered
by Cowen under the Securities Act with respect to a pending sale of the
Placement Shares, (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act), the Company will
comply with all requirements imposed upon it by the Securities Act, as from time
to time in force, and to file on or before their respective due dates all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14,
15(d) or any other provision of or under the Exchange Act.  If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Securities Act, the Company will promptly notify Cowen to
suspend the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the
expense of the Company) so as to correct such statement or omission or effect
such compliance.

 

(d)           Listing of Placement Shares.  During any period in which the
Prospectus relating to the Placement Shares is required to be delivered by Cowen
under the Securities Act with respect to a pending sale of the Placement Shares
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act), the Company will use its commercially
reasonable efforts to cause the Placement Shares to be listed on Nasdaq and to
qualify the Placement Shares for sale under the securities laws of such
jurisdictions as Cowen reasonably designates and to continue such qualifications
in effect so long as required for the distribution of the Placement Shares;
provided, however, that the Company shall not be required in connection
therewith to qualify as a foreign corporation or dealer in securities or file a
general consent to service of process in any jurisdiction.

 

(e)           Delivery of Registration Statement and Prospectus.  The Company
will furnish to Cowen and its counsel (at the expense of the Company) copies of
the Registration Statement, the Prospectus (including all documents incorporated
by reference therein) and all amendments and

 

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supplements to the Registration Statement or Prospectus that are filed with the
Commission during any period in which a Prospectus relating to the Placement
Shares is required to be delivered under the Securities Act (including all
documents filed with the Commission during such period that are deemed to be
incorporated by reference therein), in each case as soon as reasonably
practicable and in such quantities as Cowen may from time to time reasonably
request and, at Cowen’s request, will also furnish copies of the Prospectus to
each exchange or market on which sales of the Placement Shares may be made;
provided, however, that the Company shall not be required to furnish any
document (other than the Prospectus) to Cowen to the extent such document is
available on IDEA.

 

(f)            Earnings Statement.  The Company will make generally available to
its security holders as soon as practicable, but in any event not later than 15
months after the end of the Company’s current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions of
Section 11(a) and Rule 158 of the Securities Act.

 

(g)           Expenses.  The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, in
accordance with the provisions of Section 11 hereunder, will pay the following
expenses all incident to the performance of its obligations hereunder,
including, but not limited to, expenses relating to (i) the preparation,
printing and filing of the Registration Statement and each amendment and
supplement thereto, of each Prospectus and of each amendment and supplement
thereto, (ii) the preparation, issuance and delivery of the Placement Shares,
(iii) the qualification of the Placement Shares under securities laws in
accordance with the provisions of Section 7(d) of this Agreement, including
filing fees (provided, however, that any fees or disbursements of counsel for
Cowen in connection therewith shall be paid by Cowen except as set forth in
(vii) below), (iv) the printing and delivery to Cowen of copies of the
Prospectus and any amendments or supplements thereto, and of this Agreement,
(v) the fees and expenses incurred in connection with the listing or
qualification of the Placement Shares for trading on Nasdaq, (vi) filing fees
and expenses, if any, of the Commission and the FINRA Corporate Financing
Department (including, with respect to any required review by FINRA, the
reasonable fees and expenses of Cowen’s counsel in an amount not to exceed
$10,000) and (vii) the Company shall reimburse Cowen for the fees and
disbursements of Cowen’s counsel in an amount not to exceed $50,000.

 

(h) Use of Proceeds.  The Company will use the Net Proceeds as described in the
Prospectus in the section entitled “Use of Proceeds.”

 

(i) Notice of Other Sales.  During the pendency of any Placement Notice given
hereunder, and for 5 trading days following the termination of any Placement
Notice given hereunder, the Company shall provide Cowen notice as promptly as
reasonably possible before it offers to sell, contracts to sell, sells, grants
any option to sell or otherwise disposes of any shares of Common Stock (other
than Placement Shares offered pursuant to the provisions of this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire Common Stock; provided, that such notice shall not
be required in connection with the (i) issuance, grant or sale of Common Stock,
options to purchase shares of Common Stock or Common Stock issuable upon the
exercise of options or other equity awards pursuant to the any stock option,
stock bonus or other stock plan or arrangement described in the Prospectus,
(ii) the issuance of securities in connection with an acquisition, merger or
sale or purchase of assets or (iii) the issuance or sale of Common Stock
pursuant to any dividend

 

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reinvestment plan that the Company may adopt from time to time provided the
implementation of such is disclosed to Cowen in advance or (iv) any shares of
common stock issuable upon the exchange, conversion or redemption of securities
or the exercise of warrants, options or other rights in effect or outstanding.

 

(j)            Change of Circumstances.  The Company will, at any time during a
fiscal quarter in which the Company intends to tender a Placement Notice or sell
Placement Shares, advise Cowen promptly after it shall have received notice or
obtained knowledge thereof, of any information or fact that would alter or
affect in any material respect any opinion, certificate, letter or other
document provided to Cowen pursuant to this Agreement.

 

(k)           Due Diligence Cooperation.  The Company will cooperate with any
reasonable due diligence review conducted by Cowen or its agents in connection
with the transactions contemplated hereby, including, without limitation,
providing information and making available documents and senior corporate
officers, during regular business hours and at the Company’s principal offices,
as Cowen may reasonably request.

 

(l)            Required Filings Relating to Placement of Placement Shares.  The
Company agrees that on such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act (each and every
filing under Rule 424(b), a “Filing Date”), which prospectus supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
Cowen, the Net Proceeds to the Company and the compensation payable by the
Company to Cowen with respect to such Placement Shares, and (ii) deliver such
number of copies of each such prospectus supplement to each exchange or market
on which such sales were effected as may be required by the rules or regulations
of such exchange or market.

 

(m)          Representation Dates; Certificate.  On or prior to the First
Delivery Date and each time the Company (i) files the Prospectus relating to the
Placement Shares or amends or supplements the Registration Statement or the
Prospectus relating to the Placement Shares (other than a prospectus supplement
filed in accordance with Section 7(l) of this Agreement) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference to the Registration Statement or the
Prospectus relating to the Placement Shares; (ii) files an annual report on
Form 10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q
under the Exchange Act; or (iv) files a report on Form 8-K containing amended
financial information (other than an earnings release) under the Exchange Act
(each date of filing of one or more of the documents referred to in clauses
(i) through (iv) shall be a “Representation Date”); the Company shall furnish
Cowen with a certificate, in the form attached hereto as Exhibit 7(m) within
three (3) Trading Days of any Representation Date if requested by Cowen.  The
requirement to provide a certificate under this Section 7(m) shall be waived for
any Representation Date occurring at a time at which no Placement Notice is
pending, which waiver shall continue until the earlier to occur of the date the
Company delivers a Placement Notice hereunder (which for such calendar quarter
shall be considered a Representation Date) and the next occurring Representation
Date; provided, however, that such waiver shall not apply for any Representation
Date on which the Company files its annual report on Form 10-K.  Notwithstanding
the foregoing, if the Company subsequently decides to sell Placement Shares
following a Representation Date when the Company relied on such waiver and did
not provide Cowen with a certificate under this Section 7(m), then before the
Company

 

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delivers the Placement Notice or Cowen sells any Placement Shares, the Company
shall provide Cowen with a certificate, in the form attached hereto as
Exhibit 7(m), dated the date of the Placement Notice.

 

(n)           Legal Opinion.  On or prior to the First Delivery Date and within
three (3) Trading Days of each Representation Date with respect to which the
Company is obligated to deliver a certificate in the form attached hereto as
Exhibit 7(m) for which no waiver is applicable, the Company shall cause to be
furnished to Cowen a written opinion of Pepper Hamilton LLP, counsel for the
Company, Oblon Spivak McLelland Maier and Neustadt, L.L.P., Sorin Rand LLP,
Servilla Whitney LLC, intellectual property counsel for the Company, or other
counsel satisfactory to Cowen, in form and substance satisfactory to Cowen and
its counsel, dated the date that the opinion is required to be delivered,
modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented; provided, however, that in lieu of
such opinions for subsequent Representation Dates, counsel may furnish Cowen
with a letter (a “Reliance Letter”) to the effect that Cowen may rely on a prior
opinion delivered under this Section 7(n) to the same extent as if it were dated
the date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date).

 

(o)           Comfort Letter.  On or prior to the First Delivery Date and within
three (3) Trading Days of each Representation Date with respect to which the
Company is obligated to deliver a certificate in the form satisfactory to Cowen
and its counsel for which no waiver is applicable, the Company shall cause
Ernst & Young LLP [and Windham Brannon, P.C.] to furnish Cowen letters (the
“Comfort Letters”), dated the date of the Comfort Letter is delivered, 
(i) confirming that they are an independent registered public accounting firm
within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such
date, the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants’ “comfort
letters” to Cowen in connection with registered public offerings (the first such
letters, the “Initial Comfort Letters”) and (iii) updating the Initial Comfort
Letters with any information that would have been included in the Initial
Comfort Letters had they been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.

 

(p)           Market Activities.  The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Common Stock or (ii) sell, bid for, or purchase the Common Stock to be issued
and sold pursuant to this Agreement, or pay anyone any compensation for
soliciting purchases of the Common Stock other than Cowen; provided, however,
that the Company may bid for and purchase shares of its common stock in
accordance with Rule 10b-18 under the Exchange Act.

 

(q)           Insurance.  The Company and its Subsidiaries shall maintain, or
caused to be maintained, insurance in such amounts and covering such risks as is
reasonable and customary for the business for which it is engaged.

 

(r)            Compliance with Laws.  The Company and each of its Subsidiaries
shall maintain, or cause to be maintained, all material environmental permits,
licenses and other

 

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authorizations required by federal, state and local law in order to conduct
their businesses as described in the Prospectus, and the Company and each of its
Subsidiaries shall conduct their businesses, or cause their businesses to be
conducted, in substantial compliance with such permits, licenses and
authorizations and with applicable environmental laws, except where the failure
to maintain or be in compliance with such permits, licenses and authorizations
could not reasonably be expected to result in a Material Adverse Change.

 

(s)            Investment Company Act.  The Company will conduct its affairs in
such a manner so as to reasonably ensure that neither it nor the Subsidiaries
will be or become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the Investment Company Act,
assuming no change in the Commission’s current interpretation as to entities
that are not considered an investment company.

 

(t)            Securities Act and Exchange Act.  The Company will use its best
efforts to comply with all requirements imposed upon it by the Securities Act
and the Exchange Act as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Placement Shares as
contemplated by the provisions hereof and the Prospectus.

 

(u)           No Offer to Sell.  Other than a free writing prospectus (as
defined in Rule 405 under the Act) approved in advance by the Company and Cowen
in its capacity as principal or agent hereunder, neither Cowen nor the Company
(including its agents and representatives, other than Cowen in its capacity as
such) will make, use, prepare, authorize, approve or refer to any written
communication (as defined in Rule 405 under the Act), required to be filed with
the Commission, that constitutes an offer to sell or solicitation of an offer to
buy Common Stock hereunder

 

(v)           Sarbanes-Oxley Act.  The Company and the Subsidiaries will use
their best efforts to comply with all effective applicable provisions of the
Sarbanes-Oxley Act.

 

8.             Conditions to Cowen’s Obligations. The obligations of Cowen
hereunder with respect to a Placement will be subject to the continuing accuracy
and completeness of the representations and warranties made by the Company
herein, to the due performance by the Company of its obligations hereunder, to
the completion by Cowen of a due diligence review satisfactory to Cowen in its
reasonable judgment, and to the continuing satisfaction (or waiver by Cowen in
its sole discretion) of the following additional conditions:

 

(a)           Registration Statement Effective.  The Registration Statement
shall be effective and shall be available for (i) all sales of Placement Shares
issued pursuant to all prior Placement Notices and (ii) the sale of all
Placement Shares contemplated to be issued by any Placement Notice.

 

(b)           No Material Notices.  None of the following events shall have
occurred and be continuing:  (i) receipt by the Company or any of its
Subsidiaries of any request for additional information from the Commission or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement, the response to which would require
any post-effective amendments or supplements to the Registration Statement or
the Prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any

 

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proceedings for that purpose; (iii) receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Placement Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; (iv) the
occurrence of any event that makes any material statement made in the
Registration Statement or the Prospectus or any material document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in the Registration Statement,
related Prospectus or such documents so that, in the case of the Registration
Statement, it will not contain any materially untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and, that in the case of
the Prospectus, it will not contain any materially untrue statement of a
material fact or omit to state any 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.

 

(c)           No Misstatement or Material Omission.  Cowen shall not have
advised the Company that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact that in
Cowen’s reasonable opinion is material, or omits to state a fact that in Cowen’s
opinion is material and is required to be stated therein or is necessary to make
the statements therein not misleading.

 

(d)           Material Changes.  Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission, there shall not
have been any material adverse change, on a consolidated basis, in the
authorized capital stock of the Company or any Material Adverse Change or any
development that could reasonably be expected to result in a Material Adverse
Change, or any downgrading in or withdrawal of the rating assigned to any of the
Company’s securities (other than asset backed securities) by any rating
organization or a public announcement by any rating organization that it has
under surveillance or review its rating of any of the Company’s securities
(other than asset backed securities), the effect of which, in the case of any
such action by a rating organization described above, in the reasonable judgment
of Cowen (without relieving the Company of any obligation or liability it may
otherwise have), is so material as to make it impracticable or inadvisable to
proceed with the offering of the Placement Shares on the terms and in the manner
contemplated in the Prospectus.

 

(e)           Company Counsel Legal Opinion.  Cowen shall have received the
opinions of company counsel required to be delivered pursuant Section 7(n) on or
before the date on which such delivery of such opinion is required pursuant to
Section 7(n).

 

(f)            Cowen Counsel Legal Opinion.  Cowen shall have received from
Morgan, Lewis & Bockius LLP, counsel for Cowen, such opinion or opinions, on or
before the date on which the delivery of the company counsel legal opinions are
required pursuant to Section 7(n), with respect to such matters as Cowen may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for enabling them to pass upon such matters.

 

(g)           Comfort Letters.  Cowen shall have received the Comfort Letters
required to be delivered pursuant Section 7(o) on or before the date on which
such delivery of such Comfort Letters is required pursuant to Section 7(o).

 

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(h)                                 Representation Certificate.  Cowen shall
have received the certificate required to be delivered pursuant to Section 7(m)
on or before the date on which delivery of such certificate is required pursuant
to Section 7(m).

 

(i)                                     Secretary’s Certificate.  On or prior to
the First Delivery Date, Cowen shall have received a certificate, signed on
behalf of the Company by its corporate Secretary, in form and substance
satisfactory to Cowen and its counsel.

 

(j)                                    No Suspension.  Trading in the Common
Stock shall not have been suspended on Nasdaq.

 

(k)                                 Other Materials.  On each date on which the
Company is required to deliver a certificate pursuant to Section 7(m), the
Company shall have furnished to Cowen such appropriate further information,
certificates and documents as Cowen may have reasonably requested. All such
opinions, certificates, letters and other documents shall have been in
compliance with the provisions hereof. The Company will furnish Cowen with such
conformed copies of such opinions, certificates, letters and other documents as
Cowen shall have reasonably requested.

 

(l)                                     Securities Act Filings Made.  All
filings with the Commission required by Rule 424 under the Securities Act to
have been filed prior to the issuance of any Placement Notice hereunder shall
have been made within the applicable time period prescribed for such filing by
Rule 424.

 

(m)                             Approval for Listing.  The Placement Shares
shall either have been (i) approved for listing on Nasdaq, subject only to
notice of issuance, or (ii) the Company shall have filed an application for
listing of the Placement Shares on Nasdaq at, or prior to, the issuance of any
Placement Notice.

 

(n)                                 No Termination Event.  There shall not have
occurred any event that would permit Cowen to terminate this Agreement pursuant
to Section 11(a).

 

9.                                      Indemnification and Contribution.

 

(a)                                 Company Indemnification.  The Company agrees
to indemnify and hold harmless Cowen, the directors, officers, partners,
employees and agents of Cowen and each person, if any, who (i) controls Cowen
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, or (ii) is controlled by or is under common control with Cowen (a
“Cowen Affiliate”) from and against any and all losses, claims, liabilities,
expenses and damages (including, but not limited to, any and all reasonable
investigative, legal and other expenses  incurred in connection with, and any
and all amounts paid in settlement (in accordance with Section 9(c)) of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which Cowen, or any
such person, may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or
are based, directly or indirectly, on (x) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any amendment or

 

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supplement to the Registration Statement or the Prospectus or in any free
writing prospectus or in any application or other document executed by or on
behalf of the Company or based on written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify the Common Stock
under the securities laws thereof or filed with the Commission, (y) the omission
or alleged omission to state in any such document a material fact required to be
stated in it or necessary to make the statements in it not misleading or (z) any
breach by any of the indemnifying parties of any of their respective
representations, warranties and agreements contained in this Agreement;
provided, however, that this indemnity agreement shall not apply to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
Placement Shares pursuant to this Agreement and is caused directly or indirectly
by an untrue statement or omission made in reliance upon and in conformity with
written information relating to Cowen and furnished to the Company by Cowen
expressly for inclusion in any document as described in clause (x) of this
Section 9(a). This indemnity agreement will be in addition to any liability that
the Company might otherwise have.

 

(b)                                 Cowen Indemnification. Cowen agrees to
indemnify and hold harmless the Company and its directors and each officer of
the Company that signed the Registration Statement, and each person, if any, who
(i) controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act or (ii) is controlled by or is under common
control with the Company (a “Company Affiliate”) against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
Section 9(a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendments thereto), the Prospectus (or any amendment or
supplement thereto), or any free writing prospectus in reliance upon and in
conformity with written information relating to Cowen and furnished to the
Company by Cowen expressly for inclusion in any document as described in clause
(x) of Section 9(a).

 

(c)                                  Procedure.  Any party that proposes to
assert the right to be indemnified under this Section 9 will, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section 9, notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to notify
such indemnifying party will not relieve the indemnifying party from (i) any
liability that it might have to any indemnified party otherwise than under this
Section 9 and (ii) any liability that it may have to any indemnified party under
the foregoing provision of this Section 9 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the

 

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expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not, in any event, be liable for any settlement of any
action or claim effected without its written consent.  No indemnifying party
shall, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
9 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding.

 

(d)                                 Contribution.  In order to provide for just
and equitable contribution in circumstances in which the indemnification
provided for in the foregoing paragraphs of this Section 9 is applicable in
accordance with its terms but for any reason is held to be unavailable from the
Company or Cowen, the Company and Cowen will contribute to the total losses,
claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company from persons other than
Cowen, such as persons who control the Company within the meaning of the
Securities Act, officers of the Company who signed the Registration Statement
and directors of the Company, who also may be liable for contribution) to which
the Company and Cowen may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and
Cowen on the other. The relative benefits received by the Company on the one
hand and Cowen on the other hand shall be deemed to be in the same proportion as
the total Net Proceeds from the sale of the Placement Shares (before deducting
expenses) received by the Company bear to the total compensation received by
Cowen from the sale of Placement Shares on behalf of the Company.  If, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and Cowen, on the other, with respect to the statements or omission that
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement

 

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of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or Cowen, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and Cowen agree that
it would not be just and equitable if contributions pursuant to this Section
9(d) were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, liability, expense, or damage, or action in respect thereof,
referred to above in this Section 9(d) shall be deemed to include, for the
purpose of this Section 9(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim to the extent consistent with Section 9(c) hereof. 
Notwithstanding the foregoing provisions of this Section 9(d), Cowen shall not
be required to contribute any amount in excess of the commissions received by it
under this Agreement and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9(d), any person who controls a
party to this Agreement within the meaning of the Securities Act, and any
officers, directors, partners, employees or agents of Cowen, will have the same
rights to contribution as that party, and each officer of the Company who signed
the Registration Statement will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 9(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 9(d) except to the extent that the
failure to so notify such other party materially prejudiced the substantive
rights or defenses of the party from whom contribution is sought. Except for a
settlement entered into pursuant to the last sentence of Section 9(c) hereof, no
party will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required pursuant to
Section 9(c) hereof.

 

10.                               Representations and Agreements to Survive
Delivery.  The indemnity and contribution agreements contained in Section 9 of
this Agreement and all representations and warranties of the Company herein or
in certificates delivered pursuant hereto shall survive, as of their respective
dates, regardless of (i) any investigation made by or on behalf of Cowen, any
controlling persons, or the Company (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.

 

11.                               Termination.

 

(a)                                 Cowen shall have the right by giving notice
as hereinafter specified at any time to terminate this Agreement if (i) any
Material Adverse Change, or any development that could reasonably be expected to
result in a Material Adverse Change has occurred that, in the reasonable
judgment of Cowen, may materially impair the ability of Cowen to sell the
Placement Shares hereunder, (ii) the Company shall have failed, refused or been
unable to perform any agreement on its part to be performed hereunder; provided,
however, in the case of any failure of the Company to deliver (or cause another
person to deliver) any certification, opinion, or letter

 

27

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required under Sections 7(m), 7(n), or 7(o), Cowen’s right to terminate shall
not arise unless such failure to deliver (or cause to be delivered) continues
for more than thirty (30) days from the date such delivery was required; or
(iii) any other condition of Cowen’s obligations hereunder is not fulfilled, or
(iv), any suspension or limitation of trading in the Placement Shares or in
securities generally on Nasdaq shall have occurred.  Any such termination shall
be without liability of any party to any other party except that the provisions
of Section 7(g) (Expenses), Section 9 (Indemnification and Contribution),
Section 10 (Representations and Agreements to Survive Delivery), Section 16
(Applicable Law; Consent to Jurisdiction) and Section 17 (Waiver of Jury Trial)
hereof shall remain in full force and effect notwithstanding such termination.
If Cowen elects to terminate this Agreement as provided in this Section 11(a),
Cowen shall provide the required notice as specified in Section 12 (Notices).

 

(b)                                 The Company shall have the right, by giving
ten (10) days notice as hereinafter specified to terminate this Agreement in its
sole discretion at any time after the date of this Agreement.  Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 7(g), Section 9, Section 10, Section 16 and
Section 17 hereof shall remain in full force and effect notwithstanding such
termination.

 

(c) Cowen shall have the right, by giving ten (10) days notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time after
the date of this Agreement.  Any such termination shall be without liability of
any party to any other party except that the provisions of Section 7(g), Section
9, Section 10, Section 16 and Section 17 hereof shall remain in full force and
effect notwithstanding such termination.

 

(d)                                 Unless earlier terminated pursuant to this
Section 11, this Agreement shall automatically terminate upon the issuance and
sale of all of the Placement Shares through Cowen on the terms and subject to
the conditions set forth herein; provided that the provisions of Section 7(g),
Section 9, Section 10, Section 16 and Section 17 hereof shall remain in full
force and effect notwithstanding such termination.

 

(e)                                  This Agreement shall remain in full force
and effect unless terminated pursuant to Sections 11(a), (b), (c) or (d) above
or otherwise by mutual agreement of the parties; provided, however, that any
such termination by mutual agreement shall in all cases be deemed to provide
that Section 7(g), Section 9, Section 10, Section 16 and Section 17 shall remain
in full force and effect.

 

(f)                                   Any termination of this Agreement shall be
effective on the date specified in such notice of termination; provided,
however, that such termination shall not be effective until the close of
business on the date of receipt of such notice by Cowen or the Company, as the
case may be. If such termination shall occur prior to the Settlement Date for
any sale of Placement Shares, such Placement Shares shall settle in accordance
with the provisions of this Agreement.

 

12.                               Notices.  All notices or other communications
required or permitted to be given by any party to any other party pursuant to
the terms of this Agreement shall be in writing, unless otherwise specified in
this Agreement, and if sent to Cowen, shall be delivered to Cowen at Cowen and
Company, LLC, 599 Lexington Avenue, New York, NY 10022, fax no. 646-562-1124,
Attention:  General Counsel; or if sent to the Company, shall be delivered to 1
Cedar Brook Drive, Cranbury, New Jersey 08512, Attention: Chief Executive
Officer with a copy to

 

28

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Pepper Hamilton LLP, 3000 Two Logan Square, Eighteenth and Arch Streets,
Philadelphia, Pennsylvania 19103-2799, Attention: Steven J. Abrams, Esq. Each
party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose. 
Each such notice or other communication shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with an original to follow)
on or before 4:30 p.m., New York City time, on a Business Day (as defined
below), or, if such day is not a Business Day on the next succeeding Business
Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this Agreement, “Business
Day” shall mean any day on which the Nasdaq and commercial banks in the City of
New York are open for business.

 

13.                               Successors and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the Company and Cowen and their
respective successors and the affiliates, controlling persons, officers and
directors referred to in Section 9 hereof. References to any of the parties
contained in this Agreement shall be deemed to include the successors and
permitted assigns of such party. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party; provided,
however, that Cowen may assign its rights and obligations hereunder to an
affiliate of Cowen without obtaining the Company’s consent.

 

14.                               Adjustments for Share Splits.  The parties
acknowledge and agree that all share-related numbers contained in this Agreement
shall be adjusted to take into account any share split, share dividend or
similar event effected with respect to the Common Stock.

 

15.                               Entire Agreement; Amendment; Severability. 
This Agreement (including all schedules and exhibits attached hereto and
Placement Notices issued pursuant hereto) constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and undertakings, both
written and oral, among the parties hereto with regard to the subject matter
hereof. Neither this Agreement nor any term hereof may be amended except
pursuant to a written instrument executed by the Company and Cowen.  In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable as written by a court of competent jurisdiction, then such
provision shall be given full force and effect to the fullest possible extent
that it is valid, legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or
unenforceable term or provision was not contained herein, but only to the extent
that giving effect to such provision and the remainder of the terms and
provisions hereof shall be in accordance with the intent of the parties as
reflected in this Agreement.

 

16.                               Applicable Law; Consent to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the principles of conflicts of
laws. Each party hereby irrevocably submits to the non-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 with
any transaction contemplated hereby, 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

 

29

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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 (certified or registered
mail, return receipt requested) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.

 

17.                               Waiver of Jury Trial.  The Company and Cowen
each hereby irrevocably waives any right it may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or any
transaction contemplated hereby.

 

18.                               Absence of Fiduciary Relationship.  The
Company acknowledges and agrees that:

 

(a)                                 Cowen has been retained solely to act as
sales agent in connection with the Offering and that no fiduciary, advisory or
agency relationship between the Company and Cowen has been created in respect of
any of the transactions contemplated by this Agreement, irrespective of whether
Cowen has advised or is advising the Company on other matters;

 

(b)                                 the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement;

 

(c)                                  the Company has been advised that Cowen and
its affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that Cowen has no obligation
to disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship; and

 

(d)                                 the Company waives, to the fullest extent
permitted by law, any claims it may have against Cowen, for breach of fiduciary
duty or alleged breach of fiduciary duty and agrees that Cowen shall have no
liability (whether direct or indirect) to the Company in respect of such a
fiduciary claim or to any person asserting a fiduciary duty claim on behalf of
or in right of the Company, including stockholders, partners, employees or
creditors of the Company.

 

19.                               Counterparts.  This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Delivery of an
executed Agreement by one party to the other may be made by facsimile
transmission.

 

20.                               Definitions. As used in this Agreement, the
following term has the meaning set forth below:

 

(a)                                 “Applicable Time” means the date of this
Agreement, each Representation Date, the date on which a Placement Notice is
given, and any date on which Placement Shares are sold hereunder.

 

[Remainder of Page Intentionally Blank]

 

30

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If the foregoing correctly sets forth the understanding between the Company and
Cowen, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and Cowen.

 

 

Very truly yours,

 

 

 

COWEN AND COMPANY, LLC

 

 

 

 

 

By:

/s/ Jason Fenton

 

 

Name: Jason Fenton

 

 

Title: Managing Director

 

 

 

 

 

ACCEPTED as of the date

 

first-above written:

 

 

 

AMICUS THERAPEUTICS, INC.

 

 

 

 

 

By:

/s/ William D. Baird, III

 

Name: 

William D. Baird, III

 

Title:

Chief Financial Officer

 

31

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SCHEDULE 1

 

FORM OF PLACEMENT NOTICE

 

From:

[                                          ]

 

Cc:

[                                          ]

 

To:

[                                          ]

 

Subject:

Cowen at the Market Offering—Placement Notice

 

 

Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the Sales
Agreement between Amicus Therapeutics, Inc. (the “Company”), and Cowen and
Company, LLC (“Cowen”) dated [         ](the “Agreement”), I hereby request on
behalf of the Company that Cowen sell up to [  ] shares of the Company’s common
stock, par value $0.01 per share, at a minimum market price of $              
per share.  Sales should begin on the date of this Notice and shall continue
until [DATE] [all shares are sold].

 

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SCHEDULE 2

 

Authorized Placement Notice Parties

 

COMPANY

 

COWEN

John F. Crowley, Chief Executive Officer

 

Robert Sine

William D. Baird, III, Chief Financial Officer

 

William Follis

 

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SCHEDULE 3

 

Compensation

 

Cowen shall be paid compensation in an amount agreed to in writing by the
parties up to 3% of the gross proceeds from the sales of Common Stock pursuant
to the terms of this Agreement.

 

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Exhibit 7(m)

 

OFFICER CERTIFICATE

 

The undersigned, the duly qualified and elected
                                              , of Amicus Therapeutics, Inc.
(“Company”), a Delaware corporation, does hereby certify in such capacity (and
not in his or her individual capacity) and on behalf of the Company, pursuant to
Section 7(m) of the Sales Agreement dated             
.                          , 2014 (the “Sales Agreement”) between the Company
and Cowen and Company, LLC, that to the best of the knowledge of the
undersigned.

 

(i)            The representations and warranties of the Company in Section 6 of
the Sales Agreement (A) to the extent such representations and warranties are
subject to qualifications and exceptions contained therein relating to
materiality or Material Adverse Change, are true and correct on and as of the
date hereof with the same force and effect as if expressly made on and as of the
date hereof, except for those representations and warranties that speak solely
as of a specific date and which were true and correct as of such date, and
(B) to the extent such representations and warranties are not subject to any
qualifications or exceptions, are true and correct in all material respects as
of the date hereof as if made on and as of the date hereof with the same force
and effect as if expressly made on and as of the date hereof except for those
representations and warranties that speak solely as of a specific date and which
were true and correct as of such date; and

 

(ii)           The Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Date:

 

 

 

 

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