Exhibit 10.2

DELCATH SYSTEMS, INC.

FORM OF PLACEMENT AGENCY AGREEMENT

October     , 2013

Roth Capital Partners, LLC

888 San Clemente Drive

Newport Beach, CA 92660

Ladies and Gentlemen:

Delcath Systems, Inc., a Delaware corporation (the “Company”), proposes, subject
to the terms and conditions herein, to issue and sell an aggregate of up to
(i) [            ] shares (the “Shares”) of its common stock, par value $0.01
per share (the “Common Stock”), and (ii) [            ] warrants to purchase
shares of Common Stock (the “Warrants”) to certain investors (each an “Investor”
and, collectively, the “Investors”), in an offering under its registration
statement on Form S-3 (Registration No. 333-183675). The shares of Common Stock
issuable upon exercise of the Warrants are hereinafter referred to as the
“Warrant Shares” and the Shares, the Warrants and the Warrant Shares are
hereinafter referred to as the “Securities”. The Securities are more fully
described in the Prospectus (as defined below). The Company desires to engage
Roth Capital Partners, LLC (“Roth”) in connection with such issuance and sale of
the Securities.

The Company hereby confirms its agreement with you as follows:

1. Agreement to Act as Placement Agent.

(a) On the basis of the representations, warranties and agreements of the
Company herein contained, and subject to all the terms and conditions of this
Agreement between the Company and you, Roth shall be the Company’s exclusive
placement agent (in such capacity, the “Placement Agent”), on a best efforts
basis, in connection with the issuance and sale by the Company of the Securities
to the Investors in a proposed takedown under the Registration Statement (as
defined below), with the terms of each offering to be subject to market
conditions and negotiations between the Company, the Placement Agent and the
prospective Investors (such takedown shall be referred to herein as the
“Offering”). As compensation for services rendered, and provided that any of the
Securities are sold to Investors in the Offering, on the Closing Date (as
defined below) of the Offering, the Company shall pay to the Placement Agent an
amount equal to 7.0% of the gross proceeds received by the Company from the sale
of the Securities to all Investors (the “Placement Fee”) plus reimbursable costs
and expenses of the Placement Agent pursuant to Section 4. The Placement Fee
shall be payable to the Placement Agent at Closing, based upon the sale of the
Shares, as provided in the Subscription Agreements (defined below). The sale of
the Securities shall be made pursuant to securities purchase agreements in the
form included as Exhibit A hereto (the “Subscription Agreements”) on the terms
described on Exhibit B hereto. The Company shall have the sole right to accept
offers to purchase the Securities and may reject any such offer in whole or in
part. Notwithstanding the foregoing, it is understood and agreed that the
Placement Agent or any of their respective affiliates may, solely at their
discretion and without any obligation to do so, purchase Securities as
principal; provided, however, that any such purchases by the Placement Agent (or
their respective affiliates) shall be fully disclosed to the Company and
approved by the Company in accordance with the previous sentence.

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(b) This Agreement shall not give rise to any commitment by the Placement Agent
to purchase any of the Securities, and the Placement Agent shall have no
authority to bind the Company. The Placement Agent shall act on a best efforts
basis and does not guarantee that it will be able to raise new capital in the
Offering. The Placement Agent may retain other brokers or dealers to act as
sub-agents on its behalf in connection with the Offering, the fees of which
shall be paid out of the Placement Fee.

(c) The Company acknowledges and agrees that the Placement Agent shall act as an
independent contractor, and not as a fiduciary, and any duties of the Placement
Agent with respect to investment banking services to the Company, including the
offering of the Securities contemplated hereby (including in connection with
determining the terms of the Offering), shall be contractual in nature, as
expressly set forth herein, and shall be owed solely to the Company. Each party
disclaims any intention to impose any fiduciary or similar duty on the other.
Additionally, the Placement Agent has not advised, nor is it advising, the
Company or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction with respect to the transactions
contemplated hereby. The Company shall consult with its own advisors concerning
such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Placement Agent shall have no responsibility or liability to the Company with
respect thereto. Any review by the Placement Agent of the Company, the
transactions contemplated hereby or other matters relating to such transactions
has been and will be performed solely for the benefit of the Placement Agent and
has not been and shall not be on behalf of the Company or any other person. It
is understood that the Placement Agent has not and will not be rendering an
opinion to the Company as to the fairness of the terms of the Offering.
Notwithstanding anything in this Agreement to the contrary, the Company
acknowledges that the Placement Agent may have financial interests in the
success of the Offering contemplated hereby that are not limited to the
Placement Fee. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Placement
Agent with respect to any breach or alleged breach of fiduciary duty.

(d) Payment of the purchase price for, and delivery of, the Securities shall be
made at a closing (the “Closing”) at the offices of LeClairRyan, A Professional
Corporation, counsel for the Placement Agent, located at 885 Third Avenue, New
York, New York, at [        ], local time, as soon as practicable after the
determination of the public offering price of the Securities, but not later than
on [            ], 2013 except as otherwise agreed upon by the Company and the
Placement Agent (such date of payment and delivery being herein called the
“Closing Date”). All such actions taken at the Closing shall be deemed to have
occurred simultaneously. No Securities which the Company has agreed to sell
pursuant to this Agreement and the Subscription Agreements shall be deemed to
have been purchased and paid for, or sold by the Company, until such Securities
shall have been delivered to the Investor thereof against payment therefor by
such Investor. If the Company shall default in its obligations to deliver
Securities to an Investor whose offer it has accepted, the Company shall
indemnify and hold the Placement Agent harmless against any loss, claim or
damage incurred by the Placement Agent arising from or as a result of such
default by the Company.

(e) On the Closing Date, (i) the Investors will wire the purchase price for
their respective Securities through their delivery versus payment (“DVP”)
account set up at Roth as executing broker. Roth will use its Syndicate account
as a facilitation account to settle Investors purchases. The Company shall
deliver or cause to be delivered the Securities to Roth on behalf of the
Investors, with the delivery of the Shares to be made, through the facilities of
The Depository Trust Company’s DWAC system, and the delivery of the Warrants to
be made by mail to the Investors to the addresses set forth on the applicable
Subscription Agreement. Upon confirmation of the Shares by Roth on behalf of the
Investors, Roth will instruct its clearing firm to release the wire to the
Company. This will all occur during a closing call scheduled to settle the
transaction.

(f) The Securities shall be registered in such names and in such denominations
as the Placement Agent shall request by written notice to the Company.

 

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2. Representations, Warranties and Agreements of the Company.

The Company hereby represents, warrants and covenants to the Placement Agent as
of the date hereof, and as of the Closing Date of the Offering, as follows:

(a) Filing of Registration Statement. The Company has prepared and filed, in
conformity with the requirements of the Securities Act of 1933, as amended (the
“Securities Act”), and the published rules and regulations thereunder (the
“Rules and Regulations”) adopted by the Securities and Exchange Commission (the
“Commission”), a registration statement, including a prospectus, on Form S-3
(File No. 333-183675), which became effective on October 9, 2012, relating to
the Securities and the offering thereof (the “Offering”) from time to time in
accordance with Rule 415(a)(1)(x) of the Rules and Regulations, and such
amendments thereof as may have been required to the date of this Agreement. The
term “Registration Statement” as used in this Agreement means the aforementioned
registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Securities Act, as such section
applies to the Placement Agent (the “Effective Time”), including (i) all
documents filed as a part thereof or incorporated or deemed to be incorporated
by reference therein and (ii) any information in the corresponding Base
Prospectus (as defined below) or a prospectus supplement filed with the
Commission pursuant to Rule 424(b) under the Securities Act, to the extent such
information is deemed pursuant to Rule 430A (“Rule 430A”), 430B (“Rule 430B”) or
430C (“Rule 430C”) under the Securities Act to be a part thereof at the
Effective Time. If the Company has filed an abbreviated registration statement
to register additional Securities pursuant to Rule 462(b) under the Rules and
Regulations (the “Rule 462(b) Registration Statement”), then any reference
herein to the term “Registration Statement” shall also be deemed to include such
Rule 462(b) Registration Statement. For purposes of this Agreement, all
references to the Registration Statement, the Base Prospectus, the Prospectus
(as defined below) or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). All
references in this Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include the subsequent
filing of any document under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and which is deemed to be incorporated therein by
reference.

(b) Effectiveness of Registration Statement; Certain Defined Terms. The Company
and the transactions contemplated by this Agreement meet the requirements and
comply with the conditions for the use of Form S-3 under the Securities Act. The
aggregate market value of the Company’s voting and non-voting common equity held
by non-affiliates of the Company was at least $75 million within 60 days prior
to March 13, 2013 (the date of filing the Company’s 2012 Annual Report on Form
10-K with the Commission). The Company has complied, to the Commission’s
satisfaction, with all requests of the Commission for additional or supplemental
information. No stop order preventing or suspending use of the Registration
Statement or the Prospectus or the effectiveness of the Registration Statement
has been issued by the Commission, and no proceedings for such purpose pursuant
to Section 8A of the Securities Act against the Company or related to the
Offering have been instituted or are pending or, to the Company’s knowledge, are
contemplated or threatened by the Commission, and any request received by the
Company on the part of the Commission for additional information has been
complied with. As used in this Agreement:

(1) “Base Prospectus” means the prospectus included in the Registration
Statement at the Effective Time.

 

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(2) “Disclosure Package” means (i) the Base Prospectus, (ii) each Issuer Free
Writing Prospectus, if any, filed or used by the Company on or before the Time
of Sale and listed on Schedule I hereto (other than a roadshow that is an Issuer
Free Writing Prospectus but is not required to be filed under Rule 433 of the
Rules and Regulations) and (iii) the information included on Exhibit B hereto
all considered together.

(3) “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,”
as defined in Rule 433 of the Rules and Regulations relating to the Securities
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) of the Rules and Regulations.

(4) “Prospectus” means the prospectus supplement (including the Base Prospectus)
relating to the Securities in the form it was first filed with the Commission
pursuant to Rule 424(b) and 430B of the Securities Act.

(5) “Time of Sale” means [        ] [a].m., New York time, on the date of this
Agreement.

(c) Contents of Registration Statement. The Registration Statement complied when
it became effective, complies as of the date hereof and, as amended or
supplemented, at the Time of Sale and at all times during which a prospectus is
required by the Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) in
connection with any sale of Securities (the “Prospectus Delivery Period”), will
comply, in all material respects, with the requirements of the Securities Act;
the Registration Statement did not, as at the Effective Time, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, provided, that the Company makes no representation or warranty in
this Section 2(c) with respect to statements in or omissions from the
Registration Statement in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the
Placement Agent Information (as defined in Section 7 hereof).

(d) Contents of Prospectus. The Prospectus will comply, as of the date that it
is filed with the Commission, the date of its delivery to prospective purchasers
and at all times during the Prospectus Delivery Period, in all material
respects, with the requirements of the Securities Act; at no time during the
period that begins on the date the Prospectus is filed with the Commission and
ends at the end of the Prospectus Delivery Period will the Prospectus, as then
amended or supplemented, include an 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,
provided, that the Company makes no representation or warranty with respect to
statements in or omissions from the Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the Placement
Agent specifically for inclusion therein, which information the parties hereto
agree is limited to the Placement Agent Information.

 

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(e) Incorporated Documents. Each of the documents incorporated or deemed to be
incorporated by reference in the Registration Statement, at the time such
document was filed with the Commission or at the time such document became
effective, as applicable, complied, in all material respects, with the
requirements of the Exchange Act, were filed on a timely basis with the
Commission and did not include an 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.

(f) Disclosure Package. The Disclosure Package, as of the Time of Sale, did not,
and at the Closing Date will not, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, that the
Company makes no representations or warranty in this paragraph with respect to
statements in or omissions from the Disclosure Package in reliance upon, and in
conformity with, written information furnished to the Company by the Placement
specifically for inclusion therein, which information the parties hereto agree
is limited to the Placement Agent Information.

(g) Distributed Materials; Conflict with Registration Statement. Other than the
Base Prospectus and the Prospectus, the Company has not made, used, prepared,
authorized, approved or referred to and will not make, use, prepare, authorize,
approve or refer to any “written communication” (as defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or a solicitation of an
offer to buy the Securities other than (i) any document not constituting a
prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134
under the Securities Act or (ii) the documents listed on Schedule I hereto and
other written communications approved in advance by the Placement Agent.

(h) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, if
any, conformed or will conform in all material respects to the requirements of
the Securities Act on the date of first use, and the Company has complied or
will comply with any filing requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Securities Act. Each Issuer Free Writing Prospectus,
if any, when considered together with the Disclosure Package, as of its issue
date and at all subsequent times through the completion of the Prospectus
Delivery Period did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that
has not been superseded or modified; or includes an untrue statement of a
material fact or omitted or would omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances prevailing at the subsequent time, not misleading;
provided, that the Company makes no representation or warranty with respect to
statements in or omissions from any Issuer Free Writing Prospectus in reliance
upon, and in conformity with, written information furnished to the Company by
the Placement Agent specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agent Information.

(i) Not an Ineligible Issuer. (1) At the earliest time after the filing of the
Registration Statement that the Company or another offering participant made a
bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act)
of the Securities and (2) at the date hereof, the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 (“Rule 405”) under the Securities
Act.

 

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(j) Due Incorporation. The Company and each Subsidiary (defined below) has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of organization, with the corporate power and
authority to own its properties and to conduct its business as currently being
conducted and as described in the Registration Statement, the Prospectus and the
Disclosure Package. The Company and each Subsidiary is duly qualified to
transact business and is in good standing as a foreign corporation or other
legal entity in each other jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing or have such power or
authority (i) would not have, individually or in the aggregate, a material
adverse effect upon, the general affairs, business, operations, prospects,
properties, financial condition, or results of operations of the Company, taken
as a whole, or (ii) impair in any material respect the power or ability of the
Company to perform its obligations under this Agreement or to consummate any
transactions contemplated by this Agreement, including the issuance and sale of
the Securities (any such effect as described in clauses (i) or (ii), a “Material
Adverse Effect”).

(k) Subsidiaries. The Company has no subsidiaries (as defined in Rule 405 of the
Securities Act) other than those entities listed on Schedule V hereto (each a
“Subsidiary” and collectively, the “Subsidiaries”). The Company, directly or
indirectly, owns all of the issued and outstanding capital stock or other equity
interests of each Subsidiary and, except as otherwise described in the
Disclosure Package, does not own any beneficial interest, directly or
indirectly, in any other corporation, partnership, joint venture or other
business entity.

(l) Due Authorization and Enforceability. The Company has the full right, power
and authority to enter into this Agreement, the Subscription Agreements, and the
Warrants and to perform and discharge its obligations hereunder and thereunder;
and this Agreement and the Warrants have been duly authorized, executed and
delivered by the Company, and each constitutes the valid, legal and binding
obligation of the Company, enforceable against the Company in accordance with
their respective terms, except as rights to indemnity hereunder may be limited
by federal or state securities laws and except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity.

(m) The Securities. The issuance of the Shares and the Warrant Shares have been
duly and validly authorized by the Company and when issued, delivered and paid
for in accordance with the terms of this Agreement or the Warrants, as
applicable, will have been duly and validly issued and will be fully paid and
nonassessable, will not be subject to any statutory or contractual preemptive
rights or other rights to subscribe for or purchase or acquire any shares of
Common Stock of the Company, which have not been waived or complied with and
will conform in all material respects to the description thereof contained in
the Disclosure Package and the Prospectus and such description conforms in all
material respects to the rights set forth in the instruments defining the same.
The Warrant Shares have been duly authorized and reserved for issuance pursuant
to the terms of the Warrants, and when issued by the Company upon valid exercise
of the Warrants and payment of the exercise price, will be duly and validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights and will conform to the description thereof and contained in the
Disclosure Package and the Prospectus.

(n) Capitalization. The information set forth under the caption “Capitalization”
in the Disclosure Package and the Prospectus is fairly presented on a basis
consistent with the Company’s financial statements. The authorized capital stock
of the Company conforms as to legal matters to the

 

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description thereof contained in the Prospectus under the caption “Description
of Securities We Are Offering” and in the Disclosure Package. The issued and
outstanding shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable, and have been issued in
compliance with all federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase or acquire
any securities of the Company. There are no authorized or outstanding shares of
capital stock, options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable for, any capital stock of the Company other than those described in
the Prospectus and the Disclosure Package. The description of the Company’s
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, as described in the Prospectus and the
Disclosure Package, accurately and fairly present the information required to be
shown with respect to such plans, arrangements, options and rights.

(o) No Conflict. The execution, delivery and performance by the Company of this
Agreement, each Subscription Agreement, and the Warrants and the consummation of
the transactions contemplated hereby, and thereby including the issuance and
sale by the Company of the Securities, will not conflict with or result in a
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), give rise to any right of termination or
other right or the cancellation or acceleration of any right or obligation or
loss of a benefit under, or give rise to the creation or imposition of any lien,
encumbrance, security interest, claim or charge upon any property or assets of
the Company or any Subsidiary pursuant to (i) any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or any of their respective
properties may be bound or to which any of the property or assets of the Company
or any Subsidiary is subject, (ii) result in any violation of the provisions of
the charter or by-laws of the Company or any Subsidiary, or (iii) result in any
violation of any law, statute, rule, regulation, judgment, order or decree of
any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their properties or
assets.

(p) No Consents Required. No approval, authorization, consent or order of or
filing, qualification or registration with, any court or governmental agency or
body, foreign or domestic, which has not been made, obtained or taken and is not
in full force and effect, is required in connection with the execution, delivery
and performance of this Agreement or the Warrants by the Company, the issuance
and sale of the Securities or the consummation by the Company of the
transactions contemplated hereby or thereby other than (i) as may be required
under the Securities Act, (ii) any necessary qualification of the Shares and
Warrant Shares under the securities or blue sky laws of the various
jurisdictions in which the Securities are being offered, (iii) under the
rules and regulations of the Financial Industry Regulatory Authority (“FINRA”)
or (iv) the NASDAQ in connection with the distribution of the Securities.

(q) Preemptive Rights. Except as otherwise described in the Registration
Statement, the Prospectus and the Disclosure Package, there are no preemptive
rights or other rights (other than rights which have been waived in writing in
connection with the transactions contemplated by this Agreement or otherwise
satisfied) to subscribe for or to purchase any shares of Common Stock or shares
of any other capital stock or other equity interests of the Company, or any
agreement or arrangement between the Company and any of the Company’s
stockholders, or to the Company’s knowledge, between or among any of the
Company’s stockholders, which grant special rights with respect to any shares of
the Company’s capital stock or which in any way affect any stockholder’s ability
or right freely to alienate or vote such shares.

 

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(r) Registration Rights. Except as otherwise described in the Registration
Statement, Prospectus and the Disclosure Package, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right (other than rights which have been waived in writing in
connection with the transactions contemplated by this Agreement or otherwise
satisfied) to require the Company to register any securities with the
Commission.

(s) Independent Accountants. Ernst & Young LLP (“E&Y LLP”), whose reports on the
consolidated financial statements of the Company are incorporated by reference
in the Registration Statement, the Prospectus and the Disclosure Package, is
(A) an independent public accounting firm within the meaning of the Securities
Act, (B) a registered public accounting firm (as defined in Section 2(a)(12) of
the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)), and (C) to the
Company’s knowledge, not in violation of the auditor independence requirements
of the Sarbanes-Oxley Act.

(t) Financial Statements. The financial statements of the Company, together with
the related schedules and notes thereto, included or incorporated by reference
in the Prospectus and the Disclosure Package, comply in all material respects
with the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly in all material respects (i) the financial
condition of the Company as of the dates indicated and (ii) the consolidated
results of operations, stockholders’ equity and changes in cash flows of the
Company for the periods therein specified; and such financial statements and
related schedules and notes thereto have been prepared in conformity with United
States generally accepted accounting principles, consistently applied throughout
the periods involved (except as otherwise stated therein and subject, in the
case of unaudited financial statements, to the absence of footnotes and normal
year-end adjustments). There are no other financial statements (historical or
pro forma) that are required to be included or incorporated by reference in the
Registration Statement, the Prospectus or the Disclosure Package; and all
disclosures contained in the Registration Statement, the Disclosure Package and
the Prospectus regarding “non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10(e) of Regulation S-K under the Securities Act, to the
extent applicable, and present fairly the information shown therein and the
Company’s basis for using such measures.

(u) Absence of Material Changes. Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and the
Disclosure Package, and except as may be otherwise stated or incorporated by
reference in the Registration Statement, the Prospectus and the Disclosure
Package, there has not been (i) any Material Adverse Effect, (ii) any
transaction which is material to the Company or any Subsidiary, (iii) any
obligation, direct or contingent (including any off-balance sheet obligations),
incurred by the Company or any Subsidiary, which is material to the Company,
(iv) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company, (v) any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants or the conversion
of convertible indebtedness), or material change in the short-term debt or
long-term debt of the Company or any Subsidiary (other than upon conversion of
convertible indebtedness) or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock (other than grants of
stock options under the Company’s stock option plans existing on the date
hereof) of the Company or any Subsidiary.

(v) Legal Proceedings. There are no legal or governmental actions, suits, claims
or proceedings pending or, to the Company’s knowledge, threatened or
contemplated to which the

 

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Company or any Subsidiary is or would be a party or of which any of their
respective 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, or before or by any self-regulatory
organization or other non-governmental regulatory authority (including, without
limitation, the Food and Drug Administration of the U.S. Department of Health
and Human Services (the “FDA”)) which are required to be described in the
Registration Statement, the Disclosure Package or the Prospectus and are not so
described therein, or which, singularly or in the aggregate, if resolved
adversely to the Company or any Subsidiary, would reasonably be likely to result
in a Material Adverse Effect or prevent or materially and adversely affect the
ability of the Company to consummate the transactions contemplated hereby.

(w) No Violation. Neither the Company nor any Subsidiary is in breach or
violation of or in default (nor has any event occurred which with notice, lapse
of time or both would result in any breach or violation of, or constitute a
default) (i) under the provisions of its charter or bylaws (or analogous
governing instrument, as applicable) or (ii) in the performance or observance of
any term, covenant, obligation, agreement or condition contained in 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 Company or any Subsidiary is a party or by which it or
any of its properties may be bound or affected, or (iii) in the performance or
observance of any statute, law, rule, regulation, ordinance, judgment, order or
decree of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
Subsidiary or any of its properties, as applicable (including, without
limitation, those administered by the FDA or by any foreign, federal, state or
local governmental or regulatory authority performing functions similar to those
performed by the FDA), except, with respect to clauses (ii) and (iii) above, to
the extent any such contravention has been waived or would not result in a
Material Adverse Effect.

(x) Permits. The Company and each Subsidiary has made all filings, applications
and submissions required by, and owns or possesses all approvals, licenses,
certificates, certifications, clearances, consents, exemptions, marks,
notifications, orders, permits and other authorizations issued by, the
appropriate federal, state or foreign regulatory authorities (including, without
limitation, the FDA, and any other foreign, federal state or local government or
regulatory authorities performing functions similar to those performed by the
FDA) necessary to conduct its business as described in the Disclosure Package
and the Prospectus (collectively, “Permits”), except for such Permits which the
failure to obtain would not have a Material Adverse Effect (the “Immaterial
Permits”), and is in compliance in all material respects with the terms and
conditions of all such Permits other than the Immaterial Permits (the “Required
Permits”). All such Required Permits held by the Company or any Subsidiary are
valid and in full force and effect. Neither the Company nor any Subsidiary has
received any notice of any proceedings relating to revocation or modification
of, any such Required Permit, which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.

(y) Not an Investment Company. Neither the Company nor any Subsidiary is or,
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Disclosure Package and
the Prospectus, will be (i) required to register as an “investment company” as
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”), and the rules and regulations of the Commission thereunder or
(ii) a “business development company” (as defined in Section 2(a)(48) of the
Investment Company Act).

 

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(z) No Price Stabilization. Neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any of the Company’s or any Subsidiary’s officers,
directors, affiliates or controlling persons has taken or will take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in, or which has constituted or which 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 Securities.

(aa) Good Title to Property. The Company and each Subsidiary has good and
marketable title to all property (whether real or personal) described in the
Registration Statement, the Disclosure Package and the Prospectus as being owned
by it, in each case free and clear of all liens, claims, security interests,
other encumbrances or defects (collectively, “Liens”), except such as are
described in the Registration Statement, the Disclosure Package and the
Prospectus and those that would not, individually or in the aggregate materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company or any Subsidiary.
All of the property described in Disclosure Package and the Prospectus as being
held under lease by the Company or any Subsidiary is held thereby under leases
that are in full force and effect.

(bb) Intellectual Property Rights. The Company and each Subsidiary owns or
possesses the right to use all patents, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights, licenses,
inventions, software, databases, know-how, Internet domain names, trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, and other intellectual property
(collectively, “Intellectual Property”) necessary to carry on their respective
businesses as currently conducted, and as proposed to be conducted and described
in the Disclosure Package and the Prospectus, and neither the Company nor any
Subsidiary is aware of any claim to the contrary or any challenge by any other
person to the rights of the Company or any Subsidiary with respect to the
foregoing except for those that could not have a Material Adverse Effect. The
Intellectual Property licenses described in the Disclosure Package and the
Prospectus are, to the knowledge of the Company, valid, binding upon, and
enforceable by or against the parties thereto in accordance to their terms. The
Company and each Subsidiary has complied in all material respects with, and is
not in breach nor has received any asserted or threatened claim of breach of,
any Intellectual Property license, and neither the Company nor any Subsidiary
has knowledge of any breach or anticipated breach by any other person to any
Intellectual Property license. The Company’s and each Subsidiary’s businesses as
now conducted and as proposed to be conducted, to the knowledge of the Company,
do not and will not infringe or conflict with any patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person. Neither the Company nor any
Subsidiary has received notice of any material claim against the Company or any
Subsidiary alleging the infringement by the Company or any Subsidiary of any
patent, trademark, service mark, trade name, copyright, trade secret, license in
or other intellectual property right or franchise right of any person. The
Company and each Subsidiary has taken all reasonable steps to protect, maintain
and safeguard its rights in all Intellectual Property, including the execution
of appropriate intellectual property assignment, nondisclosure and
confidentiality agreements, and no current or former employee or contractor is
in violation of any such agreement or has retained any rights in such
Intellectual Property. The consummation of the transactions contemplated by this
Agreement will not result in the loss or impairment of or payment of any
additional amounts with respect to, nor require the consent of any other person
in respect of, the Company’s or any Subsidiary’s right to own, use, or hold for
use any of the Intellectual Property as owned, used or held for use in the
conduct of the businesses as currently conducted. Neither the Company nor any
Subsidiary has entered into any agreement to indemnify any third party against a
claim of intellectual property infringement.

 

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The Company and each Subsidiary has duly and properly filed or caused to be
filed with the United States Patent and Trademark Office (the “PTO”) and
applicable foreign and international patent authorities all patent applications
owned by the Company or any Subsidiary (collectively, the “Company Patent
Applications”). To the knowledge of the Company, the Company each Subsidiary has
complied with the PTO’s duty of candor and disclosure for the Company Patent
Applications and has made no material misrepresentation in the Company Patent
Applications. Neither the Company nor any Subsidiary is aware of any information
material to a determination of patentability regarding the Company Patent
Applications not called to the attention of the PTO or similar foreign
authority. Neither the Company nor any Subsidiary is aware of any information
not called to the attention of the PTO or similar foreign authority that would
preclude the grant of a patent for the Company Patent Applications. Neither the
Company nor any Subsidiary has knowledge of any information that would preclude
the Company or any Subsidiary, as applicable, from having clear title to the
Company Patent Applications. Neither the Company nor any Subsidiary has used any
open source software in any Company product. The Company and each Subsidiary is
in compliance with all relevant local, state, federal, and foreign laws related
to the collection, storage and distribution of personally identifiable
information and with all Company and any Subsidiary privacy policies and all
applicable agreements. The consummation of the transactions contemplated by this
Agreement will not violate any Company or any Subsidiary privacy obligations nor
require the Company or any Subsidiary to provide any notice to, or seek any
consent from, any employee, customer, supplier, service provide or other third
party.

(cc) No Labor Disputes. No labor problem or dispute with the employees of the
Company or any Subsidiary exists, or, to the Company’s knowledge, is threatened
or imminent, which would reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary is aware that any key employee or
significant group of employees of the Company or any Subsidiary plans to
terminate employment with the Company or any Subsidiary. Neither the Company nor
any Subsidiary has engaged in any unfair labor practice; except for matters
which would not, individually or in the aggregate, result in a Material Adverse
Effect, (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
and (C) no union representation dispute currently existing concerning the
employees of the Company or any Subsidiary and (ii) to the Company’s knowledge,
(A) no union organizing activities are currently taking place concerning the
employees of the Company 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.

(dd) Taxes. The Company and each Subsidiary has (i) timely filed all necessary
federal, state, local and foreign income and franchise tax returns (or timely
filed applicable extensions therefore) that have been required to be filed and
(ii) is not in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, other than any which
the Company or any Subsidiary is contesting in good faith and for which adequate
reserves have been provided and reflected in the Company’s financial statements
included in the Registration Statement, the Disclosure Package and the
Prospectus. Neither the Company nor any Subsidiary has any tax deficiency that
has been or, to the knowledge of the Company, is reasonably likely to be
asserted or threatened against it that would result in a Material Adverse
Effect.

 

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(ee) ERISA. The Company and each Subsidiary is in compliance in all material
respects with all presently applicable provisions of ERISA; no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company or any Subsidiary would have any
liability; neither the Company nor any Subsidiary has incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “pension plan”
for which the Company or any Subsidiary would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.

(ff) Compliance with Environmental Laws. The Company and each Subsidiary (i) is
in compliance with any and all applicable foreign, federal, state and local
laws, orders, rules, regulations, directives, decrees and judgments relating to
the use, treatment, storage and disposal of hazardous or toxic substances or
waste and protection of human health and safety or the environment which are
applicable to their businesses (“Environmental Laws”), (ii) has received and is
in compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct its business; and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, result in a Material Adverse Effect. There are
no costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
result in a Material Adverse Effect.

(gg) Insurance. The Company and each Subsidiary maintains or is covered by
insurance provided by recognized, financially sound and reputable institutions
with insurance policies in such amounts and covering such risks as is adequate
for the conduct of its business and the value of its properties and as is
customary for companies engaged in similar businesses in similar industries. All
such insurance is fully in force on the date hereof and will be fully in force
as of the Closing Date. Neither the Company nor any Subsidiary has reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

(hh) Accounting Controls. The Company and each Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(ii) Disclosure Controls. The Company and each Subsidiary has established,
maintains and evaluates “disclosure controls and procedures” (as such term is
defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), which (i) are
designed to ensure that material information

 

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relating to the Company is made known to the Company’s and any Subsidiary’s
principal executive officer and its principal financial officer by others within
those entities, (ii) have been evaluated for effectiveness as of the end of the
last fiscal period covered by the Registration Statement; and (iii) such
disclosure controls and procedures are effective in all material respects to
perform the functions for which they were established. There are no significant
deficiencies and material weaknesses in the design or operation of internal
controls which could adversely affect the Company’s or any Subsidiary’s ability
to record, process, summarize, and report financial data to management and the
Board of Directors of the Company. The Company is not aware of any fraud,
whether or not material, that involves management or other employees who have a
role in the Company’s or any Subsidiary’s internal controls; and since the date
of the most recent evaluation of such disclosure controls and procedures, there
have been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.

(jj) Contracts; Off-Balance Sheet Interests. There is no document, contract,
permit or instrument, or off-balance sheet transaction (including without
limitation, any “variable interests” in “variable interest entities,” as such
terms are defined in Financial Accounting Standards Board Interpretation No. 46)
of a character required by the Securities Act to be described in the
Registration Statement, the Disclosure Package or the Prospectus or to be filed
as an exhibit to the Registration Statement or document incorporated by
reference therein, which is not described or filed as required. The contracts
described in the immediately preceding sentence to which the Company or any
Subsidiary is a party have been duly authorized, executed and delivered by the
Company or such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary, are enforceable against and by the Company or such
Subsidiary in accordance with the terms thereof and are in full force and effect
on the date hereof.

(kk) No Undisclosed 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 their affiliates
on the other hand, which is required to be described in the Registration
Statement, Disclosure Package and the Prospectus or a document incorporated by
reference therein and which has not been so described.

(ll) Brokers Fees. There are no contracts, agreements or understandings between
the Company and any person (other than this Agreement) that would give rise to a
valid claim against the Company or the Placement Agent for a brokerage
commission, finder’s fee or other like payment in connection with the offering
and sale of the Securities.

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

(nn) NASDAQ; Exchange Act Registration. The Common Stock is registered pursuant
to Section 12(b) and/or 12(g) of the Exchange Act and is listed on the NASDAQ
Capital Market. Other than as described in the Disclosure Package, the Company
has taken no action designed to, or reasonably likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the NASDAQ Capital Market, nor has the Company
received any notification that the Commission or the NASDAQ Capital Market is
contemplating terminating such registration or listing. Other than as described
in the Disclosure Package, the Company has complied in all material respects
with the applicable requirements of the

 

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NASDAQ Capital Market for maintenance of inclusion of the Common Stock thereon.
The Company has filed a notification of the listing of the Shares and the
Warrant Shares on the NASDAQ Capital Market.

(oo) Sarbanes-Oxley Act. The Company, each Subsidiary, and to the Company’s
knowledge, all of the Company’s and each Subsidiary’s directors or officers, in
their capacities as such, are in compliance in all material respects with all
applicable effective provisions of the Sarbanes-Oxley Act and any related rules
and regulations promulgated by the Commission. Each of the principal executive
officer and the principal financial officer of the Company (or each former
principal executive officer of the Company and each former principal financial
officer of the Company as applicable) has made all certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission. For purposes of the preceding sentence, “principal executive
officer” and “principal financial officer” shall have the meanings given to such
terms in the Sarbanes-Oxley Act.

(pp) Corporate Records. The minute books of the Company and each Subsidiary,
representing all existing records of all meetings and actions of the board of
directors (including, Audit, Compensation and Stock Option, and Nominating
Committees) and stockholders of the Company and each Subsidiary (collectively,
the “Corporate Records”) through the date of the latest meeting and action have
been made available to the Placement Agent and counsel for the Placement Agent.
All such Corporate Records are complete and accurately reflect, in all material
respects, all transactions referred to in such Corporate Records. There are no
material transactions, agreements or other actions that have been consummated by
the Company or any Subsidiary that are not properly approved and/or recorded in
the Corporate Records of the Company and the Subsidiaries.

(qq) Foreign Corrupt Practices. Neither the Company, any Subsidiary, nor, to the
Company’s knowledge, any other person associated with or acting on behalf of the
Company or any Subsidiary, including without limitation any director, officer,
agent or employee of the Company or any Subsidiary, has, directly or indirectly,
while acting on behalf of the Company or any Subsidiary (i) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity or failed to disclose fully any
contribution in violation of law, (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof, (iii) violated or is in violation
of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended
or (iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.

(rr) Statistical or Market-Related Data. Any statistical, industry-related and
market-related data included or incorporated by reference in the Registration
Statement, the Prospectus or the Disclosure Package, are based on or derived
from sources that the Company reasonably and in good faith believes to be
reliable and accurate, and such data agree with the sources from which they are
derived.

(ss) Money Laundering Laws. The operations of the Company and each Subsidiary
are and have been conducted at all times in compliance in all material respects
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 Subsidiary with respect to the Money Laundering Laws is pending, or to
the knowledge of the Company, threatened against the Company or any Subsidiary.

 

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(tt) OFAC. Neither the Company, the Subsidiaries, nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or
any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any affiliate,
joint venture partner or other person or entity, which, to the Company’s
knowledge, will use such proceeds for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by OFAC.

(uu) 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 Securities 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 Securities
to be considered a “purpose credit” within the meanings of Regulation T, U or X
of the Federal Reserve Board.

(vv) Rated Securities. At the Time of Sale there were, and as of the Closing
Date there will be, no securities of or guaranteed by the Company that are rated
by a “nationally recognized statistical rating organization,” as that term is
defined in Rule 436(g)(2) promulgated under the Securities Act.

(ww) FINRA. There are no affiliations or associations between (i) any member of
FINRA and (ii) the Company or any of the Company’s officers, directors or 5% or
greater securityholders or any beneficial owner of the Company’s unregistered
equity securities that were acquired at any time on or after the one hundred
eightieth (180th) day immediately preceding the date the Registration Statement
was initially filed with the Commission, except as set forth in the Registration
Statement, the Disclosure Package and the Prospectus.

(xx) Exchange Act Requirements. The Company has filed in a timely manner all
reports required to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of
the Exchange Act during the preceding 12 months (except to the extent that
Section 15(d) requires reports to be filed pursuant to Sections 13(d) and 13(g)
of the Exchange Act, which shall be governed by the next clause of this
sentence); and the Company has filed in a timely manner all reports required to
be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act since
January 1, 2010, except where the failure to timely file could not reasonably be
expected individually or in the aggregate to have a Material Adverse Effect.

(yy) Trading Market. No approval of the stockholders of the Company under the
rules and regulations of any trading market (including Rule 5635 of the NASDAQ
Marketplace Rules) is required for the Company to issue and deliver the
Securities to prospective purchasers.

(zz) Regulatory Compliance.

(i) The clinical, pre-clinical and other studies and tests conducted by or on
behalf of or sponsored by the Company or any Subsidiary or in which the Company
or any

 

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Subsidiary or products or product candidates have participated that are
described in the Registration Statement, the Disclosure Package and the
Prospectus were and, if still pending, are being conducted in accordance in all
material respects with all applicable federal, state or foreign statutes, laws,
rules and regulations, as applicable (including, without limitation, those
administered by the FDA or by any foreign, federal, state or local governmental
or regulatory authority performing functions similar to those performed by the
FDA and current Good Laboratory and Good Clinical Practices) and in accordance
in all material respects with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional and scientific standards.
The descriptions in the Registration Statement, the Prospectus and the
Disclosure Package of the results of such studies, tests and trials are accurate
and complete in all material respects and fairly present the published data
derived from such studies, tests and trials. Neither the Company nor any
Subsidiary has received any notices or other correspondence from the FDA or any
other foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA with respect to any
ongoing clinical or pre-clinical studies or tests requiring the termination,
suspension or material modification of such studies, tests or preclinical or
clinical trials, which termination, suspension or material modification would
reasonably be expected to result in a Material Adverse Effect. To the Company’s
knowledge, no filing or submission to the FDA or any other federal, state or
foreign regulatory body, that is intended to be the basis for any approval,
contains any material misstatement or omission. The Company and each Subsidiary
is in compliance with all applicable federal, state, local and foreign laws,
regulations, orders and decrees governing their business as prescribed by the
FDA, or any other federal, state or foreign agencies or bodies, including those
bodies and agencies engaged in the regulation of pharmaceuticals or biohazardous
substances or materials, except where noncompliance would not, singly or in the
aggregate, result in a Material Adverse Effect.

(ii) Neither the Company nor any Subsidiary has received any written notice or
other communication from the FDA or any other foreign, federal, state or local
governmental or regulatory authority performing functions similar to those
performed by the FDA regarding non-compliance with the Federal Food, Drug, and
Cosmetic Act (“FDCA”) and applicable FDA regulations or similar laws, statutes,
ordinances, rules, or regulations of any other foreign, federal, state or local
governmental or regulatory authority, including, but not limited to, any
regulatory or warning letter, untitled letter, adverse inspection finding,
finding of deficiency, any other compliance or enforcement action. To the
Company’s knowledge, there has not been any non-compliance with or violation of
any statute, law, rule, regulation, ordinance, judgment, injunction, writ, order
or decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company, any
Subsidiary or any of their properties, as applicable (including, without
limitation, the Public Health Service Act, the FDCA and those administered by
the FDA or by any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA), that
could reasonably be expected to require the issuance of any such communication,
or an investigation, corrective action or enforcement action by the FDA or
similar governmental or regulatory authorities. To the Company’s knowledge, no
review or investigation by governmental or regulatory authorities is pending and
no such review or investigation has been threatened.

(iii) Neither the Company, any Subsidiary nor, to the Company’s knowledge, any
of their respective directors, officers, employees or agents has been convicted
of any crime or has been the subject of an FDA debarment proceeding. Neither the
Company

 

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nor any Subsidiary has been nor is now subject to FDA’s Applications Integrity
Policy. To the Company’s knowledge, neither the Company, any Subsidiary nor any
of its directors, officers, employees or agents, has made, or caused the making
of, any false statements on, or material omissions from, any applications,
approvals, reports or other submissions to the FDA or any other governmental or
regulatory authority, or made any false statements on, or material omissions
from, any other records or documentation prepared or maintained to comply with
the requirements of the FDA or any other governmental or regulatory authority.

(iv) Neither the Company, any Subsidiary nor, to the Company’s knowledge, any of
their respective directors, officers, employees or agents, have with respect to
each of the following statutes, or regulations promulgated thereto: (i) engaged
in activities under 42 U.S.C. §§ 1320a-7 or 1395nn; (ii) knowingly engaged in
any activities under 42 U.S.C. § 1320a-7a or the Federal False Claims Act, 31
U.S.C. § 3729; or (iii) knowingly and willfully engaged in any activities under
42 U.S.C. § 1320a-7b, which are, as applicable, prohibited, cause for civil
penalties, or mandatory or permissive exclusion from Medicare, Medicaid, or any
other State Health Care Program or Federal Health Care Program.

Any certificate signed by any officer of the Company and delivered to the
Placement Agent or to counsel for the Placement Agent in connection with the
Offering shall be deemed a representation and warranty by the Company to the
Placement Agent and the Investors as to the matters covered thereby.

3. Covenants. The Company covenants and agrees with the Placement Agent as
follows:

(a) Reporting Obligations; Exchange Act Compliance. The Company will (i) file
the Prospectus with the Commission within the time periods specified by Rule
424(b) and Rules 430A, 430B and 430C, as applicable under the Securities Act,
(ii) file any Issuer Free Writing Prospectus to the extent required by Rule 433
under the Securities Act, if applicable, (iii) file promptly all reports
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and during such period as the Prospectus would be required by law to
be delivered (whether physically or through compliance with Rule 172 under the
Securities Act or any similar rule) (the “Prospectus Delivery Period”), and
(iv) furnish copies of each Issuer Free Writing Prospectus, if any, (to the
extent not previously delivered) to the Placement Agent prior to 11:00 a.m.
Eastern time, on the second business day next succeeding the date of this
Agreement in such quantities as the Placement Agent shall reasonably request.

(b) Abbreviated Registration Statement. If the Company elects to rely upon Rule
462(b) under the Securities Act, the Company shall file a registration statement
under Rule 462(b) with the Commission in compliance with Rule 462(b) by 8:00
a.m., Eastern time, on the business day next succeeding the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for such Rule 462(b) registration statement or give
irrevocable instructions for the payment of such fee pursuant to the Rules and
Regulations.

(c) Amendments or Supplements. The Company will not, during the
Prospectus Delivery Period in connection with the Offering contemplated by this
Agreement, file any amendment or supplement to the Registration Statement or the
Prospectus unless a copy thereof shall first have been submitted to the
Placement Agent within a reasonable period of time prior to the filing thereof
and the Placement Agent shall not have reasonably objected thereto in good
faith.

 

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(d) Free Writing Prospectuses. The Company will (i) not make any offer relating
to the Securities that would constitute an “issuer free writing prospectus” (as
defined in Rule 433) or that would otherwise constitute a “free writing
prospectus” (as defined in Rule 405 under the Securities Act) required to be
filed by the Company with the Commission under Rule 433 under the Securities Act
unless the Placement Agent approve its use in writing prior to first use (each,
a “Permitted Free Writing Prospectus”); provided, that the prior written consent
of the Placement Agent hereto shall be deemed to have been given in respect of
the Issuer Free Writing Prospectus(es) included in Schedule I hereto, (ii) treat
each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus,
(iii) comply with the requirements of Rules 164 and 433 under the Securities Act
applicable to any Issuer Free Writing Prospectus, including the requirements
relating to timely filing with the Commission, legending and record keeping and
(iv) not take any action that would result in the Placement Agent or the Company
being required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of such
Placement Agent that such Placement Agent otherwise would not have been required
to file thereunder. The Company will satisfy the conditions in Rule 433 under
the Securities Act to avoid a requirement to file with the Commission any
electronic road show.

(e) Notice to Placement Agent. During the Prospectus Delivery Period, the
Company will notify the Placement Agent promptly, and will, if requested,
confirm such notification in writing: (i) the receipt of any comments of, or
requests for additional information from, the Commission; (ii) the time and date
of any filing of any post-effective amendment to the Registration Statement or
any amendment or supplement to the Disclosure Package or the Prospectus,
(iii) the time and date when any post-effective amendment to the Registration
Statement becomes effective; (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or any order preventing or suspending the use
of the Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus,
or the initiation of any proceedings for that purpose or the threat thereof;
(v) of receipt by the Company of any notification with respect to any suspension
or the approval of the Shares and Warrant Shares from any securities exchange
upon which it is listed for trading or included or designated for quotation, or
the initiation or threatening of any proceeding for such purpose. The Company
will use its reasonable best efforts to prevent the issuance or invocation of
any such stop order or suspension by the Commission and, if any such stop order
or suspension is so issued or invoked, to obtain as soon as possible the
withdrawal or removal thereof.

(f) Filing of Amendments or Supplements. If, during the Prospectus Delivery
Period, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus (or, if the Prospectus is not
yet available to prospective purchasers, the Disclosure Package) in order to
make the statements therein, in the light of the circumstances when the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package) is delivered to an Investor, not misleading,
or if, in the opinion of counsel for the Placement Agent, it is necessary to
amend or supplement the Prospectus (or, if the Prospectus is not yet available
to prospective purchasers, the Disclosure Package) to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Placement Agent, either amendments or supplements to the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package) so that the statements in the Prospectus
(or, if the Prospectus is not yet available to prospective purchasers, the
Disclosure Package) as so amended or supplemented will not, in the light of the
circumstances when the Prospectus (or, if the Prospectus is not yet available to
prospective purchasers, the Disclosure Package) is delivered to an Investor, be
misleading or so that the Prospectus (or, if the Prospectus is not yet available
to prospective purchasers, the Disclosure Package), as amended or

 

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supplemented, will comply with law. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement relating
to the Securities or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances prevailing at
that subsequent time, not misleading, the Company promptly will notify the
Placement Agent and will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.

(g) Delivery of Copies. The Company will deliver promptly to the Placement Agent
and their counsel such number of the following documents as the Placement Agent
shall reasonably request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) copies of any Issuer Free Writing Prospectus,
(iii) during the Prospectus Delivery Period, copies of the Prospectus (or any
amendments or supplements thereto); (iii) any document incorporated by reference
in the Prospectus (other than any such document that is filed with the
Commission electronically via EDGAR or any successor system) and (iv) all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Securities under the Securities Act.

(h) Lock-Up Period. The Company hereby agrees that, without the prior written
consent of Roth, it will not, during the period ending on and including the 30th
day after the date hereof (as the same may be extended as described below, the
“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
shares of Common Stock, including, but not limited to, any pursuant to the
Company’s Sales Agreement with Cowen and Company, LLC dated March 13, 2013 and
the Company’s Stock Purchase Agreement with Terrapin Opportunity, L.P. dated
December 5, 2012; or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of shares of Common Stock or such
other securities, in cash or otherwise; or (iii) file any registration statement
with the Commission relating to the offering of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for shares of
Common Stock. The restrictions contained in the preceding sentence shall not
apply to (1) the Shares to be sold hereunder, (2) the issuance of shares of
Common Stock upon the exercise of options or warrants disclosed as outstanding
in the Registration Statement (excluding exhibits thereto) or the Prospectus,
and (3) the issuance of employee stock options not exercisable during the
Lock-Up Period and the grant of restricted stock awards or restricted stock
units pursuant to equity incentive plans described in the Registration Statement
(excluding exhibits thereto) and the Prospectus. Notwithstanding the foregoing,
if (x) the Company issues an earnings release or material news, or a material
event relating to the Company occurs, during the last 17 days of the Lock-Up
Period, or (y) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by
this clause shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event, unless Roth waives such extension in writing;
provided, however, that this sentence shall not apply if (A) the Company meets
the applicable requirements of Rule 139(a)(1) under the Securities Act in the
manner contemplated by NASD Conduct Rule 2711(f)(4) (B) the Company’s securities
are “actively traded” as defined in Rule 101(c)(1) of Regulation M of the
Exchange Act and (C) the provisions of NASD Conduct Rule 2711(f)(4) do not
restrict the publication or distribution, by the Placement Agent, of any
research reports relating to the Company during the 15 days before or after the
last day of the Lock-up Period (before giving effect to such extension).

 

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(i) Earnings Statement. As soon as practicable, but in any event not later than
15 months after the end of the Company’s current fiscal quarter, the Company
will make generally available to holders of its securities and deliver to the
Placement Agent, an earnings statement of the Company (which need not be
audited) that will satisfy the provisions of Section 11(a) and Rule 158 of the
Securities Act.

(j) Use of Proceeds. The Company will apply the net proceeds from the sale of
the Securities in the manner set forth in the Registration Statement, Disclosure
Package and the Prospectus under the heading “Use of Proceeds”.

(k) Public Communications. Prior to the Closing Date, the Company will not issue
any press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial or
otherwise, or the earnings, business, operations or prospects of any of them, or
the offering of the Securities, without the prior written consent of the
Placement Agent, unless in the reasonable judgment of the Company and its
counsel, and after notification to the Placement Agent, such press release or
communication is required by law or the rules of NASDAQ, in which case the
Company shall use its reasonable best efforts to allow the Placement Agent
reasonable time to comment on such release or other communication in advance of
such issuance.

(l) Stabilization. The Company will not take directly or indirectly any action
designed, or that might reasonably be expected to cause or result in, or that
will constitute, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Securities.

(m) Transfer Agent. The Company shall engage and maintain, at its expense, a
transfer agent and, if necessary under the jurisdiction of incorporation of the
Company, a registrar for the Shares and Warrant Shares.

(n) Investment Company Act. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities in such a
manner as would require the Company to register as an investment company under
the Investment Company Act.

(o) Sarbanes-Oxley Act. The Company will comply with all effective applicable
provisions of the Sarbanes Oxley Act.

(p) Periodic Reports. During the Prospectus Delivery Period, the Company will
file with the Commission such periodic and special reports as required by the
Exchange Act.

(q) NASDAQ. The Company will use its reasonable best efforts to obtain approval
for, and maintain the listing of the Shares and Warrant Shares on the NASDAQ for
so long as the Common Stock is listed thereon.

4. Costs and Expenses. The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay or
reimburse, if paid by the Placement Agent, all actual out-of-pocket costs and
expenses incident to the performance of the obligations of the Company under
this Agreement and in connection with the transactions contemplated

 

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hereby, including but not limited to costs and expenses of or relating to:
(i) the preparation, printing, filing, delivery and shipping of the Registration
Statement, any Issuer Free Writing Prospectus, the Disclosure Package and the
Prospectus, and any amendment or supplement to any of the foregoing and the
printing and furnishing of copies of each thereof to the Placement Agent and
dealers (including costs of mailing and shipment), (ii) the registration, issue,
sale and delivery of the Securities, including any stock or transfer taxes and
stamp or similar duties payable upon the sale, issuance or delivery of the
Securities, and the printing, delivery, and shipping of the certificates
representing the Shares and Warrants, (iii) the fees and expenses of any
transfer agent or registrar for the Shares and Warrant Shares, (iv) the filing
fees required to be paid by the Placement Agent or the Company with FINRA,
(v) fees, disbursements and other charges of counsel to the Company (vi) listing
fees, if any, for the listing or quotation of the Shares and Warrant Shares on
the NASDAQ, (vii) fees and disbursements of the Company’s auditor incurred in
delivering the letter(s) described in Section 5(h) of this Agreement,
(viii) reasonable fees and disbursements of counsel to the Placement Agent, and
(ix) the costs and expenses of the Company and the Placement Agent in connection
with the marketing of the offering and the sale of the Securities to prospective
investors including, but not limited to, those related to any presentations or
meetings undertaken in connection therewith including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged with the written consent of the Company
in connection with the road show presentations, travel, lodging and other
expenses incurred by the officers of the Company and any such consultants, and
the cost of any aircraft or other transportation chartered by the Company in
connection with the road show. Notwithstanding the foregoing, the expenses of
the Placement Agent (other than the filing fees set forth in clause (iv) above),
including attorneys’ fees and expenses of counsel to the Placement Agent, which
the Company shall be obligated to reimburse hereunder, shall not exceed the
lesser of (a) $20,000 or (b) 8% of the gross proceeds received by the Company
from the sale of the Securities, less the Placement Fee if the Offering is
consummated. It is understood that except as provided in this Section 4,
Section 6 and Section 8(b), the Placement Agent shall pay all of its own
expenses.

5. Conditions of Placement Agent’s Obligations. The obligations of the Placement
Agent hereunder are subject to the following conditions:

(a) Filings with the Commission. The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act at or before 5:30
p.m., Eastern time, within two full business days of the date of this Agreement
(or such earlier time as may be required under the Securities Act).

(b) Abbreviated Registration Statement. If the Company has elected to rely upon
Rule 462(b), the registration statement filed under Rule 462(b) shall have
become effective under the Securities Act by 8:00 a.m., Eastern time, on the
business day next succeeding the date of this Agreement.

(c) No Stop Orders. Prior to the Closing: (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act and no proceedings initiated under Section 8(d) or 8(e) of the
Securities Act for that purpose shall be pending or threatened by the
Commission, and (ii) any request for additional information on the part of the
Commission (to be included in the Registration Statement, the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the Placement
Agent.

(d) Action Preventing Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency or body

 

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which would, as of the Closing Date, prevent the issuance or sale of the
Securities; and no injunction, restraining order or order of any other nature by
any federal or state court of competent jurisdiction shall have been issued as
of the Closing Date which would prevent the issuance or sale of the Securities.

(e) Objection of Placement Agent. No Prospectus or amendment or supplement to
the Registration Statement shall have been filed to which the Placement Agent
shall have objected in writing, which objection shall not be unreasonable. The
Placement Agent shall not have advised the Company that the Registration
Statement, the Disclosure Package or the Prospectus, or any amendment thereof or
supplement thereto, or any Issuer Free Writing Prospectus contains an untrue
statement of fact which, in their opinion, is material, or omits to state a fact
which, in their opinion, is material and is required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

(f) No Material Adverse Change. (i) Prior to the Closing, there shall not have
occurred any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or operations of
the Company from that set forth in the Disclosure Package and the Prospectus
that, in the Placement Agent’s reasonable judgment, is material and adverse and
that makes it, in the Placement Agent’s reasonable judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the
Disclosure Package.

(i) There shall not have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange, the NYSE MKT, the NASDAQ Stock Market, NASDAQ Global Select Market,
the NASDAQ Global Market, the NASDAQ Capital Market or the over the counter
market or the establishing on such exchanges or market by the SEC or by such
exchanges or markets of minimum or maximum prices that are not in force and
effect on the date hereof;

(ii) a suspension or material limitation in trading in the Company’s securities
on NASDAQ or any other exchange or market or the establishing on any such market
or exchange by the SEC or by such market of minimum or maximum prices that are
not in force and effect on the date hereof;

(iii) a general moratorium on commercial banking activities declared by either
federal or any state authorities;

(iv) the outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, which in
the Placement Agent’s sole judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities in the manner
contemplated in the Prospectus; or

(v) any calamity or crisis, change in national, international or world affairs,
act of God, change in the international or domestic markets, or change in the
existing financial, political or economic conditions in the United States or
elsewhere, that in the Placement Agent’s judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities in the manner contemplated in each of the Disclosure Package and the
Prospectus.

(g) Representations and Warranties. Each of the representations and warranties
of the Company contained herein shall be true and correct, in all material
respects (other than those

 

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representations, warranties and agreements that are qualified as to materiality,
which shall be true and correct in all respects), as of the date hereof and the
Closing Date, and all covenants and agreements herein contained to be performed
on the part of the Company and all conditions herein contained to be fulfilled
or complied with by the Company at or prior to the Closing Date shall have been
duly performed, fulfilled or complied with.

(h) Comfort Letter. On the Closing Date, the Placement Agent shall have received
a letter from Ernst & Young LLP, addressed to the Placement Agent, executed and
dated such date, confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualifications of accountants under Rule 2-01 of
Regulation S-X of the Commission, and confirming, as of the date of such letter
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Disclosure Package, as of a date not more than three business days prior to the
date of such letter), the conclusions and findings of said firm, of the type
ordinarily included in accountants’ “comfort letters” to underwriters, with
respect to the financial information, including any financial information
contained in reports filed pursuant to the Exchange Act by the Company or
incorporated by reference in the Registration Statement, the Disclosure Package
and the Prospectus, and other matters required by the Placement Agent.

(i) On the Closing Date, there shall have been furnished to the Placement Agent
the opinion and negative assurance letter of Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Company, dated the Closing Date and addressed to the
Placement Agent, in form and substance reasonably satisfactory to the Placement
Agent.

(j) Officer’s Certificate. The Placement Agent shall have received on the
Closing Date a certificate, addressed to the Placement Agent and dated the
Closing Date, of the co-chief executive officers of the Company to the effect
that:

(i) each of the representations, warranties and agreements of the Company in
this Agreement are true and correct, in all material respects (other than those
representations, warranties and agreements that are qualified as to materiality,
which are true and correct in all respects), as of the Time of Sale and the
Closing Date; and the Company has complied with all agreements and satisfied all
the conditions on its part required under this Agreement to be performed or
satisfied at or prior to the Closing Date;

(ii) subsequent to the respective dates as of which information is given in the
Disclosure Package, there has not been (A) a material adverse change or any
development involving a prospective material adverse change in the general
affairs, business, properties, management, financial condition or results of
operations of the Company and the Subsidiaries taken as a whole, (B) any
transaction that is material to the Company and the Subsidiaries taken as a
whole, except transactions entered into in the ordinary course of business,
(C) any obligation, direct or contingent, that is material to the Company and
the Subsidiaries taken as a whole, incurred by the Company or the Subsidiaries,
except obligations incurred in the ordinary course of business, (D) except as
disclosed in the Disclosure Package and in the Prospectus, any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants) or any material change in the short term or long term indebtedness of
the Company or any of the Subsidiaries taken as a whole, (E) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any of the Subsidiaries or (F) any loss or damage (whether or not
insured) to the property of the Company or any of its Subsidiaries which has
been sustained or will have been sustained which has had or is reasonably likely
to result in a Material Adverse Effect;

 

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(iii) no stop order suspending the effectiveness of the Registration Statement
or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale, nor suspending or preventing the use of the
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall
have been issued, and no proceedings for that purpose shall be pending or to
their knowledge, threatened by the Commission or any state or regulatory body;
and

(iv) the signers of said certificate have reviewed the Registration Statement,
the Disclosure Package and the Prospectus, and any amendments thereof or
supplements thereto (and any documents filed under the Exchange Act and deemed
to be incorporated by reference into the Disclosure Package and the Prospectus),
and (A) (i) the Registration Statement and any amendment thereof did not contain
when the Registration Statement (or such amendment) became effective, any untrue
statement of a material fact or omit to state when the Registration Statement
(or such amendment) became effective, any material fact required to be stated
therein or necessary to make the statements therein not misleading and (ii) as
of the Time of Sale, neither the Disclosure Package nor any individual Issuer
Limited Use Free Writing Prospectus, when considered together with the
Disclosure Package, contained any untrue statement of material fact or omitted
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and (iii) the
Prospectus, as amended or supplemented, does not and did not contain, as of the
time of filing and as of the Closing Date, any untrue statement of material fact
or omit to state and did not omit to state as of such date, a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (B) since the Time of Sale, there has
occurred no event required to be set forth in an amendment or supplement to the
Registration Statement, the Disclosure Package or the Prospectus which has not
been so set forth and there has been no document required to be filed under the
Exchange Act that upon such filing would be deemed to be incorporated by
reference in to the Disclosure Package and into the Prospectus that has not been
so filed.

(k) Secretary’s Certificate. On the Closing Date, the Company shall have
furnished to the Placement Agent a Secretary’s Certificate of the Company.

(l) Other Filings with the Commission. The Company shall have prepared and filed
with the Commission a Current Report of Form 8-K with respect to the
transactions contemplated hereby, including as an exhibit thereto this Agreement
and any other documents relating thereto.

(m) No FINRA Objection. FINRA shall not have raised any objection with respect
to the fairness and reasonableness of the placement agency terms and
arrangements relating to the issuance and sale of the Securities; provided, that
if any such objection is raised, the Company and the Placement Agent shall
negotiate promptly and in good faith appropriate modifications to such placement
agency terms and arrangements in order to satisfy such objections.

(n) NASDAQ. The Shares and the Warrant Shares shall have been approved for
listing on The NASDAQ Capital Market, subject to official notice of issuance.

(o) Additional Documents. Prior to the Closing Date, the Company shall have
furnished to the Placement Agent such further information, certificates or
documents as the Placement Agent shall have reasonably requested for the purpose
of enabling them to pass upon the issuance and

 

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sale of the Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of
any of the conditions or agreements, herein contained.

All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.

If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Placement
Agent by notice to the Company at any time prior to the Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Section 4, Section 6 and Section 8 shall at all times be
effective and shall survive such termination.

6. Indemnification and Contribution.

(a) Indemnification of the Placement Agent. The Company agrees to indemnify,
defend and hold harmless each of the Placement Agent, its respective directors
and officers, and each person, if any, who controls such Placement Agent within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, claim or liability, which, jointly or
severally, such Placement Agent or any such person may become subject under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, the common law or otherwise, (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, damage, claim or liability (or actions in
respect thereof as contemplated below) arises out of or is based upon: (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto or the omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and, in the case of
(i) and (ii) above, to reimburse such Placement Agent and each such controlling
person for any and all reasonable expenses (including reasonable fees and
disbursements of counsel) as such expenses are incurred by such Placement Agent
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, it arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in or omitted from, and in
conformity with information concerning such Placement Agent furnished in writing
by or on behalf of such Placement Agent to the Company expressly for use
therein, which information the parties hereto agree is limited to the Placement
Agent Information or (iii) any untrue statement or alleged untrue statement of
any material fact contained in the Company’s investor presentation slides in the
form furnished by the Company under Form 8-K on October 17, 2013.
Notwithstanding the foregoing, the Company will not be liable to the Placement
Agent pursuant to this Section 6(a) to the extent that any such loss, damage,
claim or liability is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from the Placement Agent’s willful
misconduct or gross negligence.

 

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(b) Indemnification of the Company. The Placement Agent will indemnify, defend
and hold harmless the Company, its directors and officers, and any person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, claim, damage,
liability or expense, as incurred to which, jointly or severally, the Company or
any such person may become subject under the Securities Act, the Exchange Act,
or other federal or state statutory law or regulation, the common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Placement Agent), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, or the omission or alleged omission
therefrom to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, in the case of each of
(i) and (ii) above, to the extent but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information concerning such Placement Agent furnished in writing
by or on behalf of such Placement Agent to the Company expressly for use therein
and to reimburse the Company, or any such director, officer or controlling
person for any legal and other expense reasonably incurred by the Company, or
any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, that the parties hereto hereby
agree that such written information provided by the Placement Agent consists
solely of the Placement Agent Information. Notwithstanding the provisions of
this Section 6(b), in no event shall any indemnity by the Placement Agent under
this Section 6(b) exceed the Placement Fee.

(c) Notice and Procedures. If any action, suit or proceeding (each, a
“Proceeding”) is brought against a person (an “indemnified party”) in respect of
which indemnity may be sought against the Company or the Placement Agent (as
applicable, the “indemnifying party”) pursuant to subsection (a) or (b),
respectively, of this Section 6, such indemnified party shall promptly notify
such indemnifying party in writing of the institution of such Proceeding and
such indemnifying party shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such indemnifying party shall not relieve such indemnifying party from
any liability which such indemnifying party may have to any indemnified party or
otherwise, except to the extent such failure results in the forfeiture by the
indemnifying party of substantial rights or defenses. The indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by the indemnifying party in connection with the
defense of such Proceeding, (ii) the indemnifying party shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to such
indemnifying party, in any of which events such reasonable fees and expenses
shall be borne by such indemnifying party and paid as incurred (it being
understood, however, that such indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel)

 

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in any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). An
indemnifying party shall not be liable for any settlement of any Proceeding
(including by consent to the entry of any judgment) effected without its written
consent but, if settled with its written consent or if there be a final judgment
for the plaintiff, such indemnifying party agrees to indemnify and hold harmless
the indemnified party or parties from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel (which fees
and expenses shall be reasonably documented) as contemplated by the second
sentence of this Section 6(c), then the indemnifying party agrees that it shall
be liable for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 90 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have fully reimbursed the indemnified party in accordance with
such request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days’ prior notice of
its intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened Proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such Proceeding and does not include an
admission of fault or culpability or a failure to act by or on behalf of such
indemnified party.

(d) Contribution. If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsections (a) or (b) of this
Section 6 or insufficient to hold an indemnified party harmless in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party shall, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages, liabilities or
expenses referred to in subsection (a) or (b) above, (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Placement Agent on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Placement Agent on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Placement Agent on the other hand shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the Placement
Fee received by the Placement Agent, in each case as set forth on the cover of
the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Company on the one hand and the Placement
Agent on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or by the Placement Agent, on the
other hand, and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Placement Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this
Section 6(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 6(d) shall be deemed to include any legal or

 

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other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this Section 6(d). Notwithstanding the provisions of this Section 6(d), the
Placement Agent shall not be required to contribute any amount in excess of the
Placement Fee. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

(e) Representations and Agreements to Survive Delivery. The obligations of the
Company under this Section 6 shall be in addition to any liability which the
Company may otherwise have. The indemnity and contribution agreements of the
parties contained in this Section 6 and the covenants, warranties and
representations of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of the Placement Agent,
any person who controls the Placement Agent within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act or any
affiliate of the Placement Agent, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (iii) the issuance and delivery of the Securities. The Company and the
Placement Agent agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company’s officers or directors in connection with the issuance and sale of the
Securities, or in connection with the Registration Statement, the Disclosure
Package or the Prospectus.

7. Information Furnished by Placement Agent. The Company acknowledges that the
statements set forth in the tenth paragraph under the heading “Plan of
Distribution” in the Prospectus (the “Placement Agent Information”) constitute
the only information relating to the Placement Agent furnished in writing to the
Company by the Placement Agent as such information is referred to in Sections 2
and 6 hereof.

8. Termination.

(a) The Placement Agent shall have the right to terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the Closing
Date, without liability on the part of the Placement Agent to the Company, if
(i) prior to delivery and payment for the Securities (A) trading in securities
generally shall have been suspended or materially limited on or by the New York
Stock Exchange, the NASDAQ Stock Market, the NASDAQ Global Select Market, the
NASDAQ Global Market, the NASDAQ Capital Market, or the NYSE MKT (each, a
“Trading Market”), (B) trading in the Common Stock of the Company shall have
been suspended or materially limited on any exchange or in the over-the-counter
market, (C) a general moratorium on commercial banking activities shall have
been declared by federal or New York state authorities, (D) there shall have
occurred any outbreak or material escalation of hostilities or acts of terrorism
involving the United States or there shall have been a declaration by the United
States of a national emergency or war, (E) there shall have occurred any other
calamity or crisis or any material change in general economic, political or
financial conditions in the United States or elsewhere, if the effect of any
such event specified in clause (D) or (E), in the reasonable judgment of the
Placement Agent, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities on the Closing Date on
the terms and in the manner contemplated by this Agreement, the Disclosure
Package and the Prospectus, or (ii) since the time of execution of this
Agreement or the earlier respective dates as of which information is given in
the Disclosure Package, there has been, (A) any Material Adverse Effect or
(B) the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character that, in

 

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the reasonable judgment of the Placement Agent would, individually or in the
aggregate, result in a Material Adverse Effect and which would, in the
reasonable judgment of the Placement Agent, make it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities on the terms and
in the manner contemplated in the Disclosure Package. Any such termination shall
be without liability of any party to any other party except that the provisions
of Section 4, Section 6, Section 8(b) and Section 11 hereof shall at all times
be effective notwithstanding such termination.

(b) If this Agreement shall be terminated by the Placement Agent pursuant to
Section 5, Section 8(a)(i)(B) or Section 8(a)(ii)(A) or (2) the sale of the
Securities to Investors is not consummated because of any failure, refusal or
inability on the part of the Company to comply with the terms or perform any
agreement or obligation of this Agreement or any Subscription Agreement, other
than by reason of a default by the Placement Agent, the Company will, in
addition to paying the amounts described in Section 4 hereof, reimburse the
Placement Agent for all of their reasonable and actual out-of-pocket
disbursements (including, but not limited to, the reasonable fees and
disbursements of its counsel).

9. Notices. All statements, requests, notices and agreements hereunder shall be
in writing or by facsimile, and:

(a) if to the Placement Agent, shall be delivered or sent by mail, telex or
facsimile transmission to:

Roth Capital Partners, LLC

888 San Clemente Drive

Newport Beach, California 92660

Attention: Aaron Gurewitz, Managing Director and Head of Equity Capital Markets

Facsimile No.: (858) 720-7227

with a copy (which shall not constitute notice) to:

LeClairRyan, A Professional Corporation

885 Third Avenue

New York, New York 10022

Attention: James T. Seery

Facsimile No.: (973) 491- 3415

E-mail address: james.seery@leclairryan.com

(b) if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to:

Delcath Systems, Inc.

810 Seventh Avenue, 35th Fl

New York, New York 10019

Attn: General Counsel

Facsimile No.: (646) 562-1124

 

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with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention: Andrea Nicolas, Esq.

Facsimile No.: (917) 777-3416

E-mail address: andrea.nicolas@skadden.com

Any such notice shall be effective only upon receipt. Any 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.

10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and shall be binding upon the Placement Agent, the Company and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 7. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation (including
the Investors), other than the persons, firms or corporations mentioned in the
preceding sentence, any legal or equitable remedy or claim under or in respect
of this Agreement, or any provision herein contained. The term “successors and
assigns” as herein used shall not include any purchaser of the Securities by
reason merely of such purchase.

11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of laws provisions thereof.

12. No Fiduciary Relationship. The Company hereby acknowledges that the
Placement Agent is acting solely as Placement Agent in connection with the
offering of the Company’s securities. The Company further acknowledges that the
Placement Agent is acting pursuant to a contractual relationship created solely
by this Agreement entered into on an arm’s length basis and in no event do the
parties intend that the Placement Agent act or be responsible as a fiduciary to
the Company, its management, stockholders, creditors or any other person in
connection with any activity that the Placement Agent may undertake or have
undertaken in furtherance of the offering of the Company’s securities, either
before or after the date hereof. The Placement Agent hereby expressly disclaims
any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to
such transactions, and the Company hereby confirms its understanding and
agreement to that effect. The Company and the Placement Agent agree that they
are each responsible for making their own independent judgments with respect to
any such transactions, and that any opinions or views expressed by the Placement
Agent to the Company regarding such transactions, including but not limited to
any opinions or views with respect to the price or market for the Company’s
securities, do not constitute advice or recommendations to the Company. The
Company hereby waives and releases, to the fullest extent permitted by law, any
claims that the Company may have against the Placement Agent with respect to any
breach or alleged breach of any fiduciary or similar duty to the Company in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions.

13. Entire Agreement. This Agreement, together with the schedule and exhibits
attached hereto and as the same may be amended from time to time in accordance
with the terms hereof, contains the entire agreement among the parties hereto
relating to the subject matter hereof and there are no other or further
agreements outstanding not specifically mentioned herein.

14. Headings. The Section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.

 

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15. Amendments and Waivers. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. The failure of a party to exercise any right or remedy shall not be
deemed or constitute a waiver of such right or remedy in the future. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (regardless of whether similar), nor shall
any such waiver constitute a continuing waiver unless otherwise expressly
provided.

16. Submission to Jurisdiction. Except as set forth below, no Proceeding may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company hereby
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Proceeding arising out of or in any way relating to
this Agreement is brought by any third party against the Placement Agent. The
Company hereby waives all right to trial by jury in any Proceeding (whether
based upon contract, tort or otherwise) in any way arising out of or relating to
this Agreement. The Company agrees that a final judgment in any such Proceeding
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts in the jurisdiction of which the Company is
or may be subject, by suit upon such judgment.

17. Counterparts. This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together
constitute one and the same instrument. Delivery of an executed counterpart by
facsimile shall be effective as delivery of a manually executed counterpart
thereof.

[Signature pages follow]

 

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If the foregoing is in accordance with your understanding of the agreement
between the Company and the Placement Agent, kindly indicate your acceptance in
the space provided for that purpose below.

 

Very truly yours, DELCATH SYSTEMS, INC. By:  

 

  Name:   Title:

 

Accepted as of the date first above written: ROTH CAPITAL PARTNERS, LLC By:  

 

  Name:   Title:

Signature Page to Placement Agency Agreement