EXHIBIT 10.1

 

Arcturus Therapeutics Holdings Inc.

Common Stock

($0.001 par value)

 

SALES AGREEMENT

 

March 27, 2020

 

Stifel, Nicolaus & Company, Incorporated

787 Seventh Avenue
New York, New York 10019

 

Ladies and Gentlemen:

 

Arcturus Therapeutics Holdings Inc., a Delaware corporation (the “Company”),
confirms its agreement (this “Agreement”) with Stifel, Nicolaus & Company,
Incorporated (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 up to
$40,000,000 of shares of common stock, $0.001 par value per share, of the
Company (the “Shares”), subject to the limitations set forth in Section 5(c)
(the “Placement Shares”). Notwithstanding anything to the contrary contained
herein, the parties hereto agree that compliance with the limitation set forth
in this Section 1 on the aggregate gross sales price of Placement Shares that
may be issued and sold under this Agreement from time to time 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) filed by the Company and declared effective by the Securities and
Exchange Commission (the “Commission”) on July 29, 2019, although nothing in
this Agreement shall be construed as requiring the Company to issue any
Placement Shares.

 

The Company has prepared and filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the “Securities Act”), with the Commission a registration
statement on Form S-3 (File No. 333-232281), 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 (collectively, the “Exchange Act”). The Company has prepared a
prospectus supplement to the base prospectus included as part of the such
registration statement at the time the registration statement became effective,
which prospectus supplement specifically relates to the Placement Shares to be
issued from time to time pursuant to this Agreement (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 at
the time it became effective, as supplemented by the Prospectus Supplement.
Except where the context otherwise requires, such registration statement,
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 or Rule 462(b) under the Securities Act, is herein called the
“Registration Statement.” The base prospectus, including all documents
incorporated therein by reference, included in the Registration Statement, as it
may be supplemented by the Prospectus Supplement, in the form in which such
prospectus and/or Prospectus Supplement have most recently been filed by the
Company with the Commission pursuant to Rule 424(b) under the Securities Act,
together with any “issuer free writing prospectus” (as used herein, as defined
in Rule 433 under the Securities Act (“Rule 433”)), relating to the Placement
Shares that (i) is required to be filed with the Commission by the Company or
(ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case, in the
form filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g), is
herein called the “Prospectus.”

 

 

Any reference herein to the Registration Statement, the Prospectus Supplement,
the Prospectus or any issuer free writing prospectus shall be deemed to refer to
and include the documents, if any, that are or are deemed to be incorporated by
reference therein (the “Incorporated Documents”), including, unless the context
otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents. Any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement, the Prospectus
Supplement, the Prospectus or any issuer free writing prospectus shall be deemed
to refer to and include the filing of any document under the Exchange Act on or
after the most-recent effective date of the Registration Statement, or the
respective dates of the Prospectus Supplement, Prospectus or such issuer free
writing prospectus, as the case may be, and incorporated therein by reference.
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or 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 wishes to issue and
sell any Placement Shares through the Agent hereunder (each, a “Placement”), it
will notify the Agent by email notice (or other method mutually agreed to in
writing by the parties) (each such notice, a “Placement Notice”) containing the
parameters in accordance with which it desires such Placement Shares to be sold,
which at a minimum shall include the maximum number or amount of Placement
Shares to be sold, the time period during which sales are requested to be made,
any limitation on the number or amount of Placement Shares that may be sold in
any one Trading Day (as defined in Section 3) and any minimum price below which
sales may not be made, a form of which containing such minimum sales parameters
is attached hereto as Schedule 1. The Placement Notice must originate from one
of the individuals authorized to act on behalf of the Company and set forth on
Schedule 2 (with a copy to each of the other individuals from the Company listed
on such Schedule 2), and shall be addressed to each of the individuals from the
Agent set forth on Schedule 2, as such Schedule 2 may be updated by either party
from time to time by sending a written notice containing a revised Schedule 2 to
the other party in the manner provided in Section 12 (including by email
correspondence to each of the individuals of the Company set forth on Schedule
2, if receipt of such correspondence is actually acknowledged by any of the
individuals to whom the notice is sent, other than via auto-reply). The
Placement Notice shall be effective upon receipt by the Agent unless and until
(i) in accordance with the notice requirements set forth in Section 4, the Agent
declines to accept the terms contained therein for any reason, in its sole
discretion, within two Trading Days of the date the Agent receives the Placement
Notice, (ii) in accordance with the notice requirements set forth in Section 4,
the Agent suspends sales under the Placement Notice for any reason in its sole
discretion, (iii) the entire amount of the Placement Shares has been sold
pursuant to this Agreement, (iv) in accordance with the notice requirements set
forth in Section 4, the Company suspends sales under or terminates the Placement
Notice for any reason in its sole discretion, (v) the Company issues a
subsequent Placement Notice and explicitly indicates that its parameters
supersede those contained in the earlier dated Placement Notice or (vi) this
Agreement has been terminated pursuant to the provisions of Section 11. 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
effected through the Agent shall be calculated in accordance with the terms set
forth in Schedule 3. 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
this Agreement and the terms of a Placement Notice, the terms of the Placement
Notice will control with respect to the matters covered thereby.

 

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3.                   Sale of Placement Shares by the Agent. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, including, without limitation, Section 5(c), upon
the effectiveness of a Placement Notice as provided in Section 2, 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
Nasdaq Global Market (“Nasdaq”) to sell such Placement Shares up to the number
or amount specified in, and otherwise in accordance with the terms of, such
Placement Notice. The Agent will provide written confirmation to the Company
(including by email correspondence to each of the individuals of the Company set
forth on Schedule 2, if receipt of such correspondence is actually acknowledged
by any of the individuals to whom the notice is sent, other than via auto-reply)
no later than the opening of the Trading Day (as defined below) immediately
following the Trading Day on which it has made sales of Placement Shares
hereunder setting forth the number or amount of Placement Shares sold on such
Trading Day, the volume-weighted average price of the Placement Shares sold, the
Net Proceeds (as defined below) payable to the Company and an itemization of the
deductions made by the Agent from the gross proceeds that it receives from such
sales. Unless otherwise specified by the Company in 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,
including, without limitation, sales made directly on or through Nasdaq, on or
through any other existing trading market for the Shares or to or through a
market maker. If expressly authorized by the Company (including in a Placement
Notice), the Agent may also sell Placement Shares by any other method permitted
by law, including but not limited to privately negotiated transactions.
Notwithstanding the provisions of Section 6(uu), except as may be otherwise
agreed by the Company and the Agent, the Agent shall not purchase Placement
Shares on a principal basis pursuant to this Agreement unless the Company and
the Agent enter into a separate written agreement setting forth the terms of
such sale. 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 Nasdaq 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 unless the Company and the Agent enter into a separate written
agreement setting forth the terms of such sale. For the purposes hereof,
“Trading Day” means any day on which Shares are purchased and sold on Nasdaq.

 

4.                   Suspension of Sales.

 

(a)                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 2, if receipt of such correspondence is
actually acknowledged by any of the individuals to whom the notice is sent,
other than via auto-reply) or by telephone (confirmed immediately by verifiable
facsimile transmission or email correspondence to each of the individuals of the
other party set forth on Schedule 2), suspend any sale of Placement Shares;
provided, however, that such suspension shall not affect or impair either
party’s obligations with respect to any Placement Shares sold hereunder prior to
the receipt of such notice. Each of the parties agrees that no such notice under
this Section 4 shall be effective against the other party unless notice is sent
by one of the individuals named on Schedule 2 hereto to the other party in
writing (including by email correspondence to each of the individuals of the
other party set forth on Schedule 2, if receipt of such correspondence is
actually acknowledged by any of the individuals to whom the notice is sent,
other than via auto-reply).

 

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(b)                Notwithstanding any other provision of this Agreement, during
any period in which the Company is, or is reasonably deemed to be, in possession
of material non-public information, the Company and the Agent agree that (i) no
sale of Placement Shares will take place, (ii) the Company shall not request the
sale of any Placement Shares and shall cancel any effective Placement Notices
instructing the Agent to make any sales and (iii) the Agent shall not be
obligated to sell or offer to sell any Placement Shares.

 

(c)                While a suspension is in effect any obligation under Sections
7(l), 7(m), 7(n) and 7(o) with respect to the delivery of certificates,
opinions, or comfort letters to the Agent, shall be waived.

 

5.                   Settlement and Delivery of the Placement Shares.

 

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

 

(b)                On or before each Settlement Date, the Company will issue the
Placement Shares being sold on such date and will, or will cause its transfer
agent to, electronically transfer such Placement Shares by crediting the Agent’s
or its designee’s account (provided the Agent shall have given the Company
written notice of such designee prior to the Settlement Date) at The Depository
Trust Company through its Deposit and Withdrawal at Custodian System (“DWAC”) or
by such other means of delivery as may be mutually agreed upon by the parties
hereto, which in all cases shall be duly authorized, freely tradeable,
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 Agent
shall be responsible for providing DWAC instructions or other instructions for
delivery by other means with regard to the transfer of the Placement Shares
being sold. In addition to and in no way limiting the rights and obligations set
forth in Section 9(a) hereto, the Company agrees that if the Company or its
transfer agent (if applicable), defaults in its obligation to deliver duly
authorized, freely tradeable, transferable, registered Placement Shares in good
deliverable form by 2:30 P.M., New York City time, on a Settlement Date (other
than as a result of a failure by the Agent to provide instructions for
delivery), and as a result the Agent cancels such trade, the Company will (i)
take all necessary action to cause the full amount of any Net Proceeds that were
delivered to the Company’s account with respect to such settlement, together
with any costs incurred by the Agent and/or its clearing firm in connection with
recovering such Net Proceeds, to be immediately returned to the Agent or its
clearing firm no later than 5:00 P.M., New York City time, on such Settlement
Date, by wire transfer of immediately available funds to an account designated
by the Agent or its clearing firm, (ii) indemnify and hold the Agent and its
clearing firm harmless against any reasonably incurred out-of-pocket loss,
claim, damage, or expense (including reasonable legal fees and expenses),
arising out of or in connection with such default by the Company or its transfer
agent (if applicable) and (iii) pay to the Agent any commission, discount or
other compensation to which it would otherwise have been entitled absent such
default. Certificates for the Placement Shares, if any, shall be in such
denominations and registered in such names as the Agent may request in writing
one Business Day (as defined below) before the applicable Settlement Date.
Certificates for the Placement Shares, if any, will be made available by the
Company for examination and packaging by the Agent in New York City not later
than 12:00 P.M., New York City time, on the Business Day prior to the applicable
Settlement Date.

 

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(c)                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 number or gross sales proceeds of Placement
Shares sold pursuant to this Agreement would exceed the lesser of: (i) the
number or dollar amount of Shares registered pursuant to, and available for
offer and sale under, the Registration Statement pursuant to which the offering
of Placement Shares is being made, (ii) the number of authorized but unissued
Shares of the Company (less Shares issuable upon exercise, conversion or
exchange of any outstanding securities of the Company or otherwise reserved from
the Company’s authorized capital), (iii) the number or dollar amount of Shares
permitted to be offered and sold by the Company under Form S-3 (including
General Instruction I.B.6. thereof, if such instruction is applicable), (iv) the
number or dollar amount of Shares the Company’s board of directors or a duly
authorized committee thereof is authorized to issue and sell from time to time,
and notified to the Agent in writing, or (v) the dollar amount of Shares for
which the Company has filed the Prospectus Supplement. 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 or a duly authorized
committee thereof, and notified to the Agent in writing. Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge and
agree that compliance with the limitations set forth in this Section 5(c) on the
number or dollar amount of Placement Shares that may be issued and sold under
this Agreement from time to time shall be the sole responsibility of the
Company, and that the Agent shall have no obligation in connection with such
compliance.

 

6.                   Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Agent that, except as set forth
in the Registration Statement or the Prospectus, as of the date of this
Agreement, and (unless such representation or warranty is made expressly as of
the date hereof) as of (i) each Representation Date (as defined in Section
7(m)), (ii) each date on which a Placement Notice is given, (iii) the date and
time of each sale of any Placement Shares pursuant to this Agreement and (iv)
each Settlement Date (each such time or date referred to in clauses (i) through
(iv), an “Applicable Time”):

 

(a)                The Company and the transactions contemplated by this
Agreement meet the requirements for and comply with the applicable conditions
for the use of Form S-3 (including General Instructions I.A and I.B) under the
Securities Act. The Registration Statement has been filed with and has been
declared effective by the Commission under the Securities Act. At the time the
Registration Statement originally became effective and at the time the Company’s
Annual Report on Form 10-K for the year ended December 31, 2019, was filed with
the Commission, the Company met the then-applicable requirements for use of Form
S-3 under the Securities Act, including General Instruction I.B.1 of such form.
The Registration Statement meets, and the offering and sale of Placement Shares
as contemplated hereby comply in all material respects with, the requirements of
Rule 415(a)(1)(x) under the Securities Act. The Agent is named as the agent
engaged by the Company in the section entitled “Plan of Distribution” in the
Prospectus Supplement. The Company has not received, and has no notice from the
Commission of, any notice pursuant to Rule 401(g)(1) under the Securities Act
objecting to the use of the shelf registration statement form. No stop order of
the Commission preventing or suspending the use of the base prospectus, the
Prospectus Supplement or the Prospectus, or the effectiveness of the
Registration Statement, has been issued, and no proceedings for such purpose are
pending before or, to the knowledge of the Company, threatened by the
Commission. At the time of the initial filing of the Registration Statement, the
Company paid the required Commission filing fees relating to the securities
covered by the Registration Statement, including the Shares that may be sold
pursuant to this Agreement, in accordance with Rule 457(o) under the Securities
Act. Copies of the Registration Statement, the Prospectus, any such amendments
or supplements to any of the foregoing and all Incorporated Documents 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.

 

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(b)                Each of the Registration Statement and any post-effective
amendment thereto, at the time it became or becomes effective, at each deemed
effective date with respect to the Agent pursuant to Rule 430B(f)(2) under the
Securities Act and as of each Applicable Time, complied, complies and will
comply in all material respects with the requirements of the Securities Act and
did not, does not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the representations and
warranties set forth in this sentence do not apply to Agent’s Information (as
defined below). The Prospectus and any amendment or supplement thereto, when so
filed with the Commission under Rule 424(b) under the Securities Act, complied,
complies and as of each Applicable Time will comply in all material respects
with the requirements of the Securities Act, and each Prospectus Supplement,
Prospectus or issuer free writing prospectus (or any amendments or supplements
to any of the foregoing) furnished to the Agent for use in connection with the
offering of the Placement Shares was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T. Neither the Prospectus nor any amendment or
supplement thereto, as of its date and as of each Applicable Time, included,
includes or will include an untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this sentence do not apply to Agent’s Information. Each Incorporated Document
heretofore filed, when it was filed (or, if any amendment with respect to any
such document was filed, when such amendment was filed), conformed in all
material respects with the requirements of the Exchange Act and were filed on a
timely basis with the Commission, and any further Incorporated Documents so
filed and incorporated after the date of this Agreement will be filed on a
timely basis and, when so filed, will conform in all material respects with the
requirements of the Exchange Act; no such Incorporated Document when it was
filed (or, if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and no such Incorporated Document, when it
is filed, will contain an untrue statement of a material fact or will 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. 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)                (i) At the time of filing the Registration Statement and (ii)
at the time of the execution of this Agreement (with such date being used as the
determination date for purposes of this clause (ii)), the Company was not and is
not an “ineligible issuer” (as defined in Rule 405 of the Securities Act (“Rule
405”)), without taking account of any determination by the Commission pursuant
to Rule 405 that it is not necessary that the Company be considered an
ineligible issuer.

 

(d)                [Reserved].

 

(e)                Each issuer free writing prospectus, if any, as of its issue
date and as of each Applicable Time, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
Incorporated Document deemed to be a part thereof that has not been superseded
or modified. Each issuer free writing prospectus that the Company has filed, or
is required to file, pursuant to Rule 433 or that was prepared by or on behalf
of or used by the Company complies or will comply in all material respects with
the requirements of the Securities Act.

 

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(f)                 The Company has not distributed and, prior to the later to
occur of each Settlement Date and completion of the Agent’s distribution of the
Placement Shares under this Agreement, will not distribute any offering material
in connection with the offering and sale of the Placement Shares other than the
Registration Statement, the Prospectus or any Permitted Free Writing Prospectus
(as defined below).

 

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

 

(h)                The Company is subject to and in compliance in all material
respects with the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act. The Shares are registered pursuant to Section 12(b) of the
Exchange Act and are listed on Nasdaq, and the Company has taken no action
designed to, or reasonably likely to have the effect of, terminating the
registration of the Shares under the Exchange Act or delisting the Shares from
Nasdaq, nor has the Company received any notification that the Commission or
Nasdaq is contemplating terminating such registration or listing. The Company is
in compliance with the current listing standards of Nasdaq. The Company will
file a Notification of Listing of Additional Shares with Nasdaq with respect to
the Placement Shares prior to issuance by the Company of the first Placement
Notice.

 

(i)                 Except for the Agent, there is no broker, finder or other
party that is entitled to receive from the Company or any of its Subsidiaries
(as defined below) any brokerage or finder’s fee or other fee or commission as a
result of any transactions contemplated by this Agreement.

 

(j)                 The Company and each of its Subsidiaries are duly organized,
validly existing as a corporation and in good standing under the laws of their
respective jurisdictions of organization.  The Company and each of its
Subsidiaries are duly licensed or qualified as a foreign corporation for
transaction of business and in good standing (or the non-U.S. equivalent
thereof) 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 or would reasonably be expected to have a material
adverse effect on or affecting the assets, business, operations, earnings,
properties, condition (financial or otherwise), prospects, shareholders’ equity
or results of operations of the Company and the Subsidiaries taken as a whole,
or prevent or materially interfere with consummation of the transactions
contemplated hereby (a “Material Adverse Effect”).

 

(k)                The Company does not own or control, directly or indirectly,
any corporation, association or other entity, other than the subsidiaries listed
on Schedule 4 attached hereto (each, a “Subsidiary”). 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. No Subsidiary is prohibited or restricted, directly or indirectly, from
paying dividends to the Company, from making any other distribution with respect
to such Subsidiary’s equity securities, from repaying to the Company or any
other Subsidiary any amounts that may from time to time become due under any
loans or advances to such Subsidiary from the Company or from transferring any
property or assets to the Company or to any other Subsidiary.

 

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(l)                 The issued and outstanding Shares have been validly issued,
are fully paid and nonassessable 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 the grant of additional options under the Company’s existing share
option plans, or changes in the number of outstanding Shares of the Company due
to the issuance of shares upon the exercise or conversion of securities
exercisable for, or convertible into, Shares outstanding on the date hereof) and
such authorized capital conforms in all material respects to the description
thereof set forth in the Registration Statement and the Prospectus. The
description of the securities of the Company 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 does 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 its authorized capital
or other securities.

 

(m)              The Placement Shares have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered by the Company
against payment therefor pursuant to this Agreement, will be validly issued,
fully paid and nonassessable and will confirm in all material respects to the
description thereof contained in the Prospectus. The issuance and sale of the
Placement Shares as contemplated hereby shall not be subject to any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase the Placement Shares. When issued and delivered by the Company against
payment therefor pursuant to this Agreement, the purchasers of the Placement
Shares issued and sold hereunder will acquire good, marketable and valid title
to such Placement Shares, free and clear of all pledges, liens, security
interests, charges, claims or encumbrances. There are no restrictions upon the
voting or transfer of the Shares under the Company’s certificate of
incorporation or other organizational documents or any agreement or other
instrument to which the Company is a party or otherwise filed as an exhibit to
the Registration Statement.

 

(n)                There is no statute, regulation, contract, agreement or other
document required to be described in the Registration Statement, Prospectus or
in any Incorporated Document, or to be filed as an exhibit to the Registration
Statement or any Incorporated Document which is not described or filed as
required. The statements set forth or incorporated by reference in the
Prospectus, insofar as they purport to constitute summaries of the terms of the
statutes, regulations, contracts, agreements or other documents described and
filed, constitute accurate summaries of the terms thereof in all material
respects.

 

(o)                This Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforceability, including rights of indemnification, may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally and by general principles of equity.

 

(p)                The Company is not and, after giving effect to the offering
and sale of the Placement Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an “investment company” as defined in
the Investment Company Act of 1940, as amended.

 

(q)                No consent, approval, license, permit, qualification,
authorization or other order or decree of, or registration or filing with, any
court or other governmental, taxing or regulatory authority or agency, is
required for the Company’s execution, delivery and performance of this Agreement
or consummation of the transactions contemplated hereby or by the Registration
Statement and the Prospectus (including the issuance and sale of the Placement
Shares hereunder), except such as have been already obtained or made or as may
be required under the Securities Act, applicable state securities or Blue Sky
laws, applicable rules of Nasdaq, or Rule 5110 of the Financial Industry
Regulatory Authority, Inc. (“FINRA”). In accordance with FINRA Conduct Rule
5110(b)(7)(C)(i), the Placement Shares have been registered with the Commission
on Form S-3 under the Securities Act pursuant to the standards for such Form S-3
in effect prior to October 21, 1992.

 

8

 

(r)                 Neither the execution and delivery by the Company of, nor
the performance of the Company of its obligations under, this Agreement will
conflict with, result in a breach or violation of, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to: (i) the certificate of
incorporation or other organizational documents, of such entity, (ii) the terms
of any indenture, contract, license, lease, mortgage, deed of trust, note
agreement, agreement or other instrument, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property or assets is
subject or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any of its Subsidiaries or any of their
respective properties or assets, as applicable, except, in the case of clauses
(ii) and (iii) above, for any such conflict, breach, violation or default that
would not, individually or in the aggregate, have a Material Adverse Effect.

 

(s)                 Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus: (i) there has been no
Material Adverse Effect or the occurrence of any development that the Company
reasonably expects will result in a Material Adverse Effect, (ii) neither the
Company nor its Subsidiaries has (A) incurred any material liability or
obligation, indirect, direct or contingent, including without limitation any
losses or interference with its business from fire, explosion, flood,
earthquakes, accident or other calamity, whether or not covered by insurance, or
from any strike, labor dispute or court or governmental action, order or decree,
that are material, individually or in the aggregate, to the Company and its
Subsidiaries, considered as one entity, (B) entered into any material
transactions not in the ordinary course of business or (C) issued or granted any
Shares or securities convertible into or exchangeable or exercisable for or that
represent the right to receive Shares other than under the Company’s existing
share option plans; and (iii) there has not been any material decrease in the
share capital or any material increase in any short-term or long-term
indebtedness of the Company or any of its Subsidiaries and there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or another Subsidiary, by any
Subsidiary on any class of shares, or any repurchase or redemption by the
Company or any of its Subsidiaries of any class of shares.

 

(t)                 The consolidated financial statements 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 of the dates indicated and the consolidated results of operations, cash flows
and changes in shareholders’ equity of the Company and the Subsidiaries for the
periods specified and have been prepared in compliance with the requirements of
the Securities Act and Exchange Act and in conformity with United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
during the periods involved (except for such adjustments to accounting standards
and practices as are noted therein). To the extent applicable, any pro forma
financial statements, information or data included or incorporated by reference
in the Registration Statement and the Prospectus comply with the requirements of
Regulation S-X of the Securities Act, including, without limitation, Article 11
thereof, fairly present the information set forth herein, and the assumptions
used in the preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate to give
effect to the circumstances referred to therein and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of those
statements and data. The other financial data set forth or incorporated by
reference in the Registration Statement and the Prospectus is accurately and
fairly presented in all material respects and prepared on a basis consistent in
all material respects 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 no included or incorporated by reference
therein 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 disclosed in the Registration Statement and the
Prospectus. All disclosures contained in the Registration Statement or the
Prospectus that contain “non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply, in all material
respects, with Regulation G under the Exchange Act and Item 10 of Regulation S-K
under the Securities Act, to the extent applicable. To the Company’s knowledge,
no person who has been suspended or barred from being associated with a
registered public accounting firm, or who has failed to comply with any sanction
pursuant to Rule 5300 promulgated by the Public Company Accounting Oversight
Board (“PCAOB”), has participated in or otherwise aided the preparation of, or
audited, the financial statements, supporting schedules or other financial data
filed with the Commission as a part of the Registration Statement and the
Prospectus.

 

9

 

(u)                The statistical, industry-related and market-related data
included or incorporated by reference in the Registration Statement and the
Prospectus were obtained or derived from sources which the Company reasonably
and in good faith believes are reliable and accurate, such data agree with the
sources from which they are derived, and the Company has obtained the written
consent to the use of such data from such sources to the extent required.

 

(v)                No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or its or their property is pending, or to the best knowledge of the Company,
threatened, that (i) could reasonably be expected to have a material adverse
effect on the performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected to have a
Material Adverse Effect.

 

(w)              The Company and its Subsidiaries own or lease all such real
properties as are necessary to the conduct of their operations as presently
conducted in all material respects.

 

(x)                Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its certificate of incorporation, charter,
bylaws, articles of association, limited liability company agreement,
certificate or agreement of limited or general partnership, or other similar
organizational documents, as the case may be, of such entity, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property or assets is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company, any of its Subsidiaries or
any of their respective properties or assets, as applicable, except, in the case
of clauses (ii) and (iii) above, for any such default or violation that would
not, individually or in the aggregate, have a Material Adverse Effect.

 

(y)                Ernst & Young LLP, whose reports 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 by reference in the Registration Statement and the Prospectus, is
an independent registered public accounting firm as required by the Securities
Act, the Exchange Act and the rules of the PCAOB.

 

(z)                There are no transfer taxes or other similar fees or charges
under federal law, the laws of any state, any foreign law, or any political
subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale by the Company
of the Placement Shares.

 

10

 

(aa)             The Company and each of its Subsidiaries have filed all
federal, state, local and foreign income tax returns which have been required to
be filed and paid all income 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 so file or pay 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 of its Subsidiaries 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.

 

(bb)            No labor dispute with the employees of the Company or any of its
Subsidiaries exists or, to the Company’s knowledge, is threatened or imminent,
and the Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its or any of its Subsidiaries’ principal
suppliers, manufacturers, contractors or customers, in each case that would have
a Material Adverse Effect. None of the employees of the Company or any of its
Subsidiaries is represented by a union and, to the knowledge of the Company, no
union organizing activities are taking place. Neither the Company nor any of its
Subsidiaries has violated (or received notice of any violation of) any material
federal, state or local law or foreign law relating to the discrimination in
hiring, promotion or pay of employees, nor any applicable wage or hour laws, or
the rules and regulations thereunder, or analogous foreign laws and regulations,
which would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

(cc)             Each of the Company and its Subsidiaries are insured by
recognized and reputable institutions with policies in such amounts and with
such deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its Subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes and
policies covering the Company and its Subsidiaries for clinical trial liability
claims. The Company has no reason to believe that it or any of its Subsidiaries
will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that could not reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has been denied any
material insurance coverage which it has sought or for which it has applied.

 

(dd)            The Company and each of its Subsidiaries has good and marketable
title in fee simple to all real property owned by them and good and marketable
title to all personal property owned by them that is material to their business,
in each case free and clear of all liens, encumbrances and defects except such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or any
Subsidiary; and any real property and buildings held under lease by the Company
or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company or such Subsidiary.

 

(ee)             The Company and its Subsidiaries possess and are operating in
all material respects in compliance with such valid and current material
certificates, authorizations or permits required by United States federal, state
or foreign regulatory agencies or bodies to conduct their respective businesses
as currently conducted and as described in the Registration Statement and the
Prospectus (collectively, “Permits”). Neither the Company nor any of its
Subsidiaries is in violation of, or in default under, any of the Permits or has
received any written notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit, which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to result
in a Material Adverse Effect.

 

11

 

(ff)               The Company and each of its Subsidiaries make and keep
accurate books and records and maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences; and (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Registration Statement and the Prospectus fairly presents the information
called for in all material respects and is prepared in accordance with the
Commission’s rules and guidelines applicable thereto.

 

(gg)            The Company and each of its Subsidiaries have established and
maintain disclosure controls and procedures (as defined in Rules 13a-15 and
15d-15 under the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated Subsidiaries, is
made known to the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared and (ii) are effective in all material respects to perform the
functions for which they were established. Since the end of the Company’s most
recent audited fiscal year, there has been no material weakness in the Company’s
internal control over financial reporting (whether or not remediated) and no
change in the Company’s internal control over financial reporting, including any
corrective actions with regard to significant deficiencies or material
weaknesses. The Company is not aware of any change in its internal control over
financial reporting that has occurred during its most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.

 

(hh)            Neither the Company, nor any of its Subsidiaries, nor to the
knowledge of the Company, any of its or their respective directors, officers or
controlling persons has taken, directly or indirectly, without giving effect to
any actions taken by the Agent, (i) any action designed to or that might
constitute or reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Placement Shares or (ii) any
action designed to or that might constitute or reasonably be expected to cause
or result in a violation of Regulation M under the Exchange Act.

 

(ii)               Except as set forth in the Registration Statement or the
Prospectus, the Company and its Subsidiaries (i) are in compliance in all
material respects 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.

 

12

 

(jj)               To the knowledge of the Company, each material employee
benefit plan that is maintained, administered or contributed to by the Company
or any of its affiliates for employees or former employees of the Company and
any of its Subsidiaries has been maintained in material compliance with its
terms and the requirements of any applicable statutes, orders, rules and
regulations. The Company does not have any material benefit plans within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended.

 

(kk)            The Company is in compliance with, and there is and has been no
failure on the part of the Company and, to the Company’s knowledge, any of the
Company’s directors or officers, in their capacities as such, to comply with,
any applicable provision of the Sarbanes-Oxley Act of 2002 and all rules and
regulations promulgated thereunder or implementing the provisions thereof (the
“Sarbanes-Oxley Act”), including Section 402 relating to loans.

 

(ll)               [Reserved].

 

(mm)           None of the Company, any Subsidiary, affiliate, director, officer
or employee thereof or, to the best of the Company’s knowledge, any agent,
representative or other person acting on behalf of the Company or any of its
Subsidiaries or affiliates, is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of any applicable
anti-corruption laws, including the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office or otherwise took any action (or failed to fully disclose any action) in
contravention of the FCPA; and the Company, its Subsidiaries and each of their
respective affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain, and will continue to maintain, policies
and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.

 

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

 

(oo)            Neither the Company nor any of its Subsidiaries, nor, to the
Company’s knowledge any director or officer, employee, agent, affiliate or
representative of the Company or any of its Subsidiaries, is currently or is
owned or controlled by an individual or entity that is subject to any sanctions
administered or enforced by the United States government (including, without
limitation, the Office of Foreign Assets Control of the United States Department
of the Treasury), the United Nations Security Council, the European Union, Her
Majesty’s Treasury or other relevant sanctions authority (collectively,
“Sanctions”) or is located, organized or resident in a country or territory that
is the subject or target of Sanctions; and the Company will not directly or
indirectly use the proceeds of the sale of the Shares, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, or any joint venture
partner or other person or entity, for the purpose of financing or facilitating
the activities of or business of any person or entity, or in any country or
territory, that currently or at the time of such financing or facilitation is
the subject of any Sanctions or in any other manner that will result in a
violation by any person or entity (including any person participating in the
transactions contemplated by this Agreement) of any Sanctions. For the past five
years, the Company and its Subsidiaries have not knowingly engaged in and are
not now knowingly engaged in any dealings or transactions with any person or
entity, or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.

 

13

 

(pp)            Except as described in the Registration Statement or the
Prospectus, the Company and its Subsidiaries own, possess, license or have other
rights to use, on reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the “Intellectual Property”) necessary for the conduct
of their respective businesses in all material respects. Except as set forth in
the Registration Statement and the Prospectus, (i) there are no rights of third
parties to any such Intellectual Property, including no liens, security
interests, or other encumbrances; (ii) to the knowledge of the Company, no third
party has any ownership right in or to any Intellectual Property that is owned
or purported to be owned by the Company or any of its Subsidiaries, other than
any co-owner of any patent constituting Intellectual Property who is listed on
the records of the U.S. Patent and Trademark Office and any co-owner of any
patent application constituting Intellectual Property who is named in such
patent application; (iii) to the Company’s knowledge, there is no material
infringement or misappropriation by third parties of any such Intellectual
Property; (vi) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others challenging the Company’s rights in
or to any such Intellectual Property, and the Company is aware of no factual
basis for any such claim; (v) such Intellectual Property has not been adjudged
by a court of competent jurisdiction invalid or unenforceable, in whole or in
part, there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, including interferences, oppositions,
reexaminations, or government proceedings, and the Company is aware of no
factual basis for any such claim; (vi) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others that the
Company infringes, misappropriates, or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the Company
is aware of no factual basis for any such claim; (vii) neither the Company nor
any of its Subsidiaries has received notice of any claim of infringement,
misappropriation or conflict with any asserted rights of others with respect to
any of the Company’s products, proposed products, processes or Intellectual
Property; (viii) to the knowledge of the Company, neither the development nor
sale nor any currently proposed use of any of the Company’s product candidates
or processes referred to in the Prospectus, in the current conduct of the
business of the Company in the manner and to the extent described in the
Prospectus, do currently, or will upon commercialization, to the knowledge of
the Company, infringe any proprietary right or valid patent claim of any third
party; (ix) the Company is not obligated to pay a material royalty, grant a
license, or provide other material consideration to any third party in
connection with the Intellectual Property; (x) to the Company’s knowledge, no
employee of the Company is in or has been in violation of any term of any
employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer where the
basis of such violation relates to such employee’s employment with the Company;
(xi) to the Company’s knowledge, there is no patent or published patent
application in the United States or other jurisdiction which contains claims
that dominate or may dominate any Intellectual Property described in the
Prospectus as being owned by or licensed to the Company or that interferes with
the issued or pending claims of any such Intellectual Property; (xii) to the
Company’s knowledge, there is no prior art that may render any patent held by
the Company invalid or any patent application held by the Company unpatentable;
and (xiii) all prior art of which the Company is aware that may be material to
the validity of a U.S. patent or to the patentability of a U.S. patent
application has been disclosed to the U.S. Patent and Trademark Office, and all
such prior art has been disclosed to the patent office of other jurisdictions
where required; and (xiv) the Company has taken all reasonable measures to
protect its confidential information and trade secrets and to maintain and
safeguard the Intellectual Property, including the execution of appropriate
nondisclosure and confidentiality agreements. All licenses and material
agreements to which the Company is a party relating to the Intellectual Property
are in full force and effect and the Company is not in violation of any term of
such license.

 

14

 

(qq)            The Company and each of its Subsidiaries (i) are and have at all
times been in material compliance with all laws, statutes, rules, regulations or
guidance applicable to the Company and its Subsidiaries and the ownership,
testing, development, manufacture, packaging, processing, use, distribution,
marketing, advertising, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any pharmaceuticals or biohazardous substances,
materials or any other products developed, manufactured or distributed by the
Company (including, without limitation, from the United States Food and Drug
Administration (“FDA”), European Medicines Agency (“EMA”) and any local or other
governmental or regulatory authority performing functions similar to those
performed by the FDA or EMA) (collectively, “Applicable Laws”), except as could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, (ii) have not received any notice of adverse finding,
warning letter, untitled letter or other correspondence or notice from the FDA
or any other federal, state or foreign governmental authority having authority
over the Company, any of its Subsidiaries or their activities alleging or
asserting noncompliance with any Applicable Laws or any licenses, certificates,
approvals, clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws (collectively, the “Governmental
Permits”), (iii) have made all filings with, the appropriate local, or other
governmental or regulatory agencies or bodies that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement and the
Prospectus, except where any failures to possess or make the same would not,
singularly or in the aggregate, have a Material Adverse Effect, (iv) possess all
material Governmental Permits necessary to conduct their respective businesses
as described in the Registration Statement and the Prospectus, and such
Governmental Permits are valid and in full force and effect and are not in
violation of any term of any such Governmental Permits, (v) have filed,
obtained, maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements or
amendments as required by any Applicable Laws or Governmental Permits and that
all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were complete and correct in all
material respects on the date filed (or were corrected or supplemented by a
subsequent submission), and (vi) are not a party to any corporate integrity
agreements, monitoring agreements, consent decrees, settlement orders or similar
agreements with or imposed by any governmental authority. All Governmental
Permits are valid and in full force and effect, except where the validity or
failure to be in full force and effect would not, singularly or in the
aggregate, have a Material Adverse Effect.

 

(rr)               There is no legal or governmental proceeding to which the
Company or any of its Subsidiaries is a party or of which any property or assets
of the Company or any of its Subsidiaries is the subject, including any
proceeding before the FDA, the EMA or any foreign, local, national or other
governmental agency with jurisdiction over the types of products being developed
by the Company that is required to be described in the Registration Statement or
the Prospectus and is not described therein, or which, singularly or in the
aggregate, if determined adversely to the Company or any of its Subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and no such
proceedings are threatened or contemplated by governmental or regulatory
authorities or threatened by others. The Company and its Subsidiaries (i) have
not received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any governmental
authority or third party alleging that any product operation or activity is in
violation of any Applicable Laws or Governmental Permits and have no knowledge
that any such governmental authority or third party is considering any such
claim, litigation, arbitration, action, suit, investigation or proceeding and
(ii) have not received notice that any governmental authority has taken, is
taking or intends to take action to limit, suspend, modify or revoke any
Governmental Permits and the Company has no knowledge that any such governmental
authority is considering such action.

 

15

 

(ss)              The research, non-clinical pre-clinical studies and clinical
studies and tests conducted or being conducted by or on behalf of the Company or
any of its Subsidiaries or in which any of their respective product candidates
have participated and, to the Company’s knowledge, the preclinical studies and
clinical trials directed or sponsored by the Company’s collaborators
(collectively, the “Studies”) that are described in, or the results of which are
referred to in, the Registration Statement and the Prospectus were and, if still
pending, are being conducted with reasonable care and in all material respects
in accordance with the protocols, procedures and controls pursuant to all
Applicable Laws and Governmental Permits and with standard medical and
scientific research procedures; each description of the results of such Studies
is accurate and complete in all material respects and fairly presents the data
derived from such Studies, and the Company and its Subsidiaries have no
knowledge of any other research, non-clinical studies or tests the results of
which are inconsistent with, or otherwise call into question, the results
described or referred to in the Registration Statement and the Prospectus; the
Company and its Subsidiaries have made all such filings and obtained all such
approvals as may be required by the EMA, the FDA or any committee thereof or
from any other United States or foreign government agency with jurisdiction over
the types of products being developed by the Company; neither the Company nor
any of its Subsidiaries has received any notice of, or correspondence from, any
governmental authority requiring the termination, suspension or modification of
any Study; and the Company and its Subsidiaries have each operated and currently
are in compliance in all material respects with all applicable rules,
regulations and policies of all governmental authorities. To the Company’s
knowledge, the manufacturing facilities and operations of its suppliers are
operated in compliance in all material respects with all Applicable Laws and
Governmental Permits.

 

(tt)               The Company acknowledges and agrees that the Agent has
informed the Company that the Agent may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell Shares for its own
account while this Agreement is in effect; provided, that (i) no such purchase
or sales shall take place while a Placement Notice is in effect (except to the
extent the Agent may engage in sales of Placement Shares purchased or deemed
purchased from the Company as a “riskless principal” or in a similar capacity)
and (ii) the Company shall not be deemed to have authorized or consented to any
such purchases or sales by the Agent, except as may be otherwise agreed by the
Company and the Agent.

 

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

 

(vv)            Neither the Company nor any of the Subsidiaries (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). All of the
information (including, but not limited to, information regarding affiliations,
security ownership and trading activity) provided to the Agent or its counsel by
the Company, its officers and directors and the holders of any securities (debt
or equity) or warrants, options or rights to acquire any securities of the
Company in connection with the filing to be made and other supplemental
information to be provided to FINRA pursuant to FINRA Rule 5110 in connection
with the transactions contemplated by this Agreement is true, complete and
correct.

 

(ww)         The Company is not a shell company (as defined in Rule 405) and has
not been a shell company for at least 12 calendar months previously.

 

(xx)            Each of the independent directors (or independent director
nominees, once appointed, if applicable) named in the Registration Statement and
Prospectus satisfies the independence standards established by Nasdaq and, with
respect to members of the Company’s audit committee, other than with respect to
any non-independent director identified in the Registration Statement or
Prospectus, the enhanced independence standards contained in Rule 10A-3(b)(1)
promulgated by the Commission under the Exchange Act.

 

16

 

(yy)            Each financial or operational projection or other
“forward-looking statement” (as defined by Section 27A of the Securities Act or
Section 21E of the Exchange Act) contained in the Registration Statement or the
Prospectus (i) was so included by the Company in good faith and with reasonable
basis after due consideration by the Company of the underlying assumptions,
estimates and other applicable facts and circumstances and (ii) as required, is
accompanied by meaningful cautionary statements identifying those factors that
could cause actual results to differ materially from those in such
forward-looking statement. No such statement was made with the knowledge of a
director or senior manager of the Company that was false or misleading.

 

(zz)             The Company is not in or subject to a bankruptcy or insolvency
proceeding in any jurisdiction.

 

(aaa)          Except as would not have a Material Adverse Effect, neither the
Company nor any of its Subsidiaries has breached and is currently in breach of
any provision of any license, contract or other agreement governing the use by
the Company or its Subsidiaries of Intellectual Property owned by third parties
(collectively, the “Licenses”) and no third party has alleged any such breach
and the Company is unaware of any facts that would form a reasonable basis for
such a claim. To the Company’s knowledge, no other party to the Licenses has
breached or is currently in breach of any provision of the Licenses. Each of the
Licenses is in full force and effect and constitutes a valid and binding
agreement between the parties thereto, enforceable in accordance with its terms,
and there has not occurred any breach or default under any such Licenses or any
event that, with the giving of notice or lapse of time, would constitute a
breach or default thereunder. Except as would not have a Material Adverse
Effect, neither the Company nor any of its Subsidiaries has been and is
currently involved in any disputes regarding the Licenses. To the Company’s
knowledge, all patents licensed to the Company pursuant to the Licenses are
valid, enforceable and being duly maintained. To the Company’s knowledge, any
patent applications licensed to the Company pursuant to the Licenses are being
duly prosecuted.

 

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

 

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 the 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 or a similar rule); (i) the Company will
notify the Agent promptly of the time when any subsequent amendment to the
Registration Statement, other than Incorporated Documents, has been filed with
the Commission and/or has become effective or any subsequent supplement to the
Prospectus, other than Incorporated Documents, has been filed and of any request
by the Commission for any amendment or supplement to the Registration Statement
or Prospectus or for additional information; (ii) the Company will prepare and
file with the Commission, promptly upon the Agent’s request, any amendments or
supplements to the Registration Statement or Prospectus that, in the Agent’s
reasonable opinion, 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 by the Company to make such filing (but without limiting the Agent’s
rights under Section 9 hereof) will 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, other than Incorporated Documents, relating to the Placement Shares
or a security convertible into or exchangeable or exercisable for the Placement
Shares 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 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 provided, further, that the only remedy the
Agent shall have with respect to the Company’s making such filing
notwithstanding the Agent’s objection (but without limiting the Agent’s rights
under Section 9 hereof) will 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 Incorporated Document, except for those documents available via EDGAR; and
(iv) the Company will cause each amendment or supplement to the Prospectus,
other than Incorporated Documents, to be filed with the Commission as required
pursuant to the applicable paragraph of Rule 424(b) of the Securities Act and,
in the case of any Incorporated Document, to be filed with the Commission as
required pursuant to the Exchange Act, within the time period prescribed.

 

17

 

(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 promptly use its commercially reasonable efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such a stop order should be
issued. 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 for additional information related
to the offering of the Placement Shares or for additional information related to
the Registration Statement or the Prospectus.

 

(c)                Delivery of Prospectus; Subsequent Changes. During any period
in which the Prospectus relating to the Placement Shares is required to be
delivered by the Agent under the Securities Act with respect to the offer and
sale of the Placement Shares (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 of the Securities Act Rules or a similar
rule), the Company will comply in all material respects with all requirements
imposed upon it by the Securities Act, as from time to time in force, and will
file on or before their respective due dates (taking into account any extensions
available under the Exchange Act) all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under
the Exchange Act. If during such period any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Securities Act, the
Company will promptly notify 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. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430B
under the Securities Act, it will use its best efforts to comply with the
provisions thereof and make all requisite filings with the Commission pursuant
to said Rule 430B and to notify the Agent promptly of all such filings if not
available on EDGAR.

 

(d)                Listing of Placement Shares. During any period in which the
Prospectus relating to the Placement Shares is required to be delivered by the
Agent under the Securities Act with respect to the offer and sale of the
Placement Shares (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act or a similar rule), the
Company will use its commercially reasonable efforts to cause the Placement
Shares to be listed on Nasdaq. The Company will timely file with Nasdaq all
material documents and notices required by Nasdaq of companies that have or will
issue securities that are traded on Nasdaq.

 

18

 

(e)                Delivery of Registration Statement and Prospectus. The
Company will furnish to the Agent and its counsel (at the expense of the
Company) copies of the Registration Statement, the Prospectus (including all
Incorporated Documents) and all amendments and supplements to the Registration
Statement or Prospectus that are filed with the Commission during any period in
which the Prospectus relating to the Placement Shares is required to be
delivered under the Securities Act (including all Incorporated Documents filed
with the Commission during such period), 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 and to the Agent 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) of and Rule 158 under the Securities Act.

 

(g)                Expenses. The Company will pay all expenses incident to the
performance of its obligations hereunder, including, but not limited to,
expenses relating to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of the
Prospectus and of each amendment and supplement thereto and 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, (ii) the
preparation, issuance, sale and delivery of the Placement Shares and any taxes
due or payable in connection therewith, (iii) the qualification of the Placement
Shares under securities laws in accordance with the provisions of Section 7(w)
of this Agreement, including filing fees (provided, however, that any fees or
disbursements of counsel for the Agent in connection therewith shall be paid by
the Agent except as set forth in clauses (vii) and (viii) below), (iv) the
printing and delivery to the Agent and its counsel of copies of the Prospectus
and any amendments or supplements thereto, and of this Agreement, and (v) the
fees and expenses incurred in connection with the listing or qualification of
the Placement Shares for trading on Nasdaq, (vi) the filing fees and expenses,
if any, owed to the Commission or FINRA and the fees and expenses of any
transfer agent or registrar for the Shares.

 

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

 

(i)                 Notice of Other Sales. 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 Shares
(other than the Placement Shares offered pursuant to this Agreement) or
securities convertible into or exchangeable or exercisable for Shares, warrants
or any rights to purchase or acquire Shares during the period beginning on the
fifth Trading Day immediately prior to the date on which any Placement Notice is
delivered to Agent hereunder and ending on the second 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, the date of such suspension or termination); and will not
directly or indirectly in any other “at the market offering” or continuous
equity transaction offer to sell, sell, contract to sell, grant any option to
sell or otherwise dispose of any Shares (other than the Placement Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable or
exercisable for Shares, warrants or any rights to purchase or acquire, Shares
prior to the later of the termination of this Agreement and the sixtieth day
immediately following the final Settlement Date with respect to Placement Shares
sold pursuant to such Placement Notice; provided, however, that such
restrictions will not be required in connection with the Company’s issuance or
sale of (i) Shares, options to purchase Shares, other securities under the
Company’s existing equity incentive plans, or Shares issuable upon the exercise
of options or vesting of other securities, pursuant to any employee or director
share option or benefits plan, share ownership plan or dividend reinvestment
plan (but not Shares subject to a waiver to exceed plan limits in its dividend
reinvestment plan) of the Company whether now in effect or hereafter
implemented, (ii) Shares 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
and (iii) Shares or securities convertible into or exchangeable for Shares as
consideration for mergers, acquisitions, other business combinations or
strategic alliances occurring after the date of this Agreement which are not
issued for capital raising purposes.

 

19

 

(j)                 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 of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document provided or required to be provided to the Agent pursuant to
this Agreement.

 

(k)                Due Diligence Cooperation. During the term of this Agreement,
the Company will cooperate with any reasonable due diligence review conducted by
the Agent, its affiliates agents and counsel from time to time 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.

 

(l)                 Required Filings Relating to Placement of Placement Shares.
The Company agrees that on or prior to 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, which
prospectus supplement will set forth, within the relevant period, the number or
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; provided, that, unless a prospectus supplement containing such
information is required to be filed under the Securities Act, the requirement of
this Section 7(l) may be satisfied by Company’s inclusion in the Company’s Form
10-K, Form 10-Q or Form 8-K, as applicable, of the number or 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 during the relevant period.

 

(m)              Representation Dates; Certificate. On or prior to the date on
which the Company first delivers a Placement Notice pursuant to this agreement
(the “First Placement Notice Date”) and each time the Company:

 

(i)                 amends or supplements the Registration Statement or the
Prospectus relating to the Placement Shares (other than a prospectus supplement
filed in accordance with Section 7(l) of this Agreement) by means of a
post-effective amendment, sticker or supplement but not by means of
incorporation of document(s) by reference into the Registration Statement or the
Prospectus relating to the Placement Shares;

 

20

 

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

 

(iii)             files a quarterly report on Form 10-Q under the Exchange Act
containing financial statements, supporting schedules or other financial data
incorporated by reference into the Registration Statement; or

 

(iv)              files a current report on Form 8-K containing amended
financial information under the Exchange Act incorporated by reference into the
Registration Statement (each date of filing of one or more of the documents
referred to in clauses (i) through (iv) shall be a “Representation Date”), the
Company shall furnish the Agent (but in the case of clause (iv) above only if
(1) a Placement Notice is pending or in effect and (2) the Agent requests such
certificate within three Business Days after the filing of such Form 8-K with
the Commission) with a certificate, in the form attached hereto as Exhibit 7(m)
(modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented), within two Trading Days of any
Representation Date. The requirement to provide a certificate under this Section
7(m) shall be waived for any Representation Date occurring at a time at which no
Placement Notice is pending or in effect, which waiver shall continue until the
earlier to occur of (1) the date the Company delivers a Placement Notice
hereunder (which for such calendar quarter shall be considered a Representation
Date) and (2) the next occurring Representation Date; provided, however, that
such waiver shall not apply for any Representation Date on which the Company
files its annual report on Form 10-K (including any Form 10-K containing amended
financial information or a material amendment to the previously filed Form
10-K). Notwithstanding the foregoing, if the Company subsequently decides to
sell Placement Shares following a Representation Date on which the Company
relied on the waiver referred to in the previous sentence and did not provide
the Agent with a certificate under this Section 7(m), then before the Company
delivers a Placement Notice or the Agent sells any Placement Shares pursuant
thereto, the Company shall provide the Agent with a certificate, in the form
attached hereto as Exhibit 7(m), dated the date of such Placement Notice. Within
two Trading Days of each Representation Date, the Company shall have furnished
to the Agent such further information, certificates and documents as the Agent
may reasonably request.

 

(n)                Legal Opinions. On or prior to the First Placement Notice
Date and on any date which the Company is obligated to deliver a certificate
pursuant to Section 7(m) for which no waiver is applicable, the Company shall
cause to be furnished to the Agent the written opinion and negative assurance
letter of Dentons US LLP, counsel to the Company (“Company Counsel”), in form
and substance reasonably satisfactory to the Agent and its counsel, dated the
date that the opinion and negative assurance letter, as applicable, are required
to be delivered, modified, as necessary, to relate to the Registration Statement
and the Prospectus as then amended or supplemented; provided, however, the
Company shall be required to furnish to Agent no more than one negative
assurance letter and one opinion hereunder per calendar quarter and provided,
further, that in lieu of such opinion and negative assurance letter for
subsequent Representation Dates, each Company Counsel may furnish the Agent with
a letter to the effect that the Agent may rely on a prior opinion or negative
assurance letter, as applicable, delivered by such counsel under this Section
7(n) to the same extent as if it were dated the date of such letter (except that
statements in such prior opinion or negative assurance letter shall be deemed to
relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date).

 

(o)                Intellectual Property Opinion. On or prior to the First
Placement Notice Date and on any date which the Company is obligated to deliver
a certificate pursuant to Section 7(m) for which no waiver is applicable, the
Company shall cause to be furnished to the Agent the written opinion of Baker &
Hostetler LLP, intellectual property counsel to the Company, with respect to
intellectual property matters, or such other intellectual property counsel
reasonably satisfactory to the Agent (“Intellectual Property Counsel”), in form
and substance reasonably satisfactory to the Agent and its counsel, dated the
date that the opinion letter is required to be delivered, modified, as
necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, however, that in lieu of such written opinion
for subsequent Representation Dates, Intellectual Property Counsel may furnish
the Agent with a letter to the effect that the Agent may rely on a prior opinion
letter delivered by such counsel under this Section 7(o) to the same extent as
if it were dated the date of such opinion letter (except that statements in such
prior opinion letter shall be deemed to relate to the Registration Statement and
the Prospectus as amended or supplemented at such Representation Date).

 

21

 

(p)                Comfort Letter. On or prior to the First Placement Notice
Date and on any date which the Company is obligated to deliver a certificate
pursuant to Section 7(m) for which no waiver is applicable, the Company shall
cause its independent registered public accounting firm (and any other
independent accountants whose report is included in the Registration Statement
or the Prospectus) 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(p); provided, that if reasonably requested by the Agent,
the Company shall cause a Comfort Letter to be furnished to the Agent within 10
Trading Days of the occurrence of any material transaction or event that
necessitates the filing of additional, pro forma, amended or revised financial
statements (including any restatement of previously issued financial
statements). Each Comfort Letter shall be in form and substance reasonably
satisfactory to the Agent and each Comfort Letter from the Company’s independent
registered public accounting firm shall (i) confirm that they are an independent
registered public accounting firm within the meaning of the Securities Act and
the PCAOB, (ii) state, 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) update 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.

 

(q)                Market Activities. The Company will not, directly or
indirectly, and will cause its officers, directors and Subsidiaries not to (i)
take any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of Shares
or (ii) sell, bid for, or purchase Shares in violation of Regulation M, or pay
anyone any compensation for soliciting purchases of the Placement Shares other
than the Agent; provided, however, that the Company may bid for and purchase
Shares in accordance with Rule 10b-18 under the Exchange Act.

 

(r)                 Investment Company Act. The Company will conduct its affairs
in such a manner so as to reasonably ensure that neither it nor any of its
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.

 

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

 

(t)                 No Offer to Sell. Other than a free writing prospectus (as
defined in Rule 405) approved in advance by the Company and the Agent, neither
the Agent nor the Company (including its agents and representatives, other than
the Agent in its capacity as agent) 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 Shares hereunder.

 

22

 

(u)                Blue Sky and Other Qualifications. The Company will use its
commercially reasonable efforts, in cooperation with the Agent, to qualify the
Placement Shares for offering and sale, or to obtain an exemption for the
Placement Shares to be offered and sold, under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Agent may
designate and to maintain such qualifications and exemptions in effect for so
long as required for the distribution of the Placement Shares (but in no event
for less than one year from the date of this Agreement); provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Placement Shares have
been so qualified or exempt, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification or exemption, as the case may be, in effect for so long as
required for the distribution of the Placement Shares (but in no event for less
than one year from the date of this Agreement).

 

(v)                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 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 such controls and other
procedures, including, without limitation, to the extent applicable to the
Company, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and
the applicable regulations thereunder that are designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms,
including, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the
Company’s management, including its principal executive officer and principal
financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure and to ensure that material
information relating to the Company is made known to it by others within the
Company, particularly during the period in which such periodic reports are being
prepared.

 

(w)              [Reserved.]

 

(x)                Renewal of Registration Statement. If, immediately prior to
the third anniversary of the initial effective date of the Registration
Statement (the “Renewal Date”), any of the Placement Shares remain unsold and
this Agreement has not been terminated, the Company will, prior to the Renewal
Date, file a new shelf registration statement or, if applicable, an automatic
shelf registration statement relating to the Shares that may be offered and sold
pursuant to this Agreement (which shall include a prospectus reflecting the
number or amount of Placement Shares that may be offered and sold pursuant to
this Agreement), in a form satisfactory to the Agent and its counsel, and, if
such registration statement is not an automatic shelf registration statement,
will use its best efforts to cause such registration statement to be declared
effective within 180 days after the Renewal Date. The Company will take all
other reasonable actions necessary or appropriate to permit the public offer and
sale of the Placement Shares to continue as contemplated in the expired
registration statement and this Agreement. From and after the effective date
thereof, references herein to the “Registration Statement” shall include such
new shelf registration statement or such new automatic shelf registration
statement, as the case may be.

 

23

 

(y)                General Instruction I.B.6. of Form S-3. If, from and after
the date of this Agreement, the Company is no longer eligible to use Form S-3
(pursuant to General Instruction I.B.1.) at the time it files with the
Commission an annual report on Form 10-K or any post-effective amendment to the
Registration Statement, then it shall promptly notify the Agent and, within two
Business Days after the date of filing of such annual report on Form 10-K or
amendment to the Registration Statement, the Company shall file a new prospectus
supplement with the Commission reflecting the number of Shares available to be
offered and sold by the Company under this Agreement pursuant to General
Instruction I.B.6. of Form S-3; provided, however, that the Company may delay
the filing of any such prospectus supplement for up to 30 days if, in the
reasonable judgment of the Company, it is in the best interest of the Company to
do so, provided that no Placement Notice is in effect or pending during such
time. Until such time as the Company shall have corrected such misstatement or
omission or effected such compliance, the Company shall not notify the Agent to
resume the offering of Placement Shares.

 

(z)                Tax Indemnity. The Company will indemnify and hold harmless
the Agent against any documentary, stamp or similar issue tax, including any
interest and penalties, on the issue and sale of the Placement Shares.

 

(aa)             Transfer Agent. The Company has engaged and will maintain, at
its sole expense, a transfer agent and registrar for the Shares.

 

8.                   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, 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 the Agent in its reasonable judgment, and to
the continuing satisfaction (or waiver by the Agent in its sole discretion) in
all material respects of the following additional conditions:

 

(a)                Registration Statement Effective. The Registration Statement
shall be effective and shall be available for all offers and sales of Placement
Shares (i) that have been issued pursuant to all prior Placement Notices and
(ii) that will be issued pursuant to any Placement Notice.

 

(b)                Prospectus Supplement. The Company shall have filed with the
Commission the Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second
Business Day following the date of this Agreement.

 

(c)                No Material Notices. None of the following events shall have
occurred and be continuing: (i) receipt by the Company or any of its
Subsidiaries of any request for additional information from the Commission or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement, the response to which would require
any post-effective amendments or supplements to the Registration Statement or
the Prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) receipt by the Company or any of its Subsidiaries of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Placement Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; 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 material
changes in the Registration Statement, the Prospectus or Incorporated Documents
so that, in the case of the Registration Statement, it will not contain any
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, in the case of the Prospectus, so that it will not contain any 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.

 

24

 

(d)                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.

 

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

 

(f)                 Company Counsel Legal Opinions. The Agent shall have
received the opinions and negative assurance letters, as applicable, of Company
Counsel and Intellectual Property Counsel required to be delivered pursuant to
Section 7(n) and Section 7(o), as applicable, on or before the date on which
such delivery of such opinions and negative assurance letters are required
pursuant to Section 7(n) and Section 7(o), as applicable.

 

(g)                Agent’s Counsel Legal Opinion. The Agent shall have received
from Goodwin Procter LLP, counsel for the Agent, such opinion or opinions, on or
before the date on which the delivery of the Company Counsel legal opinion is
required pursuant to Section 7(n), with respect to such matters as the Agent may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may request to enable them to pass upon such matters.

 

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

 

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

 

(j)                 Secretary’s Certificate. On or prior to the First Placement
Notice Date, the Agent shall have received a certificate, signed on behalf of
the Company by its Secretary of the Company and attested to by an executive
officer of the Company, dated as of such date and in form and substance
satisfactory to the Agent and its counsel, certifying as to (i) the certificate
of incorporation of the Company, (ii) the resolutions of the board of directors
of the Company or duly authorized committee thereof authorizing the execution,
delivery and performance of this Agreement and the issuance and sale of the
Placement Shares and (iii) the incumbency of the officers of the Company duly
authorized to execute this Agreement and the other documents contemplated by
this Agreement (including each of the officers set forth on Schedule 2).

 

25

 

(k)                No Suspension. The Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance, on Nasdaq.
Trading in the Shares shall not have been suspended on, and the Shares shall not
have been delisted from, Nasdaq.

 

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

 

(m)              Securities Act Filings Made. All filings with the Commission
required by Rule 424(b) or Rule 433 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(b)
(without reliance on Rule 424(b)(8) of the Securities Act) or Rule 433, as
applicable.

 

(n)                Approval for Listing. The Placement Shares shall either have
been (i) approved for listing on Nasdaq, subject only to notice of issuance, or
(ii) the Company shall have filed an application for listing of the Placement
Shares on Nasdaq at, or prior to, the First Placement Notice Date and Nasdaq
shall have reviewed such application and not provided any objections thereto.

 

(o)                FINRA. FINRA shall have raised no objection to the terms of
the offering contemplated hereby and the amount of compensation allowable or
payable to the Agent as described in the Prospectus.

 

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

 

9.                   Indemnification and Contribution.

 

(a)                Company Indemnification. The Company agrees to indemnify and
hold harmless the Agent, its affiliates and their respective partners, members,
directors, officers, employees and agents, and each person, if any, who (i)
controls the Agent 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 Agent, in each case from and against any and all losses,
claims, liabilities, expenses and damages (including, but not limited to, any
and all investigative, legal and other expenses) reasonably incurred in
connection with, and any and all amounts paid in settlement (in accordance with
this Section 9), any action, suit, investigation or proceeding between any of
the indemnified parties and any indemnifying parties or between any indemnified
party and any third party (including, without limitation, any governmental or
self-regulatory authority, or otherwise, or any claim asserted or threatened),
as and when incurred, to which the Agent, or any such other person may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based, directly or
indirectly, on (x) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or any
amendment or supplement to the Registration Statement or the Prospectus) or in
any free writing prospectus or in any application or other document executed by
or on behalf of the Company or based on written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Shares
under the securities laws thereof or filed with the Commission, (y) the omission
or alleged omission to state in any such document a material fact required to be
stated therein or necessary to make the statements therein (solely with respect
to the Prospectus, in light of the circumstances under which they were made) not
misleading or (z) any breach by any of the indemnifying parties of any of their
respective representations, warranties or agreements contained in this
Agreement; provided, however, that this indemnity agreement shall not apply to
the extent that such loss, claim, liability, expense or damage arises from the
sale of the Placement Shares pursuant to this Agreement and is caused, directly
or indirectly, by an untrue statement or omission, or alleged untrue statement
or omission, made in reliance upon and in conformity with the Agent’s
Information.

 

26

 

(b)                Agent Indemnification. The Agent agrees to indemnify and hold
harmless the Company and its directors and each officer of the Company that
signed the Registration Statement, and each person, if any, who (i) controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act or (ii) is controlled by or is under common control with the
Company against any and all loss, liability, claim, damage and expense described
in the indemnity contained in Section 9(a), as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendments thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
the Agent’s Information.

 

(c)                Procedure. Any party that proposes to assert the right to be
indemnified under this Section 9 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 9, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 9 and (ii) any
liability that it may have to any indemnified party under the foregoing
provision of this Section 9 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified party to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly after the indemnifying party receives a written invoice relating
to such 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
9 (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, in form and substance reasonably satisfactory to such
indemnified party, from all liability arising out of such claim, action or
proceeding 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.

 

27

 

(d)                Settlement Without Consent if Failure to Reimburse. If an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel for which it is
entitled to be reimbursed under this Section 9, such indemnifying party agrees
that it shall be liable for any settlement of the nature contemplated by
Section 9(a) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

 

(e)                Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 9 is applicable in accordance with its
terms but for any reason is held to be unavailable or insufficient 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, investigation or proceeding or any
claim asserted) 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 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, suit, investigation or
proceeding 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 9(e) 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,
suit, investigation or proceeding in respect thereof, referred to above in this
Section 9(e) shall be deemed to include, for the purpose of this Section 9(e),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, suit, investigation,
proceeding or claim to the extent consistent with this Section 9.
Notwithstanding the foregoing provisions of this Section 9(e), 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 9(e), any person who
controls a party to this Agreement within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, any affiliates of the Agent,
any partners, members, directors, officers, employees and agents of the Agent
and each person that is controlled by or under common control with the Agent
will have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 9(e), will notify any such party or parties from
whom contribution may be sought, but the omission to so notify will not relieve
that party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 9(e) except to the extent that
the failure to so notify such other party materially prejudiced the substantive
rights or defenses of the party from whom contribution is sought. Except for a
settlement entered into pursuant to the last sentence of Section 9(c) hereof or
pursuant to Section 9(d) hereof, no party will be liable for contribution with
respect to any action or claim settled without its written consent if such
consent is required pursuant to Section 9(c) hereof.

 

28

 

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

 

11.               Termination.

 

(a)                The Agent shall have the right, by giving notice as
hereinafter specified, at any time to terminate this Agreement if (i) any
Material Adverse Effect has occurred that, in the judgment of the Agent, may
materially impair the ability of the Agent to sell the Placement Shares
hereunder, (ii) the Company shall have failed, refused or been unable to perform
any agreement on its part to be performed hereunder; provided, however, in the
case of any failure of the Company to deliver (or cause another person to
deliver) any certification, opinion or letter required under Section 7(m),
Section 7(n), Section 7(o) or Section 7(p), the Agent’s right to terminate shall
not arise unless such failure to deliver (or cause to be delivered) continues
for more than 15 calendar days from the date such delivery was required, (iii)
any other condition of the Agent’s obligations hereunder is not fulfilled, (iv)
any suspension or limitation of trading in the Placement Shares or in securities
generally on Nasdaq shall have occurred, (v) a general banking moratorium shall
have been declared by any of United States federal or New York authorities, or
(vi) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States or
international political, financial or economic conditions that, in the judgment
of the Agent, may materially impair the ability of the Agent to sell the
Placement Shares hereunder or to enforce contracts for the sale of securities.
Any such termination shall be without liability of any party to any other party
except that the provisions of Section 7(g), Section 9, Section 10, Section 16,
and Section 17 hereof shall remain in full force and effect notwithstanding such
termination. If the Agent elects to terminate this Agreement as provided in this
Section 11(a), the Agent shall provide the required notice as specified in
Section 12.

 

(b)                The Company shall have the right, by giving 10 days’ prior
notice as hereinafter specified, to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16,
and Section 17 hereof shall remain in full force and effect notwithstanding such
termination.

 

29

 

(c)                The Agent shall have the right, by giving 10 days’ prior
notice as hereinafter specified, to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16,
and Section 17 hereof shall remain in full force and effect notwithstanding such
termination.

 

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

 

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

 

(f)                 Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided, however, that such
termination shall not be effective until the close of business on the date of
receipt of such notice by 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. Upon termination of this Agreement, the Company shall not be
required to pay to the Agent any discount or commission with respect to any
Placement Shares not otherwise sold by the Agent under this Agreement; provided,
however, that the Company shall remain obligated to reimburse the Agent’s
expenses pursuant to Section 7(g).

 

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

 

Stifel, Nicolaus & Company, Incorporated

787 Seventh Avenue

New York, New York 10019

Attention: Equity Capital Markets

with copies (which shall not constitute notice) to:

 

Goodwin Procter LLP

The New York Times Building

620 Eighth Avenue

New York, New York 10018

Attention: Thomas S. Levato, Esq.

and if to the Company, shall be delivered to:

 

Arcturus Therapeutics Holdings Inc.

10628 Science Center Dr.

Suite 200

San Diego, California 92121

Attention: Chief Executive Officer

 

30

 

with copies (which shall not constitute notice) to:

 

Dentons US LLP

4655 Executive Drive
Suite 700
New York, New York 10178

Attention: Jeffrey A. Baumel, Esq.

 

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

 

An electronic communication (“Electronic Notice”) shall be deemed written notice
for purposes of this Section 12 if sent to the electronic mail address specified
by the receiving party in Section 12. Electronic Notice shall be deemed received
at the time the party sending Electronic Notice receives actual acknowledgment
of receipt from the person whom the notice is sent, other than via auto-reply.
Any party receiving Electronic Notice may request and shall be entitled to
receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”),
which shall be sent to the requesting party within 10 days of receipt of the
written request for Nonelectronic Notice.

 

13.               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, directors and
other persons referred to in Section 9 hereof. References to any of the parties
contained in this Agreement shall be deemed to include the successors and
permitted assigns of each such party. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto, the
persons referred to in the preceding sentence and their respective successors
and permitted assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.
Neither party may assign its rights or obligations under this Agreement without
the prior written consent of the other party; provided, however, that the Agent
may assign its rights and obligations hereunder to an affiliate of the Agent
without obtaining the Company’s consent, so long as such affiliate is a
registered broker-dealer.

 

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

 

15.               Entire Agreement; Amendment; Severability; Waiver. This
Agreement (including all schedules (as amended pursuant to this Agreement) 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; provided, however, that Schedule 2 of
this Agreement may be amended by either party from time to time by sending a
notice containing a revised Schedule 2 to the other party in the manner provided
in Section 12 and, upon such amendment, all references herein to Schedule 2
shall automatically be deemed to refer to such amended Schedule 2. 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. No implied waiver by a
party shall arise in the absence of a waiver in writing signed by such party. No
failure or delay in exercising any right, power, or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any right,
power, or privilege hereunder.

 

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16.               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. EACH PARTY 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.

 

17.               Consent to Jurisdiction. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection with any of the transactions 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 (certified or registered mail, return receipt requested) to such
party at the address in effect for notices under Section 12 of this Agreement
and agrees that such service shall constitute good and sufficient notice 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.

 

18.               [Reserved].

 

19.               [Reserved].

 

20.               Construction.

 

(a)                The section and exhibit headings herein are for convenience
only and shall not affect the construction hereof.

 

(b)                Words defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.

 

(c)                The words “hereof,” “hereto,” “herein” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

 

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(d)                Wherever the word “include,” “includes” or “including” is
used in this Agreement, it shall be deemed to be followed by the words “without
limitation.”

 

(e)                References herein to any gender shall include each other
gender.

 

(f)                 References herein to any law, statute, ordinance, code,
regulation, rule or other requirement of any governmental authority shall be
deemed to refer to such law, statute, ordinance, code, regulation, rule or other
requirement of any governmental authority as amended, reenacted, supplemented or
superseded in whole or in part and in effect from time to time and also to all
rules and regulations promulgated thereunder.

 

21.               Permitted Free Writing Prospectuses. The Company represents,
warrants and agrees that, unless it obtains the prior written consent of the
Agent, which consent shall not be unreasonably withheld, conditioned or delayed,
and the Agent represents, warrants and agrees that, unless it obtains the prior
written consent of the Company, which consent shall not be unreasonably
withheld, conditioned or delayed, it has not made and will not make any offer
relating to the Placement Shares that would constitute an issuer free writing
prospectus, or that would otherwise constitute a free writing prospectus (as
defined in Rule 405), required to be filed with the Commission. Any such free
writing prospectus consented to by the Agent or by the Company, as the case may
be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The
Company represents and warrants that it has treated and agrees that it will
treat each Permitted Free Writing Prospectus as an issuer free writing
prospectus, and that it has complied and will comply with the requirements of
Rule 433 applicable to any Permitted Free Writing Prospectus, including timely
filing with the Commission where required, legending and record keeping.

 

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

 

(a)                the Agent has been retained to act as sales agent in
connection with the sale of the Shares, the Agent has acted at arms’ length and
no fiduciary or advisory relationship between the Company or any of its
respective affiliates, shareholders (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 the Agent has advised or is advising
the Company on other matters and the Agent has no duties or obligations to the
Company with respect to the transactions contemplated by this Agreement except
the obligations expressly set forth herein;

 

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

 

(c)                neither the Agent nor its affiliates have 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)                the Company has been advised and 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 that the Agent and its
affiliates have no obligation to disclose such interests and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship or
otherwise; and

 

(e)                the Company waives, to the fullest extent permitted by law,
any claims it may have against the Agent or its affiliates for breach of
fiduciary duty or alleged breach of fiduciary duty in connection with the
transactions contemplated by this Agreement and agrees that the Agent and its
affiliates shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary claim or to any person asserting a fiduciary duty
claim on behalf of or in right of the Company, including shareholders (or other
equity holders), creditors or employees of the Company.

 

33

 

23.               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 or electronic
transmission.

 

24.               Use of Information. The Agent may not provide any information
gained in connection with this Agreement and the transactions contemplated by
this Agreement, including due diligence, to any third party other than its legal
counsel advising it on this Agreement unless expressly approved by the Company
in writing.

 

25.               Agent’s Information; Knowledge of the Company. As used in this
Agreement, “Agent’s Information” means solely the following information in the
Registration Statement and the Prospectus: the last sentence of the last
paragrpah under the heading “Plan of Distribution” in the Prospectus Supplement.

 

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 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 “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 Page Intentionally Blank]

 

34

 

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,         ARCTURUS THERAPEUTICS HOLDINGS INC.         By: /s/
Joseph E. Payne   Name: Joseph E. Payne   Title: Chief Executive Officer        
ACCEPTED AS OF THE DATE   FIRST-ABOVE WRITTEN:         STIFEL, NICOLAUS &
COMPANY, INCORPORATED         By: /s/ Daniel J. Covatta   Name: Daniel J.
Covatta   Title: Managing Director