ITUS CORPORATION

Common Stock

(par value $0.01 per share)

At Market Issuance Sales Agreement

                                                                                                                           
 November 17, 2017

B. Riley FBR, Inc. 
299 Park Avenue, 7th Floor 
New York, NY, 10171

 

Ladies and Gentlemen:

ITUS Corporation, a Delaware corporation (the “Company”), confirms its agreement
(this “Agreement”) with B. Riley FBR, Inc. (the “Agent”) as follows:

                        1.                     Issuance and Sale of Shares. The
Company agrees that, from time to time during

the term of this Agreement, on the terms and subject to the conditions set forth
herein, it may issue and sell through the Agent, shares (the “Placement Shares”)
of the Company’s common stock, par value $0.01 per share (the “Common Stock”);
provided however, that in no event shall the Company issue or sell through the
Agent such number of Placement Shares that (a) would cause the Company to not
satisfy the eligibility requirements for use of Form S-3 (including Instruction
I.B.6. Thereof), (b) exceeds the number of shares or dollar amount of Common
Stock registered on the effective Registration Statement (as defined below)
pursuant to which the offering is being made, (c) exceeds the number of
authorized but unissued shares of the Common Stock, or (d) exceeds the number of
shares or dollar amount for which the Company has filed a Prospectus Supplement
(as defined below) (the lesser of (a) through (d) the “Maximum Amount”).
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitations set forth in this Section 1 on the
amount of Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company and that the Agent shall have no obligation
in connection with such compliance. The issuance and sale of Placement Shares
through the Agent will be effected pursuant to the Registration Statement (as
defined below), although nothing in this Agreement shall be construed as
requiring the Company to use the Registration Statement to issue any Common
Stock, including the Placement Shares.

 

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The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended and the rules and regulations thereunder (the “Securities
Act”), with the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-3 (File No. 333-220963) (the “Current
Registration Statement”), including a base prospectus, relating to certain
securities including the Placement Shares to be issued from time to time by the
Company, and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the Securities Exchange
Act of 1934, as amended and the rules and regulations thereunder (the “Exchange
Act”). The Company has prepared a prospectus supplement to the base prospectus
included as part of such registration statement specifically relating to the
Placement Shares (the “Prospectus Supplement”). The Company will furnish to the
Agent, for use by the Agent, copies of the base prospectus included as part of
such registration statement, as supplemented by the Prospectus Supplement,
relating to the Placement Shares. Except where the context otherwise requires,
such registration statement, and any post-effective amendment thereto, including
all documents filed as part thereof or incorporated by reference therein, and
including any information contained in a Prospectus (as defined below)
subsequently filed with the Commission pursuant to Rule 424(b) under the
Securities Act or deemed to be a part of such registration statement pursuant to
Rule 430B of the Securities Act, is herein called the “Registration Statement.”
The base prospectus, including all documents incorporated or deemed incorporated
therein by reference to the extent such information has not been superseded or
modified in accordance with Rule 412 under the Securities Act (as qualified by
Rule 430B(g) of the Securities Act), included in the Registration Statement, as
it may be supplemented by the Prospectus Supplement, in the form in which such
base prospectus and/or Prospectus Supplement have most recently been filed by
the Company with the Commission pursuant to Rule 424(b) under the Securities Act
is herein called the “Prospectus.” Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto shall be deemed
to refer to and include the documents incorporated by reference therein, and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement or the Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission incorporated by reference therein (the “Incorporated Documents”).

For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or to any amendment or supplement thereto shall be deemed to
include the most recent copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission
(collectively, “EDGAR”).

                        2.                     Placements. Each time that the
Company, in its sole discretion, wishes to issue and sell Placement Shares
hereunder (each, a “Placement”), it will notify the Agent by electronic mail (or
other method mutually agreed to in writing by the parties) of the number of
Placement Shares, the time period during which sales are requested to be made,
any limitation on the number of Placement Shares that may be sold in any one day
and any minimum price below which sales may not be made (a “Placement Notice”),
the form of which is attached hereto as Schedule 1. The Placement Notice shall
originate from any of the individuals from the Company set forth on Schedule 3
(with a copy to each of the other individuals from the Company listed on such
schedule), and shall be addressed to each of the individuals from the Agent set
forth on Schedule 3, as such Schedule 3 may be amended from time to time. The
Placement Notice shall be effective immediately upon receipt by the Agent unless
and until (i) the Agent declines to accept the terms contained therein for any
reason, in its sole discretion, (ii) the entire amount of the Placement Shares
thereunder has been sold, (iii) the Company suspends or terminates the Placement
Notice, which suspension and termination rights may be exercised by the Company
in its sole discretion, or (iv) this Agreement has been terminated under the
provisions of Section 13. The amount of any discount, commission or other
compensation to be paid by the Company to the Agent in connection with the sale
of the Placement Shares shall be calculated in accordance with the terms set
forth in Schedule 2.  It is expressly acknowledged and agreed that neither the
Company nor the Agent will have any obligation whatsoever with respect to a
Placement or any Placement Shares unless and until the Company delivers a
Placement Notice to the Agent and the Agent does not decline such Placement
Notice pursuant to the terms set forth above, and then only upon the terms
specified therein and herein. In the event of a conflict between the terms of
Sections 2 or 3 of this Agreement and the terms of a Placement Notice, the terms
of the Placement Notice will control.

 

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                        3.                     Sale of Placement Shares by the
Agent.  Subject to the terms and conditions of this Agreement, for the period
specified in a Placement Notice, the Agent will use its commercially reasonable
efforts consistent with its normal trading and sales practices and applicable
state and federal laws, rules and regulations and the rules of the NASDAQ
Capital Market (the “Exchange”), to sell the Placement Shares up to the amount
specified in, and otherwise in accordance with the terms of, such Placement
Notice. The Agent will provide written confirmation to the Company no later than
the opening of the Trading Day (as defined below) immediately following the
Trading Day on which it has made sales of Placement Shares hereunder setting
forth the number of Placement Shares sold on such day, the compensation payable
by the Company to the Agent pursuant to Section 2 with respect to such sales,
and the Net Proceeds (as defined below) payable to the Company, with an
itemization of the deductions made by the Agent (as set forth in Section 5(b))
from the gross proceeds that it receives from such sales. Subject to the terms
of a Placement Notice, the Agent may sell Placement Shares by any method
permitted by law deemed to be an “at the market offering” as defined in Rule 415
of the Securities Act. “Trading Day” means any day on which shares of Common
Stock are purchased and sold on the Exchange.  Neither the Agent nor any of its
affiliates or subsidiaries shall engage in (i) any short sale of any security of
the Company or (ii) any sale of any security of the Company that the Agent does
not own or any sale which is consummated by the delivery of a security of the
Company borrowed by, or for the account of, the Agent. Neither the Agent nor any
of its affiliates or subsidiaries, engages in any proprietary trading or trading
for the Agent’s (or its affiliates’ or subsidiaries’) own account. 

                     4.                     Suspension of Sales. The Company or
the Agent may, upon notice to the other party in writing (including by email
correspondence to each of the individuals of the other party set forth on
Schedule 3, if receipt of such correspondence is actually acknowledged by any of
the individuals to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile transmission or email
correspondence to each of the individuals of the other party set forth on
Schedule 3), suspend any sale of Placement Shares (a “Suspension”); provided,
however, that such suspension shall not affect or impair any party’s obligations
with respect to any Placement Shares sold hereunder prior to the receipt of such
notice. While a Suspension is in effect, any obligation under Sections 7(l),
7(m), and 7(n) with respect to the delivery of certificates, opinions, or
comfort letters to the Agent, shall be waived. Each of the parties agrees that
no such notice under this Section 4 shall be effective against any other party
unless it is made to one of the individuals named on Schedule 3 hereto, as such
Schedule may be amended from time to time.

 

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                     5.                     Sale and Delivery to the Agent;
Settlement.

a.                   Sale of Placement Shares. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, upon the Agent’s acceptance of the terms of a
Placement Notice, and unless the sale of the Placement Shares described therein
has been declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, the Agent, for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws, rules and
regulations and the rules of the Exchange to sell such Placement Shares up to
the amount specified in, and otherwise in accordance with the terms of, such
Placement Notice. The Company acknowledges and agrees that (i) there can be no
assurance that the Agent will be successful in selling Placement Shares, (ii)
the Agent will incur no liability or obligation to the Company or any other
person or entity if it does not sell Placement Shares for any reason other than
a failure by the Agent to use its commercially reasonable efforts consistent
with its normal trading and sales practices and applicable state and federal
laws, rules and regulations and the rules of the Exchange to sell such Placement
Shares as required under this Agreement and (iii) the Agent shall be under no
obligation to purchase Placement Shares on a principal basis pursuant to this
Agreement, except as otherwise agreed by the Agent and the Company.

b.                  Settlement of Placement Shares. Unless otherwise specified
in the applicable Placement Notice, settlement for sales of Placement Shares
will occur on the third (3rd) Trading Day (or such earlier day as is industry
practice for regular-way trading) following the date on which such sales are
made (each, a “Settlement Date”). The Agent shall notify the Company of each
sale of Placement Shares no later than opening day following the Trading Day
that the Agent sold Placement Shares. The amount of proceeds to be delivered to
the Company on a Settlement Date against receipt of the Placement Shares sold
(the “Net Proceeds”) will be equal to the aggregate sales price received by the
Agent, after deduction for (i) the Agent’s commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof,
and (ii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.

c.                   Delivery of Placement Shares. On or before each Settlement
Date, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Shares being sold by crediting the Agent’s or its
designee’s account (provided the Agent shall have given the Company written
notice of such designee and such designee’s account information at least one
Trading Day prior to the Settlement Date) at The Depository Trust Company
through its Deposit and Withdrawal at Custodian System or by such other means of
delivery as may be mutually agreed upon by the parties hereto which in all cases
shall be freely tradable, transferable, registered shares in good deliverable
form. On each Settlement Date, the Agent will deliver the related Net Proceeds
in same day funds to an account designated by the Company on, or prior to, the
Settlement Date. The Company agrees that if the Company, or its transfer agent
(if applicable), defaults in its obligation to deliver Placement Shares on a
Settlement Date through no fault of the Agent, then in addition to and in no way
limiting the rights and obligations set forth in Section 11(a) hereto, it will
(i) hold the Agent harmless against any loss, claim, damage, or reasonable,
documented expense (including reasonable and documented legal fees and
expenses), as incurred, arising out of or in connection with such default by the
Company or its transfer agent (if applicable) and (ii) pay to the Agent (without
duplication) any commission, discount, or other compensation to which it would
otherwise have been entitled absent such default.

 

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d.                  Limitations on Offering Size. Under no circumstances shall
the Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate gross sales
proceeds of Placement Shares sold pursuant to this Agreement would exceed the
lesser of (A) together with all sales of Placement Shares under this Agreement,
the Maximum Amount, (B) the amount available for offer and sale under the
currently effective Registration Statement and (C) the amount authorized from
time to time to be issued and sold under this Agreement by the Company’s board
of directors, a duly authorized committee thereof or a duly authorized executive
committee, and notified to the Agent in writing.  Under no circumstances shall
the Company cause or request the offer or sale of any Placement Shares pursuant
to this Agreement at a price lower than the minimum price authorized from time
to time by the Company’s board of directors, a duly authorized committee thereof
or a duly authorized executive committee, and notified to the Agent in writing. 
Further, under no circumstances shall the Company cause or permit the aggregate
offering amount of Placement Shares sold pursuant to this Agreement to exceed
the Maximum Amount.

                     6.                     Representations and Warranties of
the Company. Except as disclosed in the Registration Statement or the Prospectus
(including the Incorporated Documents), the Company represents and warrants to,
and agrees with the Agent that as of the date of this Agreement and as of each
Applicable Time (as defined below), unless such representation, warranty or
agreement specifies a different date or time:

a.                   Registration Statement and Prospectus. Assuming no act or
omission on the part of the Agent that would make such statement untrue, the
transactions contemplated by this Agreement meet the requirements for and comply
with the conditions for the use of Form S‑3 under the Securities Act. The
Registration Statement has been filed with the Commission and has been declared
effective under the Securities Act. The Prospectus Supplement will name the
Agent as the agent in the section entitled “Plan of Distribution.” The Company
has not received, and has no notice of, any order of the Commission preventing
or suspending the use of the Registration Statement, or threatening or
instituting proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the requirements
of Rule 415 under the Securities Act and comply in all material respects with
said Rule. Any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement have been so described or
filed, as applicable. Copies of the Registration Statement, the Prospectus, and
any such amendments or supplements and all documents incorporated by reference
therein that were filed with the Commission on or prior to the date of this
Agreement have been delivered, or are available through EDGAR, to the Agent and
its counsel. The Company has not distributed and, prior to the later to occur of
each Settlement Date and completion of the distribution of the Placement Shares,
will not distribute any offering material in connection with the offering or
sale of the Placement Shares other than the Registration Statement and the
Prospectus and any Issuer Free Writing Prospectus (as defined below) to which
the Agent has consented, which consent will not be unreasonably withheld or
delayed, or that is required by applicable law or the listing maintenance
requirements of the Exchange. The Common Stock is currently quoted on the
Exchange under the trading symbol “ITUS.” The Company has no reason to believe
that it will not in the foreseeable future regain compliance and thereafter
continue to be in compliance with all such listing and maintenance requirements
of the Exchange.

 

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b.                  No Misstatement or Omission. At each Settlement Date, the
Registration Statement and the Prospectus, as of such date, will conform in all
material respects with the requirements of the Securities Act. The Registration
Statement, when it became or becomes effective, did not, and will not, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Prospectus and any amendment and supplement thereto, on the date thereof and
at each Applicable Time (defined below), did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The documents incorporated by reference in the Prospectus
or any Prospectus Supplement did not, and any further documents filed and
incorporated by reference therein will not, when filed with the Commission,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated in such document or necessary to make the statements in
such document, in light of the circumstances under which they were made, not
misleading. The foregoing shall not apply to statements in, or omissions from,
any such document made in reliance upon, and in conformity with, information
furnished to the Company by the Agent specifically for use in the preparation
thereof.

c.                   Conformity with Securities Act and Exchange Act. The
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or
any amendment or supplement thereto, and the Incorporated Documents, when such
documents were or are filed with the Commission under the Securities Act or the
Exchange Act or became or become effective under the Securities Act, as the case
may be, conformed or will conform in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable.

d.                  Financial Information. The consolidated financial statements
of the Company included or incorporated by reference in the Registration
Statement and the Prospectus, together with the related notes and schedules,
present fairly, in all material respects, the consolidated financial position of
the Company and the Subsidiaries (as defined below) as of the dates indicated
and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Company and the Subsidiaries for the periods
specified (subject, in the case of unaudited statements, to normal year-end
audit adjustments which will not be material, either individually or in the
aggregate) and have been prepared in compliance with the published requirements
of the Securities Act and Exchange Act, as applicable, and in conformity with
generally accepted accounting principles in the United States (“GAAP”) applied
on a consistent basis (except (i) for such adjustments to accounting standards
and practices as are noted therein and (ii) in the case of unaudited interim
financial statements, to the extent that they may not include footnotes or may
be condensed or summary statements) during the periods involved; the other
financial and statistical data with respect to the Company and the Subsidiaries
contained or incorporated by reference in the Registration Statement and the
Prospectus, are accurately and fairly presented and prepared on a basis
consistent with the financial statements and books and records of the Company;
there are no financial statements (historical or pro forma) that are required to
be included or incorporated by reference in the Registration Statement, or the
Prospectus that are not included or incorporated by reference as required; the
Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off balance sheet obligations),
not described in the Registration Statement, and the Prospectus which are
required to be described in the Registration Statement or Prospectus; and all
disclosures contained or incorporated by reference in the Registration Statement
and the Prospectus regarding “non-­GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission), if any, comply in all
material respects with Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.

 

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e.                   Conformity with EDGAR Filing. The Prospectus delivered to
the Agent for use in connection with the sale of the Placement Shares pursuant
to this Agreement will be identical to the versions of the Prospectus created to
be transmitted to the Commission for filing via EDGAR, except to the extent
permitted by Regulation S-T.

f.                   Organization. The Company and any subsidiary that is a
significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X
promulgated by the Commission) (each, a “Subsidiary,” collectively, the
“Subsidiaries”), are, and will be, duly organized, validly existing as a
corporation and in good standing under the laws of their respective
jurisdictions of organization. The Company and the Subsidiaries are duly
licensed or qualified as a foreign corporation for transaction of business and
in good standing under the laws of each other jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such license or qualification, and have all corporate power
and authority necessary to own or hold their respective properties and to
conduct their respective businesses as described in the Registration Statement
and the Prospectus, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the assets, business, operations,
earnings, properties, condition (financial or otherwise), prospects,
stockholders’ equity or results of operations of the Company and the
Subsidiaries taken as a whole, or prevent the consummation of the transactions
contemplated hereby (a “Material Adverse Effect”).

g.                  Subsidiaries.  As of the date hereof, the Company’s only
Subsidiaries are set forth on Schedule 6(g).  The Company owns directly or
indirectly, all of the equity interests of the Subsidiaries free and clear of
any lien, charge, security interest, encumbrance, right of first refusal or
other restriction, and all the equity interests of the Subsidiaries are validly
issued and are fully paid, nonassessable and free of preemptive and similar
rights. 

h.                  No Violation or Default. Neither the Company nor any
Subsidiary is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other similar agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary is bound or to which any of the property or assets of
the Company or any Subsidiary is subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of each of clauses
(ii) and (iii) above, for any such violation or default that would not,
individually or in the aggregate, have a Material Adverse Effect. To the
Company’s knowledge, no other party under any material contract or other
agreement to which it or any Subsidiary is a party is in default in any respect
thereunder where such default would have a Material Adverse Effect.

 

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i.                    No Material Adverse Effect. Since the date of the most
recent financial statements of the Company included or incorporated by reference
in the Registration Statement and Prospectus, there has not been (i) any
Material Adverse Effect, or any development that would result in a Material
Adverse Effect, (ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or the Subsidiaries, which is material to the Company and the
Subsidiaries taken as a whole, (iv) any material change in the capital stock
(other than (A) the grant of additional options under the Company’s existing
stock option plans, (B) changes in the number of outstanding Common Stock of the
Company due to the issuance of shares upon the exercise or conversion of
securities exercisable for, or convertible into, Common Stock outstanding on the
date hereof, (C) as a result of the issuance of Placement Shares, (D) any
repurchases of capital stock of the Company, (E) as described in a Form 8-K, a
proxy statement filed on Schedule 14A or a Registration Statement on Form S-4,
or (F) otherwise publicly announced) or outstanding long-term indebtedness of
the Company or any of its Subsidiaries or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or any
Subsidiary, other than in each case above in the ordinary course of business or
as otherwise disclosed in the Registration Statement or Prospectus (including
any document incorporated by reference therein). 

j.                    Capitalization. The issued and outstanding shares of
capital stock of the Company have been validly issued, are fully paid and
non-assessable and, other than as disclosed in the Registration Statement or the
Prospectus, are not subject to any preemptive rights, rights of first refusal or
similar rights. The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement and the Prospectus as
of the dates referred to therein (other than (i) the grant of additional options
under the Company’s existing stock option plans, (ii) changes in the number of
outstanding Common Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or convertible into,
Common Stock outstanding on the date hereof, (iii) as a result of the issuance
of Placement Shares, or (iv) any repurchases of capital stock of the Company)
and such authorized capital stock conforms to the description thereof set forth
in the Registration Statement and the Prospectus. The description of the Common
Stock in the Registration Statement and the Prospectus is complete and accurate
in all material respects. Except as disclosed in or contemplated by the
Registration Statement or the Prospectus, as of the date referred to therein,
the Company did not have outstanding any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible into, or
exchangeable for, or any contracts or commitments to issue or sell, any shares
of capital stock or other securities.

k.                  S-3 Eligibility. At the time the Registration Statement was
declared effective, and at the time the Company’s most recent Annual Report on
Form 10-K was filed with the Commission, the Company met or will meet the then
applicable requirements for the use of Form S-3 under the Securities Act,
including, but not limited to, General Instruction I.B.6 of Form S-3, if
applicable.  As of the close of trading on the Exchange on September 26, 2017,
the aggregate market value of the outstanding voting and non-voting common
equity (as defined in Rule 405) of the Company held by persons other than
affiliates of the Company (pursuant to Rule 144 of the Securities Act, those
that directly, or indirectly through one or more intermediaries, control, or are
controlled by, or are under common control with, the Company)  (the
“Non-Affiliate Shares”), was approximately $74.3 million (calculated by
multiplying (x) the price at which the common equity of the Company was last
sold on the Exchange on September 26, 2017 times (y) the number of Non-Affiliate
Shares).  The Company is not a shell company (as defined in Rule 405 under the
Securities Act) and has not been a shell company for at least 12 calendar months
previously and if it has been a shell company at any time previously, has filed
current Form 10 information (as defined in General Instruction I.B.6 of Form
S-3) with the Commission at least 12 calendar months previously reflecting its
status as an entity that is not a shell company.     

 

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l.                    Authorization; Enforceability. The Company has full legal
right, power and authority to enter into this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except to the extent that (i) enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable principles and (ii) the
indemnification and contribution provisions of Section 11 hereof may be limited
by federal or state securities laws and public policy considerations in respect
thereof.

m.                Authorization of Placement Shares. The Placement Shares, when
issued and delivered pursuant to the terms approved by the board of directors of
the Company or a duly authorized committee thereof, or a duly authorized
executive committee, against payment therefor as provided herein, will be duly
and validly authorized and issued and fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest or other claim (other
than any pledge, lien, encumbrance, security interest or other claim arising
from an act or omission of the Agent or a purchaser), including any statutory or
contractual preemptive rights, resale rights, rights of first refusal or other
similar rights, and will be registered pursuant to Section 12 of the Exchange
Act. The Placement Shares, when issued, will conform in all material respects to
the description thereof set forth in or incorporated into the Prospectus.

n.                  No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or any
governmental or regulatory authority is required for the execution, delivery and
performance by the Company of this Agreement, and the issuance and sale by the
Company of the Placement Shares as contemplated hereby, except for such
consents, approvals, authorizations, orders and registrations or qualifications
(i) as may be required under applicable state securities laws or by the by-laws
and rules of the Financial Industry Regulatory Authority (“FINRA”) or the
Exchange, including any notices that may be required by the Exchange, in
connection with the sale of the Placement Shares by the Agent, (ii) as may be
required under the Securities Act and (iii) as have been previously obtained by
the Company.

o.                  No Preferential Rights. (i) No person, as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act
(each, a “Person”), has the right, contractual or otherwise, to cause the
Company to issue or sell to such Person any Common Stock or shares of any other
capital stock or other securities of the Company (other than upon the exercise
of options or warrants to purchase Common Stock or upon the exercise of options
that may be granted from time to time under the Company’s stock option plan),
(ii) no Person has any preemptive rights, rights of first refusal, or any other
rights (whether pursuant to a “poison pill” provision or otherwise) to purchase
any Common Stock or shares of any other capital stock or other securities of the
Company from the Company which have not been duly waived with respect to the
offering contemplated hereby, (iii) no Person has the right to act as an
underwriter or as a financial advisor to the Company in connection with the
offer and sale of the Common Stock, and (iv) no Person has the right,
contractual or otherwise, to require the Company to register under the
Securities Act any Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or other securities in
the Registration Statement or the offering contemplated thereby, whether as a
result of the filing or effectiveness of the Registration Statement or the sale
of the Placement Shares as contemplated thereby or otherwise, except in each
case for such rights as have been waived on or prior to the date hereof.

 

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p.                  Independent Public Accountant. Haskell & White LLP (the
“Accountant”), whose report on the consolidated financial statements of the
Company is filed with the Commission as part of the Company’s most recent Annual
Report on Form 10-K filed with the Commission and incorporated into the
Registration Statement, are and, during the periods covered by their report,
were independent public accountants within the meaning of the Securities Act and
the Public Company Accounting Oversight Board (United States). To the Company’s
knowledge, the Accountant is not in violation of the auditor independence
requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with
respect to the Company.

 

q.                  Enforceability of Agreements. All agreements between the
Company and third parties expressly referenced in the Prospectus, other than
such agreements that have expired by their terms or whose termination is
disclosed in documents filed by the Company on EDGAR, are legal, valid and
binding obligations of the Company and, to the Company’s knowledge, enforceable
in accordance with their respective terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification provisions of certain
agreements may be limited by federal or state securities laws or public policy
considerations in respect thereof, and except for any unenforceability that,
individually or in the aggregate, would not have a Material Adverse Effect.

r.                    No Litigation. There are no legal, governmental or
regulatory actions, suits or proceedings pending, nor, to the Company’s
knowledge, any legal, governmental or regulatory investigations, including any
proceeding before the United States Food and Drug Administration of the U.S.
Department of Health and Human Services (the “FDA”) or comparable federal,
state, local or foreign governmental authorities (it being understood that the
interaction between the Company and the FDA and such comparable governmental
authorities relating to the clinical development and product approval process
shall not be deemed proceedings for purposes of this representation), to which
the Company or a Subsidiary is a party or to which any property of the Company
or any Subsidiary is the subject that, individually or in the aggregate, if
determined adversely to the Company or any Subsidiary, would have a Material
Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; to the Company’s knowledge, no
such actions, suits or proceedings are threatened or contemplated by any
governmental or regulatory authority or threatened by others that, individually
or in the aggregate, if determined adversely to the Company or any Subsidiary,
would have a Material Adverse Effect; and there are no current or pending legal,
governmental or regulatory actions, suits, proceedings or, to the Company’s
knowledge, investigations that are required under the Securities Act to be
described in the Prospectus that are not described in the Prospectus (including
any Incorporated Document).  The Company is in compliance with all applicable
federal, state, local and foreign laws, regulations, orders and decrees
governing its business as enforced by the FDA, or any other federal, state or
foreign agencies or bodies engaged in the regulation of medical devices, except
where noncompliance would not, singularly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. All preclinical and clinical studies
conducted by or on behalf of the Company to support clearance for
commercialization of the Company’s products have been conducted by the Company,
or to the Company’s knowledge by third parties, in compliance with all
applicable federal, state or foreign laws, rules, orders and regulations, except
for such failure or failures to be in compliance as would not reasonably be
expected to have, singularly or in the aggregate, a Material Adverse Effect.

 

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s.                   Licenses and Permits. The Company and the Subsidiaries
possess or have obtained, all licenses, certificates, consents, orders,
approvals, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their respective
businesses as currently conducted, as described in the Registration Statement
and the Prospectus (the “Permits”), except where the failure to possess, obtain
or make the same would not, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received written
notice of any proceeding relating to revocation or modification of any such
Permit or has any reason to believe that such Permit will not be renewed in the
ordinary course, except where the failure to obtain any such renewal would not,
individually or in the aggregate, have a Material Adverse Effect.          

t.                    No Material Defaults. Neither the Company nor any
Subsidiary has defaulted on any installment on indebtedness for borrowed money
or on any rental on one or more long-term leases, which defaults, individually
or in the aggregate, would have a Material Adverse Effect. The Company has not
filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of its last Annual Report on Form 10-K, indicating that it (i) has failed
to pay any dividend or sinking fund installment on preferred stock or (ii) has
defaulted on any installment on indebtedness for borrowed money or on any rental
on one or more long-term leases, which defaults, individually or in the
aggregate, would have a Material Adverse Effect.

u.                  Certain Market Activities. Neither the Company, nor any
Subsidiary, nor, to the knowledge of the Company, any of their respective
directors, officers or controlling persons has taken, directly or indirectly,
any action designed, or that has constituted or would cause or result in, under
the Exchange Act or otherwise, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Placement
Shares.

v.                  Broker/Dealer Relationships. Neither the Company nor any
Subsidiary or any related entities (i) is required to register as a “broker” or
“dealer” in accordance with the provisions of the Exchange Act or (ii) directly
or indirectly through one or more intermediaries, controls or is a “person
associated with a member” or “associated person of a member” (within the meaning
set forth in the FINRA Manual).

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

 

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x.                  Taxes. The Company and the Subsidiaries have filed all
federal, state, local and foreign tax returns which have been required to be
filed and paid all taxes shown thereon through the date hereof, to the extent
that such taxes have become due and are not being contested in good faith,
except where the failure to do so would not have a Material Adverse Effect.
Except as otherwise disclosed in or contemplated by the Registration Statement
or the Prospectus, no tax deficiency has been determined adversely to the
Company or any Subsidiary which has had, or would have, individually or in the
aggregate, a Material Adverse Effect. The Company has no knowledge of any
federal, state or other governmental tax deficiency, penalty or assessment which
has been or might be asserted or threatened against it which would have a
Material Adverse Effect.

y.                  Title to Real and Personal Property. The Company and the
Subsidiaries have good and valid title in fee simple to all items of real
property and good and valid title to all personal property described in the
Registration Statement or Prospectus as being owned by them that are material to
the businesses of the Company or such Subsidiary, in each case free and clear of
all liens, encumbrances and claims, except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries or (ii) would not, individually or in the
aggregate, have a Material Adverse Effect. Any real property described in the
Registration Statement or Prospectus as being leased by the Company and the
Subsidiaries is held by them under valid, existing and enforceable leases,
except those that (A) do not materially interfere with the use made or proposed
to be made of such property by the Company or the Subsidiaries or (B) would not,
individually or in the aggregate, have a Material Adverse Effect.

z.                   Intellectual Property. The Company and the Subsidiary own
or possess adequate enforceable rights to use all patents, patent applications,
trademarks (both registered and unregistered), trade names, trademark
registrations, service marks, service mark registrations, Internet domain name
registrations, copyrights, copyright registrations, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
“Intellectual Property”), necessary for the conduct of their respective
businesses as conducted as of the date hereof, except to the extent that the
failure to own or possess adequate rights to use such Intellectual Property
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as disclosed in writing to the Agent, the
Company and the Subsidiaries have not received any written notice of any claim
of infringement or conflict which asserted Intellectual Property rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect. There are no pending, or to
the Company’s knowledge, threatened judicial proceedings or interference
proceedings challenging the Company’s or any Subsidiary’s rights in or to or the
validity of the scope of any of the Company’s or its Subsidiaries’ patents,
patent applications or proprietary information. No other entity or individual
has any right or claim in any of the Company’s or any of its Subsidiary’s
patents, patent applications or any patent to be issued therefrom by virtue of
any contract, license or other agreement entered into between such entity or
individual and the Company or any Subsidiary or by any non-contractual
obligation, other than by written licenses granted by the Company or any
Subsidiary. The Company has not received any written notice of any claim
challenging the rights of the Company or its Subsidiaries in or to any
Intellectual Property owned, licensed or optioned by the Company or any
Subsidiary which claim, if the subject of an unfavorable decision, would result
in a Material Adverse Effect.

 

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aa.               Compliance with Applicable Laws. The Company and the
Subsidiaries: (A) are and at all times have been in material compliance with all
statutes, rules and regulations applicable to the ownership, testing,
development, manufacture, packaging, processing, use, distribution, marketing,
labeling, promotion, sale, offer for sale, storage, import, export or disposal
of any product under development, manufactured or distributed by the Company or
the Subsidiaries (“Applicable Laws”), (b) have not received any Form 483 from
the FDA, notice of adverse finding, warning letter, or other written
correspondence or notice from the FDA, the European Medicines Agency (the
“EMA”), or any other federal, state, local or foreign governmental or regulatory
authority alleging or asserting material noncompliance with any Applicable Laws
or any licenses, certificates, approvals, clearances, authorizations, permits
and supplements or amendments thereto required by any such Applicable Laws
(“Authorizations”), which would, individually or in the aggregate, result in a
Material Adverse Effect; (C) possess all material Authorizations and such
Authorizations are valid and in full force and effect and neither the Company
nor the Subsidiaries is in material violation of any term of any such
Authorizations; (D) have not received written notice of any claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action
from the FDA, the EMA, or any other federal, state, local or foreign
governmental or regulatory authority or third party alleging that any Company
product, operation or activity is in material violation of any Applicable Laws
or Authorizations and has no knowledge that the FDA, the EMA, or any other
federal, state, local or foreign governmental or regulatory authority or third
party is considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding against the Company; (E) have not received written
notice that the FDA, EMA, or any other federal, state, local or foreign
governmental or regulatory authority has taken, is taking or intends to take
action to limit, suspend, modify or revoke any material Authorizations and has
no knowledge that the FDA, EMA, or any other federal, state, local or foreign
governmental or regulatory authority is considering such action; and (F) have
filed, obtained, maintained or submitted all reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as
required by any Applicable Laws or Authorizations except where the failure to
file such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments would not result in a Material Adverse
Effect, and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were materially
complete and correct on the date filed (or were corrected or supplemented by a
subsequent submission).

bb.              Compliance Program. The Company has established and administers
a compliance program applicable to the Company, to assist the Company and the
directors, officers and employees of the Company in complying with applicable
regulatory guidelines (including, without limitation, those administered by the
FDA, the EMA, and any other foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by the FDA
or EMA); except where such noncompliance would not reasonably be expected to
have a Material Adverse Effect.

 

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cc.               Clinical Studies. The animal and other preclinical studies and
clinical trials conducted by the Company or on behalf of the Company were, and,
if still pending are, to the Company’s knowledge, being conducted in all
material respects in compliance with all Applicable Laws and in accordance with
experimental protocols, procedures and controls generally used by qualified
experts in the preclinical study and clinical trials of new drugs and biologics
as applied to comparable products to those being developed by the Company; the
descriptions of the results of such preclinical studies and clinical trials
contained in the Registration Statement and the Prospectus are accurate and
complete in all material respects, and, except as set forth in the Registration
Statement and the Prospectus, the Company has no knowledge of any other clinical
trials or preclinical studies, the results of which reasonably call into
question the clinical trial or preclinical study results described or referred
to in the Registration Statement and the Prospectus when viewed in the context
in which such results are described; and the Company has not received any
written notices or correspondence from the FDA, the EMA, or any other domestic
or foreign governmental agency requiring the termination, suspension or
modification of any preclinical studies or clinical trials conducted by or on
behalf of the Company that are described in the Registration Statement and the
Prospectus or the results of which are referred to in the Registration Statement
and the Prospectus.   For the avoidance of doubt, the Company makes no
representation or warranty that the results of any studies, tests or preclinical
or clinical trials conducted by or on behalf of the Company will be sufficient
to obtain governmental approval from the FDA or any foreign, state or local
governmental body exercising comparable authority.

dd.             Environmental Laws. The Company and the Subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws,
rules, regulations, decisions and orders relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental Laws”); (ii) have
received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement and the Prospectus; and
(iii) have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except, in the case of any of
clauses (i), (ii) or (iii) above, for any such failure to comply or failure to
receive required permits, licenses, other approvals or liability as would not,
individually or in the aggregate, have a Material Adverse Effect.

ee.               Disclosure Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company is not aware of any material weaknesses in its internal control over
financial reporting (other than as set forth in the Registration Statement or
the Prospectus). Since the date of the latest audited financial statements of
the Company included in the Prospectus, there has been no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting (other than as set forth in the Registration
Statement or the Prospectus). The Company has established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) that comply
with the requirements of the Exchange Act. The Company’s certifying officers
have evaluated the effectiveness of the Company’s controls and procedures as of
a date within 90 days prior to the filing date of the Form 10-K for the fiscal
year most recently ended (such date, the “Evaluation Date”). The Company
presented in its Form 10-K for the fiscal year most recently ended the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the most recent
Evaluation Date, and the “disclosure controls and procedures” are effective.

 

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ff.                Sarbanes-Oxley Act. There is and has been no failure on the
part of the Company or, to the knowledge of the Company, any of the Company’s
directors or officers, in their capacities as such, to comply in all material
respects with any applicable provisions of the Sarbanes-Oxley Act and the rules
and regulations promulgated thereunder. 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 or furnished by it to
the Commission during the past 12 months. For purposes of the preceding
sentence, “principal executive officer” and “principal financial officer” shall
have the meanings given to such terms in the Exchange Act Rules 13a-15 and
15d-15.

gg.              Finder’s Fees. Neither the Company nor any Subsidiary has
incurred any liability for any finder’s fees, brokerage commissions or similar
payments in connection with the transactions herein contemplated, except as may
otherwise exist with respect to the Agent pursuant to this Agreement.

hh.              Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any Subsidiary exists or, to the knowledge of the
Company, is threatened which would result in a Material Adverse Effect.

ii.                  Investment Company Act. Neither the Company nor any
Subsidiary is or, after giving effect to the offering and sale of the Placement
Shares, will be required to register as an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”).

jj.                  Operations. The operations of the Company and the
Subsidiaries are and have been conducted at all times in compliance with
applicable financial record keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions to which the Company or the Subsidiaries are
subject, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental
agency having jurisdiction over the Company (collectively, the “Money Laundering
Laws”), except where the failure to be in such compliance would not result in a
Material Adverse Effect; 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.

 

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kk.              Off-Balance Sheet Arrangements. There are no transactions,
arrangements and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any unconsolidated
entity, including, but not limited to, any structured finance, special purpose
or limited purpose entity (each, an “Off Balance Sheet Transaction”) that would
affect materially the Company’s liquidity or the availability of or requirements
for its capital resources, including those Off Balance Sheet Transactions
described in the Commission’s Statement about Management’s Discussion and
Analysis of Financial Conditions and Results of Operations (Release Nos.
33-8056; 34-45321; FR-61), required to be described in the Registration
Statement or the Prospectus which have not been described as required.

ll.                  Underwriter Agreements. The Company is not a party to any
agreement with an agent or underwriter for any other “at the market” or
continuous equity transaction.

mm.          ERISA. To the knowledge of the Company, (i) each material employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) that is maintained,
administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and the Subsidiaries has been
maintained in material compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred which would result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant
to a statutory or administrative exemption; and (iii) for each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302 of ERISA,
no “accumulated funding deficiency” as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of the assets of
each such plan (excluding for these purposes accrued but unpaid contributions)
equals or exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions, other than, in the case of
(i), (ii) and (iii) above, as would not have a Material Adverse Effect.

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

oo.              Margin Rules. Neither the issuance, sale and delivery of the
Placement Shares nor the application of the proceeds thereof by the Company as
described in the Registration Statement and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.

pp.              Insurance. The Company and the Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the Company and
the Subsidiaries reasonably believe are adequate for the conduct of their
business.

 

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qq.              No Improper Practices. (i) Neither the Company nor, to the
Company’s knowledge, the Subsidiaries, nor to the Company’s knowledge, any of
their respective executive officers has, in the past five years, made any
unlawful contributions to any candidate for any political office (or failed
fully to disclose any contribution in violation of law) or made any contribution
or other payment to any official of, or candidate for, any federal, state,
municipal, or foreign office or other person charged with similar public or
quasi-public duty in violation of any law or of the character required to be
disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge, the Subsidiaries or
any affiliate of any of them, on the one hand, and the directors, officers and
stockholders of the Company or, to the Company’s knowledge, the Subsidiaries, on
the other hand, that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described; (iii) no
relationship, direct or indirect, exists between or among the Company or the
Subsidiaries or any affiliate of them, on the one hand, and the directors,
officers, stockholders or directors of the Company or, to the Company’s
knowledge, the Subsidiaries, on the other hand, that is required by the rules of
FINRA to be described in the Registration Statement and the Prospectus that is
not so described; (iv) there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or, to the Company’s
knowledge, the Subsidiaries to or for the benefit of any of their respective
officers or directors or any of the members of the families of any of them; and
(v) the Company has not offered, or caused any placement agent to offer, Common
Stock to any person with the intent to influence unlawfully (A) a customer or
supplier of the Company or the Subsidiaries to alter the customer’s or
supplier’s level or type of business with the Company or the Subsidiaries or (B)
a trade journalist or publication to write or publish favorable information
about the Company or the Subsidiaries or any of their respective products or
services, and, (vi) neither the Company nor the Subsidiaries nor, to the
Company’s knowledge, any employee or agent of the Company or the Subsidiaries
has made any payment of funds of the Company or the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation (including,
without limitation, the Foreign Corrupt Practices Act of 1977), which payment,
receipt or retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus.

rr.                 Status Under the Securities Act. The Company was not and is
not an ineligible issuer as defined in Rule 405 under the Securities Act at the
times specified in Rules 164 and 433 under the Securities Act in connection with
the offering of the Placement Shares.

ss.                No Misstatement or Omission in an Issuer Free Writing
Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of
each Applicable Time (as defined in Section 25 below), did not, does not and
will not, through the completion of the Placement or Placements for which such
Issuer Free Writing Prospectus is issued, include any information that
conflicted, conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any incorporated document
deemed to be a part thereof that has not been superseded or modified. The
foregoing sentence does not apply to statements in or omissions from any Issuer
Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by the Agent specifically for use therein.

 

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tt.                 No Conflicts. Neither the execution of this Agreement, nor
the issuance, offering or sale of the Placement Shares, nor the consummation of
any of the transactions contemplated herein and therein, nor the compliance by
the Company with the terms and provisions hereof and thereof will conflict with,
or will result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any contract or other
agreement to which the Company may be bound or to which any of the property or
assets of the Company is subject, except (i) such conflicts, breaches or
defaults as may have been waived and (ii) such conflicts, breaches and defaults
that would not have a Material Adverse Effect; nor will such action result (x)
in any violation of the provisions of the organizational or governing documents
of the Company, or (y) in any material violation of the provisions of any
statute or any order, rule or regulation applicable to the Company or of any
court or of any federal, state or other regulatory authority or other government
body having jurisdiction over the Company, except where such violation would not
have a Material Adverse Effect.

uu.              OFAC.

                                                                    
(i)                     Neither the Company nor any Subsidiary (collectively,
the “Entity”) nor, to the Company’s knowledge, any director, officer, employee,
agent, affiliate or representative of the Entity, is a government, individual,
or entity (in this paragraph (uu), “Person”) that is, or is owned or controlled
by a Person that is:

(a)                the subject of any sanctions administered or enforced by the
U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the
United Nations Security Council (“UNSC”), the European Union (“EU”), Her
Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively,
“Sanctions”), nor

(b)               located, organized or resident in a country or territory that
is the subject of Sanctions.

                                                                      
(ii)                 The Entity will not, directly or indirectly, knowingly use
the proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other Person:

(a)                to fund or facilitate any activities or business of or with
any Person or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or

(b)               in any other manner that will result in a violation of
Sanctions by any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or otherwise).

                                                                     
(iii)                The Entity represents and covenants that, except as
detailed in the Registration Statement and the Prospectus, for the past 5 years,
it has not knowingly engaged in and is not now knowingly engaged in any dealing
or transactions with any Person, or in any country or territory, that at the
time of the dealing or transaction is or was the subject of Sanctions.

vv.              Stock Transfer Taxes. On each Settlement Date, all material
stock transfer or other taxes (other than income taxes) which are required to be
paid in connection with the sale and transfer of the Placement Shares to be sold
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with
by the Company in all material respects.

 

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                        Any certificate signed by an officer of the Company and
delivered to the Agent or to counsel for the Agent pursuant to or in connection
with this Agreement shall be deemed to be a representation and warranty by the
Company, as applicable, to the Agent as to the matters set forth therein.

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

a.                   Registration Statement Amendments. After the date of this
Agreement and during any period in which a prospectus relating to any Placement
Shares is required to be delivered by the Agent under the Securities Act
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act) (the “Prospectus Delivery Period”) (i) the
Company will notify the Agent promptly of the time when any subsequent amendment
to the Registration Statement, other than documents incorporated by reference or
amendments not related to any Placement, has been filed with the Commission
and/or has become effective or any subsequent supplement to the Prospectus has
been filed and of any request by the Commission for any amendment or supplement
to the Registration Statement or Prospectus related to the Placement or for
additional information related to the Placement, (ii) the Company will prepare
and file with the Commission, promptly upon the Agent’s request, any amendments
or supplements to the Registration Statement or Prospectus that, upon the advice
of the Company’s legal counsel, may be necessary or advisable in connection with
the distribution of the Placement Shares by the Agent (provided, however, that
the failure of the Agent to make such request shall not relieve the Company of
any obligation or liability hereunder, or affect the Agent’s right to rely on
the representations and warranties made by the Company in this Agreement and
provided, further, that the only remedy the Agent shall have with respect to the
failure to make such filing shall be to cease making sales under this Agreement
until such amendment or supplement is filed); (iii) the Company will not file
any amendment or supplement to the Registration Statement or Prospectus relating
to the Placement Shares or a security convertible into the Placement Shares
(other than an Incorporated Document) unless a copy thereof has been submitted
to the Agent within a reasonable period of time before the filing and the Agent
has not reasonably objected thereto (provided, however, that (A) the failure of
the Agent to make such objection shall not relieve the Company of any obligation
or liability hereunder, or affect the Agent’s right to rely on the
representations and warranties made by the Company in this Agreement and (B) the
Company has no obligation to provide the Agent any advance copy of such filing
or to provide the Agent an opportunity to object to such filing if the filing
does not name the Agent or does not relate to the transaction herein provided;
and provided, further, that the only remedy the Agent shall have with respect to
the failure by the Company to obtain such consent shall be to cease making sales
under this Agreement) and the Company will furnish to the Agent at the time of
filing thereof a copy of any document that upon filing is deemed to be
incorporated by reference into the Registration Statement or Prospectus, except
for those documents available via EDGAR; and (iv) the Company will cause each
amendment or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the Securities
Act or, in the case of any document to be incorporated therein by reference, to
be filed with the Commission as required pursuant to the Exchange Act, within
the time period prescribed (the determination to file or not file any amendment
or supplement with the Commission under this Section 7(a), based on the
Company’s reasonable opinion or reasonable objections, shall be made exclusively
by the Company). 

 

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

c.                   Delivery of Prospectus; Subsequent Changes. During the
Prospectus Delivery Period, the Company will comply with all requirements
imposed upon it by the Securities Act, as from time to time in force, and to
file on or before their respective due dates all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision
of or under the Exchange Act. If the Company has omitted any information from
the Registration Statement pursuant to Rule 430A under the Securities Act, it
will use its commercially reasonable efforts to comply with the provisions of
and make all requisite filings with the Commission pursuant to said Rule 430A
and to notify the Agent promptly of all such filings. If during the Prospectus
Delivery Period any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if during such
Prospectus Delivery Period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Securities Act, the
Company will promptly notify the Agent to suspend the offering of Placement
Shares during such period and the Company will promptly amend or supplement the
Registration Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance; provided, however,
that the Company may delay the filing of any amendment or supplement, if in the
judgment of the Company, it is in the best interest of the Company.

d.                  Listing of Placement Shares. During the Prospectus Delivery
Period, the Company will use its commercially reasonable efforts to cause the
Placement Shares to be listed on the Exchange.

 

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e.                   Delivery of Registration Statement and Prospectus.  The
Company will furnish to the Agent and its counsel (at the reasonable expense of
the Company) copies of the Registration Statement, the Prospectus (including all
documents incorporated by reference therein) and all amendments and supplements
to the Registration Statement or Prospectus that are filed with the Commission
during the Prospectus Delivery Period (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in such quantities
as the Agent may from time to time reasonably request and, at the Agent’s
request, will also furnish copies of the Prospectus to each exchange or market
on which sales of the Placement Shares may be made; provided, however, that the
Company shall not be required to furnish any document (other than the
Prospectus) to the Agent to the extent such document is available on EDGAR.

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

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

h.                  Notice of Other Sales. Without the prior written consent of
the Agent, the Company will not, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common
Stock (other than the Placement Shares offered pursuant to this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock during the period beginning on the
date on which any Placement Notice is delivered to the Agent hereunder and
ending on the third (3rd) Trading Day immediately following the final Settlement
Date with respect to Placement Shares sold pursuant to such Placement Notice
(or, if the Placement Notice has been terminated or suspended prior to the sale
of all Placement Shares covered by a Placement Notice, ending on the date of
such suspension or termination); and will not directly or indirectly engage in
any other “at the market” or continuous equity transaction offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common
Stock (other than the Placement Shares offered pursuant to this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock prior to the termination of this
Agreement; provided, however, that such restrictions will not apply in
connection with the Company’s issuance or sale of (i) Common Stock, options to
purchase Common Stock or Common Stock issuable upon the exercise of options,
pursuant to any stock option, or benefits plan, stock ownership plan or dividend
reinvestment plan (but not Common Stock subject to a waiver to exceed plan
limits in its dividend reinvestment plan) of the Company whether now in effect
or hereafter implemented, including the ITUS Corporation 2010 Share Incentive
Plan; (ii) Common Stock issuable upon conversion of securities or the exercise
of warrants, options or other rights in effect or outstanding, and disclosed in
filings by the Company available on EDGAR or otherwise in writing to the Agent,
(iii) Common Stock, or securities convertible into or exercisable for Common
Stock, offered and sold in a privately negotiated transaction to vendors,
customers, strategic partners or potential strategic partners or other investors
conducted in a manner so as not to be integrated with the offering of Common
Stock hereby and (iv) Common Stock in connection with any acquisition, strategic
investment or other similar transaction (including any joint venture, strategic
alliance or partnership).

 

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i.                    Change of Circumstances. The Company will, at any time
during the pendency of a Placement Notice advise the Agent promptly after it
shall have received notice or obtained knowledge thereof, of any information or
fact that would alter or affect in any material respect any opinion,
certificate, letter or other document required to be provided to the Agent
pursuant to this Agreement.

j.                    Due Diligence Cooperation. During the term of this
Agreement, the Company will cooperate with any reasonable due diligence review
conducted by the Agent or its representatives in connection with the
transactions contemplated hereby, including, without limitation, providing
information and making available documents and senior corporate officers, during
regular business hours and at the Company’s principal offices, as the Agent may
reasonably request.

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

l.                    Representation Dates; Certificate. Each time during the
term of this Agreement that the Company:

                                                                    
(i)                     amends or supplements (other than a prospectus
supplement relating solely to an offering of securities other than the Placement
Shares) the Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker, or supplement but not by
means of incorporation of documents by reference into the Registration Statement
or the Prospectus relating to the Placement Shares;

                                                                   
(ii)                    files an annual report on Form 10-K under the Exchange
Act (including any Form 10-K/A containing amended audited financial information
or a material amendment to the previously filed Form 10-K);

                                                                  
(iii)                   files its quarterly reports on Form 10-Q under the
Exchange Act; or

                                                                  
(iv)                   files a current report on Form 8-K containing amended
financial information (other than information “furnished” pursuant to Items 2.02
or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K
relating to the reclassification of certain properties as discontinued
operations in accordance with Statement of Financial Accounting Standards No.
144) under the Exchange Act;

(Each date of filing of one or more of the documents referred to in clauses (i)
through (iv) shall be a “Representation Date.”)

 

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the Company shall furnish the Agent (but in the case of clause (iv) above only
if the Agent reasonably determines that the information contained in such Form
8-K is material) with a certificate, in the form attached hereto as Exhibit
7(l). The requirement to provide a certificate under this Section 7(l) shall be
waived for any Representation Date occurring at a time at which no Placement
Notice is pending, which waiver shall continue until the earlier to occur of the
date the Company delivers a Placement Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next occurring
Representation Date on which the Company files its annual report on Form 10-K.
Notwithstanding the foregoing, (i) upon the delivery of the first Placement
Notice hereunder and (ii) if the Company subsequently decides to sell Placement
Shares following a Representation Date when the Company relied on such waiver
and did not provide the Agent with a certificate under this Section 7(l), then
before the Agent sells any Placement Shares, the Company shall provide the Agent
with a certificate, in the form attached hereto as Exhibit 7(l), dated the date
of the Placement Notice.

m.                Legal Opinion. On or prior to the date of the first Placement
Notice given hereunder the Company shall cause to be furnished to the Agent a
written opinion and a negative assurance letter of Ellenoff Grossman & Schole
LLP (“Company Counsel”), or other counsel reasonably satisfactory to the Agent,
each in form and substance reasonably satisfactory to the Agent. Thereafter,
within five (5) Trading Days of each Representation Date with respect to which
the Company is obligated to deliver a certificate in the form attached hereto as
Exhibit 7(l) for which no waiver is applicable, the Company shall cause to be
furnished to the Agent a negative assurance letter of Company Counsel in form
and substance reasonably satisfactory to the Agent; provided however, the
Company shall be required to furnish to the Agent no more than one opinion
hereunder per calendar quarter; provided further that, in lieu of such negative
assurance for subsequent periodic filings under the Exchange Act, counsel may
furnish the Agent with a letter (a “Reliance Letter”) to the effect that the
Agent may rely on the negative assurance letter previously delivered under this
Section 7(m) to the same extent as if it were dated the date of such letter
(except that statements in such prior letter shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented as of the
date of the Reliance Letter).

n.                  Comfort Letter. On or prior to the date of the first
Placement Notice given hereunder and within five (5) Trading Days after each
subsequent Representation Date, other than pursuant to Section 7(l)(iii), the
Company shall cause its independent accountants to furnish the Agent letters
(the “Comfort Letters”), dated the date the Comfort Letter is delivered, which
shall meet the requirements set forth in this Section 7(n). The Comfort Letter
from the Company’s independent accountants shall be in a form and substance
reasonably satisfactory to the Agent, (i) confirming that they are an
independent public accounting firm within the meaning of the Securities Act and
the PCAOB, (ii) stating, as of such date, the conclusions and findings of such
firm with respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to underwriters in connection with
registered public offerings (the first such letter, the “Initial Comfort
Letter”) and (iii) updating the Initial Comfort Letter with any information that
would have been included in the Initial Comfort Letter had it been given on such
date and modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.

 

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o.                  Market Activities. The Company will not, directly or
indirectly, (i) take any action designed to cause or result in, or that
constitutes or would constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of Common Stock
or (ii) sell, bid for, or purchase Common Stock in violation of Regulation M, or
pay anyone any compensation for soliciting purchases of the Placement Shares
other than the Agent.

p.                  Investment Company Act. The Company will conduct its affairs
in such a manner so as to reasonably ensure that neither it nor the Subsidiaries
will be or become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the Investment Company Act.

q.                  No Offer to Sell. Other than an Issuer Free Writing
Prospectus approved in advance by the Company and the Agent in its capacity as
agent hereunder pursuant to Section 23, neither of the Agent nor the Company
(including its agents and representatives, other than the Agent in its capacity
as such) will make, use, prepare, authorize, approve or refer to any written
communication (as defined in Rule 405), required to be filed with the
Commission, that constitutes an offer to sell or solicitation of an offer to buy
Placement Shares hereunder.

r.                    Sarbanes-Oxley Act. The Company will maintain and keep
accurate books and records reflecting its assets and maintain internal
accounting controls in a manner designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP and including
those policies and procedures that (i) pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company, (ii) provide reasonable assurance
that transactions are recorded as necessary to permit the preparation of the
Company’s consolidated financial statements in accordance with GAAP, (iii) that
receipts and expenditures of the Company are being made only in accordance with
management’s and the Company’s directors’ authorization, and (iv) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a
material effect on its financial statements. The Company will maintain
disclosure controls and procedures that comply with the requirements of the
Exchange Act.

                     8.                     Representations and Covenants of the
Agent.

The Agent represents and warrants that it is duly registered as a broker-dealer
under FINRA, the Exchange Act and the applicable statutes and regulations of
each state in which the Placement Shares will be offered and sold, except such
states in which the Agent is exempt from registration or such registration is
not otherwise required. The Agent shall continue, for the term of this
Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange
Act and the applicable statutes and regulations of each state in which the
Placement Shares will be offered and sold, except such states in which it is
exempt from registration or such registration is not otherwise required, during
the term of this Agreement.  The Agent shall comply with all applicable laws and
regulations in connection with the transactions contemplated by this Agreement,
including the issuance and sale through the Agent of the Placement Shares.

 

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                     9.                     Payment of Expenses. The Company
will pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, filing, including any fees required by
the Commission, and printing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment and
supplement thereto and each Free Writing Prospectus, in such number as the Agent
shall deem reasonably necessary, (ii) the printing and delivery to the Agent of
this Agreement and such other documents as may be required in connection with
the offering, purchase, sale, issuance or delivery of the Placement Shares,
(iii) the preparation, issuance and delivery of the certificates, if any, for
the Placement Shares to the Agent, including any stock or other transfer taxes
and any capital duties, stamp duties or other duties or taxes payable upon the
sale, issuance or delivery of the Placement Shares to the Agent, (iv) the fees
and disbursements of the counsel, accountants and other advisors to the Company,
(v) the reasonable and documented out-of-pocket fees and disbursements of
counsel to the Agent up to $30,000; (vi) the fees and expenses of the transfer
agent and registrar for the Common Stock, (vii) the filing fees incident to any
review by FINRA of the terms of the sale of the Placement Shares, and (viii) the
fees and expenses incurred in connection with the listing of the Placement
Shares on the Exchange.

                   10.                   Conditions to the Agent’s Obligations.
The obligations of the Agent hereunder with respect to a Placement will be
subject to the continuing accuracy and completeness of the representations and
warranties made by the Company herein (other than those representations and
warranties made as of a specified date or time), to the due performance in all
material respects by the Company of its obligations hereunder, to the completion
by the Agent of a due diligence review satisfactory to it in its reasonable
judgment, and to the continuing reasonable satisfaction (or waiver by the Agent
in its sole discretion) of the following additional conditions:

a.                   Registration Statement Effective. The Registration
Statement shall remain effective and shall be available for the sale of all
Placement Shares contemplated to be issued by any Placement Notice.

b.                  No Material Notices. None of the following events shall have
occurred and be continuing: (i) receipt by the Company of any request for
additional information from the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post‑effective amendments or
supplements to the Registration Statement or the Prospectus; (ii) the issuance
by the Commission or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or receipt
by the Company of notification of the initiation of any proceedings for that
purpose; (iii) receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Placement Shares for sale in any jurisdiction or receipt by the Company of
notification of the initiation of, or a threat to initiate, any proceeding for
such purpose; or (iv) the occurrence of any event that makes any material
statement made in the Registration Statement or the Prospectus or any material
Incorporated Document untrue in any material respect or that requires the making
of any changes in the Registration Statement, the Prospectus or any material
Incorporated Document so that, in the case of the Registration Statement, it
will not contain any materially untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and, that in the case of the Prospectus or any
material Incorporated Document, it will not contain any materially untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

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

d.                  Material Changes. Except as contemplated in the Prospectus,
or disclosed in the Company’s reports filed with the Commission, there shall not
have been any Material Adverse Effect, or any development that would cause a
Material Adverse Effect,.

e.                   Legal Opinion. The Agent shall have received the opinion
and negative assurance letter of Company Counsel required to be delivered
pursuant to Section 7(m) on or before the date on which such delivery of such
opinion and negative assurance letter are required pursuant to Section 7(m).

f.                   Comfort Letter. The Agent shall have received the Comfort
Letter required to be delivered pursuant Section 7(n) on or before the date on
which such delivery of such letter is required pursuant to Section 7(n).

g.                  Representation Certificate. The Agent shall have received
the certificate required to be delivered pursuant to Section 7(l) on or before
the date on which delivery of such certificate is required pursuant to Section
7(l).

h.                  Secretary’s Certificate. On or prior to the first
Representation Date, the Agent shall have received a certificate, signed on
behalf of the Company by its corporate Secretary, in form and substance
satisfactory to the Agent and its counsel.

i.                    No Suspension. Trading in the Common Stock shall not have
been suspended on the Exchange and the Common Stock shall not have been delisted
from the Exchange.

j.                    Other Materials. On each date on which the Company is
required to deliver a certificate pursuant to Section 7(l), the Company shall
have furnished to the Agent such appropriate further information, certificates
and documents as the Agent may reasonably request and which are usually and
customarily furnished by an issuer of securities in connection with a securities
offering of the type contemplated hereby. All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof. 

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

l.                    Approval for Listing. The Placement Shares shall either
have been approved for listing on the Exchange, subject only to notice of
issuance, or the Company shall have filed an application for listing of the
Placement Shares on the Exchange at, or prior to, the issuance of any Placement
Notice.

 

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m.                No Termination Event. There shall not have occurred any event
that would permit the Agent to terminate this Agreement pursuant to Section
13(a).

                   11.                   Indemnification and Contribution.

(a)        Company Indemnification. The Company agrees to indemnify and hold
harmless the Agent, its partners, members, directors, officers, employees and
agents and each person, if any, who controls the Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:

(i)           against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, arising out of or based upon 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 of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

(ii)         against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 11(d) below) any such
settlement is effected with the written consent of the Company, which consent
shall not unreasonably be delayed or withheld; and

(iii)       against any and all expense whatsoever, as incurred (including the
reasonable and documented out-of-pocket fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above,

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made solely in
reliance upon and in conformity with written information furnished to the
Company by the Agent expressly for use in the Registration Statement (or any
amendment thereto), or in any related Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto).

(b)        Indemnification by the Agent. The Agent agrees to indemnify and hold
harmless the Company and its directors and officers, and each person, if any,
who (i) controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act or (ii) is controlled by or is under
common control with the Company against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 11(a), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or in any related Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information relating to the Agent and furnished to the Company
in writing by the Agent expressly for use therein.

 

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(c)        Procedure. Any party that proposes to assert the right to be
indemnified under this Section 11 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 11, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 11 and (ii) any
liability that it may have to any indemnified party under the foregoing
provisions of this Section 11 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict of interest exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable and documented out-of-pocket fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable and documented out-of-pocket
fees, disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such reasonable and documented out-of-pocket fees, disbursements
and other charges will be reimbursed by the indemnifying party promptly after
the indemnifying party receives a written invoice relating to fees,
disbursements and other charges in reasonable detail. An indemnifying party will
not, in any event, be liable for any settlement of any action or claim effected
without its written consent. No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 11 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent (1) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (2) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.

 

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(d)       Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 11 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Agent, the Company
and the Agent will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Agent, such as persons who
control the Company within the meaning of the Securities Act or the Exchange
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and the Agent may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Agent on the other hand. The relative benefits received by the Company on the
one hand and the Agent on the other hand shall be deemed to be in the same
proportion as the total Net Proceeds from the sale of the Placement Shares
(before deducting expenses) received by the Company bear to the total
compensation received by the Agent (before deducting expenses) from the sale of
Placement Shares on behalf of the Company. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company, on the one hand, and the Agent, on the
other hand, with respect to the statements or omission that resulted in such
loss, claim, liability, expense or damage, or action in respect thereof, as well
as any other relevant equitable considerations with respect to such offering. 
Such relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Agent, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Agent agree that it would not be just and
equitable if contributions pursuant to this Section 11(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above in this
Section 11(d) shall be deemed to include, for the purpose of this Section 11(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 11(c) hereof. Notwithstanding the foregoing
provisions of this Section 11(d), the Agent shall not be required to contribute
any amount in excess of the commissions received by it under this Agreement and
no person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 11(d), any person who controls a party to this Agreement within the
meaning of the Securities Act or the Exchange Act, and any officers, directors,
partners, employees or agents of the Agent, will have the same rights to
contribution as that party, and each officer who signed the Registration
Statement and director of the Company will have the same rights to contribution
as the Company, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for contribution may
be made under this Section 11(d), will notify any such party or parties from
whom contribution may be sought, but the omission to so notify will not relieve
that party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 11(d) except to the extent
that the failure to so notify such other party materially prejudiced the
substantive rights or defenses of the party from whom contribution is sought.
Except for a settlement entered into pursuant to the last sentence of Section
11(c) hereof, no party will be liable for contribution with respect to any
action or claim settled without its written consent if such consent is required
pursuant to Section 11(c) hereof.

 

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

                   13.                   Termination.

a.                   The Agent may terminate this Agreement, by notice to the
Company, as hereinafter specified at any time (1) if there has been, since the
time of execution of this Agreement or since the date as of which information is
given in the Prospectus, any Material Adverse Effect, or any development that
would have a Material Adverse Effect that, in the sole judgment of the Agent, is
material and adverse and makes it impractical or inadvisable to market the
Placement Shares or to enforce contracts for the sale of the Placement Shares,
(2) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Agent, impracticable or inadvisable
to market the Placement Shares or to enforce contracts for the sale of the
Placement Shares, (3) if trading in the Common Stock has been suspended or
limited by the Commission or the Exchange, or if trading generally on the
Exchange has been suspended or limited, or minimum prices for trading have been
fixed on the Exchange, (4) if any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market shall have occurred
and be continuing, (5) if a major disruption of securities settlements or
clearance services in the United States shall have occurred and be continuing,
or (6) if a banking moratorium has been declared by either U.S. Federal or New
York authorities. Any such termination shall be without liability of any party
to any other party except that the provisions of Section 9 (Payment of
Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof
shall remain in full force and effect notwithstanding such termination. If the
Agent elects to terminate this Agreement as provided in this Section 13(a), the
Agent shall provide the required notice as specified in Section 14 (Notices).

 

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b.                  The Company shall have the right, by giving five (5) days’
notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section 12 (Representations and Agreements to Survive Delivery),
Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19
(Consent to Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.

c.                   The Agent shall have the right, by giving five (5) days’
notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section 12 (Representations and Agreements to Survive Delivery),
Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19
(Consent to Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.

d.                  Unless earlier terminated pursuant to this Section 13, this
Agreement shall automatically terminate upon the issuance and sale of all of the
Placement Shares through the Agent on the terms and subject to the conditions
set forth herein except that the provisions of Section 9 (Payment of Expenses),
Section 11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of
Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full
force and effect notwithstanding such termination.

e.                   This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by
mutual agreement of the parties; provided, however, that any such termination by
mutual agreement shall in all cases be deemed to provide that Section 9 (Payment
of Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) shall
remain in full force and effect. Upon termination of this Agreement, the Company
shall not have any liability to the Agent for any discount, commission or other
compensation with respect to any Placement Shares not otherwise sold by the
Agent under this Agreement.

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

 

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                   14.                   Notices. All notices or other
communications required or permitted to be given by any party to any other party
pursuant to the terms of this Agreement shall be in writing, unless otherwise
specified, and if sent to the Agent, shall be delivered to:

 

B. Riley FBR, Inc. 

299 Park Avenue, 7th Floor

New York, NY, 10171

Attention:     General Counsel
Telephone:   (212) 457-9947

Email:           atmdesk@brileyfbr.com

with a copy to:

Duane Morris LLP

One Riverfront Plaza

1037 Raymond Boulevard, Suite 1800

Newark, NJ 07102

Attention:        James T. Seery

Telephone:       (973) 424-2088

Email:              jtseery@duanemorris.com

and if to the Company, shall be delivered to:

 

ITUS Corporation

3150 Almaden Expressway, Suite 250

San Jose, CA 95118
Attention:     Dr. Amit Kumar
Telephone:    (408) 708-9808

Email: ak@ITUScorp.com

 

with a copy to:

 

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, New York 10105-0302

Attention: David Selengut
Telephone: (212) 370-1300

Email: selengut@egsllp.com

 

Each party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
Each such notice or other communication shall be deemed given (i) when delivered
personally, by email, or by verifiable facsimile transmission on or before 4:30
p.m., New York City time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to a nationally-recognized overnight courier and (iii) on the
Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid). For purposes of
this Agreement, “Business Day” shall mean any day on which the Exchange and
commercial banks in the City of New York are open for business.

 

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                       15.                   Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the Company and the
Agent and their respective successors and the affiliates, controlling persons,
officers and directors referred to in Section 11 hereof. References to any of
the parties contained in this Agreement shall be deemed to include the
successors and permitted assigns of such party. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. Neither the Company nor the
Agent may assign its rights or obligations under this Agreement without the
prior written consent of the other party.

                       16.                   Adjustments for Stock Splits. The
parties acknowledge and agree that all share‑related numbers contained in this
Agreement shall be adjusted to take into account any share consolidation, stock
split, stock dividend, corporate domestication or similar event effected with
respect to the Placement Shares.

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

                   18.                   GOVERNING LAW AND TIME; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY AND THE
AGENT EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

                   19.                   CONSENT TO JURISDICTION. EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION
CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT
UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL
BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW.

 

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                   20.                   Use of Information. The Agent may not
use any information gained in connection with this Agreement and the
transactions contemplated by this Agreement, including due diligence, to advise
any party with respect to transactions not expressly approved by the Company.

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

                   22.                   Effect of Headings.  The section,
Schedule and Exhibit headings herein are for convenience only and shall not
affect the construction hereof.

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

a.                   the Agent is acting solely as agent in connection with the
public offering of the Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such transactions, and
no fiduciary or advisory relationship between the Company or any of its
respective affiliates, stockholders (or other equity holders), creditors or
employees or any other party, on the one hand, and the Agent, on the other hand,
has been or will be created in respect of any of the transactions contemplated
by this Agreement, irrespective of whether or not the Agent has advised or is
advising the Company on other matters, and the Agent has no obligation to the
Company with respect to the transactions contemplated by this Agreement except
the obligations expressly set forth in this Agreement;

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

c.                   the Agent has not provided any legal, accounting,
regulatory or tax advice with respect to the transactions contemplated by this
Agreement and it has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate;

d.                  it is aware that the Agent and its affiliates are engaged in
a broad range of transactions which may involve interests that differ from those
of the Company and the Agent has no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or agency
relationship or otherwise; and

 

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e.                   it waives, to the fullest extent permitted by law, any
claims it may have against the Agent for breach of fiduciary duty or alleged
breach of fiduciary duty in connection with the sale of Placement Shares under
this Agreement and agrees that the Agent shall not have any liability (whether
direct or indirect, in contract, tort or otherwise) to it in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on its
behalf or in right of it or the Company, employees or creditors of Company,
other than in respect of the Agent’s obligations under this Agreement and to
keep information provided by the Company to the Agent and its counsel
confidential to the extent not otherwise publicly-available.

                   24.                   Definitions.  As used in this
Agreement, the following terms have the respective meanings set forth below:

“Applicable Time” means (i) each Representation Date and (ii) the time of each
sale of any Placement Shares pursuant to this Agreement.

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Placement Shares that (1) is required to be
filed with the Commission by the Company, (2) is a “road show” that is a
“written communication” within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission, or (3) is exempt from filing pursuant
to Rule 433(d)(5)(i) because it contains a description of the Placement Shares
or of the offering that does not reflect the final terms, in each case in the
form filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g)
under the Securities Act.

 “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and
“Rule 433” refer to such rules under the Securities Act.

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.

All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free
Writing Prospectuses that, pursuant to Rule 433, are not required to be filed
with the Commission) shall be deemed to include the copy thereof filed with the
Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any
supplements, “wrappers” or similar materials prepared in connection with any
offering, sale or private placement of any Placement Shares by the Agent outside
of the United States.

[Remainder of the page intentionally left blank]

 

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

 

 

Very truly yours,

 

ITUS CORPORATION

 

 

 

By:

/s/ Amit Kumar

 

Name: Dr. Amit Kumar

 

Title:  Chairman, President and Chief

 

Executive Officer

 

 

                         ACCEPTED as of the date first-above written:

 

B. RILEY FBR, INC.

 

 

 

By:

/s/ Patrice McNicoll

 

Name:  Patrice McNicoll

 

Title:  Co-Head of Investment Banking

 

 

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SCHEDULE 1

 

 

 

FORM OF PLACEMENT NOTICE

 

 

From:

ITUS Corporation

To:

B. Riley FBR, Inc.

Attention:

[•]

Subject:

At Market Issuance--Placement Notice

 

 

Gentlemen:

Pursuant to the terms and subject to the conditions contained in the At Market
Issuance Sales Agreement between ITUS Corporation, a Delaware corporation (the
“Company”), and B. Riley FBR, Inc. (the “Agent”), dated November 13, 2017, the
Company hereby requests that the Agent sell up to [____] of the Company’s Common
Stock, par value $0.01 per share, at a minimum market price of $     per share,
during the time period beginning [month, day, time] and ending [month, day,
time].

 

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SCHEDULE 2

________________________

Compensation

________________________

 

The Company shall pay to the Agent in cash, upon each sale of Placement Shares
pursuant to this Agreement, an amount equal to 5.0% of the gross proceeds from
each sale of Placement Shares.

 

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SCHEDULE 3

 

________________________

 

Notice Parties

________________________

 

The Company

 

Dr. Amit Kumar          ak@ITUScorp.com

Michael J. Catelani      mcatelani@ITUScorp.com

 

The Agent

 

Matthew Feinberg                   mfeinberg@brileyfbr.com 

           

Ryan Loforte                           rloforte@brileyfbr.com

 

Patrice McNicoll                     pmcnicoll@brileyfbr.com  

 

Keith Pompliano                     kpompliano@brileyfbr.com

 

with a copy to                         atmdesk@brileyfbr.com

 

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SCHEDULE 6(g)

 

 

________________________

 

Subsidiaries

________________________

 

Name of Company and Name Doing Business

 

Jurisdiction of Organization

Anixa Diagnostics Corporation

 

State of Delaware

CopyTele International Ltd.

 

British Virgin Islands

CopyTele Marketing Inc.

 

British Virgin Islands

ITUS Patent Acquisition Corporation

 

State of Delaware

J-Channel Industries Corporation

 

State of Delaware

Loyalty Conversion Systems Corporation

 

State of Delaware

Secure Web Conference Corporation

 

State of Delaware

Encrypted Cellular Communications Corporation

State of Delaware

Auction Acceleration Corp.

State of Delaware

Cyber Instruments Technologies Corporation.

State of Delaware

Meetrix IP, LLC

State of Texas

Certainty Therapeutics, Inc.

 

State of Delaware

 

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EXHIBIT 7(l)
Form of Representation Date Certificate

___________, 20___

This Representation Date Certificate (this “Certificate”) is executed and
delivered in connection with Section 7(l) of the At Market Issuance Sales
Agreement (the “Agreement”), dated November 13, 2017, and entered into between
ITUS Corporation (the “Company”) and B. Riley FBR, Inc. (the “Agent”). All
capitalized terms used but not defined herein shall have the meanings given to
such terms in the Agreement.

The undersigned, a duly appointed and authorized officer of the Company, having
made reasonable inquiry to establish the accuracy of the statements below and
having been authorized by the Company to execute this certificate on behalf of
the Company hereby certifies as follows:

1.                     As of the date of this Certificate (i) the Registration
Statement does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading and (ii) neither the Registration
Statement nor the Prospectus contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (iii) no event has occurred as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading for this paragraph 1 to be true.

2.                     Each of the representations and warranties of the Company
contained in the Agreement were, when originally made, and are, as of the date
of this Certificate, true and correct in all material respects.

3.                     Except as waived by the Agent in writing, each of the
covenants required to be performed by the Company in the Agreement on or prior
to the date of the Agreement, this Representation Date, and each such other date
prior to the date hereof as set forth in the Agreement, has been duly, timely
and fully performed in all material respects and each condition required to be
complied with by the Company on or prior to the date of the Agreement, this
Representation Date, and each such other date prior to the date hereof as set
forth in the Agreement has been duly, timely and fully complied with in all
material respects.

4.                     Subsequent to the date of the most recent financial
statements in the Prospectus, and except as described in the Prospectus,
including Incorporated Documents, there has been no Material Adverse Effect.

5.                     No stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued, and, to our
knowledge, no proceedings for that purpose have been instituted or are pending
or threatened by any securities or other governmental authority (including,
without limitation, the Commission).

6.                     No order suspending the effectiveness of the Registration
Statement or the qualification or registration of the Placement Shares under the
securities or Blue Sky laws of any

jurisdiction are in effect and no proceeding for such purpose is pending before,
or threatened, to the Company’s knowledge or in writing by, any securities or
other governmental authority (including, without limitation, the Commission).

 

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The undersigned has executed this Representation Date Certificate as of the date
first written above.

 

ITUS Corporation

By:

 

Name:

 

Title:

 

 

 

 

42