Exhibit 10.1

SAREPTA THERAPEUTICS, INC.

Common Stock

($0.0001 par value per share)

AT-THE-MARKET EQUITY OFFERING SALES AGREEMENT

September 4, 2012

CITADEL SECURITIES LLC

601 Lexington Avenue, 28th Floor

New York, NY 10003

Ladies and Gentlemen:

Sarepta Therapeutics, Inc., an Oregon corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell from time
to time to or through Citadel Securities LLC (“Citadel”), as sales agent and/or
principal (“Agent”), shares (the “Shares”) of the Company’s common stock,
$0.0001 par value per share (the “Common Stock”), having an aggregate offering
price of up to $40,000,000 on the terms set forth in Section 2 of this Sales
Agreement (the “Agreement”). The Company agrees that whenever it determines to
sell Shares directly to the Agent as principal, it will enter into a separate
agreement (each, a “Terms Agreement”) in substantially the form of Annex I
hereto, relating to such sale in accordance with Section 3 of this Agreement.

The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the “1933 Act”),
on Form S-3 (File No. 333-180258), in respect of the Company’s Common Stock
(including the Shares) and other securities within three years prior to the date
hereof; such registration statement, and any post-effective amendment thereto,
has become effective; and no stop order suspending the effectiveness of such
registration statement or any part thereof has been issued and no proceeding for
that purpose has been initiated or, to the knowledge of the Company, threatened
by the Commission (the base prospectus filed as part of such registration
statement, in the form in which it has most recently been filed with the
Commission on or prior to the date of this Agreement, is hereinafter called the
“Base Prospectus”; the various parts of such registration statement, including
all exhibits thereto and any prospectus supplement or prospectus relating to the
Shares that is filed with the Commission and deemed by virtue of Rule 430B under
the 1933 Act to be part of such registration statement, each as amended at the
time such part of the registration statement became effective, are hereinafter
collectively called the “Registration Statement”; the prospectus supplement
specifically relating to the Shares prepared and filed with the Commission
pursuant to Rule 424(b) under the 1933 Act is hereinafter called the “Prospectus
Supplement”; the Base Prospectus, as amended and supplemented by the Prospectus
Supplement, is hereinafter called the “Prospectus”; any reference herein to the
Base Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act; any reference to any amendment or
supplement to the Base Prospectus, the Prospectus Supplement or the Prospectus
shall be deemed to refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement or prospectus relating to the
Shares filed with the Commission pursuant to

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Rule 424(b) under the 1933 Act and any documents filed under the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the “1934 Act”), and incorporated therein, in each case after the
date of the Base Prospectus, the Prospectus Supplement or the Prospectus, as the
case may be; any reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of
the Registration Statement that is incorporated by reference in the Registration
Statement; and any “issuer free writing prospectus” as defined in Rule 433 under
the 1933 Act relating to the Shares is hereinafter called an “Issuer Free
Writing Prospectus”).

For the purposes of this Agreement, the “Applicable Time” means, with respect to
any Shares, the time of sale of such Shares pursuant to this Agreement. The
Prospectus and the applicable Issuer Free Writing Prospectus(es) issued at or
prior to such Applicable Time, taken together, collectively, and, with respect
to any Shares, together with the public offering price of such Shares, shall be
referred to herein as the “General Disclosure Package”.

Section 1. Representations and Warranties. The Company represents, warrants and
covenants to the Agent, as of the date of this Agreement, any applicable
Registration Statement Amendment Date (as defined in Section 3 below), each
Company Periodic Report Date (as defined in Section 3 below), each Applicable
Time and each Settlement Date (as defined in Section 2 below), if any, as
follows (unless such representation or warranty specifies a different time):

(a) Compliance with Registration Requirements. The Registration Statement and
any Rule 462(b) Registration Statement have been declared effective by the
Commission under the 1933 Act. The Company has complied, to its knowledge to the
Commission’s satisfaction, with all requests of the Commission for additional or
supplemental information made on or prior to the date hereof. No stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the Company’s knowledge, are contemplated
or threatened by the Commission.

The Base Prospectus when filed complied in all material respects with the 1933
Act and, if filed by electronic transmission pursuant to the Commission’s
Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) (except as
may be permitted by Regulation S-T under the 1933 Act), was identical to the
copy thereof delivered to the Agent for use in connection with the offer and
sale of the Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time it
became effective and at all subsequent times during which a prospectus is
required by the 1933 Act to be delivered (whether physically or through
compliance with Rule 153 or 172 or any similar rules, or in lieu thereof, a
notice referred to in Rule 173(a) under the 1933 Act) in connection with sales
by the Agent or a dealer (the “Prospectus Delivery Period”), complied and will
comply in all material respects with the 1933 Act and did 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. As of each Applicable Time, the General Disclosure Package
(including any Prospectus wrapper), taken as a whole, did not, and at the time
of each sale of the Shares and at each Settlement Date (as hereinafter defined
in Section 2), the General Disclosure Package, as then amended or supplemented
by the Company, if applicable, taken as a whole, will not, contain any untrue
statement of a material fact or omit to state

 

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a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Prospectus
(including any Prospectus wrapper), as amended or supplemented, as of its date
and at all subsequent times during the Prospectus Delivery Period, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the three immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Base Prospectus, the Prospectus or the General
Disclosure Package, or any amendments or supplements thereto, made in reliance
upon and in conformity with information relating to the Agent furnished to the
Company in writing by the Agent expressly for use therein, it being understood
and agreed that the only such information furnished by the Agent to the Company
consists of the information described in Section 7(b) below. There are no
contracts or other documents required to be described in the General Disclosure
Package or the Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.

The Company is not an “ineligible issuer” in connection with the offering of the
Shares pursuant to Rules 164, 405 and 433 under the 1933 Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under
the 1933 Act has been, or will be, filed with the Commission in accordance with
the requirements of the 1933 Act. Each free writing prospectus that the Company
has filed, or is required to file, pursuant to Rule 433(d) under the 1933 Act or
that was prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the requirements of
Rule 433 under the 1933 Act including timely filing with the Commission or
retention where required and legending, and each such free writing prospectus,
as of its issue date and at all subsequent times through the completion of the
public offer and sale of the Shares did not, does not and will not include any
information that conflicted, conflicts with or will conflict with the
information contained in the Registration Statement, the Base Prospectus or the
Prospectus. Except for the free writing prospectuses, if any, identified on
Schedule A hereto, furnished to you before first use, the Company has not
prepared, used or referred to, and will not, without your prior consent, not to
be unreasonably withheld or delayed, prepare, use or refer to, any free writing
prospectus.

(b) Offering Materials Furnished to Agent. If so requested by the Agent, the
Company has delivered to the Agent two complete copies of the Registration
Statement, each amendment thereto and any Rule 462(b) Registration Statement and
of each consent and certificate of experts filed as a part thereof.

(c) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the completion of the Agent’s
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than the Base Prospectus, the General
Disclosure Package, the Prospectus, any free writing prospectus reviewed and
consented to by the Agent, or the Registration Statement.

(d) The Sales Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
against the Company in accordance with its terms, except as rights to
indemnification hereunder may be limited by

 

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applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.

(e) Authorization of the Shares. The Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable, and the issuance and sale of the Shares is not subject to any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase the Shares, except for such rights as have been duly waived. No
approval of the shareholders of the Company under the rules and regulations of
the Nasdaq Global Market (including Rule 5635 of the Nasdaq Marketplace Rules)
is required for the Company to issue and deliver to the Agent the Shares. All
subsequent references herein to “Nasdaq” mean the Nasdaq Global Market or such
national securities exchange as the Shares are listed on from time to time as
the principal exchange thereof.

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

(g) No Material Adverse Change. Except as otherwise disclosed in the General
Disclosure Package, subsequent to the respective dates as of which information
is given in the General Disclosure Package: (i) there has been no material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries taken as a whole (any such change is called a “Material Adverse
Change”); (ii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of capital stock or repurchase or redemption by the Company of any
class of capital stock.

(h) Independent Accountants. KPMG LLP, who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) for the years ended December 31, 2011, 2010
and 2009 and related supporting schedules, each filed with the Commission as a
part of the Registration Statement and incorporated by reference into the Base
Prospectus, the Prospectus and General Disclosure Package are an independent
registered public accounting firm with respect to the Company within the
applicable rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (the “PCAOB”) and as required by the 1933
Act.

(i) Preparation of the Financial Statements. The financial statements filed with
the Commission as a part of the Registration Statement and included in the Base
Prospectus, the General Disclosure Package and the Prospectus present fairly in
all material respects the financial position of the Company and its subsidiaries
as of and at the dates indicated and the results of its operations and cash
flows for the periods specified. The supporting schedules included in the
Registration

 

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Statement, taken together with such financial statements, present fairly in all
material respects the information required to be stated therein. Such financial
statements and supporting schedules have been prepared in conformity with
generally accepted accounting principles as applied in the United States applied
on a consistent basis throughout the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements). No other financial
statements or supporting schedules are required to be included in the
Registration Statement or the Prospectus. The financial data set forth or
incorporated by reference in the Registration Statement and the Prospectus
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement and
the Prospectus. 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
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 included in the
Prospectus. The interactive data in eXtensible Business Reporting Language
incorporated by reference into the Registration Statement, General Disclosure
Package and the Prospectus has been prepared in all material respects in
accordance with the Commission’s rules and guidelines applicable thereto (the
“XBRL Data”).

(j) Company’s Accounting System. The Company makes and keeps accurate books and
records and maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States 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 XBRL Data is prepared in all material
respects in accordance with the Commission’s rules and guidelines applicable
thereto. Except as disclosed in the General Disclosure Package, the Company is
not aware of any material weakness in the Company’s internal control over
financial reporting (whether or not remediated) as of December 31, 2011 and as
of the date hereof, and since December 31, 2011, there has been no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.

(k) Incorporation and Good Standing of the Company. Each of the Company and its
subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation and has the
power and authority to own, lease and operate its properties and to conduct its
business as described in the General Disclosure Package and the Prospectus and
to enter into and perform its obligations under this Agreement. The Company is
duly qualified as a foreign corporation to transact business and is in good
standing in the State of Washington, the Commonwealth of Massachusetts and the
Commonwealth of Virginia and each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to be so qualified or in good
standing would not reasonably be expected to result in a Material Adverse
Change. Each of the

 

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subsidiaries of the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to be so qualified
or in good standing would not reasonably be expected to result in a Material
Adverse Change. Except as set forth in the General Disclosure Package, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity.

(l) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus and
the General Disclosure Package as of the dates referred to therein (other than
for subsequent issuances, if any, pursuant to employee benefit plans described
in the General Disclosure Package or changes in the number of outstanding shares
of common stock of the Company due to the issuance of shares of common stock
upon the exercise or conversion of securities exercisable for, or convertible
into, Common Stock, or as a result of the issuance of the Shares). The Shares
conform in all material respects to the description thereof contained in the
General Disclosure Package. All of the issued and outstanding shares have been
duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws. None of the
issued and outstanding shares was issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company other than those described in
the Prospectus and the General Disclosure Package. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted thereunder, set forth in the Prospectus and
the General Disclosure Package accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights. All grants of options to acquire Shares (each, a “Company Stock Option”)
were validly issued and approved by the Board of Directors of the Company, a
committee thereof or an individual with authority duly delegated by the Board of
Directors of the Company or a committee thereof. Grants of Company Stock Options
were (i) made in material compliance with all applicable laws and (ii) as a
whole, made in material compliance with the terms of the plans under which such
Company Stock Options were issued. There is no and has been no policy or
practice of the Company in connection with the granting of Company Stock Options
that violates any applicable law. Except as described in the General Disclosure
Package and the Prospectus, the Company has not sold or issued any Shares during
the six-month period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the 1933 Act other than
Shares issued pursuant to employee benefit plans, qualified stock options plans
or other employee compensation plans or pursuant to outstanding options, rights
or warrants.

(m) Stock Exchange Listing. The Shares are registered pursuant to Section 12(b)
of the 1934 Act and are listed on the Nasdaq Global Market under the trading
symbol “SRPT,” and the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Shares under the 1934
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, except for such notifications described in the General
Disclosure Package and the Prospectus. The Company has filed a Listing of
Additional Shares Notification Form for the Shares on Nasdaq.

 

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(n) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws, or (ii) in default (or, with the giving of
notice or lapse of time, would be in default) (“Default”) under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it may be bound (including, without limitation, any credit agreement,
indenture, pledge agreement, security agreement or other instrument or agreement
evidencing, guaranteeing, securing or relating to indebtedness of the Company),
or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an “Existing Instrument”), except for such
Defaults as would not reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change. The Company’s execution,
delivery and performance of this Agreement, consummation of the transactions
contemplated hereby and by the General Disclosure Package and the issuance and
sale of the Shares (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the charter or
by-laws of the Company, (ii) will not conflict with or constitute a breach of,
or Default under, 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, or require the consent of any other party to, any
Existing Instrument, except for consents that have been validly obtained and
except for such breaches, Defaults or results, or failure to obtain such
consent, as would not reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Change, and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any of its subsidiaries, except for such
violations as would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change. No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the
Company’s execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the General Disclosure Package,
except such as have been obtained or made or will be made by the Company under
the 1933 Act or the 1934 Act, or that may be required by the Financial Industry
Regulatory Authority (“FINRA”).

(o) No Material Actions or Proceedings. Except as disclosed in the General
Disclosure Package and the Prospectus, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company’s
knowledge, threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which have as the subject thereof any officer or director of,
or property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such
case (A) such action, suit or proceeding (including without limitation, any such
action, suit or proceeding for which, to the Company’s knowledge, there is a
substantial likelihood that it will be determined adversely to the Company or
any of its subsidiaries or such officer or director), if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement or (B) any such action, suit or proceeding is or would be material in
the context of the sale of Shares. There are no current or pending legal,
governmental or regulatory investigations of which the Company is aware,
actions, suits or proceedings that are required under the 1933 Act to be
described in the Prospectus that are not so described. No material labor dispute
with the employees of the Company or any of its subsidiaries exists or, to the
Company’s knowledge, is threatened or imminent.

 

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(p) Intellectual Property Rights. The Company and each of its subsidiaries owns
or possesses the right to use all patents, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights, licenses,
inventions, software, databases, know-how, Internet domain names, trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, and other intellectual property
(collectively, “Intellectual Property”) necessary to carry on their respective
businesses as currently conducted, and as proposed to be conducted and described
in the General Disclosure Package and the Prospectus, and the Company has not
received written notice of any challenge, which is to their knowledge still
pending, by any other person to the rights of the Company and its subsidiaries
with respect to the foregoing except for those described in the General
Disclosure Package and the Prospectus or those that would not reasonably be
expected to result in a Material Adverse Change. The Intellectual Property
licenses described in the General Disclosure Package and the Prospectus are
valid, binding upon, and enforceable against the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with their terms, except
(i) as limited by laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) as limited by rules of law governing
specific performance, injunctive relief or other equitable remedies and by
general principles of equity. The Company and each of its subsidiaries have not
received any written notice of any asserted or threatened claim of breach, and
the Company and its subsidiaries have complied in all material respects with,
and are not in breach of any Intellectual Property license, and the Company has
no knowledge of any breach by any other person to any Intellectual Property
license. Except as described in the General Disclosure Package and the
Prospectus, no written claim has been made against the Company or any of its
subsidiaries alleging the infringement by the Company or any of its subsidiaries
of any patent, trademark, service mark, trade name, copyright, trade secret,
license in or other intellectual property right or franchise right of any
person. The Company and each of its subsidiaries has taken all reasonable steps
to protect, maintain and safeguard its rights in all Intellectual Property ,
including the execution of appropriate nondisclosure and confidentiality
agreements to protect its trade secrets. The consummation of the transactions
contemplated by this Agreement will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the consent of
any other person in respect of, the Company’s or any of its subsidiaries’ right
to own, use, or hold for use any of the Intellectual Property as owned, used or
held for use in the conduct of their respective businesses as currently
conducted. The Company and each of its subsidiaries has at all times complied in
all material respects with all applicable laws relating to privacy, data
protection, and the collection and use of personal information collected, used,
or held for use by the Company and each of its subsidiaries in the conduct of
the their respective businesses. No written claims have been asserted or
threatened against the Company or any of its subsidiaries alleging a violation
of any person’s privacy or personal information or data rights and the
consummation of the transactions contemplated hereby will not breach or
otherwise cause any violation of any law related to privacy, data protection, or
the collection and use of personal information collected, used, or held for use
by the Company or any of its subsidiaries in the conduct of their respective
businesses. The Company and each of its subsidiaries takes reasonable measures
to ensure that such information is protected against unauthorized access, use,
modification, or other misuse.

(q) All Necessary Permits, etc. The Company and each of its subsidiaries has
made all filings, applications, declarations and submissions required by, and
owns or possesses all approvals, licenses, certificates, clearances, consents,
exemptions, marks, notifications, orders, authorizations

 

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and permits issued by the appropriate local, state, federal or foreign
regulatory agencies or bodies, including, without limitation, the Food and Drug
Administration (the “FDA”) and any agency of any foreign government and any
other foreign regulatory authority exercising authority comparable to that of
the FDA (including any non-governmental entity whose approval or authorization
is required under foreign law comparable to that administered by the FDA), which
are required for the ownership of their respective properties or the conduct of
their current respective businesses as described in the General Disclosure
Package and the Prospectus (collectively, the “Governmental Permits”) and is in
compliance with the terms and conditions of all such Governmental Permits,
except where any failures to make, own or possess or be in compliance with such
Government Permits would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change. All such Governmental Permits
are valid and in full force and effect. Except as set forth in the General
Disclosure Package, neither the Company nor any of its subsidiaries has received
any written notice of any revocation, modification or cancellation of, any such
Governmental Permit, which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would reasonably be expected to
result in a Material Adverse Change.

(r) Clinical Matters. (i) Each Investigational New Drug application (“IND”)
submitted by the Company or any of its subsidiaries to the FDA or equivalent
application submitted by the Company to foreign regulatory bodies, and related
documents and written information, has been submitted and maintained in
compliance in all material respects with applicable statutes, rules and
regulations administered or promulgated by the FDA or other regulatory body
(“FDA Laws”), or was corrected or supplemented by a subsequent document or
written information in compliance in all material respects with FDA Laws, except
as would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change; (ii) to the Company’s knowledge, the studies,
tests and preclinical and clinical trials conducted by or on behalf of the
Company or its subsidiaries that are described in the General Disclosure Package
or the Prospectus were and, if still pending, are being, conducted in all
material respects in accordance with experimental protocols, procedures and
controls pursuant to, where applicable, accepted medical and scientific
standards; and the drug substances used in the clinical trials have been
manufactured in all material respects under applicable current Good
Manufacturing Practice requirements, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change; and
(iii) the descriptions of the results of the studies, tests and preclinical and
clinical trials that are described in the General Disclosure Package and the
Prospectus are accurate and complete in all material respects. Neither the
Company nor any of its subsidiaries has received any written notices or
correspondence from the FDA or any foreign, state or local governmental body
exercising comparable authority requiring the termination or suspension of any
studies, tests or preclinical or clinical trials conducted by or on behalf of
the Company or any of its subsidiaries. To the Company’s knowledge, no filing or
submission made by the Company to the FDA or any other regulatory body, that is
intended to be the basis for any approval of the Company’s or any of its
subsidiaries’ product candidates, contained any material omission or, materially
false information as of the date of submission, and any necessary or required
updates, changes, corrections or modifications have been submitted to the
relevant regulatory body.

(s) Title to Properties. Except as set forth in the General Disclosure Package,
each of the Company and its subsidiaries has good and marketable title to all of
the real property and good and valid title to all personal property and other
assets reflected as owned in the financial statements

 

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referred to in Section 1(i) above (or elsewhere in the General Disclosure
Package) (excluding patents and patent applications covered in Section 1(p)
above), in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, adverse claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company. To the Company’s knowledge, the real property, improvements, equipment
and personal property held under lease by the Company or its subsidiaries are
held under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company and its subsidiaries.

(t) Tax Law Compliance. The Company and each of its subsidiaries has filed all
necessary federal, state and foreign income and franchise tax returns or has
properly requested extensions thereof and has paid all material taxes required
to be paid by the Company and each of its subsidiaries and, if due and payable,
any related or similar assessment, fine or penalty levied against the Company
and each of its subsidiaries except as may be being contested in good faith and
by appropriate proceedings or as disclosed in the General Disclosure Package.
The Company and each of its subsidiaries has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section 1(i)
above to the extent required by generally accepted accounting principles in the
U.S. in respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company and each of its
subsidiaries has not been finally determined.

(u) Company Not an “Investment Company”. Neither the Company nor any of its
subsidiaries is, and at no time during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172 under
the Act or any similar rule) in connection with any sale of Shares will be, and,
after giving effect to the offering and sale of any Shares, neither of them will
be, an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”).

(v) Insurance. The Company and each of its subsidiaries maintain insurance
covering their respective properties, operations, personnel and businesses as
the Company reasonably deems adequate; such insurance insures against such
losses and risks to an extent which is adequate in accordance with customary
industry practice to protect the Company and the subsidiaries and their
respective businesses; all such insurance is fully in force on the date hereof
and will be fully in force at the time of purchase of Shares and each additional
time of purchase of Shares, if any; neither the Company nor any of its
subsidiaries has reason to believe that it will not be able to renew any such
insurance as and when such insurance expires.

(w) No Price Stabilization or Manipulation; Compliance with Regulation M.
Neither the Company nor any of its subsidiaries has taken, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Shares or any
other “reference security” (as defined in Rule 100 of Regulation M under the
1934 Act (“Regulation M”)) whether to facilitate the sale or resale of the
Shares or otherwise, and has taken no action which would directly or indirectly
violate Regulation M.

 

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(x) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company, any of its subsidiaries or any
other person required to be described in the Registration Statement or the
Prospectus which have not been described as required.

(y) S-3 Eligibility. At the time the Registration Statement was originally
declared effective and as of the date hereof, the Company met the then
applicable requirements for use of Form S-3 under the 1933 Act. The Company is
eligible to offer and sell securities under the Registration Statement
(including the offer and sale of the Shares) without reliance on General
Instruction I.B.6 of Form S-3. On the date of this Agreement, the Company
(i) had a non-affiliate, public common equity float of at least $150 million and
(ii) had been subject to the 1934 Act reporting requirements for a period of at
least 36 months.

(z) 1934 Act Compliance. The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and, when read together with the other information
in the Prospectus and the General Disclosure Package, at the time the
Registration Statement and any amendments thereto become effective and at the
Settlement Date, as the case may be, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

(aa) FINRA Matters. All of the information provided to the Agent or to counsel
for the Agent by the Company, its officers and directors and, to the Company’s
knowledge, the holders of any securities (debt or equity) or options to acquire
any securities of the Company in connection with letters, filings or other
supplemental information provided pursuant to FINRA Rule 5110 or the National
Association of Securities Dealers Inc. (the “NASD”) Conduct Rule 2710 or 2720 is
true, complete and correct. Neither the Company nor, to the knowledge of the
Company, any of its affiliates (within the meaning of the NASD Conduct
Rule 2720(f)(1)) directly or indirectly controls, is controlled by, or is under
common control with, or is an associated person (within the meaning of Article
I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.

(bb) Statistical and Market-Related Data. The statistical, demographic and
market-related data included in the Registration Statement and the Prospectus
and General Disclosure Package are based on or derived from sources that the
Company believes to be reliable and accurate or represent the Company’s good
faith estimates that are made on the basis of data derived from such sources.

(cc) No Unlawful Contributions or Other Payments. Except as set forth in the
General Disclosure Package and the Prospectus (which exception shall not be
construed as an admission of any such contribution or payment), neither the
Company nor any of its subsidiaries, and, to the Company’s knowledge, any
employee or agent of the Company, have made any contribution or other payment to
any official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character required to be disclosed in the
Registration Statement and the Prospectus.

(dd) Disclosure Controls and Procedures; Deficiencies in or Changes to Internal
Control Over Financial Reporting. The Company has established and maintains
disclosure controls and procedures (as defined in 1934 Act Rules 13a-15(e) and
15d-15(e)), which (i) are designed to ensure

 

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that material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within
the Company, particularly during the periods in which the periodic reports
required under the 1934 Act are being prepared; (ii) have been evaluated by
management of the Company for effectiveness as of the end of the Company’s most
recent fiscal quarter; and (iii) the Company’s principal executive officer and
principal financial officer concluded to be effective at the reasonable
assurance level. Based on the most recent evaluation of its internal control
over financial reporting, the Company is not aware of (i) any significant
deficiencies or material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information or (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company’s internal control
over financial reporting. 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.

(ee) Compliance with Environmental Laws. Except as would not, reasonably be
expected to, individually or in the aggregate, result in a Material Adverse
Change, (i) neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
“Environmental Laws”), (ii) the Company and each of its subsidiaries has all
permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, (iii) there are
no pending or, to the Company’s knowledge threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries, and (iv) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.

(ff) ERISA Compliance. The Company and any “employee benefit plan” (as defined
under the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company or its “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA. “ERISA Affiliate”
means, with respect to the Company, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the “Code”) of which the Company is a member. No “reportable event” (as defined
under ERISA) has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained

 

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by the Company or any of its ERISA Affiliates. No “employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any “amount of unfunded
benefit liabilities” (as defined under ERISA). Neither the Company nor any of
its ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the
Code. Each “employee benefit plan” established or maintained by the Company or
any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would reasonably be expected to result in the
loss of such qualification.

(gg) Sarbanes-Oxley. There is and has been no failure on the part of the
Company, any of its subsidiaries, or, to the knowledge of the Company, any of
the Company’s directors or officers, in their capacities as such, to comply with
any applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and the rules and regulations promulgated thereunder. Each of the
principal executive officer and the principal financial officer of the Company
(or each former principal executive officer of the Company and each former
principal financial officer of the Company as applicable) has made all
certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with
respect to all reports, schedules, forms, statements and other documents
required to be filed by it or furnished by it to the Commission. For purposes of
the preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

(hh) Brokers. Except as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any brokerage
or finder’s fee or other fee or commission as a result of any transactions
contemplated by this Agreement.

(ii) Underwriter Agreements. As of the date hereof, the Company is not a party
to any agreement with an agent or underwriter for any other “at-the-market” or
continuous equity transaction.

(jj) No Outstanding Loans or Other Extensions of Credit. Since the adoption of
Section 13(k) of the 1934 Act, neither the Company nor any of its subsidiaries
has extended or maintained credit, arranged for the extension of credit, or
renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer (or equivalent thereof) of the Company or any of
its subsidiaries except for such extensions of credit as are permitted by
Section 13(k) of the 1934 Act.

(kk) Compliance with Laws. Except as set forth in the General Disclosure Package
and the Prospectus (which exception shall not be construed as an admission of
any such contribution or payment), neither the Company nor any of its
subsidiaries has been advised, and has no reason to believe, that it is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except
where failure to be so in compliance would not result in a Material Adverse
Change. Except as set forth in the General Disclosure Package and the Prospectus
(which exception shall not be construed as an admission of any such contribution
or payment), neither the Company nor any subsidiary has received any notice

 

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of adverse finding, warning letter, untitled letter or other correspondence or
notice from any other governmental authority alleging or asserting noncompliance
with any laws applicable to the Company, except for such noncompliance the
correction of which would not result in a Material Adverse Change.

(ll) Foreign Corrupt Practices Act. Except as set forth in the General
Disclosure Package and the Prospectus (which exception shall not be construed as
an admission of any such contribution or payment), neither the Company, any
subsidiary of the Company, nor, to the Company’s knowledge, any director,
officer, agent, employee, affiliate or other person acting on behalf of the
Company or any of its subsidiaries is aware of or has taken any action, directly
or indirectly, that has resulted or would result in a violation of 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, in contravention of the FCPA; and the Company, each of
its subsidiaries, and, to the Company’s knowledge, the Company’s affiliates have
conducted their respective businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.

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

(nn) OFAC. Neither the Company nor any of its subsidiaries nor, to the knowledge
of the Company, any director, officer, employee, representative, agent or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering of the Shares contemplated hereby, or lend,
contribute or otherwise make available such proceeds to any person or entity for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.

(oo) Forward-looking statements. Each “forward-looking statement” (within the
meaning of Section 27A of the Act or Section 21E of the Exchange Act) contained
or incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus has been made or reaffirmed with a
reasonable basis and in good faith.

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

 

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The Company acknowledges that the Agent and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company, will rely upon
the accuracy and truthfulness of the foregoing representations and hereby
consents to such reliance.

Section 2. Sale and Delivery of Shares.

(a) Subject to the terms and conditions set forth herein, the Company agrees to
issue and sell exclusively through the Agent acting as sales agent or directly
to the Agent acting as principal from time to time, and the Agent agrees to use
its commercially reasonable efforts to sell as sales agent for the Company, the
Shares. Sales of the Shares, if any, through the Agent acting as sales agent or
directly to the Agent acting as principal will be made only by methods deemed to
be an “at the market offering” as defined in Rule 415 under the 1933 Act or as
otherwise agreed to by the Agent and the Company, including by means of ordinary
brokers’ transactions on the Nasdaq, or otherwise at market prices prevailing at
the time of sale or at prices related to prevailing market prices or at
negotiated prices or, with the Company’s prior written approval, in privately
negotiated transactions. Nothing contained herein shall be deemed to restrict
the Company from undertaking a simultaneous offering of its securities, provided
the Agent is given notice, if applicable, pursuant to Section 3(p).

(b) The Shares are to be sold on a daily basis or otherwise as shall be agreed
to by the Company and the Agent on that trading day (other than a day on which
the Nasdaq is scheduled to close prior to its regular weekday closing time,
each, a “Trading Day”), provided that the Company has satisfied its obligations
under Section 6 of this Agreement and that the Company has instructed the Agent
to make such sales (the “Purchase Date”); provided further that so long as the
Company’s Common Stock is not an “actively-traded security” within the meaning
of Rule 101(c)(1) of Regulation M or if deemed necessary, in the Agent’s
reasonable discretion, in connection with the Agent’s initiation of research
reports about the Company, the Agent may, in its reasonable discretion, by
reasonable notice to the Company, delay the Purchase Date in respect of all or
any portion of the Shares deliverable pursuant to any Terms Agreement to such
date as it determines is reasonably necessary to ensure compliance with
Regulation M and any other applicable legal or regulatory requirements. On any
Trading Day, the Company may instruct the Agent by telephone (confirmed promptly
by telecopy or email, which confirmation will be promptly acknowledged by the
Agent), and Agent shall follow such instruction, as to the maximum number of
Shares to be sold by the Agent on such day (in any event not in excess of the
number available for issuance under the Prospectus and the currently effective
Registration Statement) and the minimum price per Share at which such Shares may
be sold, which may be determined using a formula, calculation or other
methodology (including an average daily volume or weighted average price).
Subject to the terms and conditions hereof, the Agent shall use its commercially
reasonable efforts to sell as sales agent all of the Shares so designated by the
Company. The Company and the Agent each acknowledge and agree that (A) there can
be no assurance that the Agent will be successful in selling the Shares, (B) the
Agent will incur no liability or obligation to the Company or any other person
or entity if they do not sell 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 law and regulations to sell such
Shares as required by this Agreement, and (C) the Agent shall be under no
obligation to purchase Shares on a principal basis except as otherwise
specifically agreed by each of the Agent and the Company pursuant to a Terms
Agreement. In the event of a conflict between the terms of this Agreement and
the terms of a Terms Agreement, the terms of such Terms Agreement will control.

 

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(c) Notwithstanding the foregoing, the Company shall not authorize the issuance
and sale of, and the Agent as sales agent shall not be obligated to use its
commercially reasonable efforts to sell, any Shares (i) at a price lower than
the minimum price therefor authorized from time to time, or (ii) in a number in
excess of the number of Shares authorized from time to time to be issued and
sold under this Agreement, in each case, by the Company’s board of directors, or
a duly authorized committee thereof, and notified to the Agent in writing. In
addition, the Company may, upon notice to the Agent, suspend the offering of the
Shares or the Agent may, upon reasonable notice to the Company, suspend the
offering of the Shares with respect to which the Agent is acting as sales agent
for any reason and at any time; provided, however, that such suspension shall
not affect or impair the parties’ respective obligations with respect to the
Shares sold hereunder prior to the giving of such notice. Any notice given
pursuant to the preceding sentence may be given by telephone (confirmed promptly
by telecopy or email, which confirmation will be promptly acknowledged). The
Company may, upon notice to the Agent by telephone (confirmed promptly by
telecopy or email, which confirmation will be promptly acknowledged by the
Agent), seek to terminate or amend a Company instruction to the extent not
completed at the time of notice, and the Agent will use good faith efforts to
implement such termination or amendment, but shall not be obligated to take any
action that in its discretion it deems would disrupt a sale in progress but not
yet confirmed.

(d) The gross sales price of any Shares sold pursuant to this Agreement by the
Agent acting as sales agent of the Company shall be the market price prevailing
at the time of sale for shares of the Company’s Common Stock sold by the Agent
on the Nasdaq, or otherwise at market prices prevailing at the time of sale or
at prices related to prevailing market prices or at negotiated prices or, with
the Company’s prior written approval, in privately negotiated transactions. The
compensation payable to the Agent for sales of Shares with respect to which the
Agent acts as sales agent shall be equal to 3.0% of the gross sales price of the
Shares for amounts of Shares sold pursuant to this Agreement. The Company may
sell Shares to the Agent, acting as principal, at a price agreed upon with the
Agent at the relevant Applicable Time and pursuant to a separate Terms
Agreement. The remaining proceeds, after further deduction for any transaction
fees imposed by any governmental, regulatory or self-regulatory organization in
respect of such sales, shall constitute the net proceeds to the Company for such
Shares (the “Net Proceeds”). The Agent shall notify the Company as promptly as
practicable if any deduction referenced in the preceding sentence will be
required. As of the date hereof, no such deductions are expected to be imposed.

(e) If acting as a sales agent hereunder, the Agent shall provide written
confirmation to the Company following the close of trading on the Nasdaq, each
day in which Shares are sold under this Agreement setting forth the number of
Shares sold on such day, the aggregate gross sales proceeds of the Shares, the
Net Proceeds to the Company and the compensation payable by the Company to the
Agent with respect to such sales.

(f) Under no circumstances shall the aggregate offering price or number, as the
case may be, of Shares sold pursuant to this Agreement and any Terms Agreement
exceed the aggregate offering price or number, as the case may be, of Shares of
Common Stock (i) set forth in the preamble paragraph of this Agreement,
(ii) available for issuance under the Prospectus and the then currently

 

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effective Registration Statement or (iii) authorized from time to time to be
issued and sold under this Agreement or any Terms Agreement by the Company’s
board of directors, or a duly authorized committee thereof, and notified to the
Agent in writing. In addition, under no circumstances shall any Shares with
respect to which the Agent acts as sales agent be sold at a price lower than the
minimum price therefor 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.

(g) Settlement for sales of Shares pursuant to this Section 2 will occur on the
third business day that is also a Trading Day following the trade date on which
such sales are made, unless another date shall be agreed to by the Company and
the Agent (each such day, a “Settlement Date”). On each Settlement Date, the
Shares sold through the Agent for settlement on such date shall be delivered by
the Company to the Agent against payment of the Net Proceeds from the sale of
such Shares. Settlement for all Shares shall be effected by book-entry delivery
of Shares to the Agent’s account at The Depository Trust Company against
payments by the Agent of the Net Proceeds from the sale of such Shares in
immediately available funds delivered to an account designated by the Company.
If the Company shall default on its obligation to deliver Shares on any
Settlement Date, the Company shall (i) indemnify and hold the Agent harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (ii) pay the Agent any commission to which it would otherwise be
entitled absent such default.

(h) Notwithstanding any other provision of this Agreement, the Company and the
Agent agree that no sales of Shares shall take place, and the Company shall not
request the sale of any Shares that would be sold, and the Agent shall not be
obligated to sell, during any period in which the Company is, or could
reasonably be deemed to be, in possession of material non-public information.

(i) At each Applicable Time, Settlement Date, Registration Statement Amendment
Date (as defined in Section 3 below) and Company Periodic Report Date (as
defined in Section 3(i) below), the Company shall be deemed to have affirmed
each representation and warranty contained in this Agreement, modified as
necessary to relate to the Registration Statement and the Prospectus as amended
to such time. Any obligation of the Agent to use its commercially reasonable
efforts to sell the Shares on behalf of the Company as sales agent shall be
subject to the continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in
Section 6 of this Agreement.

Section 3. Covenants. The Company agrees with the Agent:

(a) During the Prospectus Delivery Period, (i) that the Company will not file
any amendment or any supplement to the Registration Statement or the Prospectus
(other than documents incorporated by reference) prior to any Settlement Date
unless a copy thereof has been submitted to the Agent a reasonable period before
the filing and the Agent has not reasonably objected thereto (provided, the
failure to object shall not relieve the Company of liability or obligations
hereunder or affect the Agent’s rights to rely on the representations and
warranties herein) and will advise the Agent, promptly after it receives notice
thereof, of the time when any such amendment to the Registration Statement has
been filed or becomes effective or any amendment or supplement to the

 

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Prospectus has been filed and to furnish the Agent with copies thereof, (ii) to
file promptly all other material required to be filed by the Company with the
Commission pursuant to Rule 433(d) under the 1933 Act, (iii) to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act, (iv) to advise the Agent, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of the Prospectus or other prospectus in
respect of the Shares, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the form of the Registration Statement or the
Prospectus or for additional information, and (v) in the event of the issuance
of any such stop order or of any such order preventing or suspending the use of
the Prospectus in respect of the Shares or suspending any such qualification, to
promptly use its commercially reasonable efforts to obtain the withdrawal of
such order; and in the event of any such issuance of a notice of objection,
promptly to take such reasonable steps as may be necessary to permit offers and
sales of the Shares by the Agent, which may include, without limitation,
amending the Registration Statement or filing a new registration statement, at
the Company’s expense (references herein to the Registration Statement shall
include any such amendment or new registration statement).

(b) Promptly from time to time to take such action as the Agent may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as the Agent may reasonably request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the sale of the
Shares, provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction or to become subject to taxation in any jurisdiction
in which it is not otherwise subject; and to promptly advise the Agent of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.

(c) During the Prospectus Delivery Period, the Company will make available to
the Agent, as soon as practicable after the execution of this Agreement, and
thereafter from time to time furnish to the Agent, copies of the most recent
Prospectus in such quantities and at such locations as the Agent may reasonably
request for the purposes contemplated by the 1933 Act. During the Prospectus
Delivery Period, and if at such time any event shall have occurred 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 any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the 1934 Act any document
incorporated by reference in the Prospectus in order to comply with the 1933 Act
or the 1934 Act, to notify the Agent and to file such document and to prepare
and furnish without charge to the Agent as many written and electronic copies as
the Agent may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance.

 

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(d) To make generally available to its securityholders as soon as practicable,
but in any event not later than sixteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the 1933 Act), an
earnings statement of the Company (which need not be audited) complying with
Section 11(a) of the 1933 Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).

(e) To pay the required Commission filing fees relating to the Shares within the
time required by Rule 456(b)(1) under the 1933 Act without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933
Act.

(f) To use the Net Proceeds received by it from the sale of the Shares pursuant
to this Agreement and any Terms Agreement in the manner specified in the General
Disclosure Package.

(g) In connection with the offering and sale of the Shares, the Company will
file with the Nasdaq all documents and notices, and make all certifications,
required by the Nasdaq of companies that have securities that are listed or
quoted on the Nasdaq and will maintain such listings or quotations.

(h) To not take, directly or indirectly, and to cause its affiliates to refrain
from taking, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, under the 1934 Act or otherwise,
the stabilization or manipulation of the price of any securities of the Company
to facilitate the sale or resale of the Shares.

(i) At each Applicable Time, each Settlement Date, each Registration Statement
Amendment Date (as defined below), each Company Periodic Report Date (as defined
below) and each date on which Shares are delivered to the Agent pursuant to a
Terms Agreement (but only if so required therein as a supplement thereto), the
Company shall be deemed to have affirmed each representation, warranty, covenant
and other agreement contained in this Agreement or any Terms Agreement. In each
Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed by the Company
in respect of any quarter in which sales of Shares were made by or through the
Agent under this Agreement or any Terms Agreement (each date on which any such
document is filed, and any date on which an amendment to any such document is
filed, a “Company Periodic Report Date”), the Company shall set forth with
regard to such quarter the number of Shares sold through the Agent under this
Agreement or any Terms Agreement and the Net Proceeds received by the Company
with respect to sales of Shares pursuant to this Agreement or any Terms
Agreement.

(j) Upon commencement of the offering of Shares under this Agreement and each
time the Shares are delivered to the Agent as principal on a Settlement Date
pursuant to a Terms Agreement and not later than three (3) Trading Days after
each (i) date the Registration Statement or the Prospectus shall be amended or
supplemented (other than (1) in connection with the filing of a prospectus
supplement that contains solely the information set forth in Section 3(i),
(2) in connection with the filing of any current reports on Form 8-K (other than
any current reports on Form 8-K which contain financial statements, supporting
schedules or other financial data, including any current report on Form 8-K
under Item 2.02 of such form that is considered “filed” under the 1934 Act) or
(3) by a prospectus supplement relating to the offering of other securities
(including, without limitation, other shares of Common Stock)) (each such date,
a “Registration Statement Amendment

 

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Date”) and (ii) Company Periodic Report Date, the Company will furnish or cause
to be furnished forthwith to the Agent a certificate dated the date of
effectiveness of such amendment or the date of filing with the Commission of
such supplement or other document, as the case may be, in a form reasonably
satisfactory to the Agent to the effect that the statements contained in the
certificate referred to in Section 6(f) of this Agreement which were last
furnished to the Agent are true and correct at the time of such amendment,
supplement or filing, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement, the General Disclosure Package and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in said Section 6(f), but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented, or to the document incorporated by reference into the
Prospectus, to the time of delivery of such certificate. The requirement to
provide a certificate under this Section 3(j) shall be waived for any
Registration Statement Amendment Date or Company Periodic Report Date occurring
at a time at which no order for a sale is pending, which waiver shall continue
until the earlier to occur of the date the Company delivers a notice to sell
Shares hereunder (which for such calendar quarter shall be considered a
Registration Statement Amendment Date or Company Periodic Report Date, as
applicable) and the next occurring Registration Statement Amendment Date;
provided, however, that such waiver shall not apply for any date on which the
Company files its annual report on Form 10-K. Notwithstanding the foregoing, if
the Company subsequently decides to sell Shares following a Registration
Statement Amendment Date or Company Periodic Report Date when the Company relied
on such waiver and did not provide Agent with a certificate under this
Section 3(j), then before the Company seeks to sell Shares or Agent accepts an
order to sell any Shares, the Company shall provide Agent with a certificate
hereunder.

(k) Upon commencement of the offering of Shares under this Agreement and each
time the Shares are delivered to the Agent as principal on a Settlement Date
pursuant to a Terms Agreement (but only if so required therein as a supplement
thereto), and not later than three (3) Trading Days after each (i) Registration
Statement Amendment Date (other than arising through the amendment or supplement
to the Registration or Prospectus via incorporation by reference of documents
therein (excluding an amendment or supplement to the Registration or Prospectus
via any current reports on Form 8-K which contain financial statements,
supporting schedules or other financial data, including any current report on
Form 8-K under Item 2.02 of such form that is considered “filed” under the 1934
Act)) with respect to which the Company is obligated to deliver a certificate
under Section 3(j) and (ii) filing by the Company of an Annual Report on Form
10-K, the Company will furnish or cause to be furnished to the Agent and to
counsel to the Agent the written opinion and letter of Latham & Watkins LLP,
White Summers Caffee & James, LLP and Nelson Mullins Riley & Scarborough LLP or
other counsel reasonably satisfactory to the Agent, dated the date of
effectiveness of such amendment or the date of filing with the Commission of
such supplement or other document, as the case may be, in a form and substance
reasonably satisfactory to the Agent and its counsel, of the same tenor as the
opinions and letters referred to in Section 6(b), Section 6(c) and Section 6(d),
respectively, of this Agreement, but modified as necessary to relate to the
Registration Statement, the General Disclosure Package and the Prospectus as
amended and supplemented, or to the document incorporated by reference into the
Prospectus, to the time of delivery of such opinion and letter or, in lieu of
such opinion and letter, counsel last furnishing such

 

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letter to the Agent shall furnish the Agent with a letter substantially to the
effect that the Agent may rely on such last opinion and letter to the same
extent as though each were dated the date of such letter authorizing reliance
(except that statements in such last letter shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing reliance).

(l) Upon commencement of the offering of Shares under this Agreement and each
time the Shares are delivered to the Agent as principal on a Settlement Date,
and promptly after each (i) Registration Statement Amendment Date (other than
arising through the amendment or supplement to the Registration or Prospectus
via incorporation by reference therein (excluding an amendment or supplement to
the Registration or Prospectus via any current reports on Form 8-K which contain
financial statements, supporting schedules or other financial data, including
any current report on Form 8-K under Item 2.02 of such form that is considered
“filed” under the 1934 Act)) with respect to which the Company is obligated to
deliver a certificate under Section 3(j) and (ii) filing by the Company of an
Annual Report on Form 10-K, the Company will cause KPMG LLP, or other
independent accountants reasonably satisfactory to the Agent, to furnish to the
Agent a letter, dated the date of effectiveness of such amendment or the date of
filing of such supplement or other document with the Commission, as the case may
be, in form reasonably satisfactory to the Agent and its counsel, of the same
tenor as the letter referred to in Section 6(e) hereof, but modified as
necessary to relate to the Registration Statement, the General Disclosure
Package and the Prospectus, as amended and supplemented, or to the document
incorporated by reference into the Prospectus, to the date of such letter. As
used in this paragraph, to the extent there shall be an Applicable Time on or
following the date referred to in clause (i) or (ii) above, promptly shall be
deemed to be on or prior to the next succeeding Applicable Time.

(m) The Company consents to Citadel (and its affiliates and agents) trading in
the Company’s Common Stock for the account of Citadel (and its affiliates and
agents) and for the account of its clients at the same time as sales of Shares
occur pursuant to this Agreement or any Terms Agreement, so long as such trading
does not render Agent incapable of compliance with its obligations hereunder or
violate applicable law.

(n) If, to the knowledge of the Company, all filings required by Rule 424 in
connection with this offering shall not have been made or the representations in
Section 1(a) shall not be true and correct on the applicable Settlement Date,
the Company will, to the extent required by applicable law, offer to any person
who has agreed to purchase Shares from the Company as the result of an offer to
purchase solicited by the Agent the right to refuse to purchase and pay for such
Shares.

(o) The Company will cooperate timely with any reasonable due diligence review
conducted by the Agent or its counsel from time to time in connection with the
transactions contemplated hereby or in any Terms Agreement, including, without
limitation, and upon reasonable notice providing information and making
available documents and appropriate corporate officers, during regular business
hours and at the Company’s principal offices or electronically or
telephonically, as the Agent may reasonably request.

(p) During the period beginning on and including the fifth business day
immediately prior to the date on which the Company has instructed the Agent to
make sales of Shares under this Agreement through and including the third
business day following the final Settlement Date with respect to the Shares sold
pursuant to such instruction, the Company will not, without (i) giving the

 

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Agent at least five business days’ prior written notice specifying the nature of
the proposed sale and the date of such proposed sale and (ii) the Agent
suspending activity under this program for such period of time as requested by
the Company or as deemed appropriate by the Agent in light of the proposed sale,
(A) (1) offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant for the sale of, lend or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for or repayable with
Common Stock, or file any registration statement under the 1933 Act with respect
to any of the foregoing (other than a shelf registration statement under
Rule 415 under the 1933 Act, a registration statement on Form S-8 or
post-effective amendment to the Registration Statement) or (2) enter into any
swap or other agreement or any transaction that transfers in whole or in part,
directly or indirectly, any of the economic consequence of ownership of the
Common Stock, or any securities convertible into or exchangeable or exercisable
for or repayable with Common Stock, whether any such swap or transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise; or (B) directly or
indirectly repurchase, offer to repurchase, announce its intention to
repurchase, or otherwise enter into any transaction with the economic effect of
repurchasing any shares of its Common Stock. The foregoing sentence shall not
apply to (x) the Shares to be offered and sold through the Agent pursuant to
this Agreement or any Terms Agreement, (y) the issuance of shares of Common
Stock issuable upon exercise of the Company’s currently outstanding warrants and
(z) stock options, restricted stock or other equity incentive awards approved by
the board of directors of the Company or the compensation committee thereof or
the issuance of Common Stock upon exercise thereof.

(q) If immediately prior to the third anniversary (the “Renewal Deadline”) of
the initial effective date of the Registration Statement, any of the Shares
remain unsold, this Agreement shall automatically terminate on such Renewal
Deadline unless prior thereto the Company has filed, if it has not already done
so and is eligible to do so, an “automatic shelf registration statement” (as
defined in Rule 405 under the 1933 Act) relating to the Shares, in a form
reasonably satisfactory to the Agent, or, if the Company is not eligible to file
an automatic shelf registration statement, the Company has filed, if it has not
already done so, a new shelf registration statement relating to the Shares, in a
form reasonably satisfactory to the Agent. The Company will use its commercially
reasonable efforts to cause such registration statement to be declared effective
within 60 days after the Renewal Deadline. Unless this Agreement is
automatically terminated as provided above, the Company will take all other
action necessary or appropriate to permit the issuance and sale of the Shares to
continue as contemplated in the expired registration statement relating to the
Shares. References herein to the Registration Statement shall include such new
automatic shelf registration statement or such new shelf registration statement,
as the case may be.

(r) The Company will give prior written notice to Agent prior to entering into
any agreement with an agent or underwriter for any other “at-the-market” or
continuous equity transaction.

Section 4. Free Writing Prospectus.

(a) (i) The Company represents and agrees that without the prior consent of the
Agent, it has not made and will not make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined in Rule 405 under the
1933 Act; and (ii) the Agent represents and agrees that, without the prior
consent of the Company, it has not made and will not make any offer relating to
the Shares that would constitute a free writing prospectus required to be filed
with the Commission

 

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(b) The Company has complied and will comply with the requirements of Rule 433
under the 1933 Act applicable to any Issuer Free Writing Prospectus (including
any free writing prospectus identified in Section 4(a) hereof), including timely
filing with the Commission or retention where required and legending.

Section 5. Payment of Expenses. The Company covenants and agrees with the Agent
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Shares under the 1933 Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, the Base Prospectus, Prospectus Supplement, any Issuer
Free Writing Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Agent; (ii) the
cost of printing or producing this Agreement or any Terms Agreement, any Blue
Sky Memoranda, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all documented expenses in connection with the qualification
of the Shares for offering and sale under state securities laws as provided in
Section 3(b) hereof, including the reasonable and documented fees and
disbursements of counsel for the Agent in connection with such qualification and
in connection with the Blue Sky Surveys; (iv) any documented filing fees
incident to, and the reasonable and documented fees and disbursements of counsel
for the Agent in connection with, any required review by FINRA of the terms of
the sale of the Shares; (v) the reasonable and documented fees and expenses of
counsel to the Agent in connection with this Agreement and the offering
contemplated hereby, in an amount not to exceed $75,000; (vi) all fees and
expenses in connection with listing or quoting the Shares on the Nasdaq;
(vii) the cost of preparing the Shares; (vii) the costs and charges of any
transfer agent or registrar or any dividend distribution agent; and (ix) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Section 7
hereof, the Agent will pay all of its own costs and expenses, including the fees
of its counsel, transfer taxes on resale of any of the Shares by it, and any
advertising expenses connected with any offers it may make. Expenses related to
clauses (iii) and (iv) of this Section 5 shall not exceed $10,000.

Section 6. Conditions of the Agent’s Obligation. The obligations of the Agent
hereunder shall be subject, in its discretion, to the condition that all
representations and warranties and other statements of the Company herein or in
certificates of any officer of the Company delivered pursuant to the provisions
hereof are true and correct as of the time of the execution of this Agreement,
the date of any executed Terms Agreement and as of each Registration Statement
Amendment Date, Company Periodic Report Date, Applicable Time and Settlement
Date, to the condition that the Company shall have performed in all material
respects all of its obligations hereunder theretofore to be performed, and the
following additional conditions:

(a) The Prospectus Supplement shall have been filed with the Commission pursuant
to Rule 424(b) under the 1933 Act on the business day immediately following the
date hereof and in accordance with Section 3(a) hereof, any other material
required to be filed by the Company

 

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pursuant to Rule 433(d) under the 1933 Act shall have been filed with the
Commission within the applicable time periods prescribed for such filings by
Rule 433; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission and no notice
of objection of the Commission to the use of the form of the Registration
Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2)
under the 1933 Act shall have been received; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the reasonable satisfaction of the Agent.

(b) On every date specified in Section 3(k) hereof and on such other dates as
reasonably requested by the Agent, Latham & Watkins LLP, counsel for the
Company, shall have furnished to the Agent a written opinion or opinions
substantially similar to the form attached as Annex III hereto and a negative
assurance letter, dated as of such date, in each case, in form and substance
reasonably satisfactory to the Agent.

(c) On every date specified in Section 3(k) hereof and on such other dates as
reasonably requested by the Agent, White Summers Caffee & James, LLP, Oregon
counsel for the Company, shall have furnished to the Agent a written opinion or
opinions substantially similar to the form attached as Annex IV hereto, dated as
of such date, in form and substance reasonably satisfactory to the Agent.

(d) On every date specified in Section 3(k) hereof and on such other dates as
reasonably requested by the Agent, Nelson Mullins Riley & Scarborough LLP,
intellectual property counsel for the Company, shall have furnished to the Agent
a written opinion or opinions substantially similar to the form attached as
Annex V hereto, dated as of such date, in form and substance reasonably
satisfactory to the Agent.

(e) At the dates specified in Section 3(l) hereof and on such other dates as
reasonably requested by the Agent, the independent accountants of the Company
who have certified the financial statements of the Company included or
incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus shall have furnished to the Agent a letter dated as
of the date of delivery thereof and addressed to the Agent in form and substance
reasonably satisfactory to the Agent and its counsel, containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements of the Company included or
incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus.

(f) (i) Upon commencement of the offering of Shares under this Agreement and on
such other dates as reasonably requested by the Agent, the Company will furnish
or cause to be furnished promptly to the Agent a certificate of an officer in a
form reasonably satisfactory to the Agent stating the minimum price for the sale
of such Shares pursuant to this Agreement and the maximum number of Shares that
may be issued and sold pursuant to this Agreement or, alternatively, maximum
gross proceeds from such sales, as authorized from time to time by the Company’s
board of directors or a duly authorized committee thereof or, in connection with
any amendment, revision or modification

 

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of such minimum price or maximum Share number or amount, a new certificate with
respect thereto and (ii) on each date specified in Section 3(j) and on such
other dates as reasonably requested by the Agent, the Agent shall have received
a certificate of the Company executed by an executive officer of the Company,
whom shall be any of the Chief Executive Officer, the Chief Financial Officer,
Chief Accounting Officer or Vice President, Finance, dated as of the date
thereof, certifying, after reasonable inquiry, that (A) there has been no
Material Adverse Change since the date as of which information is given in the
General Disclosure Package and the Prospectus as then amended or supplemented
(giving effect to documents incorporated by reference and filed publicly on
EDGAR), (B) the representations and warranties in Section 1 hereof are true and
correct as of such date (or as of any earlier date specified therein), (C) no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the Company’s knowledge, are
contemplated or threatened by the Commission, (D) the Company has complied with
all of the agreements entered into in connection with the transaction
contemplated herein and satisfied all conditions on its part to be performed or
satisfied.

(g) Since the date of the latest audited financial statements then included or
incorporated by reference in the General Disclosure Package and the Prospectus,
no Material Adverse Change shall have occurred.

(h) The Company shall have complied with the provisions of Section 3(c) hereof
with respect to the timely furnishing of prospectuses.

(i) On such dates as reasonably requested by the Agent, the Company shall have
cooperated with and permitted Agent to conduct due diligence sessions, in form
and substance satisfactory to the Agent.

(j) All filings with the Commission required by Rule 424 under the 1933 Act to
have been filed by each Applicable Time or related Settlement Date shall have
been made within the applicable time period prescribed for such filing by
Rule 424 (without reliance on Rule 424(b)(8)).

(k) The Shares shall have received approval for listing or quotation on the
Nasdaq prior to the first Settlement Date.

(l) Prior to any Settlement Date, the Company shall have furnished to the Agent
such further information, documents or certificates as the Agent may reasonably
request.

Section 7. Indemnification.

(a) The Company will indemnify and hold harmless the Agent, its affiliates,
directors and officers, agents and employees, members and managers, and each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors and assigns
of such persons, against any losses, claims, damages or liabilities, joint or
several, to which the Agent may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration

 

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Statement, the Base Prospectus, the Prospectus Supplement or the Prospectus or
any amendment or supplement thereto, any Issuer Free Writing Prospectus or any
“issuer information” filed or required to be filed pursuant to Rule 433(d) under
the 1933 Act, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Agent for any
legal or other expenses reasonably incurred by the Agent in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Base Prospectus, the
Prospectus Supplement or the Prospectus, or any amendment or supplement thereto,
or any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for use
therein, it being understood and agreed upon that the only such information
furnished by the Agent consists of the information in the Prospectus as
specified in Annex II hereto.

(b) The Agent will indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Base Prospectus, the Prospectus Supplement or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the Base
Prospectus, the Prospectus Supplement or the Prospectus, or any such amendment
or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon
and in conformity with written information furnished to the Company by the Agent
expressly for use therein, it being understood and agreed upon that the only
such information furnished by the Agent consists of the information in the
Prospectus as specified in Annex II hereto; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection except and then only to the extent such
indemnifying party is materially prejudiced thereby. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 7 for any legal expenses of
other counsel or any other expenses,

 

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in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
not to be unreasonably withheld or delayed, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) 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.

(d) If the indemnification provided for in this Section 7 is unavailable to hold
harmless an indemnified party under subsection (a) or (b) above in respect of
any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agent on the other from the offering of the Shares to which such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Agent on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total commissions received by the Agent. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Agent on the other and the parties’ relative intent,
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 contribution pursuant to this subsection (d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Agent shall not be required to contribute
any amount in excess of the amount by which the total compensation received by
the Agent with respect to sales of the Shares sold by it to the public exceeds
the amount of any damages which the Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

 

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(e) The obligations of the Company under this Section 7 shall be in addition to
any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to the directors, officers, employees, attorneys and
agents of the Agent and to each person, if any, who controls the Agent within
the meaning of the 1933 Act or is controlled by or under common control with the
Agent and each broker dealer affiliate of the Agent; and the obligations of the
Agent under this Section 7 shall be in addition to any liability which the Agent
may otherwise have and shall extend, upon the same terms and conditions, to each
director, officer, employee, attorney and agent of the Company and to each
person, if any, who controls the Company within the meaning of the 1933 Act.

Section 8. Representations, Warranties and Agreements to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and the Agent, as set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of the Agent or any controlling
person of the Agent, or the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and payment for the Shares.

Section 9. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (i) the Agent is acting solely in the capacity of an arm’s length
contractual counterparty to the Company with respect to the offering of Shares
contemplated hereby (including in connection with determining the terms of such
offering) and (ii) the Agent has not assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether the Agent has
advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Agreement and (iii) the Company has consulted its own legal and financial
advisors to the extent it deemed appropriate. The Company agrees that it will
not claim that the Agent has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Company, in connection with
such transaction or the process leading thereto.

Section 10. Termination.

(a) The Company shall have the right, by giving written notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party,
except that (i) with respect to any pending sale through the Agent for the
Company, the obligations of the Company, including in respect of compensation of
the Agent, shall remain in full force and effect notwithstanding such
termination; and (ii) the provisions of Section 1, Section 5, Section 7 and
Section 8 of this Agreement shall remain in full force and effect
notwithstanding such termination.

(b) Subject to subsection (e) below, only with respect to the sale of Shares to
the Agent as principal pursuant to a Terms Agreement, the Agent shall have the
right, by giving written notice as hereinafter specified, to terminate this
Agreement in its sole discretion at any time. Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 1, Section 5, Section 7 and Section 8 of this Agreement shall remain in
full force and effect notwithstanding such termination.

 

28

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(c) This Agreement shall remain in full force and effect until and unless
terminated pursuant to Section 10(a) or (b) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
or pursuant to this subsection (c) shall in all cases be deemed to provide that
Section 1, Section 5, Section 7 and Section 8 of this Agreement shall remain in
full force and effect.

(d) Any termination of this Agreement shall be effective on the date specified
in such notice of termination; provided 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 Shares, such sale shall settle in
accordance with the provisions of Section 2(g) hereof.

(e) In the case of any purchase by the Agent pursuant to a Terms Agreement, the
Agent may terminate this Agreement, at any time at or prior to the Settlement
Date (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the General
Disclosure Package or the Prospectus, any Material Adverse Change, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Agent, impracticable or inadvisable
to market the Shares or to enforce contracts for the sale of Shares, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq, or if trading generally on the NYSE or
Nasdaq has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, FINRA or
any other governmental authority, or (iv) a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States, or (v) if a banking moratorium has been declared by either Federal or
New York authorities.

(f) Subject to the additional limitations set forth in Section 5 of this
Agreement, in the event of termination of this Agreement (i) prior to the sale
of any Shares or (ii) as a result of an event set forth under clauses (i) or
(iii) in subsection (e) above, the Agent shall be entitled only to reimbursement
of its out-of-pocket expenses actually incurred.

Section 11. Notices. All statements, requests, notices and agreements hereunder
shall be in writing, and if to Citadel shall be delivered or sent by mail, telex
or facsimile transmission to:

Citadel Securities LLC

c/o Citadel LLC

131 South Dearborn Street

Chicago, IL 60603

Attn: Legal Department

Ph: 312-395-2100

Fax: 312-267-7300

with a mandatory copy to: CitadelAgreementNotice@citadelgroup.com

 

29

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and if to the Company to:

Sarepta Therapeutics, Inc.

3450 Monte Villa Parkway, Suite 101

Bothell, Washington 98021

Fax: 1 (425) 489-5933

Attention: Chief Executive Officer

with a copy to:

Alan C. Mendelson, Esq.

c/o Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Fax: (650) 463-2600

Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.

Section 12. Parties. This Agreement shall be binding upon, and inure solely to
the benefit of, the Company and the Agent and, to the extent provided in
Section 7 and Section 8 hereof, the Agent’s affiliates, directors and officers,
agents and employees, members and managers, and each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of Shares
through the Agent shall be deemed a successor or assign by reason merely of such
purchase.

Section 13. Time of the Essence. Time shall be of the essence of this Agreement.
As used herein, the term “business day” shall mean any day when the Commission’s
office in Washington, D.C. is open for business.

Section 14. Waiver of Jury Trial. The Company and the Agent hereby irrevocably
waive, 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.

Section 15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
PRINCIPLES OF CONFLICTS OF LAW.

Section 16. Counterparts. This Agreement and any Terms Agreement may be executed
by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
This Agreement and any Terms Agreement may be delivered by any party by
facsimile or other electronic transmission.

Section 17. Severability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section,

 

30

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paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as
are necessary to make it valid and enforceable.

 

31

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent and the Company in accordance with its terms.

 

Very truly yours,

SAREPTA THERAPEUTICS, INC.

By:  

 

/s/ Christopher Garabedian

Name: Christopher Garabedian

Title: Chief Executive Officer

Sales Agreement Signature Page

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Accepted as of the date hereof:

 

CITADEL SECURITIES LLC

By:

  /s/ Christopher L. Ramsay

Name:

  Christopher L. Ramsay

Title:

  Authorized Signatory

 

Signature Page to Sales Agreement

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Annex I

SAREPTA THERAPEUTICS, INC.

Common Stock

($0.0001 par value per share)

TERMS AGREEMENT

CITADEL SECURITIES LLC

601 Lexington Avenue, 28th Floor

New York, NY 10003

Attn:

Ladies and Gentlemen:

Sarepta Therapeutics, Inc., an Oregon corporation (the “Company”), proposes,
subject to the terms and conditions stated herein and in the At-the-Market
Equity Offering Sales Agreement, dated September 4, 2012 (the “Sales
Agreement”), between the Company and Citadel Securities LLC (the “Agent”), to
issue and sell to the Agent the securities specified in the Schedule hereto (the
“Purchased Securities”). All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Sales Agreement.

Each of the provisions of the Sales Agreement not specifically related to the
solicitation by the Agent, as agent of the Company, of offers to purchase
securities is incorporated herein by reference in its entirety, and shall be
deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement and the Applicable Time, except that each
representation and warranty in Section 1 of the Sales Agreement which makes
reference to the Prospectus (as therein defined) shall be deemed to be a
representation and warranty as of the date of the Sales Agreement in relation to
the Prospectus, and also a representation and warranty as of the date of this
Terms Agreement and the Settlement Date in relation to the Prospectus as amended
and supplemented to relate to the Purchased Securities.

An amendment to the Registration Statement (as defined in the Sales Agreement),
or a supplement to the Prospectus, as the case may be, relating to the Purchased
Securities, in the form heretofore delivered to the Agent is now proposed to be
filed with the Securities and Exchange Commission.

Subject to the terms and conditions set forth herein and in the Sales Agreement
which are incorporated herein by reference, the Company agrees to issue and sell
to the Agent and the latter agrees to purchase from the Company the number of
shares of the Purchased Securities at the time and place and at the purchase
price set forth in the Schedule hereto.

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent and the Company in accordance with its terms.

 

Very truly yours,

SAREPTA THERAPEUTICS, INC.

By:  

 

Name:   Title:  

Accepted as of the date hereof:

CITADEL SECURITIES LLC

 

By:  

 

  Name:   Title:

 

2

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Annex II

Information Supplied by the Agent

Subject to the terms and conditions of this Agreement, Citadel will use its
commercially reasonable efforts to sell shares of common stock on the Company’s
behalf on a daily basis or as otherwise agreed upon by the Company and Citadel.

As sales agent, Citadel will not engage in any transactions that stabilize our
common stock.

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Annex III

Form of Latham & Watkins LLP Opinion

1. The execution and delivery of the Sales Agreement and the issuance and sale
of the Shares by the Company through you pursuant to the Sales Agreement do not
on the date hereof:

 

  (i) result in the breach of or a default under any of the Specified
Agreements;

 

  (ii) violate any federal statute, rule or regulation applicable to the
Company; or

 

  (iii) require any consents, approvals, or authorizations to be obtained by the
Company

from, or any registrations, declarations or filings to be made by the Company
with, any governmental authority under any federal statute, rule or regulation
applicable to the Company on or prior to the date hereof that have not been
obtained or made.

2. The Registration Statement has become effective under the Act. With your
consent, based solely on a telephonic confirmation by a member of the Staff of
the Commission on September 4, 2012, we confirm that no stop order suspending
the effectiveness of the Registration Statement has been issued under the Act
and no proceedings therefor have been initiated by the Commission. The
Prospectus has been filed in accordance with Rule 424(b) under the Act.

3. The Registration Statement at September 4, 2012, including the information
deemed to be a part thereof pursuant to Rule 430B under the Act, and the
Prospectus, as of its date, each appeared on their face to be appropriately
responsive in all material respects to the applicable form requirements for
registration statements on Form S-3 under the Act and the rules and regulations
of the Commission thereunder; it being understood, however, that we express no
view with respect to Regulation S T or the financial statements, schedules or
other financial data, or statistical data derived therefrom, included in,
incorporated by reference in, or omitted from, the Registration Statement or the
Prospectus. For purposes of this paragraph, we have assumed that the statements
made in the Registration Statement and the Prospectus are correct and complete.

4. The Company is not, and immediately after giving effect to the sale of the
Shares in accordance with the Sales Agreement and the application of the
proceeds as described in the Prospectus under the caption “Use of Proceeds,”
will not be, required to be, registered as an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

5. With your consent based solely on a certificate of an officer of the Company
as to factual matters and a review of the Specified Agreements, the Company is
not a party to any agreement that would create contractual rights similar to
preemptive rights against the Company with regard to the Shares.

--------------------------------------------------------------------------------

6. The primary purpose of our professional engagement was not to establish or
confirm factual matters or financial or quantitative information. Therefore, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in, or incorporated by
reference in, the Registration Statement, the Prospectus, or the Incorporated
Documents and have not made an independent check or verification thereof.
However, in the course of acting as special counsel to the Company in connection
with the preparation by the Company of the Registration Statement and the
Prospectus, we reviewed the Registration Statement, the Prospectus, and the
Incorporated Documents, and participated in conferences and telephone
conversations with officers and other representatives of the Company, the
independent public accountants for the Company, White Summers Caffee & James,
LLP, Oregon counsel to the Company, Nelson Mullins Riley & Scarborough, LLP,
intellectual property counsel to the Company, your representatives, and your
counsel, during which conferences and conversations the contents of the
Registration Statement and the Prospectus (and portions of certain of the
Incorporated Documents) and related matters were discussed. We also reviewed and
relied upon certain corporate records and documents, letters from counsel and
accountants, and oral and written statements of officers and other
representatives of the Company and others as to the existence and consequence of
certain factual and other matters.

Based on our participation, review and reliance as described above, we advise
you that no facts came to our attention that caused us to believe that:

 

  •  

the Registration Statement, as of September 4, 2012, including the information
deemed to be a part of the Registration Statement pursuant to Rule 430B under
the Act (together with the Incorporated Documents at that time), contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or

 

  •  

the Prospectus, as of its date, (together with the Incorporated Documents at
that date), contained an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

it being understood that we express no belief with respect to the financial
statements, schedules or other financial data, or statistical data derived
therefrom, included or incorporated by reference in, or omitted from, the
Registration Statement, the Prospectus or the Incorporated Documents.

 

2

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Annex IV

Form of White Summers Caffee & James, LLP Opinion

 

1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Oregon with
corporate power and authority to own, lease and operate its properties and
assets, and to conduct its business as described in the General Disclosure
Package and the Prospectus and to carry out and perform its obligations under
the Agreement.

 

2. The Company is an active foreign corporation under the records of each of the
Secretary of State of Washington, the Secretary of the Commonwealth of
Massachusetts and the Secretary of the Commonwealth of Virginia and is qualified
to do business in the State of Washington and is in good standing under the laws
of each of the Commonwealth of Massachusetts and the Commonwealth of Virginia.

 

3. The Company has an authorized equity capitalization as set forth in the
Prospectus.

 

4. The Shares to be issued and sold by the Company pursuant to the Agreement
have been duly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Agreement, will be duly and
validly issued and fully paid and non-assessable.

 

5. The Shares to be issued and sold by the Company pursuant to the Agreement
will conform in all material respects to the description thereof contained in
the Prospectus.

 

6. There are no preemptive rights or similar rights to subscribe for or
purchase, nor any restrictions upon the voting or transfer of, the shares of
Common Stock pursuant to the Fourth Restated and Amended Articles of
Incorporation, as further amended (the “Restated Articles”), the First Restated
Bylaws, as further amended (the “Restated Bylaws”), or the Oregon Business
Corporation Act.

 

7. The Agreement has been duly authorized, executed and delivered by the
Company.

 

8. The execution and delivery of the Agreement, and the issuance and sale of the
Shares by the Company in accordance with the Agreement, will not result in any
violation by the Company of (i) the Restated Articles or the Restated Bylaws,
(ii) any Oregon statute, rule or regulation, or (iii) any order, judgment, or
decree known to us of any Oregon court or state administrative agency or body
having jurisdiction over the Company or any of its properties.

 

9.

No consent, approval, authorization, order, registration or qualification of or
with any Oregon court or administrative agency or body is required under Oregon
law for the execution and delivery of the Agreement and the issue and sale of
the Shares on the date hereof, except (i) such as may have been obtained or made
under the 1933 Act, (ii) such

--------------------------------------------------------------------------------

  consents, approvals, authorizations, orders, registrations or qualifications
as may be required under applicable state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares, and (iii) as may be
expressly contemplated by the Agreement.

 

10. The statements set forth in the Prospectus under the caption “Description of
Our Capital Stock” with respect to Common Stock, insofar as such statements
purport to constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize in all material respects the matters
referred to therein.

 

2

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Annex V

Form of Nelson Mullins Riley & Scarborough LLP Opinion

 

1. We are familiar with the technology and products relating to the DMD drug
candidates used by the Company in its business and the manner of its use and
have read the IP Portions contained in the Registration Statement and the
Prospectus;

 

2. To our knowledge, and based solely upon our role as Patent Counsel for the
Company, and except as set forth in the IP Portions contained in the
Registration Statement as of its effective date and the Prospectus, as of its
date and as of the date hereof, there are no legal or governmental proceedings
pending or threatened relating to the Patent Rights owned by or licensed to the
Company, other than review by the USPTO and foreign patent offices in the
ordinary course of patent application examination by such office;

 

3. To our knowledge, and based solely upon our role as Patent Counsel for the
Company, and except as set forth in the IP Portions contained in the
Registration Statement as of its effective date and the Prospectus, as of its
date and as of the date hereof, the Company has not received any written notice
of any pending or threatened actions, suits or proceedings by third parties
challenging the validity, enforceability or scope of the Patent Rights;

 

4. To our knowledge, and based solely upon our role as Patent Counsel for the
Company, and except as set forth in the IP Portions contained in the
Registration Statement as of its effective date and the Prospectus, as of its
date and as of the date hereof, there are no actions, suits, claims or
proceedings of third parties to any ownership or inventorship interest with
respect to the Patent Rights;

 

5. To our knowledge, and based solely upon our role as Patent Counsel for the
Company, and limited to the Patent Rights accorded under the patent laws of the
United States, and except as set forth in the IP Portions contained in the
Registration Statement as of its effective date and the Prospectus, as of its
date and as of the date hereof the Company currently owns, co-owns or has rights
to the Patent Rights, in that the Company is a licensee or the owner of such
Patent Rights as evidenced by inspection of public records at the USPTO; and to
our knowledge, as evidenced by inspection of public records at the USPTO, such
Patent Rights are currently pending and required maintenances fees, if any, have
been timely made; and

 

6. To our knowledge, and based solely upon our role as Patent Counsel for the
Company, and limited to the Patent Rights accorded under the patent laws of the
United States, and except as set forth in the IP Portions contained in the
Registration Statement as of its effective date and the Prospectus, as of its
date and as of the date hereof the Company has not received any written notice
of any pending or threatened actions, suits or proceedings by third parties with
respect to the Company’s products.

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Schedule A